Household budgets are being stretched with the latest cost-of-living index rising at its fastest annual growth rate in four years.
The living-cost index for the June quarter, published by the Australian Bureau of Statistics, rose by 0.4 per cent.
The cost of living for aged pensioners and benefit recipients lifted 2.5 per cent over the past 12 months, with employee households' costs up 2.3 per cent and self-funded retiree households hit by a two per cent rise.
The index answers the question: "By how much would after tax money incomes need to change to allow households to purchase the same quantity of consumer goods and services that they purchased in the base period?"
CommSec senior economist Ryan Felsman said petrol prices, medical and hospital services and alcohol and tobacco price rises are stretching budgets.
At the same time wage growth sits at 2.1 per cent.
ACTU secretary Sally McManus said it showed Australians needed a pay rise.
"Working people need the tools and power to win fair pay rises," she said.
"This includes the ability to band together in groups larger than small workplaces. The enterprise-only bargaining system is failing."
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