Australians are seeing basic expenses gobble up a larger share of their household budgets, but are experiencing less financial stress, according to new figures released from the Australian Bureau of Statistics (ABS).
The cost of living
According to the 2015-16 Household Expenditure Survey (HES), approximately 59% of weekly household spending went towards the basic essentials, such as housing, food, energy, health care and transport. This is up from the 56% of household spending on basics recorded in 1984.
Largest contributors to household spending:
|Food (20%)||Housing (20%)|
|Transport (16%)||Food (17%)|
|Housing (13%)||Transport (15%)|
While spending on housing was found to have increased by 25% since the last ABS survey in 2009-2010, larger increases in spending were recorded for education (44%), household services and operations, such as cleaning products and pest control services (30%), energy (26%), and health care (26%).
Stress free living?
The ABS survey also found that in 2015-16, 1.3 million Australian households (15%) reported four or more markers of financial stress, down from 16% in 2009-10. What’s more, the proportion of Australian households who did not report experiencing any markers of financial stress was found to have steadily increased, from 54% in 2009-10 to 59% in 2015-16.
It remains to be seen whether this situation could change if the housing market were to shift – separate ABS data classifies around three-in-ten Australian households (29%) in 2015-2016 as ‘over-indebted’, with mortgaged households being the most likely (47%) to be over-indebted.
With many over-indebted households (77%) lacking sufficient liquid assets (e.g. cash, shares) to cover a quarter of the value of their debts, these households could be at risk of defaulting on their loans if their incomes are not sufficient to meet repayments.