Fuel Prices

Every Australian is feeling the squeeze of the cost-of-living crisis. From the weekly grocery bill to electricity and rent, households are under pressure in ways that would have been hard to imagine only a few years ago. For many families in Tasmania and across the nation, the financial buffer that once absorbed shocks has been worn thin.

Unfortunately, the pressures are not easing. Fuel prices remain volatile, the war in the Middle East continues to create global uncertainty in energy markets, and economists are increasingly warning that inflation risks may yet prompt further action from the Reserve Bank of Australia. If the Reserve Bank responds by raising interest rates again, mortgage holders could see another round of painful increases in repayments.

For households already stretched to the limit, the consequences could be severe. Even small increases in fuel costs or mortgage repayments can push budgets past breaking point. Some Australians may be forced into poverty, others into mortgage default, and for the most vulnerable, homelessness becomes a frighteningly real possibility.

These economic pressures do not fall evenly across our communities. Where we live plays a major role in determining how resilient we are to global shocks. This is where an important piece of research from RMIT University becomes highly relevant.

RMIT’s VAMPIRE Index — short for the Vulnerability Assessment for Mortgage, Petroleum and Inflation Risks and Expenditure — examines how household vulnerability changes depending on location and transport costs. The index highlights a pattern that urban planners have long warned about: households living on the urban fringe are far more exposed to external economic shocks than those living closer to city centres.

The reason is simple. Many outer suburban households carry large mortgages and rely heavily on cars for daily life. Long commutes to work, school, shops and services mean that when fuel prices rise, household costs spike immediately. If interest rates increase at the same time, the double hit of mortgage and transport costs can quickly overwhelm family budgets.

In contrast, households living closer to services and employment centres tend to be far less vulnerable. Proximity offers flexibility. Inner-city residents are less likely to be completely dependent on cars, and the costs of running multiple vehicles often disappear entirely.

Living closer to work and essential services allows people to walk, cycle, scoot or catch public transport. A short bus trip or a ten-minute bike ride to the office is not just good for the environment and personal health — it is also good for household finances. When global oil prices spike, people who can leave the car at home are far less exposed to the shock.

This is one of the clearest arguments for densifying our cities and supporting more housing closer to where people work and access services. Urban infill development — building more homes within the existing urban footprint — is not just about city aesthetics or planning theory. It is about economic resilience for everyday families.

Unfortunately, recent policy decisions risk taking us in the opposite direction. Planning Minister Felix Ellis’ decision to expand Hobart’s urban growth boundary to promote further development on the urban fringe raises serious concerns.

While the intention may be to address housing supply, expanding further into poorly serviced areas risks locking more Tasmanian families into precisely the kind of financial vulnerability identified by the VAMPIRE Index. When new suburbs are built far from jobs, public transport, schools and services, residents often have little choice but to rely on cars for nearly every aspect of daily life.

That may seem manageable when fuel prices are stable and interest rates are low. But when global uncertainty pushes costs upward — as we are seeing now — households in these areas bear the brunt of the shock.

The consequences for families forced into these car-dependent communities have not been fully thought through. Housing affordability cannot simply be measured by the price of a house. True affordability includes transport costs, commuting time and access to services. A cheaper house on the fringe can quickly become an expensive place to live.

Instead of continuing to expand outward, Hobart needs a stronger focus on urban infill and thoughtful densification in the city’s heart and established suburbs. That means enabling more housing close to jobs, universities, hospitals, shops and public transport.

Strategic planning led by experts must guide this process. Done well, urban infill can support vibrant neighbourhoods, improve housing supply and make our city more resilient to global economic pressures.

Transport will also play a key role. Investment in light rail along the Northern Suburbs transport corridor has the potential to unlock significant new housing through transit-oriented development. When high-quality public transport connects people directly to employment centres and services, higher density housing becomes both viable and attractive.

This is not a simple task. Urban planning involves complex trade-offs, long timelines and coordination between multiple levels of government. Housing supply, transport infrastructure, economic resilience and community needs must all be balanced carefully.

But complexity cannot be an excuse for inaction.

Hobart needs leaders with the vision and courage to tackle these challenges head-on. We need decision-makers across local, state and federal government who understand the intricacies of strategic planning and who are willing to champion policies that strengthen our city for the long term.

Densifying Hobart’s heart, supporting urban infill housing and investing in smart transport infrastructure will not solve the cost-of-living crisis overnight. But these decisions can make our communities far more resilient to the global shocks that are increasingly shaping household finances.

If we want a city that protects families from forces beyond their control, the direction of travel is clear. The future of Hobart must be built inward, not endlessly pushed outward.