Cost-of-living crunch sends Australian families to the financial brink

Inflation and interest rate rises are driving middle-class Australians into poverty, as more than half of households slice food spending, and a quarter ditch doctors’ visits | EXCLUSIVE POLLING

Young Australians are being hardest hit by cost of living increases. Melbourne student Catherine Baker has had to cut back on her university study so she can work four days a week to pay her bills. Picture: Aaron Francis

Bill shock and housing hardship are pushing Middle Australia into poverty, as more than half of households slice food spending, and a quarter ditch doctors’ visits, in a cost-of-living crisis likened to a natural disaster.

Struggling Australians across every age and income bracket are slashing spending on basic needs such as food, electricity and transport, in the wake of 13 interest rate rises that have failed to snuff out rampant inflation.

The highest interest rates in 12 years have turbocharged the cost of housing, through higher mortgage costs that flow into rising rents.

The Australian’s exclusive Needs of the Nation survey reveals that millennials have been hit hardest by the rising cost of living, with one in three 18 to 34-year-olds skipping meals to save money in the past 12 months.

Cutting back on grocery spending, takeaways and eating out is most common in the child-raising cohort of 35 to 49-year-olds, who are also the most likely to re­finance loans or switch utility providers to save money.

Among the over-50s, one in five skipped meals, just over half reduced spending on groceries and two-thirds cut back on dining out and takeaway meals.

Foodbank, a charity that gives free groceries to the needy, on Sunday revealed it had met with Reserve Bank officials to plead for an end to interest rate rises.

Brianna Casey, chief executive of the Foodbank charity, has appealed to the Reserve Bank to pause interest rates hikes.

Foodbank chief executive Brianna Casey said requests for food increased within days of every ­interest rate rise, as middle-class working families struggled to pay the rent or mortgage.

Likening the cost-of-living ­crisis to a natural disaster, she revealed that some parents were juggling multiple jobs while working day and night to avoid losing their homes. “These are the human faces of cash rate decisions,’’ she said. “I (have) met with the RBA and implored them to consider the real-life consequences of these cash rate increases.

“Every time we see the Reserve deliberating on cash rate increases, we brace for what is to come. People are living so close to the edge that they are choosing to meet the mortgage repayments over feeding themselves.’’

Ms Casey said some families were keeping children home from school because they couldn’t afford school lunches or bus fares.

“Those who are on the lowest incomes, as well as those who are living on what previously were considered to be quite reasonable incomes, are hurting,’’ she said.

The Australian’s polling reveals women are more likely than men to be tightening their belts by cutting spending on groceries and health care.

Even the wealthiest households are slashing spending on life’s essentials: almost a quarter of those earning more than $200,000 a year have delayed seeing a doctor, and half have reduced their grocery spend in the past year.

In the poorest households, 28 per cent of people have delayed or avoided medical treatment and 57 per cent have cut spending on groceries.

The highest rates of hardship are reflected in households earning $60,000 to $80,000 a year, with 35 per cent delaying a doctor’s visit and 69 per cent cutting back on groceries. In a trend that has alarmed the Australian Medical Association, 28 per cent of Australians delayed or avoided seeing a doctor this year, with another 17 per cent unable to buy a prescription medication.

AMA president Steve Robson said Medicare rebates for GP visits had failed to keep up with the rising cost of providing care, so doctors had to charge more to cover increases in rents, insurance and staff wages.

“If you’ve got a family with sick kids, or you’ve got a problem like a mental health condition or diabetes, you have to see a doctor all the time,’’ he said.

“Paying $40 or $50 or even more out of pocket every time you see your doctor means often you can’t pay your rent or put food on the table, you can’t buy school books.

“Often people can’t afford to see a GP … so they end up getting worse, and the only place they can actually get care is an emergency department.’’

The proportion of Australians too poor to pay for medical treatment has doubled in a decade, based on 2024 polling by The Growth Distillery and research examining key questions for the nation commissioned for The Australian’s 60th anniversary this month.

In 2014, 14 per cent of Australians surveyed by Newspoll for The Australian’s 50th anniversary revealed they had delayed or avoided seeing a doctor due to cost-of-living concerns.

The Growth Distillery survey shows half the nation’s households are trying to minimise soaring power bills by turning off lights or appliances when not in use.

Eight per cent have refinanced loans for a cheaper interest rate, and 6 per cent moved house to save money in the past 12 months.

A quarter of people are buying second-hand goods online or from op-shops, instead of shopping for new items, in a trend that is undermining a shaky retail sector.

Only 10 per cent of people surveyed have not taken action to tighten their belts in the past 12 months, The Growth Distillery survey of 987 people shows, when asked what they had they personally done to save money over the past 12 months.

As we scrimp on groceries and healthcare, the latest inflation data from the Australian Bureau of Statistics reveals the cost of petrol and rent is outstripping wage increases. While wages grew by 4 per cent, in total, in the 12 months to March, the cost of petrol rose 9.3 per cent, rents increased 7.4 per cent, electricity bills blew out by 6.5 per cent and insurance premiums jumped 7.8 per cent.

Monthly repayments for the average $625,000 home loan have soared from $2310 to $3861, forcing homeowners to find an extra $1551 every month, since the RBA began raising interest rates two years ago.

National Union of Students president Ngaire Bogemann said many university students were dropping out or studying part-time so they could work longer hours to pay rising rents.

“They’re not eating three meals a day, and are going without the bare necessities of medication or doctors’ appointments or feminine hygiene products – they simply cannot afford them,’’ she said.

“A lot of student organisations will run food pantries and free breakfasts, and these services are completely overrun with students.

“At the University of Melbourne, our union runs a supermarket where students can come and pick up some groceries for free, and we have lines around the block for that every single week.’’

Bachelor of arts student Catherine Baker, 22, has cut back her study load so she can work four days a week, juggling lectures and assignments with two jobs in retail and on a factory floor.

The financial necessity to work will delay her graduation by a year.

“It’s really stressful,’’ Ms Baker said of the work-study juggle.