Since Covid, there has been a dramatic change of fortunes with an alarming disparity developing between those feeling the heat of higher costs and and mortgages and those who don’t.
Only a third of Australians have a mortgage, another third are dealing with crippling rents and then there is the third who remain above the fray, mostly older, wealthier Australians who have paid off mortgages and seen their children leave the nest.
The Commonwealth Bank released data showing that those under the age of 45 are cutting back, while those over the age of 55 are spending more, possibly because they have paid off their mortgages and were earning a higher return on deposits.
It’s that working, middle class who are looking for the baseball bats, a term former Premier Wayne Goss used when referring to the anger in the community for the Keating Government, which was a graphic example of what happens when governments forget their central role.
An election is like a release valve for community anger and in Queensland there are extra issues like crime which have taken centre stage and add to community frustration.
We are living in an era when Australian living standards have fallen dramatically. Disposable incomes have fallen below the 2019 level, according to OECD. Since June last year they are down 5.1 per cent.
The seeds of any economic crisis are often sown in dealing with the previous one and disposable income has been on a roller coaster ride since 2020 when the Morrison Government threw an extraordinary amount of money at Covid.
Disposable income soared, fell and soared again in June 2021, but since September of that year it has been on a rapid decline to be just below that 2019 level. In the meantime, costs have soared.
We are the worst in the OECD, but far from alone. Norway, Sweden, Ireland, Austria, Italy, Canada, the Netherlands and Germany have all gone backwards.
Since interest rates started rising in May, 2022, repayments have soared. Someone with a $500,000 loan is paying $1210 a month in mortgage repayments.
Stemming from that, a survey by the University of Melbourne, the Melbourne Institute and Roy Morgan showed an alarming high level of community stress.
It found that of the 18 to 54 demographic, singles, single parents, couples with children, unemployed, part-timers, and those living in Queensland, WA, Tasmania, and the NT reported rates greater than 50 percent for one or more of housing, energy, health, and food insecurities.
“Compared to six months ago, we see increases in challenges associated with covering housing/ utilities and seeing a doctor. For many groups, challenges associated with getting enough food (and healthy food) have started to decline,’’ the survey report said.
“In many groups, at least 20 percent of respondents have difficulty making ends meet in terms of eating or paying for housing.’’
That’s an alarmingly high level of financial stress.
“Australians face challenges in making ends meet. We are starting to see improvements in the coverage of housing and food costs, but this is balanced with increasing challenges in covering utility bills and taking care of our health,’’ the report said.
“We are juggling priorities to be able to cover our day-to-day expenses. Prices have been rising and interest rates are higher than they have been for some time.’’
While the anger is clearly strong in the working middle class, they are not alone.
Shareholders, who were once more concerned about hoarding franking credits, have turned on corporate Australia which continues to show a knack for being completely out of touch. Did someone say Optus?
Well, they’re not alone. Shareholders have taken out their own baseball bats and waved them above their heads at various AGMs in recent days. Qantas, Woolworths, Tabcorp, Magellan, AMP and Endeavour have all had first strikes against them this year.
People have clearly had enough.Jump to next article