Transport costs are now making up 13% of the Aussie household budget


It is a shock to find that, on average, transport costs Australian households with two cars up to 13% of the household budget, or $22,000, each year.

"Australians know transport is expensive but they might be surprised to know just how expensive," says Michael Bradley, chief executive of the Australian Automobile Association, which commissioned the first transport affordability index.

"The average household will spend $14,000 a year on transport in Hobart but up to $22,000 if they live in western Sydney. It is remarkable when you consider that electricity, water and telecommunications costs account for only 1% to 3% of income combined."

transport costs

A typical two-car Sydney household faced weekly transport costs of $419, ahead of Brisbane and Melbourne (at $376 and $348 respectively), even without taking into account any parking expenses.

By contrast, in higher-income but lower-density Perth and Canberra transport costs are less at $301 and $300 respectively. Lower-income, lower-density cities such as Adelaide, Hobart and Darwin are even cheaper at $286, $271 and $286 respectively.

Tolls contribute heavily to the costs in Sydney, Brisbane and Melbourne but even without them these cities still top the list of the most expensive places.

The index is based on the incomes and transport costs of a hypothetical household that consists of a couple with children and two cars. It assumes that one member of the family drives to work while the other catches public transport. Running costs include the purchase of a new vehicle, interest payments, registration, stamp duty, compulsory third party insurance, comprehensive car insurance and driver's licences.

Ongoing costs are those that increase the more the vehicle is driven and include fuel, tolls and maintenance. Public transport fares for an average commute to work are also captured, says Bradley, as these are fixed costs for many families and make up a growing share of weekly expenses.


Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.
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