Majority of Australians are at risk of financial vulnerability

Australians are not expecting the coronavirus (COVID-19) pandemic to be over in three months, with Victorians most concerned about its economic impact as restrictions increase amidst the recent surge of cases, the latest Taking the Pulse of the Nation survey shows.

Led by the Melbourne Institute: Applied Economic & Social Research at the University of Melbourne, the weekly survey tracks changes in the economic and social wellbeing of Australians. The 13th wave of the survey was conducted from 29 June-3 July.

Compared to two weeks ago, the survey shows more Australians think that the pandemic will last longer than three months – an increase from 76 per cent to 80 per cent in early July.

Melbourne Institute Professor Guay Lim said expecting a longer recovery increases concern for supporting those who are financially vulnerable.

“We define financial vulnerability as those who are not, or just barely, making ends meet,” Professor Lim said.

“The proportion of Australians vulnerable to financial stress has been above 50 per cent since the survey began in early April. While around 25 per cent are reporting difficulties paying for essential goods and services, about another 25 per cent are reporting that they are making ends meet.”

Researchers say the recent surge in new cases of coronavirus infections has spooked Victorians. In wave 13 of the survey in early July, Victoria had the highest proportion (85 per cent) expecting the personal impact to be beyond three months.

In terms of financial vulnerability, however, Victorians are similar to the rest of Australia, with 56 per cent in a precarious financial position. This demonstrates that even though the spike in cases has affected Victorians the most from a health perspective, the concern around finances is universal.

“Understanding the locations of Australians vulnerable to financial stress is important for implementing targeted regional income-support and social welfare policies,” Professor Lim said.

In a Research Insight paper based on the survey, researchers look at where the financially vulnerable are located in Australia. Their work demonstrates that financial vulnerability at a community level is wide-ranging. The threat of financial stress is as high as 81 per cent in some communities and as low as 41 per cent in other communities.

“Factors such as work and age are important and we find that areas with lower access to economic resources, populated with younger people, tend to experience higher levels of financial vulnerability,” Dr Tim Robinson, one of the authors of the research, said.

Interact with the results of the Taking the Pulse of the Nation survey on our tracker page.

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*The weekly survey by the Melbourne Institute: Applied Economic & Social Research at the University of Melbourne contains responses from 1200 people aged 18 years and over, with the sample stratified by gender, age and location to represent the Australian population.