An Australian study released Wednesday found that lower commodity prices have contributed to the economic pain felt by many in the southern and central Australian communities they represent.
The study, titled “A Lower-Income, Lower-Finance Environment For The Community,” estimates that the lower incomes and poorer-performing economies of the region have been hurt by higher fuel prices and higher prices of commodities such as copper, iron ore and oil.
The report estimates that between 2017 and 2020, average annual household income in the regions would fall by $6,400, a significant reduction from the $14,800 it would be if the regions had remained at the same level of output and incomes.
It also found that the community’s average income would fall between $10,000 and $14 to $14 per hour if the economy were not so dependent on the price of energy.
The survey also found lower household wealth in the region would contribute to a further decline in household incomes and the amount of disposable income the community has to spend on housing and food.
While the regional economy is suffering from a low-cost, high-wage economy, the study found that higher household wealth is likely to lead to more households spending more money on goods and services.
“The community’s purchasing power is likely also to be affected,” the report said.
The Commonwealth Government is committed to providing the economic opportunities for all Australians that make up the Australian community.
But the study’s authors warned that a lower-income, lower-finance environment could not be maintained for too long, because the regional economies could not absorb the cost of those higher fuel costs.
“In the longer term, higher fuel rates will be associated with lower aggregate income and, therefore, lower income, which will further reduce the purchasing power of households in the regional regions,” the authors wrote.
The researchers said that higher fuel oil prices would likely have negative impacts on the economy, and that increased petrol prices could have a negative impact on the health of communities.
In recent years, petrol prices have risen by about 1 per cent a year in the South Australian capital city of Adelaide, while in Victoria, where the economy is based on the copper mining sector, prices are up about 12 per cent annually.
In 2017, the price index in Melbourne and Sydney were both lower than the median annual household incomes of $50,000.