For nearly 30 years, Australia has had a get-out-of-jail-free card of sorts, allowing it to weather the dot-com bust and the global financial crisis without going into recession, while most of its citizens enjoyed high wages and affordable housing. It looked like there was. And a golden outlook.
The economic recession in 2020 was caused by the coronavirus disease (Covid-19) pandemic.
But four years on, Australia still has not shaken off some of the headwinds, including rising costs of living (the price of bread has risen 24% since 2021), a volatile labor market and rising inequality. These and similar problems plague countries such as the UK and the US, but they particularly plague many people in Australia, which has long considered itself a “lucky nation”.
Australia is one of the world's wealthiest, resource-rich and stable countries. But millions of residents are experiencing a level of hardship not seen in decades. They say they are struggling to put food on the table, pay housing and medical bills and cover utility bills. And many young Australians are facing a reality that their ancestors never had to experience: that they will be even poorer than their parents and grandparents.
Robin Northam, 28, once dreamed of becoming a hairdresser. But her rising rent and exorbitant childcare costs for her two children have put her training out of reach. Just two generations ago, her grandmother raised her family in her home as a single parent while working part-time as a nurse.
“For the average Australian, that's virtually impossible,” said Ms Northam, a content creator based in Cairns. Mr Northam and his partner pay A$600 a week in rent, or about $400. “It’s a completely different world now.”
Australians pay more for almost everything. Inflation spiked due to the pandemic and has since slowed, but remains relatively high at 3.4%. Rent prices in some parts of Melbourne have increased by nearly 50 per cent year-on-year, with rent affordability at its lowest in at least 17 years. Consumer sentiment has barely improved since slumping in 2020.
Homeowners are also under pressure. Australian home loans are typically fixed for several years at a time, and interest rates have tripled to 6.7% in recent years as the central bank tries to keep prices in check by raising interest rates.
This burden has led to a sharp increase in the number of working families seeking assistance. Foodbank Victoria chief executive Dave McNamara said that for 16 years, “through the bushfires and the pandemic, we have seen people from all walks of life in need of food relief on the scale we are currently experiencing. I've never had one,” he said.
“The situation is much worse than it was before the pandemic, so there is little room for optimism,” said Nikki Hatley, an independent economist in Sydney. “Everyone is working really hard.”
Economists have long argued that Australia's wealth is too tied up in the housing market, even as poor policy, lack of construction and high immigration have pushed an already scarce housing supply into crisis. It has been claimed that
A poll conducted by think tank Par Capita last year found that fewer than one in four Australians who don't own a home expect to become one. “If you have a really stable rental system, that's not necessarily the whole story, but we have terrible laws in this country,” Hatley said.
Additionally, a shortage of rental properties has led to soaring rents in some areas, pushing young people further away from cities. Sydney risks creating a “city without grandchildren” as young families leave, a recent report warned.
Talitha Vermeulen, 25, had been considering moving within the city with her partner for the past four months. In many cases, she said, available properties are leased before viewings take place. She said, “It was frustrating that I didn't even get a chance to see the place.''
With its wealth, stability and natural resources, Australia has many advantages over most other countries. Life expectancy rates and wages remain among the highest in the world, and wage growth last year outpaced inflation. Stock markets are trading at near record levels.
But it's unclear whether it's fulfilling its rich potential, said Julian Schulz, academic and author of The Australian Idea. “What I keep coming back to is that it could be better,” she said, adding, “It's kind of a lack of ambition.”
Australians often proudly say they are a “lucky nation,” but academic and author Donald Horne's comments were originally meant to criticize the country's leaders for what he viewed as inquisitive and unimaginative. there were.
And despite this country's rich blessings and attachment to egalitarian values, wealth declines as Australia joins other countries facing rising inequality and economic and generational distortions. The uneven distribution is becoming more and more common.
Australia's Unity Wellbeing Index says economic misfortune is linked to the lowest levels of “life satisfaction” since records began 22 years ago. Lead researcher Kate Lycett said the high cost of living, troubling global politics and rising inequality were all contributing factors. “A huge number of people are struggling to make a living,” she says.
On a recent Monday morning, people waited outside a food bank at a church in the Melbourne suburb of Richmond. Coordinator Frances Flood said the food bank was supporting more than 100 families and demand had increased sharply over the past six months.
“I've seen many people who work but can't survive until the end of the month,” he says. “We're definitely helping people who you wouldn't think to use a food bank if you saw them on the street.”
Even those who own their homes outright are struggling. Tracy Shepherd, 60, lives in picturesque Surfers Paradise, Queensland, just a short walk from the beach. A former civil servant, her health problems have made it difficult for her to find regular employment and she is living on her retirement savings while awaiting a decision on her disability benefits.
She said her life feels unstable as food prices have soared and the cost of maintaining her apartment has also increased. “When I was young, we were often told that we were a lucky country. That's not the case anymore.”