Hard times: Australian households and financial insecurity, 2018.

The report is part of the ‘Spinning the plates’ qualitative project, which aims to understand how low and moderate income Australian households are coping with financial uncertainty, and how they manage their finances to cope with changes in their fortnightly income or an unexpected expense.

The study examined the financial circumstances of people with low and uncertain incomes in Melbourne, with data collection methods including interviews and fortnightly surveys. The findings indicate that addressing financial hardship will involve not only building financial literacy and skills but also a fit-for-purpose social security system and economic development to underpin secure employment.

Key points

  • Drivers of economic insecurity: Insecure work and inadequate incomes. The study notes that precarious employment, low and erratic wages, inadequate and increasingly conditional welfare payments, and escalating living costs are making life financially insecure for many people in Australia.
  • Impacts of insecurity: Paying the rent or mortgage comes first; it costs more to be poor. The study notes that with low incomes, often very little is left after paying mortgage or rental costs. Moreover, there is a poverty premium to everyday costs, since households cannot afford to buy in bulk or invest in items that are more reliable.
  • Strategies for coping with insecurity: Juggling risks; doing without; borrowing, lending and trying to create buffers. The study notes how low-income households do assess, prioritise and manage a complex mix of short and longer term risks, sometimes by avoiding expenditure in necessary goods or services, or by borrowing or trading from their networks. However, this makes it hard to save for the longer term.

Policy opportunities

  • Investment in social infrastructure: The study asserts that dominant policy and program approaches to financial insecurity tend to focus on the provision of information with the aim of changing individual behaviours and attitudes. This approach, the authors contend, casts into the political shadows the drivers of poverty: inadequate and unstable incomes, the social pervasiveness of indebtedness, higher costs of living for low-income households, and an insufficient, increasingly conditional welfare safety net.
  • Enabling conditions: Thus, the study concludes, fostering economic security requires an investment in enabling conditions and more equitable social infrastructure.

(Source: Brotherhood of St Laurence | Read the report)

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