The affordability of transport costs for Australian households has improved for three consecutive quarters for the first time since 2020.
Typical transport expenditure increased slightly in the March quarter, according to the Australian Automobile Association’s (AAA) Transport Affordability Index. But, in most cities, rising incomes more than offset the modest costs rises. This meant the proportion of income that typical households spent on transport fell nationally and in all Transport Affordability Index benchmark locations, except Canberra and Bunbury.
In the March quarter, the typical Australian household spent 15.8% of its income on transport, down from 16.1% in each of the previous two quarters and from 17% in the June 2024 quarter.
However, the turnaround in mid-2024 came after seven consecutive quarters of rising total household transport costs drove household transport expenditure as a portion of all spending to significantly levels than before Covid.
In Q4 2019, the typical Australian household spent 13.9% of its income on transport. In Q3 2022, this proportion rose to 14.9% and it peaked at 17% in the June quarter of 2024.
This national figure obscures big regional variations. In the March quarter, the typical Hobart and Launceston households spent 18.2% and 19.9%, respectively, of their incomes on transport. In contrast, the typical Brisbane and Wagga Wagga households’ respective transport expenditures were 14.6% and 12%.
The typical Brisbane household’s transport costs are higher than that of Hobart’s. But in the March quarter, the disparity in these cities’ typical incomes meant Brisbane was the most affordable capital and Hobart the least affordable.
The capital city average was 15.9% of household income spent on transport and the benchmark regional centres average was 15.6%. The national average was 15.8%.
The bulk of cost increases came from higher fuel prices – with average annualised rises of $129 for the capital cities and $194 for the Index’s seven regional benchmark centres. But the March quarter’s increased fuel expenditure followed two consecutive quarters of price falls. New vehicle prices also rose, offsetting a fall in car loan interest rates. But rising incomes offset higher costs in all Index benchmark centres except Canberra and Bunbury.
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 15.8% in March 2025.
“Costs have risen across the economy and transport expenditure is one of the key drivers of inflation.
“Transport is a significant and unavoidable expense, and governments at all levels must consider these cost pressures when formulating policy.”
