I can't believe that's the actual conclusion of the report
Now I haven't read the bugger (and probably won't find the time) but the "perceptions of higher living costs" are mostly down to it costing more to live. It doesn't matter if you're lifestyle has changed or you've taken up an expensive drug habit - it costs more to live.
Let's see, in 1984 (or close enough to) I was paying a half share of $120 a week rent, petrol cost 60c a litre, a schooner of beer cost under $2 and I was making about $350 in hand a week. In 2012 that same house would rent for just under $500 a week, petrol costs $1.50 a litre, a schooner is around $5 and someone in my position then would be doing well if they take home $600 a week. But hey, it all works out even 'cause mobile phones and big TVs are cheaper...
I think I just spotted the problem here - the report was authored by AMP rather than any sort of credible source. For those not familiar with the Australian retail investment market, these guys are probably the biggest financial services company in Aus. I can well imagine that the price of German sedans, Japanese electronics and Colombian cocaine is of more concern to them than rent or food.