I hear that the cost of living in AU is very high. How can the AU economy be booming compounded with a high price of living? For you guys that live there do you feel it is really that high or is it over stated in your opinion.

All interesting questions Sugarglider and some I have trouble rationalising myself but then I'm not an economist massaging figures.

I have seen the demise of heavy industries in Australia over past decades, and ask myself how can an economy be doing well when that happens and that more and more you buy comes from asian countries - and there's some reasoning there, the mass market, cost of setting up automated manufacturing probably adding to labour costs as being factors.

We've got one of our car manufacturers closure announced recently, some good vehicles just not selling against other competion locally and from imports. But our boom times have for a long time been mineral orientated and minerals being needed by the much larger economies of overseas markets, much led by China and to the extent the Chinese are very keen on getting some ownership of mining companies in Australia, maybe not such a great idea for our economy.

So regardless of how boom times are measured and how much it is associated with the mineral industry, what seems a given is that any boom times bring higher costs - more money about, shortages of labour as low unemployment is also a given and then so with domestic costs the supply/demand boots in and if someone wants something, can't get it because of a shortage of whatever other than their own money, they'll be prepared to pay a bit more - think of any auction, just like eBay!

As to whether the cost of living is really that high, probably depends on your lifestyle and where you want to live, but all over it could be considered higher than decades back, eg.
Twenty five years ago, I bought an old farmhouse out of town for about twice my annual income, and if I was in the same type of job now, same type of house could be about three times annual income.
That ratio is also very low compared to what you might expect to pay for a reasonable house closer in, in Sydney but not so different if you want to live in or close to a country town somewhere, ideally being able to have your employment not too far from home.

So it can come down to all sorts of things that you have tastes in and what you want/need.
A car for instance, average Joe "Holden Commodore or Ford Falcon" - $30-40,000 new, two years old ex Government auction with minimal mileage ~ $20,000, two years further on and an acquaintance sells for $10,000 so he is prepared to outlay $5000/Y for a car.
Me?, I'll go and buy a 10-12 Year luxury model driven by Grandpa/Grandma and only 60,000 km. on clock, taking a chance at $6000.
If it goes well for me over 10-12 years and no reason whay not, it has cost me $500/Y.
So yeah, in any developed society, you want to splurge on the good life you can expect to be continually up to your ears in debt or making ends meet, but if you want to develop more of a simpler lifestyle and splurge when you have the money to splurge, cost of living is a lot different.

I reckon because the masses live in Capital cities where expectations are greater, costs higher, there'll always be an appreciation that cost of living is high and it's all so bloody hard.

EDITAnd if you want another example, some people might pay $20-30 or more for a bottle of wine and that's about minimum you can expect to pay in a restaurant.
Buying single bottles at a liquor store , expect to pay near $20/b for a reasonable drop, and then carton buys(12 bottles) of good stuff can be had for $15/b from wine clubs etc. and always cheaper stuff not too bad either.
Have bought good area clean skins(no labelling) for $10/b

And you can even buy 4L casks of not too bad a poison for about $10.00
Again, all in the taste.

And my latest good cost/enviro product tip (from China):
Wind up torches - no batteries and a less than one minute wind for an hours illumination - wound one ten days ago and it still comes on when switched.
Hello environment/cheaper living and Goodbye Batteries

Don't most westernized countries have a higher cost of living? Correct me if I'm wrong, that's just my assumption.

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Australian Credit Cards

Hello,
Living in Australia is an expensive task. Can I follow this statment or not? The cost of living is high or status of living, please clear my view about this.
Thanks

if the cost of living in Au is high well I assume that you will earn higher,,, many people still dreams of living in AU despite of that question.

And ajay, then Well ajay, you made the statement!, but I'll assume you're looking for some follow-up discussion in an attempt for clarification.

I reckon your three words " status of living" can mean a lot and I would not limit that to mean status as in a wealth orientated style but look at it from a point of view of how people live or may aspire to in developed countries and lets stick with Australia shall we.

Life styles have undergone enormous changes since immediately post WW2 to the current century and WW2 you could say was a catalyst in some respects for the population was moving from largely agricultural based industries into industry itself and many service people experiencing some form of travel, and then after WW2 you still had rationing coupled with greater products and services demands of expanding families and immigrants.

Manufacturing industries were booming through the fifties and sixties along with infrastructure development, soon to be followed by the mining sector expanding.

But coupled with post WW2 industry, there was a substantial degree of DIY building activity, probably much more so than today and of much smaller homes more within the scope of the DIYer with kids sharing bedrooms, often three to a room, and families survived with "at home" mothers.
Families even had vegetable plots and a few fruit trees.

WW2 also saw an enormous shift upwards in use of Oil products and that passed itself onto civillian use with personal transport and recreational vehicles, Oil and transport industries booming and there seeming to be no restrictions on availability of oil, talk of "peak oil" being something of only the last decade but a country like Australia (with relatively vast distances between population and food source centres and where people would go to on holidays) firmly having established a life style with much emphasis vehicles and oil products useage of which we are partially reliant on imports.

Seventies and eighties have been much of a transition period, post WW2DIYers ageing and that life approach not being passed on so much to the next generation quite possibly because of the greater choices people had.

Enter cheaper overseas manufacturing, demise of a lot of Australian manufacturing, travel lust, and the media industry to wet appetites on using credit cards and it is no small wonder living costs rise for:
. we do less ourselves
. we want more in just about every aspect of life
. we are prepared to borrow more to achieve it.

It is called living beyond your means and when too many people do it, the whole country hurts.

Governments seem to do little to forge a better way and probably try to do little rather than be seen to be a harsh government and kicked out of office, relying more on the reserve bank and setting pof interest rates to control inflation - also not necessarily the best tool.

So enter the twenty first century
. manufacturing other than auto is about defunct
. China, India and rest of asia will place huge demands on natural resources
. people have debt levels like never before
. credit industry seems to have lost control
. government seems intent on hurting us more with carbon trading taxes that will just make any manufacturing we still do less able to compete with overseas companies not having such regulations.

Yep, you could say that the way we live is unsustainable and one way or another the twenty first century will be one of huge life style correction, that " status of living" needing to change.