In recent years, the pervasive impact of inflation has become unavoidable for Australians. The cost of meeting basic needs such as food, housing, and healthcare has surged, outpacing stagnant wage growth.
While recent data suggests a glimmer of relief with inflation rates dropping to their lowest since January 2022, Australia is simultaneously grappling with an economic downturn, compounding financial strain on households.
Beyond its evident fiscal toll, rising prices exert a profound influence on both physical and mental health, a facet often overlooked in economic discourse. The enduring health repercussions of elevated inflation may persist for a considerable period.
Impact Disproportionately Felt
While escalating costs of essentials affect all sectors of society, certain demographic groups bear a heavier burden. Affluent households have navigated increased expenses by curbing discretionary spending and tapping into savings. Conversely, lower-income households, allocating a larger share of income to housing and essentials, confront acute financial stress and associated health challenges, exacerbated by the lack of a financial safety net.
Policymaker Imperatives
Conventional tools employed by the Reserve Bank of Australia to counter inflation, notably interest rate hikes, theoretically aim to rein in spending and alleviate price pressures. However, this approach, while effective in theory, imposes immediate financial strain on lower-income mortgage holders and renters by elevating borrowing costs.
Recognizing this stark reality, alongside the broader health ramifications of inflation, is imperative. Incorporating health and wellbeing considerations into policy responses can aid in mitigating long-term health adversities and curbing strain on healthcare infrastructure.
Moreover, policymakers should prioritize equitable access to healthcare, particularly mental health services, for those most vulnerable to cost-of-living pressures. Ensuring affordability and timely assistance can alleviate the health toll inflicted by economic challenges.
