Commonwealth Bank of Australia (CBA) has released their quarterly update of the Australian Consumer Financial Wellbeing Report. The report established that the financial wellbeing of the average Australian was up by 7.8% over the past year.
The average financial wellbeing score is calculated out of 100, with this year’s being a 51.1, up 3.8 points from the 47.4 of march last year.
The exciting part of this rise is that it represents the largest year on year difference and highest overall level ever seen since the report’s establishment in 2017.
Such an improvement in Financial Wellbeing following the pandemic is nothing short of a surprise. A couple of reasons for the increase are believed to be government fiscal policy intervention, expansionary monetary policy, widespread loan deferrals, emergency access to superannuation and changes to consumer spending patterns during unexpected lockdowns.
During the past year, the report also found that the median inflow and income increased more than outflows and spending, allowing room for precautionary spending to also increase over the same period.
This could also have an influence on the decrease in Australians reporting that they were ‘having trouble’ and ‘just coping’ by around 5.5%. Additionally, there were 17% fewer Australians consistently spending at high levels, 16% fewer Australians living pay-check to pay-check and 10% fewer Australians with an insufficient safety-net.
The report has stated the state by state differences in financial wellbeing, with the highest average levels of financial wellbeing are found in ACT at 53.8 and VIC at 53.7. The lowest levels are found in NT at 46.9 and QLD at 48.1. Additionally, age differences were found, with Australians aged between 30-39 (+4 points or 8.9%) and 40-49 (+4.5 points or 10%) had the greatest increases, while those aged over 80 had the smallest increase in financial wellbeing (+3 points or 6.9%).
The latest economic indicators are looking promising according to CBA’s report. Factors like total employment, total hours worked and the underemployment rate almost all back to pre-COVID levels.
CBA’s report gives us promising insight into the future of Australian’s financial position and our country’s economic strength as a whole. Although the past year has proved challenging, the latest statistics have shown us that things are looking up.
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