Young and lowly paid most vulnerable: RBA

Original article by John Kehoe
The Australian Financial Review – Page: 9 : 24-Jun-20

Research from the Reserve Bank of Australia has found that most households had sufficient wealth at the onset of the coronavirus-induced recession to ride out a temporary fall in income. However, only about half of younger Australians had enough liquid assets such as savings to pay their expenses for three months. A similar percentage of workers in sectors that were hardest hit by coronavirus lockdown measures had limited capacity to meet their expenses at the start of the recession. The RBA research is based of the findings of the Household and Labour Dynamics in Australia survey in 2018.

CORPORATES
RESERVE BANK OF AUSTRALIA

Rich hit hard as households lose $102b

Original article by Andrew Tillett
The Australian Financial Review – Page: 5 : 7-May-20

Research by the Australian National University highlights the economic impact of the coronavirus pandemic. The ANU’s survey suggests that the nation’s employment rate fell to 58.9 per cent in April, compared with 62 per cent in February. This equates to the loss of about 670,000 jobs. The ANU also estimates that the total loss of income for Australian households since the lockdowns began is about $102bn, while after-tax income on a per capita basis has fallen from $740 a week to $663. The richest 10 per cent of households have been hardest hit, with their income falling from $2,110 per week to $1,688.

CORPORATES
AUSTRALIAN NATIONAL UNIVERSITY

One in five households facing mortgage stress

Original article by Duncan Hughes
The Australian Financial Review – Page: 3 : 3-Jan-20

Around two million households are finding it hard to make mortgage repayments despite low interest rates, according to comparison website Finder. The number of households in this position has risen since May 2018, the month before the Reserve Bank made the first of its three cash rate cuts. Brendan Coates from the Grattan Institute notes that borrowers should be looking around more for better mortgage rate offers, while Kate Browne from Finder comments that "mortgages need constant monitoring"

CORPORATES
FINDER.COM.AU, GRATTAN INSTITUTE, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Debt down; Australians have never been richer

Original article by Matthew Cranston
The Australian Financial Review – Page: 3 : 20-Dec-19

Average household wealth increased by $10,698 in the September quarter, to a record $428,573.5 per person. The Australian Bureau of Statistics data also shows that the household debt to assets ratio eased from 18.9 times to 18.5 times during the quarter, which coincided with two interest rate cuts and income tax relief. Meanwhile, the household savings rate rose from 2.7 per cent to 4.8 per cent in the three months to September, but growth in consumption fell to 0.1 per cent, compared with 0.4 per cent in the June quarter.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS

Reserve finds silver lining in household debt cloud

Original article by Cliona O’Dowd
The Australian – Page: 27 : 15-Nov-19

Australia’s household debt-to-income ratio is now about 190 per cent, compared with around 70 per cent in the early 1990s. However, the Reserve Bank’s assistant governor Michele Bullock notes that households that are in the top 40 per cent of income distribution account for three quarters of household debt. Bullock adds that while there has also been an increase in mortgage loan arrears, it is largely confined to several states. She also says negative housing equity is generally not a major concern unless somebody becomes unemployed and must sell their home.

CORPORATES
RESERVE BANK OF AUSTRALIA

Labor reckless, irresponsible for public sector wage call

Original article by Richard Ferguson, Michael Roddan
The Australian – Page: 4 : 31-Jul-19

Shadow financial services minister Stephen Jones says the federal government should stimulate the economy and wages growth by increasing salaries in the public sector. He argues that the government is a major employer and it should "lead by example" in boosting wages. His comments follow the release of Household, Income and Labour Dynamics in Australia survey data, which highlights the low growth in average income since the global financial crisis. Finance Minister Mathias Cormann contends that public sector employees receive "reasonable and affordable" pay rises via workplace bargaining.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIA. DEPT OF THE TREASURY, ACTU, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH

Aussies no better off since GFC

Original article by Adam Creighton
The Australian – Page: 1 & 4 : 30-Jul-19

The latest Household, Income and Labour Dynamics (HILDA) survey shows that average household income in Australia increased by just 3.5 per cent (or $3,156) between 2009 and 2017. Analysis also shows that the median annual income in 2017 was $542 lower than in 2009, while the median income has fallen by $100 since the Coalition was elected in 2013. Meanwhile, the share of households in relative poverty has increased to 10.4 per cent, while the share of households living in absolute poverty has been steady at around four per cent since 2012. Interviewing for the HILDA survey is conducted by Roy Morgan.

CORPORATES
UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, AUSTRALIAN BUREAU OF STATISTICS

Stretched Australians unable to reduce debt

Original article by Matthew Cranston
The Australian Financial Review – Page: 9 : 9-Apr-19

An EY survey has found that just 28 per cent of Australians expect to reduce their debt in 2019, down from 60 per cent in 2018. The survey also found that more than 60 per cent of respondents were ‘extremely’ concerned about the cost of living, suggesting that more people are not able to cut their debt because they lack the ability to do so, rather than a lack of desire to do so. It is possible that some Australians could use the tax cuts announced in the April 2019 Budget as an opportunity to reduce their debt.

CORPORATES
ERNST AND YOUNG, RESERVE BANK OF AUSTRALIA

Household wealth plunges by $10,000, the most since 2011

Original article by John Kehoe
The Australian Financial Review – Page: 9 : 29-Mar-19

Data from the Australian Bureau of Statistics shows that the nation’s overall household net worth fell by $257bn in the December 2018 quarter. This equates to an average of $10,198 per household, and followed a decline of $2,263 in the September quarter. The ABS notes that household net wealth had not declined for two consecutive quarters since the final three months of 2011. Factors such as weaker housing prices and a sharemarket slump weighed on household wealth in the December quarter.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, AMP CAPITAL INVESTORS LIMITED, STANDARD AND POOR’S ASX 200 INDEX, HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA

Inequality flatlines in Australia

Original article by David Uren
The Australian – Page: 8 : 1-Mar-19

The OECD contends that there has been no increase in inequality in Australia in the last 15 years, which is at odds with Labor’s claim that inequality is rising. The OECD states that the income of the poorest 20 per cent of the population has risen the most since 2001, while middle-income earners have seen the lowest increase in income. It suggests that this is because workers in this income bracket are most vulnerable to automation. The OECD’s study was based on the Melbourne Institute’s Household Income and Labor Dynamics (HILDA) survey, with the OECD stating that income inequality in Australia is above the OECD average.

CORPORATES
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, AUSTRALIAN LABOR PARTY, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH