The cost of living in Australia will obviously be one of your main considerations when looking to set up home in the country. The very fact that more and more people around the world are looking to relocate to Australia is in itself confirmation that the country has much to offer and indeed the cost of living in Australia does compare very favourably to many other countries around the world. So what exactly can you expect from your new life in Australia?
General standard of living in Australia
While the cost of living is obviously a major consideration for anybody looking to move to Australia it is also worthwhile looking at the general standard of living in the country as well. There is no point having a relatively low cost of living and a relatively low standard of living because this defeats the point of moving to a new homeland.
However, thankfully we can confirm that despite having a relatively low cost of living in general, the standard of living in Australia is one of the highest in the modern developed world. The country itself offers a unique mix of climates, scenery, work opportunities, cultures and social opportunities. These factors together confirm why Australia has become one of the more popular expat destinations in the world.
The cost of property in Australia
The cost of property in Australia is the one element in the cost of living in Australia which will vary markedly from place to place. As you might expect, some of the more expensive properties are centred around the likes of Melbourne, Sydney, Perth and Adelaide while there are also a large number of property hotspots on the coast where demand continues to remain very high from domestic property buyers, expats and international investors.
You can probably acquire a property in some of the outer city suburbs for just over AUS$110,000 although there will obviously be a significant increase in the cost of inner-city properties which can cost millions of dollars. Even though there has always been a steady investment flow of funds into Australia it is only since the turn of the century that we have seen a significant increase in property prices in the country. Indeed many people believe that the 2000 Olympics was the catalyst for an increase in popularity for the Australian property market with property prices pushing ahead strongly after the focus of the world was upon Australia.
In general the property market in Australia has performed very well over the last decade and indeed the country was one of the first to exit the worldwide recession with a relatively strong economy and positive economic outlook.
Employment in Australia
For many people moving to Australia to start a new life the employment market will be vital to the standard of living they can afford and to their short, medium and long-term future in the country. While salaries in Australia are lower than those seen in the UK there is no doubt that this is offset by the lower cost of living compared to countries such as the UK. However, Australia has an economy which continues to grow and continues to attract both domestic and overseas investment. There are many who believe that Australia is well positioned to increase its presence in the worldwide economy in the medium to longer term which should bring an increase in salaries across the board.
For expats looking to move to Australia there are a number of employment positions which the domestic market is finding hard to fill, offering an interesting opportunity to fast-track the Australian visa system. Make no mistake, Australia is a country and an economy which is going places but at some point it is likely we will see the cost of living become more comparable with the likes of the UK.
Taxes in Australia
The Australian taxation system is very similar in structure to that of the UK and other developed countries with the vast majority of tax deducted at source by employers. The taxation rate in Australia is progressive, starting at 0% for the first AUS$6,000 and moving up to a higher rate of 45% for those earning over AUS$180,000 a year. While many people may view the Australian taxation system as relatively high compared to other countries such as the UK, this is more than offset by the difference in the cost of living in the country.
Indeed, the strength of the Australian economy is perfectly reflected by the recent reduction in taxation rates at a time when many countries around the world were forced to increase their rates purely and simply to manage budget deficits. Over the last few years the Australian authorities have demonstrated a real grasp of the economic situation and the potential for Australia in the short, medium and longer term. As a consequence, it is unlikely that we will see future visitors to Australia further penalised by the taxation system as the country is growing and needs to attract more and more skilled workers.
Healthcare in Australia
There is a public health system in place in Australia which is funded by a 1.5% income tax levy on the Australian population although the government has of late been encouraging members of the population to look at private health insurance. Those who are moving to Australia under a working visa will need to take out private health insurance even though countries such as the UK have a reciprocal arrangement with Australia for life-threatening and vital medical treatment.
The Medicare system, which is funded by the 1.5% income tax levy, is available to all Australian residents although like countries such as the UK the authorities have seen a significant increase in the cost of this National Health Service. It seems highly likely that we will see more focus upon the private health insurance market with the government already offering financial incentives for those subscribing to these services and penalising high earners who continue to depend upon the Medicare system.
While health care is obviously another cost to take into account when looking at your cost of living in Australia, private healthcare is becoming something of the norm across the world and is set to grow in popularity in the future.
Socialising in Australia
In general the cost of eating out and drinking in Australia compares very favourably to countries such as the UK and many other developed economies. However, a number of people who have moved to Australia in the past will tell you that initially everything seems cheap but once you get into the “Australian way of living” you will tend to notice less and less any potential cost savings. This is like anywhere in the world, once you move there you will compare the prices to your former homeland but once you have been there for some time you begin to forget the difference in prices.
As with any socialising, whether overseas or in your homeland, you can literally spend as much as you want or as little as you want. Those who live in the inner cities such as Melbourne, Sydney, Perth and Adelaide will obviously incur higher costs and higher charges in general but these will reduce the further away from the major cities that you move. The cost of socialising in any country is basically a choice for those involved, whether they want to live the high life or a more basic social life.
Cost of transport in Australia
The cost of travelling from A to B in Australia is likely to be very different from that which you have experienced in any other country in the world. This is a country which is absolutely enormous and while there is no doubt that Australia has an excellent transport network it is common to travel hundreds and hundreds of miles to get from one destination to another. The further into the “outback” which you go there is the potential for increased transport costs put credit where credit is due the Australian authorities have invested heavily in the internal transport system.
With regards to travelling overseas from Australia there is a very well developed airport network which continues to attract visitors and expats from around the world. Indeed expansion in this particular area has also attracted significant overseas investment which has helped to expand and grow the Australian economy.
The cost of education in Australia
The cost of education in Australia has increased dramatically over the last decade due to major improvements in the state schooling system, more private schools and more expats settling in the country. When you also consider the fact that Australia is a growing economy and in need of a larger skilled workforce these factors have all come together to produce an above inflation rise in the cost of education for both the state and parents alike.
The growing cost of education in Australia is perfectly reflected by a recent report which suggested that from kindergarten to year 12 it will cost the state upwards of AUS$93,000 per pupil, nearly AUS$188,000 for a catholic school and nearly AUS$400,000 for private education. While these figures are astounding it is worth remembering that the state education system has improved dramatically over the last few years and more parents are now happy to enrol their children in this taxpayer funded service.
Like so many areas of the cost of living it is literally down to the people involved as to whether they look towards a state school, catholic school or private education. This will obviously depend upon specific requirements and levels of income.
The cost of gas and electricity in Australia
In general the cost of gas and electric in Australia, and other utility services, is higher than that in many other countries around the world. This is partly due to the fact that Australia has such a large variation of landscapes and climates as well as a growing economy which is demanding more and more utility services. Indeed a recent rather doomsday scenario report suggested that on average power bills in Australia could increase by up to 60% over the next three years which would be a very bitter pill to swallow.
However, there is no doubt that as the Australian economy continues to grow and the population expands, demand for electricity, gas, water and other utility services will also grow. This has created a need for further investment into the power industry by the Australian authorities and the private sector. This will obviously take some time to filter through to utility prices so in the meantime it does look as though the cost of Australian utilities is set to rise for the foreseeable future.
While there is no doubt that the current cost of living in Australia compares very favourably to other developed countries around the world, there are various areas where the cost of living in Australia can be more expensive. In reality, one of the side-effects of a growing economy and a growing population is pressure on utilities, services and goods as well as increased demand for property. As long as the economy and population continues to grow there will be further pressure on the cost of living and we could see the differential between countries such as the UK reduce further in the future.
Australia is a country which continues to attract the attention of more and more expats around the world and more and more international companies looking at new markets. So far the Australian economy has been well managed by the authorities and indeed it was one of the first to exit the worldwide recession. It is imperative that inflation remains under control, the property market is not allowed to overheat and Australian consumers are kept in check.
Even though the cost of living in Australia is almost certain to increase in the years ahead, probably at a faster rate than that in the UK, this will be partly offset by an increase in the standard of living, employment prospects and economic growth as a whole. Australia is a country which was for many years in the shadows but has now emerged with a new powerful economy that is attracting attention from all corners of the globe.