A new research report by the Consumer Policy Research Centre explores the global response to COVID-19, with nationwide survey of 1114 Australians showing people are drawing on limited resources just to make ends meet.
- 12 million Australians are concerned about the impact of COVID-19 on their financial wellbeing; 1 in 5 are ‘very’ concerned
- Almost half of Australians (49%) are taking steps to manage their household expenses including dipping into savings (28%) and using credit cards or buy-now-pay-later services (22%)
- More than 1 in 4 Australians are worried about their ability to pay rent, mortgage repayments and energy bills
- Consumers are most concerned about their ability to manage housing costs – with 37% concerned about paying rent and 27% concerned about meeting mortgage payments
- 1 in 5 Australian renters and mortgagors are taking action to manage rent or mortgage repayments; seeking better deals with mortgage providers, requesting payment assistance or missing payments with mortgage providers and property managers in May
As COVID-19 exposes the frailties within systems and across the community, Consumer Policy Research Centre (CPRC)’s new research initiative Consumers and COVID-19: from crisis to recovery uncovers the challenges that consumers are facing and presents the building blocks for those attempting to support consumers over the coming 12 months and beyond.
“We asked consumers directly how they’re faring through this crisis. 12 million Australians reported concern about their financial wellbeing in May. People are most concerned about housing costs. And we’re seeing people express concern about what happens when support measures are removed.” said CPRC CEO, Lauren Solomon.
“It is startling to see 1 in 5 Australians needing to take action to manage rent or mortgage repayments – either seeking better deals from mortgage providers, payment assistance, reducing repayments or simply missing payments entirely.”
With already high levels of household debt across the Australian community pre-COVID, the report finds people are drawing down on finite resources to manage household expenses.
“More than a quarter of Australians dipped into savings in May to manage costs. People have been cancelling ongoing services and subscriptions and using credit or buy-now-pay-later to manage household expenses”. said Lauren “We’re also seeing higher numbers of renters and younger Australians applying for early access to super relative to the general population.”
“This crisis has dealt a sudden blow to household incomes and financial security. It has amplified existing vulnerabilities and pushed people into financial distress,” said CPRC Research and Policy Director, Emma O’Neill.
“What we know is that aggregate numbers don’t tell the full story. Casual workers, young people and renters appear to be faring much worse than the general population. We must ensure we design and deliver support measures to those who need them most.” Said Emma. “That means ensuring we’re listening and responding to actual experiences on the ground.”
CPRC’s report reflects on historical lessons, exploring local and global interventions to protect consumers through the crisis. The report also presents building blocks for policymakers and businesses supporting consumers on an uncertain path towards recovery, where policy choices made now will have long-term consequences.
“Now is not the time to be throwing vital protections out the window. What we need is a modern consumer protection framework delivered alongside stimulus measures to industry to ensure that consumers and the community derive maximum benefit.”
“Consumers are central to economic recovery. Household expenditure makes up over half of Australia’s GDP.” said Lauren. “The experience and actions of consumers will ultimately determine the trajectory of our economic and social recovery over the coming months and years. Fair treatment, safety and inclusion for all Australians must be at the heart of the recovery mission.”
To download Consumers and COVID-19: from crisis to recovery click here.
Consumers and COVID-19 Monthly Briefings will be available at www.cprc.org.au.
Consumer Policy Research Centre Media Release 25/06/2020.