Financial literacy on the decline

The survey is conducted by the Melbourne Institute and is the country’s only nationally representative longitudinal household study following the same group of Australians over their lifetimes. The latest report of the study uses data up until 2020 to reveal the impacts of the COVID-19 pandemic on Australian households.

The report showed inequality declined significantly in Australia with the largest fall in the survey’s 20-year history as governments provided unprecedented emergency income support and other measures to respond to the growing pandemic.

The Melbourne Institute estimated 23 per cent of workers got JobKeeper in 2020. Researchers said the payment pushed inequality lower and raised income growth for lower-paid workers.

The report also revealed that just under half of Australians (45 per cent) said the pandemic made their lives worse. Unemployed people, people with disability or mental health concerns, and people who are extroverted were the most likely to feel their lives were much worse because of the pandemic.

The onset of the COVID-19 pandemic saw the biggest rise in job insecurity in 20 years as nearly one in 20 workers (4.5 per cent) reported losing their job nationally, with even more in Victoria (5.3 per cent). Almost one in 10 Australian workers (9.6 per cent) were stood down without pay.

More younger people lost their job than other age groups, with 7 per cent of working 15–24-year-olds reporting being let go because of COVID-19. Despite this, younger people were less likely to report life being much worse under the pandemic than older age groups.

In 2020, however, there was a marked increase in the proportion of employed persons working from home. The proportion working any hours at home in a usual week rose to 35 per cent, while the proportion who worked most hours at home, that is, 50 per cent or more of their usual weekly work hours rose to just over 21 per cent.

The biggest increase was in the ACT, where one in three workers said they worked mostly from home in 2020, with the territory’s high concentration of office jobs particularly amenable to remote working.

Nationally, the biggest lift in remote work occurred in white-collar industries. Fewer than one in 10 financial services industry workers said they worked mostly from home in 2019, but that figure leapt to almost seven in 10 in 2020.

Housing-related finances were a challenge for many as people in need reported that the banks were more generous than landlords. Of the 11.2 per cent of Australian renters who tried to suspend rent payments, around half (5.4 per cent) were refused. Victorian renters — where lockdowns were protracted — were the least successful with their requests. Meanwhile, fewer than one in 10 (1 per cent) of mortgage holders seeking to suspend mortgage payments (11.3 per cent) were refused by their lenders.

The mean expenditure on groceries increased between 2019 and 2020, while expenditure on meals eaten out decreased particularly (but not only) in Victoria. Strikingly, expenditure on alcohol increased by approximately 8 per cent across the country, while expenditure on tobacco rose by 18.1 per cent in Victoria and 14.8 per cent in the rest of Australia. Expenditure on public transport and taxis decreased by 25.5 per cent nationwide, again with the drop considerably larger in Victoria (38.2 per cent) than in the rest of Australia (20.5 per cent). Expenditure on petrol, clothing, private health insurance, medical practitioner fees, medicines, home repairs and renovations, motor vehicle repairs and maintenance, education fees, rent, and mortgage repayments also decreased nationally.