Around four in 10 Australians (39%) are reporting financial difficulties and people are negative about their immediate outlook as household cost of living issues begin to bite hard, SEC Newgate’s latest Mood of the Nation Report finds.
Our 2nd bi-monthly report for the year also finds the cost-of-living crisis seems to be falling hardest on 35 to 49-year-olds – those most likely to be holding mortgages and starting families – with 48% of them saying they are financially struggling, and women (43%).
As the Albanese Government is set to deliver its first annual Budget in May, cost of living continues to rise, with a record 62% of Australians nominating it unprompted as their most important issue (up 5% since February), and 70% considering reducing cost increases to be an “extremely important” national priority.
The survey conducted over the 13th-18th April finds growing financial stress with 11% of the community saying they are having a lot of difficulty paying bills and covering basic living expenses.
While the political spotlight has been on energy prices, grocery prices are the greatest worry, followed by, electricity and petrol prices, with rental and mortgage payments other top concerns amongst those paying them.
Housing and rental affordability concerns have jumped sharply in the aftermath of the pandemic, with unprompted concerns almost doubling in 12 months, from 18% in May 2022 to 31% in April 2023. Interest rates as an issue has risen from 2% to 18% in the same period. This in turn has fed into concerns about rental prices, with an increasing number of Australians (57%) believing it is extremely important to increase in the availability of affordable rental housing.
The housing crisis has emerged after a record 10th interest rates hike, which while having now been paused, may continue its upward trend at the RBA meeting in May. The return of high migration rates and the lag in supply of housing construction will also test this issue.
Unsurprisingly nearly half (47%) claim to be feeling more anxious than usual due to cost of living concerns. Most Australians (57%) are cutting back on entertainment expenses to cope, calling off holidays (42%), dialling down their heating and cooling (34%) and being unable to buy their usual groceries (30%). 22% say they are having trouble paying their bills on time or relying on buy now, pay later (17%).
Around four in ten (42%) think their standard of living will continue to worsen in the remainder of 2023 with only 20% of Australians predicting any improvement this year. Women particularly are pessimistic, with 47% seeing a drop in their living standards and only 16% think it will get better.
While there was support for the rapid expansion of public debt to manage and provide relief during the COVID pandemic, Australians believe it is now time to rein in public debt – forecast to hit the $1 trillion mark. 73% believe debt is too high and that majority view is shared across men and women and across all age and voting categories. To do so, most prefer that the Government focussing mostly on spending cuts rather than tax increases.
There is high in-principle support for reducing debt across the community, although the acceptability of measures to do so is split across party lines. The most acceptable measures included crackdowns on welfare cheating and rorts (particularly favoured by Coalition voters), higher personal taxes on high income earners and increased company tax rates (favoured more by Labor and Greens voters). There is also strong support for reining in the cost of the public sector, supporting cuts in pay rises for public servants, and reducing the size of government.
In related findings, 65% support the low and middle income tax offsets which were a temporary measure by the former Coalition Government and are due to expire in the May Budget.
There has been a slow but very gradual decline in pessimism about the short-term future of the economy (50% think it will get worse in 3 months down from 57% last November) and the longer-term 3-year prediction remains mostly optimistic (62% think it will improve). Again, we find a confounding situation where improvements to the economy are not yet translating to improved personal financial situations.
Australians largely believe the nation is heading in the right direction (49% vs 53% in February) with the strongest confidence in the governments of Western Australia (67% consider it to be performing good or better), South Australia (63%), Victoria (54%) and NSW (50%). Apart from Queensland (40%) this suggests that wall-to-wall Labor governments have captured the centre ground, despite the immense challenges to living standards that have emerged post-pandemic.
The Voice retains slight majority support (52%), however it’s steadily slipped from 59% in May 2022. Women (54%) are more likely than men (49%) to support The Voice. In age categories, it has strongest support amongst 18-34-year-olds (66% support, 13% against) and 35–49 year–olds (50%/21%). Amongst the States, Victoria is most strongly supportive (60%/ 20%), followed by NSW (54%/26%), while support is weakest in WA (43%/30%) and Queensland (41%/34%). Only 26% of Coalition voters support the Voice, with 50% opposed.
Unsurprisingly the new NSW Government has made a strong start, with 1 in 2 people (50%) rating its early performance as excellent to good. However, people have high expectations that the government will go to work to tackle their priority issues of housing affordability, improving staffing levels of hospitals, building and upgrading new hospitals, and ending further privatisation of energy assets.
Contact us for more information about the full Mood of the Nation research report.
David Stolper, Partner, SEC Newgate Research – [email protected]
Sue Vercoe, Managing Director, SEC Newgate Research – [email protected]