Why life’s a stressful house of cards for Australians unable to cope with financial stress

Kevin Spacey in House of Cards ... it’s unlikely Spacey needs to rely on credit to make it to the end of the month. Supplied Source: Supplied

EXCLUSIVE

Two-thirds of households are cutting back to cope with growing financial pressure.

Research by the nation’s leading consumer group, Choice, reveals the top ways people are coping with the crunch are by spending less on entertainment and clothing.

Families with school-aged children are most worried about the rising cost of living.

One in five people say they have been living off their credit card to cover the gap until next payday. This is most common among those with a home loan.

“We are concerned to see these signs of household stress at a time when inflation and

mortgage interest rates are historically low,” said Choice CEO Alan Kirkland.

Read the full report on the Choice website

How the young are getting ahead faster than the rest

Most households are having to cut back to make ends meet. Picture: ThinkStock Source: ThinkStock

Inflation — which is the rate of price increases — has been relatively tame since 2009. And most home-loan customers are paying less than 5 per cent interest on their borrowings, well below the long-run average of more than 7 per cent.

Eighty-five per cent of those Choice surveyed said household bills have increased over the past year. There is growing concern about every significant expense, which has not been the case in any of the five previous Consumer Pulse reports it has done.

The cost of keeping the lights on is the no. 1 worry, as it has been in each of the quarterly surveys. Filling up the car has risen to equal-second, alongside filling up the shopping trolley.

A rally in the oil price has caused the most rapid rise in the fuel costs in 25 years, according to CommSec economist Craig James, and was the single-largest driver of inflation in the economy in the three months to the end of June. Food and grocery costs fell slightly during that time, at least as measured by the Australian Bureau of Statistics’ Consumer Price Index.

Anxiety about costs may be being heightened by what’s happening on the other side of the equation: incomes. The ABS Wage Growth Index is rising at its slowest pace since records began in 1998.

Mr Kirkland said consumers are currently “particularly sensitive” to policy changes that affect the cost of health, education and childcare.

Choice chief executive Alan Kirkland Source: Supplied

It’s not just the Choice research that shows this — NAB’s latest Consumer Anxiety Index, published earlier this month, found the cost of living remains households’ top concern, followed by “government policy”. These have been the leading worries since prior to the last federal election.

“Addressing these concerns is important to our broader economic health, because when consumers feel scared about the future, they will refrain from the expenditure on goods

and services that drives economic activity and employment,” Mr Kirkland said.

Follow John Rolfe on Twitter: @costofliving

Bill Shorten loses out on support from key Labor leaders

Key figures on the party’s left have failed to back Mr Shorten. Picture: Mark Stewart Source: News Corp Australia

AT LEAST three of Bill Shorten’s most senior colleagues refused to support him today in his fight against attempts by the party’s left to ban Labor using asylum seeker turn backs.

There was no shouting showdown, no shredding of the Opposition Leader’s authority as the ALP national conference voted against vetoing his new policy of returning boat people to their transit country.

But at least three of his most senior shadow minister refused to support him. And that will create tension within the Opposition and encourage Government attacks on his leadership.

Mr Shorten’s relationship with Anthony Albanese — who has complained of an ambush at the conference — is expected to be in trouble.

Otherwise, politeness prevailed as the Melbourne conference voted down a left wing motion to insert in the party platform a veto on turning back boats.

The vote was lost on the hands and then on the voices. There was no count of delegates but it was obvious supporters for Amendment 232 had lost.

However, some of Mr Shorten’s senior left wing shadow ministers dodged personally supporting the leader’s position by giving their conference vote to proxies who voted to back the bans on turn backs..

They were Deputy Leader Tanya Plibersek and Labor Senate Leader Penny Wong.

Another left wing MP, infrastructure spokesman Anthony Albanese, did not speak in support of the left motion but voted in favour of it.

The only disruption in the session came when protesters with a banner reading “No Refugee Tow-Backs” took over much of the stage. They interrupted federal Labor MP Andrew Giles who wanted to do just that — pass a motion changing the platform to bar tow backs.

The banner wavers were chided by ALP president Mark Butler for preventing free debate: “We are a party with a pulse,” said Mr Butler, comparing Labor’s convention to the well-structured Liberal conference.

The critical element of Mr Giles’ motion read: “Labor rejects turning away boats of people seeking asylum. We believe it undermines the cooperation required to reach sustainable regional processing arrangements.”

He praised shadow immigration minister Richard Marles who in turn congratulated faction members opposed to his policy overhaul for a civil debate.

One of the strongest but most emotional contributions came from former Immigration Minister Tony Burke who said: “If we give hope to the (people smugglers’) trade we will end up helping less people.

“And hundreds will start the journey and never complete it.”

Mr Shorten had the final say before the vote and urged its defeat.