Nearly 170,000 Australians Contacted Debt Helpline Last Year

Customers at cafes and retailers in Perth, Australia on Feb. 6, 2021. Stefan Gosatti/Getty Images

In 2024, more than 169,000 Australians turned to the National Debt Helpline, a notable 12 percent increase from the previous year.

While inflation shows signs of easing, this sharp rise highlights the persistent strain on households as cost-of-living pressures remain a formidable hurdle.

Peter Gartlan, co-CEO of Financial Counselling Australia, highlighted the growing strain.

“Cost-of-living pressures are mounting and having a significant impact on the financial well-being of many thousands of Australians,” he said.

Housing stress, utility bills, credit card debt, personal loans, buy-now-pay-later schemes, and tax debts remain the primary concerns of those seeking support.

Inflationary Pressures Persist

Recent figures from the Australian Bureau of Statistics revealed that the Consumer Price Index (CPI) rose to 2.3 percent in the 12 months to November 2024, up from 2.1 percent in October.

Key sectors, including food and recreation, continued to experience price hikes, presenting difficulties for the government in mitigating inflation’s impact.

Small to medium businesses (SMBs) have also felt the squeeze, with a survey conducted by the University of NSW and the Commonwealth Bank finding that nearly 80 percent of SMBs faced cash flow problems in the past year.

Challenges such as declining revenue (35 percent), low cash reserves (30 percent), and seasonal fluctuations (27 percent) have forced 27 percent of business owners to dip into personal savings, forego salaries, or both.

Rebecca Warren, CBA executive general manager of small business banking, noted the importance of getting cash flow under control.

“While it’s encouraging to see small business owners take proactive steps to manage their cash flow, some—like dipping into savings or not paying themselves—may not be what’s best for the business or the owner in the long term,” she said.

Budget and Productivity Concerns

As Australians do it tough, John Humphreys, chief economist at the Australian Taxpayers’ Alliance, expressed concerns about the country’s long term outlook.

He pointed to rising costs centres like the National Disability Insurance Scheme (NDIS), childcare subsidies, and an ageing population.

“The budget situation is doubly worrying because Australia also desperately needs another round of serious tax cuts to kickstart productivity,” Humphreys said.

He criticised the prolonged implementation of stage three tax cuts, noting that they only balanced out bracket creep marginally.

With Australia experiencing the longest per-capita recession on record (individual economic productivity), Humphreys warned the current income tax system was still a burden.

“Unless the government can kick their current addiction to big spending projects, we are destined to pass on a high-tax, low-productivity, and high-debt future to the next generation,” he added.