Victorians suffer the biggest jump in financial distress as cost of living soars

Victoria has recorded the biggest jump in financial distress of any state over the past 18 months, renewing calls for Premier Jacinta Allan’s first budget to provide fresh cost-of-living relief.

Fifty-four per cent of Victorians are experiencing cost-of-living and personal debt distress beyond normal levels, according to Suicide Prevention Australia’s latest quarterly survey.

More and more Victorians are struggling to keep up with the cost of living. Credit: Luis Enrique Ascui

The number of Victorians struggling with everyday expenses, or to keep up with their credit card debt, was up 7 percentage points in 12 months, and 16 percentage points compared to 18 months ago.

In comparison, 49 per cent of people in NSW and 47 per cent of Queenslanders reported elevated financial distress in the three months to March – increases of 11 and 4 percentage points over 18 months respectively.

The numbers have alarmed mental health advocates, who fear a new cohort of Victorians is at a greater risk of relationship breakdowns, substance abuse issues or even self harm.

Suicide Prevention Australia chief executive Nieves Murray said the data clearly showed more needed to be done to ease Victorians’ financial and mental distress.

“The fact that we are seeing cost-of-living distress continuing to escalate despite a softening in inflation and interest rates should be of real concern for our political and corporate leaders,” she said.

Murray said now was the time for the state government to provide additional cost-of-living measures and put more money into suicide prevention. The government has previously pointed to free kindergarten, free TAFE courses and power saving bonuses as examples of it stepping in to help households.

Clinical psychologist Dr Natalie Flatt said she and her colleagues had noticed more clients raising cost-of-living pressures during therapy sessions.

“They’re struggling to make ends meet. We can see a lot of relationship breakdowns, a rise in substance abuse and, unfortunately, we do see the rise in suicide rates,” she said. “At a workplace level, [there is a] productivity dip. We can’t leave those stresses at the door.”

At the 2022 election, Labor promised to spend $4 million on a new mental health training program for Victorian apprentices. Tender documents seen by The Age show the program is expected to roll out from August and target the building industry.

Flatt said that program should be expanded to include other industries as soon as possible.

Data from the National Debt Helpline backs the debt distress figures. The helpline reported a 20 per cent year-on-year surge in calls from Victoria for the month of January.

Callers most commonly asked for advice on paying their mortgage, credit card debts and household electricity bills.

Financial Counselling Victoria boss Zyl Hovenga-Wauchope called on the government to invest more in support services.

“Financial counselling services are still grappling with heavy demand. Wait times of up to two months in some areas are not going to disappear without adequate government intervention.”

Shadow treasurer Brad Rowswell said the upcoming budget needed to include tangible hip-pocket relief.

“After a decade of Labor introducing new taxes on everything from rents, jobs, schools and even weekends away, the cost-of-living pressures on Victorian households are at crisis point,” he said. “Labor cannot manage money, and Victorians shouldn’t be the ones to pay the price of the government’s own financial mismanagement.”

The Reserve Bank left the cash rate unchanged, at 4.35 per cent, earlier this month. Its next cash rate announcement is scheduled for May 7, the same day as the Victorian budget is due to be unveiled.

A Victorian government spokesman said this year’s budget would balance minimising the burden on families and businesses while continuing to provide essential services.

If you or anyone you know needs support call Lifeline 131 114, or Beyond Blue 1300 224 636.

Get the day’s breaking news, entertainment ideas and a long read to enjoy. Sign up to receive our Evening Edition newsletter here.