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6.5 million Australians cut spending in anticipation of government support expiring

  • July 24 2020
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Invest

6.5 million Australians cut spending in anticipation of government support expiring

By Cameron Micallef
July 24 2020

Millions of Australians are cutting back on spending in preparation for the easing of government and banking support, new research has revealed.

6.5 million Australians cut spending in anticipation of government support expiring

6.5 million Australians cut spending in anticipation of government support expiring

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  • July 24 2020
  • Share

Millions of Australians are cutting back on spending in preparation for the easing of government and banking support, new research has revealed.

6.5 million Australians cut spending in anticipation of government support expiring

A Canstar survey of 1,024 people revealed that one-third (33 per cent) – the equivalent of 6.5 million Aussie adults – have told Canstar that they have changed their spending habits in anticipation of when some mortgage repayment pauses, early access to superannuation, and JobSeeker and JobKeeper income support were expected to cease.  

Steve Mickenbecker, finance expert at Canstar, believes the government’s extension of JobKeeper, JobSeeker and the early access to superannuation may help the financial burden of some in the short term, but there is still an end date to these policies that consumers are preparing for.

“The extension of government income support that was due to expire in September provides some relief for households, but Aussies need to be aware the payments are less and there is still an expiry date,” said Mr Mickenbecker. 

“Hopefully, a further six months of JobKeeper is enough to save more jobs. But for some households, this will just be a reprieve, and they should use this time to improve the resilience of their budget.” 

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According to Canstar’s results, younger Australians are more likely to tighten their purse strings.

Forty-five per cent of Millennials are cutting back spending, while a further 38 per cent of Gen Z consumers are spending less.

“Young people working in the hospitality and tourism industry have been some of the hardest hit during the coronavirus pandemic, with no choice but to cut spending,” Mr Mickenbecker explained.

“Regardless of your age or occupation, the same rules apply to all. If you’ve taken a financial hit in recent months, then now’s the time to take action and be frugal with your money.

Where to make possible savings

Mr Mickenbecker has explained a few tricks to help Australians save money. 

  • For a Sydney household, switching from the average cost of a monthly electricity bill ($112) to the lowest ($90) could mean a monthly saving of $22 or annual savings of $264.
  • For a driver in NSW, switching from the average monthly car insurance premium ($114) to the lowest ($69) could mean a monthly saving of $45 or annual savings of $540.
  • For a family with a Gold tier health insurance policy, switching from the average priced policy ($342) to the lowest priced policy ($235) with the same level of cover could mean monthly savings of $107 or annual savings of $1,284.
6.5 million Australians cut spending in anticipation of government support expiring
6.5 million Australians cut spending in anticipation of government support expiring
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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