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A new report indicates that financial pressures are becoming a collective problem as Australians’ cost-of-living anxiety begins to have an impact on the fabric of society.
The second edition of the Australian Cohesion Index shows that rising costs – particularly that of housing – are having a material effect on the country’s societal wellbeing.
The index, created by The Scanlon Foundation Research Institute, was first published in 2021, though the institute has been mapping key indicators of Australian cohesion since 2007.
It examines several areas to assess Australians’ sense of belonging and perception of wellbeing. They are: trust in society and democratic processes; belonging and the extent to which Australians feel a sense of identity in their communities; economic and material wellbeing on both a personal and collective scale; and health and wellbeing as related to life expectancy and mental health.
In this report, it became clear that those who are experiencing financial hardship are more likely to be unified in some of the indicators that suggest division in Australian society.
Along with age, financial position is the most important predictor of a person’s perceived sense of social cohesion.
“People who describe themselves as poor or struggling to pay the bills are 29 per cent less likely to have a great sense of belonging in Australia than people who are prosperous or living very comfortably, 16 per cent less likely to feel they belong in their neighbourhood, 45 per cent less likely to trust the federal government all or most of the time, and 40 per cent less likely to believe that most people generally can be trusted,” it explained.
People who are struggling financially are also 32 per cent more likely to report being unhappy in the last 12 months.
And when it comes to the country’s diversity, those with tight finances are less likely to believe that multiculturalism has been good for Australia.
“In 2022, 30 per cent of Australian-born adults who described themselves as poor or struggling to pay the bills agreed that immigrants take away jobs, compared with 14 per cent of those living very comfortably or prosperously,” the index found.
The increasing cost of living, therefore, is not only a threat on a personal scale, but one that has the ability to shift the balance in Australia’s way of life, tipping the scales between trust and distrust of the government, neighbours, wider communities and the country’s new residents.
And while the report mainly looked at data prior to the more recent, sharp rental cost increases and rising interest rates, it noted that housing pressures have become an ever-heavier weight on Australians’ bottom lines.
Using the 30/40 rule, which determines the households that are facing housing stress if they are paying more than 30 per cent of their income in rent or mortgage payments and they are in the bottom 40 per cent of income earners, the index found that housing pressures have grown rapidly as a stressor for the country’s residents in recent years.
In 2019–20, 42 per cent of lower income households living in rented housing were living in housing stress, which is an increase from 35 per cent in 2007–08.
“We do not yet know how many households have experienced housing stress since 2019–20. We do know though that rents have increased sharply across the eight capital cities since the end of 2021,” the report noted.
As Peter Mares wrote in an introduction to the 2023 release, Australia is a country that shows a remarkable ability to come together in times of struggle, proving that the underlying cohesion of the country is strong as it responds to calamitous flooding or fire events. But when it comes to more complex issues that have been years in the making, the country struggles to find common ground.
“In the face of sudden catastrophe, Australians demonstrate a great capacity to put community welfare ahead of narrow self-interest. Even in more ordinary times, countless Australians generously support fellow citizens by volunteering time and skills or donating money and resources,” he noted.
“But we are not so effective at responding to slow moving disasters that require a systemic response – disasters that have been decades in the making and will take decades and billions of dollars – to unwind. Climate change is one example, the housing crisis is another.”
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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