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Economic recovery fails to relieve financial stress
Despite Australia’s rapid economic recovery from the COVID-19 pandemic, one in three Australians is still feeling financially stressed, just weeks before JobKeeper and JobSeeker end, new research shows.
Economic recovery fails to relieve financial stress
Despite Australia’s rapid economic recovery from the COVID-19 pandemic, one in three Australians is still feeling financially stressed, just weeks before JobKeeper and JobSeeker end, new research shows.
Survey data by the University of Melbourne and the Melbourne Institute shows that 31 per cent of respondents are now reporting difficulty in paying for essential items.
According to the survey results, 26 per cent of respondents say they’re “making ends meet”, while 43 per cent said they feel financially comfortable.
Self-employed Australians report the highest levels of financial stress and mental distress. Fifty per cent say they are financially stressed and 15 per cent are only making ends meet. Almost half – 47 per cent – are mentally distressed. Those on fixed term (73 per cent) and casual (77 per cent) contracts are more vulnerable to adverse income shocks.
Professor Guay Lim, author of the report, said the results suggest that economic recovery is not being felt equally across Australian society.
“The data from this latest wave suggest that not everyone is seeing the benefits of the economic upturn and this is having a serious impact on Australians’ financial and mental wellbeing,” Professor Lim said.
“This is an opportunity for policymakers to address the persistent issue of job insecurity and underemployment, particularly among low and middle-income earners.”
Despite the official unemployment rate continuing to fall and job listings rising, thousands of at-risk workers still face challenges when JobKeeper and JobSeeker benefits end on 28 March.
The report also showed that many Australians are disagreeing with key decisions around government policies, with it falling to a record low.
“Just 46 per cent of Australians are satisfied with government policies to support jobs and keep people at work, compared with 62 per cent in April 2020,” the survey showed.
ME Bank’s consulting economist, Jeff Oughton, highlighted during the latest ME Bank financial comfort survey that Aussies would feel the pinch once government benefits end.
“A decline in household financial comfort is likely to play out over the next six months as government support – especially JobKeeper and JobSeeker − is phased out,” he said.
“Australia’s labour market also remains weak, with many workers reporting very high underemployment, together with increased expected difficulty in finding a job and subdued wage gains, if any.”
The report has found that over half of the surveyed Aussies expect that it will be more difficult to find a new job in the next two months while also expecting their financial situation to worsen.
“Unless the economy gains further momentum from a rundown of these large saving buffers and a faster pace of household spending, prematurely ending government support could have negative consequences on the financial comfort of many households. Wide gaps in financial comfort across households could reemerge,” he concluded.
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