More than half of Australian households believe they have fallen behind the cost of living during the past two years, at a time when wages growth is at its lowest in at least two decades.
Two in five respondents to the weekly Essential Research poll, released on Tuesday, said while they have enough for basic essentials they can’t save any money.
Only a fraction more of the 1032 people surveyed said they could save a little money after paying for essentials, and just 19 per cent of those earning over $2000 each week said they could save a lot of money.
Well over half said they were paying a lot more for their electricity and gas, followed by insurance (31 per cent), medical and dental (30 per cent) and fresh food (29 per cent).
Little wonder consumers say they are struggling to remain positive.
The weekly ANZ-Roy Morgan confidence index fell by a further 1.8 per cent to its lowest level since late May.
ANZ head of Australian economics David Plank said increased tensions surrounding North Korea may be having an impact on sentiment.
“More broadly, we think it will be difficult for consumer confidence to sustain any material rise until we see a lift in wage growth,” he said.
The wage price index for the June quarter – the Reserve Bank and Treasury’s preferred measure of wages growth – is released on Wednesday, but is unlikely to provide much joy.
Economists expect wages grew by 0.5 per cent in the quarter, which would keep the annual rate at 1.9 per cent and at its lowest level in at least 20 years.
The minutes of the central bank’s August 1 board meeting, also released on Tuesday, say recent strong employment growth would likely contribute to an increase in household disposable income and consumption growth.
“However, ongoing low wage growth and the high level of debt on household balance sheets raised the possibility that consumption growth could be lower than forecast,” they say.
Labour force figures for July are due on Thursday. Economists believe several months of strong employment results could take the jobless rate down to 5.5 per cent from 5.6 per cent, its lowest level in over four years.
The Essential poll also found less than a third of Australians believe the Turnbull government is doing a good job managing the economy.
About two in five respondents gave the government an “average” mark on its economic performance, and only 15 per cent said they liked government policies and the progress it was making.