Australia Prices cheaper now than in 1901

[Guest The Pom Queen]

Well I wasn’t around back then, but they seem to have risen dramatically during my 15 years in Australia

A never-ending topic in Australian public discourse is about 'cost of living pressures'. Everyone feels like they pay more now for the same things that their parents and grandparents bought.

This is despite mathematical evidence that Australians are wealthier now than they have ever been. Yahoo Finance found Australian Bureau of Statistics research on 1901 prices for common household items, and applied 117 years of inflation to see how much that is in current terms.

So now we can see if things were really better in 'the good old days' or if we just have higher expectations now.

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1901 grocery prices

First the raw prices in 1901 – note the ABS already converted pounds and shillings to dollar amounts, for our convenience:

1901 prices
Average weekly wage, adult males	$4.35
Gold (1oz)	$8.50
Loaf of bread	$0.02
Flour (2kg)	$0.04
Sugar (2kg)	$0.09
Coffee (150g)	$0.05
Tea (180g)	$0.06
Rice (1kg)	$0.05
Butter (500g)	$0.13
Potatoes (1kg)	$0.02
Onions (1kg)	$0.03
Rump steak (1kg)	$0.14
Eggs (1 dozen)	$0.12
Bacon (1kg)	$0.19
Jam (500g)	$0.04
Milk (1 litre)	$0.03
Packet of cigarettes	$0.05
Soap (600g)	$0.03
Cough medicine (200ml)	$0.25
Daily newspaper	$0.01
Game of football	$0.10

Just two cents for a loaf of bread – what a bargain!

But that price tag is entirely meaningless, considering the average weekly wage was $4.35, and most families were on a single income.

It starts making more sense when inflation is applied to see what the prices are in today's terms.

1901 and 2000 grocery prices in today's dollars

Yahoo Finance has applied inflation to both 1901 prices and 2000 prices, so they can be compared to today's costs:

 

Most grocery items are cheaper now than it was in 1901 – especially for raw produce like flour, sugar, coffee, rice and potatoes.

Why? Because of globalisation.

Consumers in 2019 can buy the cheapest product available internationally, rather than be limited to what's grown locally, as was the case 118 years ago.

And this is all while the average wage has gone up spectacularly.

The ABS also notes that, for pretty much everything, price isn't the only improvement to what was offered in 1901.

"Although the brands and range of products have changed over time, many of the items commonly used at the turn of century are still everyday items. However, in many cases there will have been changes in quality, presumably for the better."

Cigarettes will kill you

Cigarettes are an exception – they are far more expensive now than in the past.

Even compared to the year 2000, a packet of cigarettes is almost double the price.

The awareness of harm to health is the big difference here, with recent governments increasing taxes on cigarette sales to deter Australians from taking up the habit, and to raise funds for the health system.

According to the ABS, in 1901 tobacco was even seen as good for health.

"Of course, cigarettes carried no health warnings in 1901. In fact, an advertisement for a brand of cigarettes appearing in an issue of the Sydney Morning Herald of the time carried the endorsement that they were 'guaranteed not to harm the throat or lungs' and, perhaps more disconcertingly, 'recommended by doctors'."

View photos

 

 

2019 is a far better world for Australian shoppers

IBISWorld senior industry analyst Nathan Cloutman told Yahoo Finance earlier this month that Australians now have far more choices when grocery shopping compared to previous generations.

Even purchasing the supermarket's cheap in-house brand didn't involve a sacrifice.

"Consumers can now purchase private-label organic and 'premium' products for low prices," said Cloutman.

While everyday items have come down in price, real estate is a significant chunk of Australian household budgets that have ballooned in recent generations.

Yahoo Finance reported previously that, since the 1970s, wages have increased about ten times but housing in Australian capital cities have shot up more than 30 times.

But then, the huge increase in property values have also made many Australian homeowners very wealthy also.

[kevsan]

I guess some of the perception that we are worse off is that we are spending more of our income on non grocery items...

more on houses, cars, schools, entertainment, technology, toys etc etc etc

so although a bag of tea is 'cheaper' in real terms, we generally have less of a percentage of the household budget available for day to day items

[Paul1Perth]

5 hours ago, kevsan said:

I guess some of the perception that we are worse off is that we are spending more of our income on non grocery items...

more on houses, cars, schools, entertainment, technology, toys etc etc etc

so although a bag of tea is 'cheaper' in real terms, we generally have less of a percentage of the household budget available for day to day items

That's by choice though isn't it. TBH I think my generation has seen the best times. Too many people in a lot of places on the planet now for too little resources. My sons will struggle to have as good a lifestyle as us I reckon. Although my eldest has had a fantastic time since his late teens when he qualified as an electrician and took advantage of the FIFO work. He's travelled and experienced things that most would dream about. He's been in Whistler Canada for the last 2 years and had a ball. He's coming back soon to work on a rig for Woodside. Guess he'll be starting from scratch with savings again though. Still, can't take experiences and memories off you.

[Marisawright]

50 minutes ago, Paul1Perth said:

That's by choice though isn't it. 

It is by choice, but I think we're all so used to our lifestyle that for younger people, it doesn't feel like a choice.

Our grandparents didn't "need" a TV or a car.  Both were luxuries that you might treat yourself to, if you were doing well.  Nowadays, most young people have a long list of "essentials" which even my generation regarded as luxuries.   

Just think of the outrage when it was suggested that smashed avocado was preventing young people getting a mortgage.  They were all indignant, but the point was valid - when my first husband and I were twenty-somethings saving for a mortgage, we would never have gone to a restaurant to buy breakfast.  If we managed chicken-in-a-basket in the pub once a week, we thought we were being hopelessly extravagant.    

[Paul1Perth]

1 hour ago, Marisawright said:

It is by choice, but I think we're all so used to our lifestyle that for younger people, it doesn't feel like a choice.

Our grandparents didn't "need" a TV or a car.  Both were luxuries that you might treat yourself to, if you were doing well.  Nowadays, most young people have a long list of "essentials" which even my generation regarded as luxuries.   

Just think of the outrage when it was suggested that smashed avocado was preventing young people getting a mortgage.  They were all indignant, but the point was valid - when my first husband and I were twenty-somethings saving for a mortgage, we would never have gone to a restaurant to buy breakfast.  If we managed chicken-in-a-basket in the pub once a week, we thought we were being hopelessly extravagant.    

Spot on Marisa. Easy credit has a lot to do with the strife the world is in, let alone why youngsters can't get on the housing ladder.

When our parents wanted a TV they had to save up for it, not just pay for it on a credit card. We refused to have one when we got our first mortgage in 1988. If we wanted things we saved up for them first as we'd both been brought up that way. A bottle of wine with a take away curry once a week was a treat.

Edited August 21, 2019 by Paul1Perth

[Whey aye]

Everything is cheaper.

The human race spends every minute thinking how can we make rubbish more expensive,how can technology make everything worse and more expensive 

 

Or the human race tries to make things better and cheaper,technology is used to make things better and cheaper.

 

From my youth everybody lived in a council house.TV and radio were things that were rented because they were so expensive to buy.Nobody ever went on an aeroplane,holidays were once every ten year things,it meant a week in a caravan around 50 miles from home,and so on.

 

The difference between 70 years ago and now is unbelievable.

[kevsan]

17 hours ago, Marisawright said:

It is by choice, but I think we're all so used to our lifestyle that for younger people, it doesn't feel like a choice.

And i think this is the crux of it.

Even my generation - mid 40's can't get out of it - its still keeping up with the neighbours. When i look at what some of my mates and their families spend their money on, i despair.

New cars every couple of years, 2odd interstate holidays a year, plus a trip to bali thrown in, multiple TV's, games consoles etc etc etc etc etc etc

I could take a good look at myself if i really wanted to and see a lot of poor choices and wasted money on things i didnt need, but i like to think i am reasonably sensible with money

I bought my 2007 commodore for $8000 when we arrived, and yes its crap and i would love a brand new one, but i cant afford it.. so i have to wait or make different choices

maybe  i am just tight.

[Toots]

1 hour ago, kevsan said:

And i think this is the crux of it.

Even my generation - mid 40's can't get out of it - its still keeping up with the neighbours. When i look at what some of my mates and their families spend their money on, i despair.

New cars every couple of years, 2odd interstate holidays a year, plus a trip to bali thrown in, multiple TV's, games consoles etc etc etc etc etc etc

I could take a good look at myself if i really wanted to and see a lot of poor choices and wasted money on things i didnt need, but i like to think i am reasonably sensible with money

I bought my 2007 commodore for $8000 when we arrived, and yes its crap and i would love a brand new one, but i cant afford it.. so i have to wait or make different choices

maybe  i am just tight.

  

We are a good bit older than you but I always asked myself 'do I want it or do I need it'. It was surprising how often the answer was 'I want it'.  So I didn't get it.   Some people however just can't do without what they want all the time then they wonder how they managed to get into debt.  At least we didn't have any money worries and still managed to  have a comfortable life.

[Marisawright]

2 hours ago, kevsan said:

And i think this is the crux of it.

Even my generation - mid 40's can't get out of it - its still keeping up with the neighbours. When i look at what some of my mates and their families spend their money on, i despair.

I don't think it's even keeping up with the Jones's - it's just doing what's considered "normal".   

I recently saw a post from a young friend of mine on Facebook, asking if anyone had a spare mobile phone. She had come across a homeless person who'd had her phone stolen, and wanted to help them.  I assumed she wanted a basic phone so the homeless person could keep in touch with family - but no.  My offer of an old but serviceable "dumb" phone was rejected as not adequate.  It had to be a decent smartphone as naturally, the homeless person had to have access to the internet and all the apps, because you can't live without those these days (apparently). 

As Toots said, I have never "needed" a smart TV, or a mobile phone, or to eat out regularly, or to go out for a drink.  I notice is that younger people see these as "needs".  They are so essential that they're horrified at the idea of life without them.

 

[Skani]

4 hours ago, Toots said:

  

We are a good bit older than you but I always asked myself 'do I want it or do I need it'. It was surprising how often the answer was 'I want it'. 

I am really grateful I grew up in an era before credit cards were available - in fact, any credit at all, apart from a mortgage...and then only if you were male or had a male to act as guarantor for you.  Having to have the cash in hand before you bought made it much easier to sort out "needs" and "wants".    I can remember back to the early 1950s - just - and I always laugh when people today say how much worse the cost of living is now.    They have no idea of how thrifty most people had to be then.  

[Paul1Perth]

On 22/08/2019 at 10:31, Marisawright said:

I don't think it's even keeping up with the Jones's - it's just doing what's considered "normal".   

I recently saw a post from a young friend of mine on Facebook, asking if anyone had a spare mobile phone. She had come across a homeless person who'd had her phone stolen, and wanted to help them.  I assumed she wanted a basic phone so the homeless person could keep in touch with family - but no.  My offer of an old but serviceable "dumb" phone was rejected as not adequate.  It had to be a decent smartphone as naturally, the homeless person had to have access to the internet and all the apps, because you can't live without those these days (apparently). 

As Toots said, I have never "needed" a smart TV, or a mobile phone, or to eat out regularly, or to go out for a drink.  I notice is that younger people see these as "needs".  They are so essential that they're horrified at the idea of life without them.

 

I can never get over when you see pictures of refugees who are supposed to be starving and poor but they all seem to have working mobile phones.

[Marisawright]

34 minutes ago, Paul1Perth said:

I can never get over when you see pictures of refugees who are supposed to be starving and poor but they all seem to have working mobile phones.

To be fair, I used to think the same thing, but it's been explained to me now.

I think we all tend to assume the refugees have always been poor people, but in fact, most of them had good jobs and nice homes before the war, just like you and me - so of course they all had mobile phones.   If you had to flee suddenly, you'd grab your phone too - it's an obvious lifeline to keep in touch with your family and friends if you get separated.   The phones still work, months down the track, because they still have bank accounts in their homeland (which they may or may not be able to access) so their phone plan is still being paid for, and they still value it as a way to keep in touch.