Financial distress is escalating, yet we are witnessing another rate hike

An RMIT expert says more people are having to choose between their health and mortgage repayments with no end in sight for cost-of-living pressures. 

Nataliya Ilyushina, Research Fellow, Blockchain Innovation Hub 

Topics: RBA, economy, cost of living, health care 

“Since the onset of the rate-hike cycle two years ago, a mortgage holder with a debt of $750,000 is now facing an additional $1,800 per month compared to what they were paying two years prior. 

“Australians are currently experiencing greater financial hardship than at any point during the COVID-19 pandemic.  

“The Australian Institute of Health and Welfare has disclosed that 20.2% of Australians are struggling considerably to manage on their present income, a percentage surpassing any recorded during the COVID pandemic. 

“Financial stress is one of the most severe mental distresses, compared in magnitude with the effect of the death of a relative.  

“A recent survey reported that the main way people are coping with increased mortgage repayments and other cost of living pressures is giving up private health insurance.  

“The decision between looking after their health and paying the bills is a clear indicator that families are now struggling with essentials.” 

Dr Nataliya Ilyushina is a Research Fellow with the RMIT Blockchain Innovation Hub and ARC Centre of Excellence for Automated Decision-Making and Society. Her current research focuses on decentralised autonomous organisations (DAOs), labour markets, and skills.