Australians set for frugal Christmas as cost-of-living bites

The Christmas lights that sparkle in Australia’s towns and cities will likely dazzle less brightly in December, as more and more households labour under a relentless cost-of-living crunch.

Nearly 12 per cent of Australians will put up fewer lights compared with earlier years and nearly one in five say they won’t put up any lights at all in a bid to save money on electricity.

The festive season frugality comes as households pare back spending, as interest rates rise and inflation eats into spending power.

The Australian Bureau of Statistics also shows household incomes fell 5.1 per cent in the 12 months to June 2023.

Alongside dimming their Santa and reindeer lights, nearly one in 10 Australians will try to reduce their power bills by investing in solar and LED Christmas lights.

The great Aussie tradition of lighting up the house with Christmas lights will likely be pared back in 2023, as households look to save money on power bills. Supplied Credit: News Corp Australia

But Compare the Market head of energy Meredith O’Brien said Christmas lights were not the central price challenge for cost-conscious households.

“Depending on your electricity plan, the type of lights you use, how many you display and how long you keep them on for, Christmas lights may only add a few dollars to your bill for the whole Christmas period,” she said.

“LED Christmas lights use significantly less electricity than the incandescent ones you may have used in the past, while solar options don’t draw electricity from the grid.

“It’s typically other things that contribute to higher bills over Christmas, such as blasting your airconditioner, cooking Christmas meals, plugging in the spare fridge for your festive food and drinks or entertaining the kids with additional screen time.

“We are expecting a hotter and drier summer thanks to the declared El Nino and coupled with higher electricity prices, chances are you’ll be paying more than you have in the past.”

Compare the Market surveyed 1005 people in October to assess how Australians were thinking about electricity usage over Christmas.

About 30 per cent of respondents said they would reduce their reliance on airconditioning and 32 per cent said they planned to switch off unused appliances at the wall.

About 10 per cent said they would not use an extra fridge or freezer over Christmas.

“Ideally, you want to set the temperature between 25 and 27 degrees,” Ms O’Brien said.

“It can be tempting to set it to a lower temperature, but each degree cooler can actually add up to 10 per cent more to your electricity usage.”

The Victorian Energy Services Commission also reported on Tuesday a substantial increase in households seeking power bill relief across the 2022-23 financial year.

A monthly average of 22,666 Victorian electricity customers accessed tailored assistance, meaning they could not pay their ongoing bill, in the year compared with 20,345 in 2021-22.