Australians face $2,000 cost-of-living surge from April 2023

Australians are bracing for a sharp rise in living costs from April 1, 2023. A mix of higher interest rates, soaring fuel prices, and the end of energy rebates will squeeze household budgets. Over a third of people already report being financially worse off than last year, with many relying on credit for basic expenses.

The Reserve Bank of Australia's decision to lift the cash rate to 4.1% on March 17, 2023, has added around $120 a month to repayments on an average $736,000 mortgage. This increase alone will cost homeowners an extra $1,440 a year.

On top of this, health insurance premiums will jump by an average of 4.41% from April 1. The timing coincides with the end of the federal government's $450 annual energy rebate, meaning households will soon receive unrebated bills. Fuel prices are also climbing sharply. The closure of the Strait of Hormuz has disrupted global oil supplies, pushing 91 octane unleaded petrol to between $2.40 and $2.50 per litre. Diesel is nearing $3.00 per litre in some areas. Recent data shows diesel in Melbourne averaged 1.74 AUD/litre in early 2026, up from 1.67 AUD/litre months earlier. In Perth, petrol prices rose from 1.60 AUD/litre to 1.62 AUD/litre over a similar period. Supply shortages and doubled fuel demand have further strained reserves, leaving Australia with around 30 days' worth of stock. Experts warn these combined pressures could add over $2,000 in annual costs for the average mortgage-paying household. Many are already struggling, with 43% using credit to cover everyday bills.

The financial strain will hit hardest from April, as households face higher repayments, insurance costs, and energy bills. Switching electricity providers or reviewing health insurance plans could save some families hundreds of dollars a year. Without relief, the pressure on budgets is expected to grow in the coming months.