Posted March 02, 2018 07:59:50 The Australian Financial Report is pleased to announce that the Australian Financial Group (AFG) is pleased the latest Australian Financial Survey has revealed the results of the Australian Households’ Report Card on the state of the economy, with a new survey by the Australian Institute of Economic and Business Research (AIEB) revealing a significant decline in Australia’s economic well-being.
The AIEB survey, which was released on Wednesday and includes a new set of questions to address the broader implications of the government’s economic policy, has revealed a substantial deterioration in Australia, with households feeling increasingly stressed and financially vulnerable.
While the AIEb survey also showed that a small number of households reported that their financial wellbeing was improving, these were relatively low levels and the overall picture was quite different.
In the past year, the AIESB has been tracking Australia’s household finances, which have increased by a further 2.5 per cent, from $1,082 billion to $1.093 trillion.
The survey also revealed that the median disposable income per household increased by 2.6 per cent over the past two years, to $30,300 per household.
“While some of the recent data from the Australian Bureau of Statistics has been quite encouraging, this survey highlights a very substantial deterioration,” said Arie Pryce, senior economist at the AriePryce Institute.
“The deterioration in the household financial situation is a consequence of both rising debt levels and falling economic activity, and it is the main driver behind our ongoing economic downturn.”
In 2017, the average Australian household spent $13,000 on debt.
The majority of Australians who took part in the Aieb survey (67 per cent) reported that they were currently in a debt situation that was “very bad”.
Households with debt in excess of $40,000 incurred the highest levels of stress (60 per cent), followed by those with debt less than $20,000 (53 per cent).
“Despite this worsening of the household situation, it is also clear that many Australians feel that their income is rising more rapidly than it is being spent on debt,” Ms Pryce said.
“This is an indication that many households are unable to maintain or maintain their current lifestyle, and this is a concern as households are facing an increasing financial strain.”
“The Australian economy is in a very precarious state, and a number of household challenges have emerged over the last year, including rising household debt levels, stagnant wages, a weakening Australian dollar and a continuing downward trend in GDP growth,” she said.
The Australian Institute for Public Policy Research (IPPR) said the economic conditions that have led to the deterioration in household financial wellbeing over the year were “particularly concerning”.
“These data also suggest that Australians are feeling less financially secure than they did a year ago, with household debt rates continuing to climb,” said David Schmitt, research director at IPPR.
“Households are increasingly reliant on the financial assistance they receive from the state, which is also a result of the high debt levels.”
Household debt levels are also likely to rise further as the economy continues to grow.
“As a result, it’s not surprising that Australians have more concern about their financial situation than they used to, given that the average household income is currently well above the pre-crisis level, which means there is a large debt burden on the household,” he said.
In 2017-18, the median household income per Australian was $26,000, down from $30