Since perceptions towards household finances were first surveyed in mid-April there has been a broad-based improvement. Around 2 in 3 households now report the state of their finances had "remained the same" in the preceding 4-week period comparaed to only 55% as of mid-April. Finances were assessed to have improved for 16% of households — up slightly from 14% previously, while the proportion of households that felt finances had deteriorated was now running at a much lower 19% from 31% around two months earlier. The timing of this latest survey lines up with restrictions having been eased to either stage 2 or 3 of the national 3-stage plan in all states and territories. The key message appears to be that perceptions towards household finances improved with restrictions being eased allowing more Australian to return to work and earn income, while the government's fiscal support programs swinging into full operation by this stage is also likely to have been influential as well.
Source: ABS
Importantly for overall confidence, financial stress appears to be at a very low level. A total of 88% said they would be able to raise a sum of $2,000 within a week for something important, up from 81% in mid-April. Around 94% of households expected that they would be in a position to pay all upcoming bills over the next 3 months while only 3% assessed they would be unable to pay at least one of their bills on time. By consequence of social distancing and shutdowns, the March quarter national accounts reported that the household saving ratio lifted sharply to 5.5% in Q1. This survey found that some 8% of Australians had drawn on these savings over the preceding 4-week period to meet living expenses, while only 2% had been required to reduce mortgage repayments for this purpose.
Analysis was also provided on the government's two key income support measures. Around 11% of respondents were receiving the JobKeeper payments, which provides a wage subsidy of $1,500 per fortnight. Of these recipients, 48% said the payments were lower than their usual pay, 33% said it was about the same, while 20% said it was more than usual. The other measure is the JobSeeker payment that could be accessed by Australians that had lost work or had their hours reduced due to the pandemic but who did not qualify for the JobKeeper scheme. The government announced a $550 supplement payable to all JobSeeker recipients on top of existing allowances, effectively doubling the maximum payment available to around $1,100 per fortnight. This survey found that 8% were receiving the $550 supplement payment, with the most common uses being for essentials such as paying bills and groceries. Key for the government is working out the way forward with these schemes, both of which are due to conclude by around the end of September. This must be carefully considered as the risks associated with a hard end date are transitioning to much higher levels of unemployment and household finances and confidence deteriorating.
In terms of spending intentions, the key findings out of the survey focus on respondents who said they had decreased their level of spending as the result of the social distancing restrictions brought in. The majority of these respondents said they planned to increase their spending mainly in the areas of household services including recreation and leisure (74%), eating out (73.9%), private transport (73.4%), personal care (69.9%) and child care (66.2%). However, areas of retail demand appear likely remain flat with spending intentions staying the same for the majority of respondents in household goods (71.5%) and clothing and footwear (52.2%).
The latest gauge of the types of activities Australians are most comfortable in resuming continue to be concentrated around essential purposes. Causing most discomfort are going to gyms and pools, playing sports and attending open house inspections or auctions.
Analysis was also provided on the government's two key income support measures. Around 11% of respondents were receiving the JobKeeper payments, which provides a wage subsidy of $1,500 per fortnight. Of these recipients, 48% said the payments were lower than their usual pay, 33% said it was about the same, while 20% said it was more than usual. The other measure is the JobSeeker payment that could be accessed by Australians that had lost work or had their hours reduced due to the pandemic but who did not qualify for the JobKeeper scheme. The government announced a $550 supplement payable to all JobSeeker recipients on top of existing allowances, effectively doubling the maximum payment available to around $1,100 per fortnight. This survey found that 8% were receiving the $550 supplement payment, with the most common uses being for essentials such as paying bills and groceries. Key for the government is working out the way forward with these schemes, both of which are due to conclude by around the end of September. This must be carefully considered as the risks associated with a hard end date are transitioning to much higher levels of unemployment and household finances and confidence deteriorating.
In terms of spending intentions, the key findings out of the survey focus on respondents who said they had decreased their level of spending as the result of the social distancing restrictions brought in. The majority of these respondents said they planned to increase their spending mainly in the areas of household services including recreation and leisure (74%), eating out (73.9%), private transport (73.4%), personal care (69.9%) and child care (66.2%). However, areas of retail demand appear likely remain flat with spending intentions staying the same for the majority of respondents in household goods (71.5%) and clothing and footwear (52.2%).
The latest gauge of the types of activities Australians are most comfortable in resuming continue to be concentrated around essential purposes. Causing most discomfort are going to gyms and pools, playing sports and attending open house inspections or auctions.
Source: ABS
Specifically on travel, Australians would be hesitant to head overseas for a holiday when border restrictions are eased, though there are more constructive signs on the domestic front with 55% of respondents keen to go on a trip.
Of those willing to take a domestic holiday, 25% said they would travel within 6 months of restrictions being eased, 44% between 6 and 12 months and 31% after 12 months.
