Aussie households worse off

Published: June 19, 2008 - 02:04 PM

Households worse off compared to a year ago

The Melbourne Institute’s June Household Saving and Investment Report released today has shown that Australian households are worse off today than they were a year ago.

The report shows that interest rate rises have influenced the behaviour of consumers, with 20.3 per cent of homeowners in the June 2008 survey stating that they would use any extra funds to pay off their mortgage or other debt, as compared to last year when only 12.7 per cent of homeowners said they would use any extra funds for this purpose.

Consumers are still most concerned with saving for holidays or for putting money away for a “rainy day”. But the increase in interest rates and other essential living costs has put pressure on the household budget, where more money is being allocated to cover the basics leaving little for luxuries or additional savings.

David Power of ShopAround.com.au says that “The average Australian household is finding it more and more difficult to make ends meet. We are now living in an environment of rising costs, with petrol costs reaching new highs every day, the cost of groceries going up every time you shop and other costs, such as electricity and gas prices increasing all the time. And as the impact of climate change and rising oil costs hit big business, more cost hikes are going to be passed straight on to consumers.”

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