Australians need $207 extra a week to ease cost-of-living pressures: NAB survey

The constantly rising cost of living has become a central concern for Australian households as fuel, childcare and energy prices continue to surge, but for the first time Australians have been clear about how much extra cash they would need to relax.

An extra $207 per week – or $10,764 per year – on top of current income would ease the average household’s cost-of-living pressures, according to NAB’s quarterly consumer behaviour survey, released on Wednesday.

NSW residents said they needed the most out of any Australian state at $221, and higher income earners reported needing 30 per cent more extra cash than low-income earners to feel comfortable.

Unsurprisingly, those living in cities are feeling the pinch more than those in regional centres and rural areas, while women were said to need $12 a week more than men to ease their cost-of-living pressures.

Consumers with children need an average of $258, significantly more than the $191 reported by those without kids.

(Source: NAB)

“While consumers told us they were a little less concerned about their household’s current financial position in the fourth quarter, being unable to pay a bill (particularly utilities) continues to have by far the biggest impact on those households most concerned about their finances,” NAB chief economist Alan Oster said.

But the survey found the number of people letting household cost pressures drive them to cut back on lifestyle luxuries had actually fallen.

“When we look back to how consumers told us they were spending a year ago, far fewer say they are cutting back on things such as travel, eating out and entertainment,” Mr Oster said.

That said, December retail spending figures were notably disappointing, with the Bureau of Statistics reporting a 0.5 per cent fall in the Christmas month – down 1.3 per cent for the month, excluding food.

Credit Suisse saw the data as confirming consumers were stressed about their budgets.

“There are major headwinds for the consumer,” a Credit Suisse economist wrote on Wednesday.

“We continue to look for a steep climb in the household saving rate as house prices and equities weaken, undermining net wealth. Negative wealth effects are likely to be compounded by tighter credit conditions, and sluggish real wage growth.”

Finally, the ability to fund retirement remains the nation’s biggest financial fear, according to NAB’s 2000-person survey, followed by our family’s future and, third, our ability to raise $2000 for an emergency – a ranking Mr Oster called “alarming”.

“Looking beyond financial concern to actual hardship, more consumers faced some form of financial stress or hardship during the quarter, and once again being unable to pay a bill (particularly utilities) caused the most stress.”