One in four consumers spent more than they earned in Q4 2019

author-avatar By on January 28,2020
One in four consumers spent more than they earned in Q4 2019

Photo by Christiann Koepke on Unsplash

Australians are more worried about job security and the cost of living, according to new data.

In its quarterly 'Consumer Anxiety' survey, National Australia Bank (NAB) reported consumers' anxiety in the fourth quarter of 2019 (Q4) was up 0.4 points on the previous quarter to 57.7 points.

It also found that around a quarter of those surveyed spent more than they earned in Q4. 

However, consumers were less worried than they were in Q4 2018 when the anxiety score was 62.0, and lower than the long-term average of 59.4.

The survey operates on a scale of 0-100, where 100 is 'extremely concerned'. 

"Higher anxiety was mainly led by growing concerns over job security, which rose for the third straight quarter amid reports of significant spare capacity remaining in the labour market, and expectations for unemployment to edge higher," the report said.

The 'government policy' consumer anxiety sub-index also rose one point over the quarter from 62.0 to 63.0, although this is significantly lower than the 66.7 it was in Q4 2018. 

The highest anxiety score belonged to the 'cost of living' sub-index at 64.7. 'Ability to fund retirement' (58.5) was the third-highest, followed by 'health' (55.7) and 'job security' (46.5). 

"Although unchanged, the cost of living is still the single biggest driver of overall anxiety, and in a low inflationary environment, highlights the ongoing disconnect between low levels of economy-wide inflation and consumer focussed costs," the report said.

The Australian Bureau of Statistics' inflation report on Q4 will be released Wednesday.

NAB's survey found that Victorians were the most anxious, scoring 59.0, followed by Queenslanders at 58.8.

Tasmanians were least anxious at 54.4.

Anxiety was highest for those earning less than $35,000 a year, at 63.1. 

Renters were also more concerned than home owners (62.4 for rented houses, 61.7 for rented apartments, and 54.4 for home owners).

NAB's report also surveyed consumers on the biggest factors that added to the cost of living in Q4.

Groceries were the biggest driver at 56% saying it added to their cost of living - utilities were 54%, while rent and mortgage were just 17% and 13% respectively. 

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Australians paying down debt, spending less on luxuries

NAB's survey also tracked household spending behaviours, and found Australians were spending less on things like holidays, takeaway coffees and entertainment, but paying down debt and using less credit compared to the previous quarter. 

  • Travel/holidays: -10 points
  • Eating out: -22 points
  • Entertainment: -24 points
  • Use of credit: -8
  • Savings, investments, super contributions: +2
  • Paying off debt: +8

However, the survey also found consumers were spending more on medical expenses (+12), transport (+20), groceries (+11), and utilities (+21). 

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Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.


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