Concerns over rising costs of necessities, stagnant income growth and prospects of increased loan rates are stressing Australian households, a survey has found.
The latest ME Household Financial Comfort Report, which surveyed 1,500 Australian households, revealed that concerns over budget balancing are increasing, as 51 per cent are found to have no spare cash at the end of each month. Rising costs of groceries, fuel and utilities have been blamed, along with weak salary growth and rising underemployment.
“Australian households are under financial stress,” said ME Bank consulting economist Jeff Oughton to ABC’s AM. “They’re concerned about the rising cost of bills but also there are income woes, interest rates are starting to rise and there’s mortgage and rental stress.”
While the unemployment rate has gone down, underemployment is still strong, with 27 per cent of casual and part-time workers saying they were eager to increase their hours.
Furthermore, 68 per cent of the respondents reported wage fall or stagnation in the past 12 months, and 40 per cent of households in debt are becoming less confident about their ability to repay their mortgage.
RBA’s eventual plan to lift the cash rate is also expected to worsen this burden on Australians “as it will impact monthly cash flows, ability to pay off debts, save and spend”, Oughton said. “It will bite into those young couples with children, single parents and also generation X-ers who are concerned about the impact on their monthly cash flows from rising rates.”