The cost of transport fell by 0.3% in the December quarter, according to new data from the Australian Automobile Association (AAA).
The organisation’s Transport Affordability Index shows the transport cost reductions were driven largely by lower fuel prices, with prices falling by an annualised $158. The savings on fuel costs offset price rises in other areas.
This follows seven consecutive quarters of rising total household transport costs.
Total transport prices remain much higher than they were before Covid-19. In Q4 2019, the typical Australian household spent 13.9% of its income on transport. In Q3 2022, it spent 14.9% of its income on transport. This peaked at 17% in Q2 2024 and settled at 16.1% in Q3 and Q4 2024.
This put the typical Australian household’s transport affordability back to where it was in mid-2023. Transport costs’ share of typical Australian household income was 16.4% in the September 2023 quarter and 15.9% in the June 2023 quarter.
The index charts changes in transport-related costs such as fuel, insurance, car maintenance and public transport costs. It also measures transport affordability – or the costs-to-income ratios in Australian capital cities and a benchmark regional centre in each state and the Northern Territory.
Transport affordability varies significantly across the country, as there are disparities between different capitals’ and regional centres’ typical costs and median incomes.
The typical Brisbane household’s transport costs are higher than that of Hobart’s.
But in the December quarter, the disparity in these cities’ typical incomes meant Brisbane was the most affordable capital (spending 14.8% of typical household income on transport) and Hobart the least affordable (spending 18.9% of typical household income on transport).
The capital city average was 16.2% of household income spent on transport and the national average (which includes benchmark regional centres) was 16.1%.
AAA Managing Director Michael Bradley says transport costs remain a major pain point for many households.
“Transport costs are significantly higher than they were before the pandemic,” he says.
“The typical Australian household’s transport costs have risen from 13.9% of its income in December 2019 to 16.1% in December 2024. Transport is a significant and unavoidable expense, and rising transport expenditure is also one of the key drivers of inflation.
“Governments at all levels must consider these cost pressures when formulating policy.”
