Income inequality may be declining but financial vulnerability is increasing

If you needed A$2,000 in a hurry where would you get it? 70% of those we surveyed said they would ask friends or family, although almost half said that it’s very or fairly unlikely that their social connections could help.

This is just one of the takeaways from our new report, funded by NAB, that shows financial resilience is declining in Australia. Large numbers of Australians are struggling to meet expenses, pay bills and manage or recover from financial shocks despite two decades of GDP growth, declining income inequality and increasing financial capability.

And while more adults in Australia are reporting regular social contact, and fewer are reporting needing community or government support, the number of Australians needing support but not receiving it has increased from 3.2% to 5.3%.

The problem is especially acute for those on low incomes. A recent report found most low-income households are unable to afford a minimum and healthy standard of living, with their incomes falling short by between A$9 and A$89 a week.

In this week’s Household Expenditure Survey, the Australian Bureau of Statistics found that two in every five households are experiencing at least one indicator of financial stress. In households with incomes in the bottom 40%, this ratio increases to one in two. Read more

Kristy Muir & Axelle Marjolin - The Conversation - 15 Sep 2017