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Computer prices down 8.1% per year … since 1984

Computer and mobile phone now a “relative necessity” for Australian households

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The price Australian consumers pay for audio visual and computing products has fallen an average of 8.1% every year since 1984, according to the new AMP.NATSEM Income Report.

The new report (PDF), titled Prices These Days – The cost of living in Australia, says audio visual and computing products are one tenth of their 1984 prices. The report uses Australian Bureau of Statistics (ABS) data to make that assertion, and notes that the rapid pace of change in technology means comparisons can be hard over 28 years.

But the report also notes that computing and communications devices are becoming more important to Australians, and consuming more of the household budget.

Again leaning on ABS data, the report says computers, mobile phones and a CD player are all ”relative necessities” for Australians. That means a PC and mobile are of less important necessities like housing, food, energy and public transport, but of greater priority than discretionary items include booze, smokes, food someone else cooks and holidays.

Natsem Data on household IT spend

The report also notes that despite audio visual and computing products experiencing more deflation than any other category of goods, Australians spend more on them than ever before as a proportion of the household budget. The report does not divulge exact spending levels, but the graph above shows the trends.

The overall conclusion of the report is that current Australian political debate discourse focussing on curbing cost of living increases does not reflect market realities, as “price inflation in Australia and living costs appear to be relatively benign and have been for the past two decades.” Incomes have generally risen and “The average family is ahead by $224 per week ...”

Perceptions of higher living costs, the report concludes, are largely derived from the fact that Australians are now “spending more money on a whole range of new goods and, in particular, services that are either aspirational in nature or necessary in dealing with the demands of a modern society.” ®

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