Guest The Pom Queen Posted September 13, 2017 Share Posted September 13, 2017 The rapidly rising cost of essentials like housing, energy and education is pushing households deeper into debt, according to the latest figures from the Australian Bureau of Statistics (ABS). The 2015-16 Household Expenditure Survey shows the average family spent about $1,425 a week — $190 more than six years earlier. Household debt had also doubled since 2003-4, with the average family owing $169,000. Property debt accounted for nearly 90 per cent of this. The largest weekly expense for families was housing — such as rents and mortgages — followed by food and then transport. However, the amount spent on power and energy had jumped 26 per cent since 2009-10 — an increase of 11 per cent in real terms. Emily Maron and Peter Gagliardi have five children under the age of nine and balance their weekly budget down to the last cent. They have amassed a $6,000 power bill debt, despite using a payment plan. "Most of the money goes on rent. Food is a big one and school, and then the bills are huge," Mr Gagliardi said. The family lives on $597 a week, less than half the average income. "It comes to the point where it is ridiculous," Mr Gagliardi said. According the latest ABS figures, the largest proportional increase of any spending category was on education — jumping 24 per cent in six years. Ms Maron said money needed for school trips could blow their budget, with their eldest children needing iPads for class, and constant demands for special school days and trips. "Things are always coming up at school that they can't participate in and that separates them from the rest," she explained. 30 years ago, food was our biggest expenditure Going back further, in 1984 it was food and non-alcoholic drinks that most people spent their money on, and housing was the third-highest category, making up just 13 per cent of spending. The proportion spent on education has more than tripled over the past 32 years, while money spent on clothing and footwear has more than halved. Across Australia, the Northern Territory and ACT spent the most on goods and services, despite Western Australian having the greatest rise in median weekly household income, from $1,111 to $1,782 over the past 10 years. Tasmania saw the smallest rise in average weekly income, from $950 to $1,209, and had the highest number of low-income families. The ABS said nearly 30 per cent of Australian households were over-burdened with debt, with mortgages the driving cause. Not surprisingly, higher-income households were more likely to be swimming in debt, given their access to credit. A quarter of the households in the top income bracket were over indebted, compared to one in six low-income families. More people in Sydney amassed more mortgage debt than Melbourne, with Sydneysiders owing on average $269,000 more than their Melbourne counterparts. However, the ABS said the gap between rich and poor remained stable. "The wealthiest 20 per cent of households in Australia has remained stable since 2013-14," ABS chief economist Bruce Hockman said. Yet figures showed inequality in net wealth was higher than income inequality. However, the St Vincent De Pauls Society said over the past three years, more and more low-income families had come to them needing help. What could go wrong? "They are seeing mounting bills and have to make choices every week as to what they can pay and can't pay, and always have that sense of dread about the next bill," the charity's Victorian CEO Sue Cattermole said. "So they may ask us for food but in fact it may be something else that is a stress for them." While Mr Gagliardi struggles to make ends meet, he remains confident he can clear his mounting debt and get his family back on track. "I have worked out a 10-years plan, just give me another five years," he said. Quote Link to comment Share on other sites More sharing options...
Guest263228 Posted September 13, 2017 Share Posted September 13, 2017 Cheap money to purchase over priced housing in a time of stagnating wages, hence falling living standards, was always going to play out badly for a large number of people. Australia is badly in need of good governance to even begin to get a grip on the crisis ahead. A reduction in immigration, from present still historically high levels, to at least normal levels urgently needed. An urgent inquiry into housing and affordability (and banks) being another. It looks like interest rates will not be too far off beginning to rise upwards. All too many will be impacted as are only just managing to keep head above water, at a time of record low rates. Canada has already started the rate rise process. 1 Quote Link to comment Share on other sites More sharing options...
Parley Posted September 13, 2017 Share Posted September 13, 2017 Interest rate rises are a long way off, as confirmed by the RBA. Growth is low and does not justify any rise in interest rates for the forseeable future. http://www.theage.com.au/business/the-economy/i-mean-hello-rbas-ian-harper-says-growth-too-slow-to-justify-rate-hike-20170913-gygn7t.html So as you were really for quite a few years yet. Quote Link to comment Share on other sites More sharing options...
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