Blue Flower

FINANCIAL STRESS RISING AS MORE HOUSEHOLDS SPEND MORE THAN THEY EARN

Financial stress is increasing in New South Wales and the number of households which are spending more than they earn has escalated during the past five years, according to a new Wesley Mission report launched in Sydney. The Wesley Report reveals that an alarming 44 per cent of NSW households are suffering financial stress – up from 37 per cent in 2010. The survey also found that 38 per cent of NSW households are spending more than they earn - a seven per cent increase from 2010. Wesley Mission commissioned Urbis to survey 500 NSW households in late 2014 and to compare the results with those found in 2010. 

“It is a telling reality that translated state-wide almost four in ten or 1,022,010 households are now technically insolvent,” said the CEO of Wesley Mission the Rev Dr Keith Garner who launched the Report with the Deputy Chair of ASIC Mr Peter Kell. Between 2010 and 2015 disposable income has decreased and an increasing number of households are spending more than they earn. “When there are no savings to fall back on when an illness or misadventure hits, hardship usually follows,” Dr Garner said. The ability to manage spending has also declined over time with fewer households able to keep a budget, growing from five to 19 per cent since 2010. 

“Politicians of all persuasions draw the analogy between government and household spending – the need to balance the budget,” Dr Garner said. “It is clear that households are not balancing their budgets and that the burden of debt is increasingly shifting from the public to the private sphere. “Households are simply not living within their means and are unable to save money.” According to the Wesley Report the increase in financial stress during the past 5 years is not surprising given that there have been large price increases in household-related expenses. According to the Consumer Price Index, between 2008 and 2013 consumer electricity prices rose by 83%, followed by water and gas prices with an increase of 63% and 57% respectively.  


In addition, between 2006 and 2011, Australian consumers were spending at least 30% more on health insurance, medical and health expenses, utilities, mortgage repayments and education. The evidence from this Wesley Report suggests that it is not one specific aspect of financial stress that is driving the total increase in 2014; rather it is a more subtle general increase across all aspects that is having an impact. 

As in 2010, in 2014 the most common selected indicators of financial stress were: 

•          16 per cent of all households had to seek help from family and friends in 2014

•          16 per cent of all households were not able to pay electricity/gas/telephone bills on time

•          12 per cent were not able to pay for car service/repairs

•          12 per cent or one in eight households were not able to pay for medical care; and

•          12 per cent had to pawn or sell something  


Financially stressed households were more likely to have characteristics like: 

•          an income of $52,000 per year or less

•          the main source of income being government benefits

•          a decline in annual income over the past 12 months

•          spending more than they earn

•          a rolling credit card debt and an inability to pay this off on a yearly basis. 

“Financial hardship and financial anxiety is impacting upon the health, safety and wellbeing of individuals and their families,” Dr Garner said. “This places a much bigger strain on medical and community services and demands a much bigger investment in addressing the management of financial stress through more counselling and education. We are also aware that financial difficulty generates a range of other issues. People who are struggling with financial stress often have other hardships such as anxiety, homelessness, addiction, or domestic violence. These difficulties can push some people beyond the point where they feel they can cope.” 

In this latest Wesley Report more than one in five respondents indicated that financial stress had resulted in physical illness, relationship issues and mental health issues. The findings from the study also reinforce the link between substance abuse and financial stress, with 15 per cent of respondents indicating that they have drunk alcohol excessively as a result of financial stress, five per cent taking non-prescribed prescription drugs and three per cent taking illegal drugs. While 63 per cent of non-financially stressed households believe they can meet future expenses, only 12 per cent of financially stressed households believe they can.  

Nearly half of financially stressed households indicated that it would be impossible to meet a $2,000 payment; this compares to only 6% of those in households not classified as being financially stressed. Wesley Mission believes that there is a need for a review of the requirements for financial advice, and for the creation of a simple level of personal financial advice without the in-depth assessments that are prohibitive to people in financial stress who are seeking advice. The promotion and awareness of advice and education opportunities needs to be increased across the sector so that in the midst of tension and uncertainty, people experiencing financial stress can find a practical and relevant pathway to advice and planning.                              

Wesley Mission seeks to promotes greater awareness of the issue of financial stress in both the community service provision and financial industry sectors. A broader provision of counselling programs across these sectors would also increase the awareness and availability of education and lower cost options of advice for those in financial stress. We must have a broader approach to identifying and directing those experiencing financial stress to advice and education so that they can improve their financial literacy. This broader approach should be promoted to those experiencing financial stress. Financial lenders and services should also provide information as to where individuals can find relevant financial counselling. 

“Lenders need to seriously consider the efficacy of this approach: the introduction of simple independent financial education programs promoted through lenders would provide borrowers with a basic understanding of their capability to service different avenues of credit,” Dr Garner said. “This would also benefit the lender as it would lower the risk of borrowers defaulting.” Wesley Mission is also calling for greater awareness of the experience of women in financial stress, especially among the services and financial counsellors that they engage with, to ensure that their needs are not going unseen and that their vulnerabilities are not made worse. 

“For decades we have had health and fitness campaigns and it is now time for us to recognise that financial health is also important for physical and mental wellbeing,” Dr Garner said. “The evidence in this Wesley Report only underlines the fact that such concerted action is needed more than ever. The costs to individuals, the community and governments are far too great.”

Source: Press Release - Wesley Mission Sydney

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PUSH FOR LABOR MP'S TO VOTE FOR SAME-SEX MARRIAGE IRRESPECTIVE OF PERSONAL VIEWS

Labor conservative and union heavyweight Joe de Bruyn says his party would be “foolish” to allow a binding vote on same-sex marriage and predicts MPs will cross the floor on the issue. The national president for the Shop, Distributive and Allied Employees Association, the country’s largest trade union, said the party’s existing position of a conscience vote should remain. It comes after a push within the Labor Party to compel MPs to vote for gay marriage, saying that Labor should change its platform at the party’s national conference in July. “I think the Labor Party is wise enough not to get itself into that sort of difficult area,” Mr de Bruyn said.

“At a time when the Labor Party has the Coalition on the ropes, it’s hardly likely to go and adopt a particular policy which is going to make it look very bad in the public eye. The Labor Party is not that foolish.” Mr de Bruyn, who is also on the party’s national executive, said he would oppose the move on the floor at the national conference if necessary and believed many leaders in the party would do the same. “I wouldn’t get too excited about what some are proposing because the Labor Party has an established policy of a conscience vote on this and I expect this to remain,” Mr de Bruyn said.

Deputy Labor leader Ms Tanya Plibersek said she expected “life or death” issues like abortion and euthanasia to remain conscience vote issues but that gay marriage was not in that genre. “This is an issue about legal equality,” Ms Plibersek said. “Marriage of course for some people is a religious sacrament but for many, many people it is ... a legal agreement, it’s an acknowledgment by our community of the rights and responsibilities that a permanent relationship presents and I think when you’re talking about an issue like this, which is an issue of legal discrimination, it is important for the Labor Party to say, ‘We don’t agree with legal discrimination’.”

Labor MP Bernie Ripoll agreed with Mr de Bruyn, saying the party’s policy should remain a conscience vote on gay marriage. II think what Labor will do is what it’s always done on these matters and I think people will vote with their conscience on matters they feel are critically important to them,” he said. “I think there is a now a natural majority within the parliament and I think if we were to have this vote the party would support it.”

Source: Compiled by APN from media reports

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TASMANIA RESTORES RELIGIOUS FREEDOM TO FAITH-BASED SCHOOLS

The Australian Christian Lobby has applauded the passing of a bill restoring the right of religious freedom to faith-based schools. This amendment to the Anti-discrimination Act will bring Tasmania into line with other states and territories in allowing faith-based schools to select students who share their ethos. “In the same way single-sex schools are able to positively discriminate in favour of students of one gender in order to ensure the goals and culture of the school are maintained, religious schools should also have this right in order to preserve their ethos and community culture,” Mr Brown said. “The proposed changes will support the rights of parents who want to educate their children a certain way” Mr Brown said.

“It will also ensure schools can continue to make certain the distinctions that make the school what it is, thereby ensuring diversity in the types of schools available in Tasmania.” The amendment will not, as some have suggested, unfairly target minority groups within the community but will acknowledge the vital place freedom of conscience and religion has in a healthy democracy. “Article 18(4) of the International Covenant on Civil and Political Rights (ICCPR) specifically protects the right of parents ‘to ensure the religious and moral education of their children in conformity with their own convictions’,” Mr Brown said.

Source: Australian Christian Lobby

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