Consumer stress levels rise ahead of federal election
Cost-of-living concerns and policy uncertainty ahead of the upcoming election are increasing consumer stress, according to NAB data.
The NAB Consumer Stress Index rose in the December quarter of 2024, with overall stress levels rising to 62.5 points, compared to 59.7 in Q3.
According to the report, higher stress rates reflected consumers’ growing concerns regarding the impacts of government policies on their spending and savings plans. Almost six in 10 (56 per cent) of respondents predicted increased government charges such as land tax and council rate rises.
Cost of living remained the largest contributor to consumer stress, increasing slightly despite fewer customers observing price hikes in the December quarter.
Consumers continued to cut back on non-discretionary goods and services, with 52 per cent of respondents having cut back on eating out at restaurants, 45 per cent cutting back on entertainment expenses and 41 per cent reducing their car usage to save on petrol costs.
Australians also reported coping with the cost of living by using their savings more rapidly (33 per cent), selling possessions (20 per cent) or borrowing money from friends or family (15 per cent). Furthermore, 12 per cent reported getting a second job or working longer hours to cover rising living expenses.
Looking forward, almost three quarters (72 per cent) of consumers expect scam risks to increase further, 65 per cent expect inflation to continue to rise and 42 per cent expect quality of life to decline further in 2025.
NAB Economics has predicted rate cuts this year as inflation eases towards the midpoint of the RBA’s target range.
