If you follow the news, recent reports surrounding tax cuts and the annual income of Australians would have you believe that an income of $85,000 a year is the norm for most Australians. However, official government figures given to The New Daily by the Treasury indicate the average wage is really just over $62,000 a year.
But the median (a more useful figure) is actually just over $55,000, and figures from the Grattan Institute show the median tax-filer’s income is just under $45,000. Making the lower end of the scale the more usual.
The latest Household Financial Comfort Report by ME Bank found that in the past year, 17 per cent of households couldn’t always pay their bills on time.
Seeking Financial Help
The same report found that 19 per cent of Australians had sought financial help from friends and family in the past year, and 15 per cent had sold or pawned something to pay for necessities.
ME Bank reports that 25 per cent of households in Australia have less than $1000 in savings, and many Australians are dipping into their savings to pay for bills and necessities. A survey of 11,000 young people aged 18 to 29 by broadcaster Triple J found more than half of young people have less than $5000 saved, a quarter have less than $1000 saved, and a tiny five per cent have more than $50,000 sitting in their accounts.
ME Bank found around 40 per cent of Australians spend all their income by the end of the week, down from 43 per cent six months ago, and 11 per cent over spend.
42 per cent of households still had the same income as a year ago, while 24 per cent had their incomes cut and just 34 per cent have increased incomes from a year ago.
The ME report found that 38 per cent of Australians are worried about their debt and around four in 10 people with debt reported they wouldn’t be able to manage their minimum repayments. A survey by Triple J discovered that one quarter of Australians aged 18 to 29 had more than $5000 worth of debt, not including HECS or Help Loans. According to ASIC, around 1.9 per cent of Australians are drowning in credit card debt, and a mind-blowing $45 billion dollars of debt is owed nation-wide, with interest being charged on $31.7 billion of it. The Australian Securities and Investments Commission (ASIC) found the average Australian owes around $3,251 on credit cards.
According to findings by the 2016 Census, 30.9 per cent of Australians are renting. The same Census results found that just 31 per cent of Australians own their home outright, and 34.5 per cent own a home but are currently paying off a mortgage.
ME Bank's report found that 45 per cent of mortgage holders are paying more than 30 per cent of their incomes towards their home loans, while only 67 per cent of renters spend more than 30 per cent of their income on rent.
The Generational Divide
The survey by ME Bank found that Gen X (35-54) are experiencing the lowest level of financial comfort compared to other generations. Baby Boomers have the highest financial comfort of all generations due to their net wealth, closely followed by Gen Y, while Millennials are experiencing large declines in financial comfort.
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