Financially stressed Australians could soon receive more support for living costs as the government explores additional assistance.
However, support may not be in the form of cash handouts, as Prime Minister Anthony Albanese worries it might worsen inflation.
“Our priority will be to provide cost of living relief whilst taking pressure off inflation,” Mr. Albanese announced on Dec. 3.
He said the Treasury and the Department of Finance are working on new cost-of-living policy ideas ahead of the May budget.
While Treasury and Finance will decide the specifics, Mr. Albanese highlighted the energy price relief plan as an effective example of reducing financial pressure.
“Because instead of giving cheques to people, it reduced their bills substantially, and we worked that through with Treasury and Finance, and it made a substantial difference in a reduction of wholesale prices,” he said.
Further, he noted fee-free TAFE, introduced in 2023, as another example of effective relief.
He said free TAFE addressed “longer-term issues of labour market shortages and supply chain issues that Australia has to deal with in order to continue to put that downward pressure on inflation.”
Other support already in place includes increased Commonwealth rent assistance and help for single mothers.
“We also want to help more Australians live in their own home,” Mr. Albanese said.
“Already 26,000 people have been helped in the first six months of our expanded home guarantee scheme. We'll continue to strengthen Medicare, and all 58 urgent care clinics that we promised would be open by the end of the year are now up and running right around Australia.”
He said that the support in place aims to ease the financial pressure on people due to global inflation.
“Australians, of course, were hit by the pandemic, and then they were hit by global inflation, which was a result of two global impacts. One was the ongoing supply issues related to the pandemic, and the second, of course, was the illegal Russian invasion of Ukraine that had an impact on prices here as they did right around the world,” he said.
Moreover, Australians are feeling the pressure of rising consumer prices and a sequence of interest rate hikes, reaching 4.35 percent, which is aimed at tackling inflation.
‘Deeply Concerned’: Opposition Urges Government to Cut Spending
However, the opposition has urged the federal government to control inflation by reducing spending rather than offering cost-of-living assistance.Nationals leader David Littleproud warned Australians will face increased cost-of-living pressures from higher food prices due to Labor’s changes to the Pacific Australia Labor Mobility (PALM) Scheme.
The scheme allows agriculture and food processing industries to hire workers from the Pacific islands and Timor-Leste when there aren’t enough local workers.
Changes to the scheme will mandate farmers provide at least 30 hours per week, over four weeks, to workers from nine Pacific Island countries and Timor-Leste.
“This is despite agriculture work being seasonal and weather-dependent and short-term workers already receiving an average of 42 hours per week, making the added bureaucracy futile,” Mr. Littleproud said.
“Unfortunately, everyone’s going to pay for this because farmers simply can’t afford not to pass this on to you at the checkout.”
“The PALM Scheme has the potential of just 42,000 workers and is now even more unattractive for farmers to sign up to. The result will be farmers will choose to plant less, and that means families will pay more.”
Australia’s major food industry groups previously said agriculture needs 172,000 more workers, but only about 16,000 PALM workers have arrived.
Deposits Exceed $1.4 Trillion
Despite rising cost pressures, households continue to save money, putting over $99 billion (US$66.8 billion) more into the bank in November 2023 compared to the same time last year, according to data from the banking regulator.APRA data showed November deposits surpassed a record high $1.4 trillion, marking a 0.7 percent increase ($10.5 billion) from October and a 7.5 percent jump compared to a year ago.
The deposits range from transaction accounts to mortgage offset accounts and savings accounts.
RateCity research director Sally Tindall said the data showed people are committed to saving money for a rainy day.
However, she said the growth in money saved in the bank has slowed over the past three months to November as households dip into their spare cash to cope with rising costs of rents, mortgages, and daily expenses.
“For many families under severe financial stress, it’s not spare cash they’re eating into, but rather what they have left of their life savings,” she said.
At the same time, Australia’s total credit card debt accruing interest charges increased by $129 million, marking the first rise since May 2023.
“For the last four months, Australians have been making steady progress in bringing down credit card debt, but October’s results have broken this streak,” Ms. Tindall said.
Therefore, the Australian Council of Social Services (ACOSS) urged action in the May federal budget, proposing increased income support, permanent measures to lower energy costs, and eliminating Stage 3 tax cuts to ease the cost of living.
ACOSS Acting CEO Edwina MacDonald said the soaring rent and energy costs are causing severe financial distress, pushing those with the lowest incomes to the brink.
“Community services are at a breaking point, unable to keep up with the demand from people in desperate need of support,” she said.
