After an agonising 15 months for Australians, it seems like there might be reason to breathe a sigh of relief with another rate rise hold confirmed. This couldn’t come a moment sooner, as these rises have continuously pushed Australians further into the depths of financial pain.
Recent data from Swag’s (Employment Hero’s new employment superapp) Australia’s Financial Behaviours Research reveals that a staggering 90 per cent of Australians have outstanding short-term credit debt, amounting to almost $38 million owing in debt Australia-wide.
According to the research, 72% of respondents said financial stress affected their happiness and wellbeing at work and home. This pause offers a chance for Australians to prioritise their mental wellbeing and recalibrate their approach to finances, especially as there’s a lingering chance that more rate rises could be around the corner.
Employers can play a supporting role in helping to alleviate this stress, even with times being just as tough for SME employers. Small gestures such as financial education and guidance on available resources for struggling employees can boost productivity and ultimately lead to better business outcomes.
Other key findings from this research include:
51 per cent can’t cover emergency or unexpected expenses like vet bills or car repairs before payday.
Of those with outstanding short-term debt, 51 per cent have missed or been late on a financial payment.
46 per cent of Australian employees said they are often (18 per cent) or sometimes (28 per cent) unable to pay recurring expenses such as rent, groceries or utilities before payday.
29 per cent of families with children under 18 at home regularly run out of money when paying for recurring expenses like rent, food and transport before payday.
The average amount of debt per person is $4,331.
Rob Dunn, Managing Director, Benefits and Payments at Employment Hero says “the decision to hold off further rate rises is a much-needed lifeline for many Australians who have been grappling with financial strain. A distressing 1 in 2 Australians can’t cover emergency or unexpected expenses like car bills before payday, this can lead to unwanted debt that continues to accumulate over time…Our economy thrives when people are financially resilient. It’s a better time than any for businesses to consider integrating financial wellbeing into their broader employee engagement strategies. As the whole of Australia navigates these economic headwinds, mutual understanding and support between SME employers and employees can go a long way in alleviating stress and building loyalty.”