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Poorer Australians end up paying 'poverty premium'



Australians on the lowest incomes are paying a "poverty premium" through higher costs for everyday essentials over the long term, a report released today found.

Compared with wealthier people, poorer residents lack significant savings, time to spend and don't have the resources to shop around or buy items in bulk such as groceries, according to the Anglicare Australia study.

It means over the long term, lower-income people pay up to one-and-a-half times more for the same services than others.

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Researchers examined the costs they are paying compared with higher income groups for everyday essential goods and services

They found they fork out 93 per cent more on groceries and 61 per cent more on insurance, while the cost of phone data was a staggering 142 per cent higher.

Anglicare Australia executive director Kasy Chambers said the extra costs were a "poverty premium" that punished poorer people.

"They pay penalties if they're forced to live further away from their work and communities. And the best credit deals are for people with high credit scores and healthy bank balances," she said.

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The research also found some people find themselves in debt spirals trying to juggle all of their costs.

Others forego basic essentials by skipping meals, missing medical appointments and avoiding signing up for insurance – only to pay for it down the track.

The report urged the federal government to ease cost-of-living pressures for people on lower incomes by raising Centrelink payments, making the minimum wage a living wage, and creating cheaper insurance and energy options for those who need them.

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