Soaring cost of basics drives surge in demand for help
The cost-of-living crisis is forcing Australians to seek help in unprecedented numbers, reports Christopher Williams The cost-of-living crisis -- more than any other life upheaval -- is driving more Australians than ever to seek outside assistance, the Salvation Army has warned.
Jennifer Kirkadly, the welfare group's general manager for welfare and advocacy, told The Burne one in three people seeking help from the Salvoes was identifying rising prices as the reason they needed support, above traditional drivers such as job losses or unexpected emergencies. “When we drill down into the budgets of people that we’re working with, we find that it is the non-negotiables ... housing, medicine, groceries, food ... that have really increased at a much higher rate than the economy-wide CPI (consumer price index),” she said.
Nervous times: Callum Stuart is feeling the pinch of rising interest rates and soaring petrol costs. (Photo: Christopher Williams)
The CPI shows a 6.7 per cent increase in housing costs in the last 12 months, second only to transport (13.7 per cent), a finding supported by the Salvation Army's frontline experience. “The biggest issue is housing, and the cost of housing, in terms of the drivers for us,” Ms Kirkaldy said. For young homebuyers, rising interest rates have presented a challenge even for those with a toe in the market, with the shift from fixed rate loans to flexible rates causing anxiety for many.
Callum Stuart was advised to get a flexible rate when he purchased a block of land so will avoid the shock of a sudden shift from fixed to flexible, but is still nervous about the trajectory of interest rates.
"I was pretty nervous at the start but he advised me to go with a flexible interest rather than a fixed one," Mr Stuart said.
"They are rising currently so I am getting a bit unsure about the future." The surge in interest rates and general cost-of-living pressures have forced him to delay building on the block. “I’ve only bought land, because I actually didn’t have enough money saved for a house and land package,” he said.
“I’m in the middle of potentially changing jobs, so I’ve got a bit of unsureness there.”
He also worries about the amount he spends on essentials. “Food and petrol are pretty necessary, and I’m constantly travelling to work, and I’m quite far away,” he said. “I’ve got to pay for petrol quite a lot which is expensive.”
The Salvation Army called for urgent action to address the housing crisis and welfare reform in its submission to the Senate cost of living inquiry.