The Australian recently published details of a new survey by Veda Advantage with disturbing but not surprising findings.
The survey reported that 21 per cent of Australians are finding it very tough to repay debt, rising from a rate of 19 per cent six months ago.
At least 2 per cent of these people said they were unsure how they would make their next debt repayment and another 28 per cent said they were likely to apply for more credit in the next six months to try and tide them over.
“Almost three in every 10 Australians who are looking to take on more debt are already in a position of financial hardship and this is concerning,” said Chris Gration of Veda Advantage.
“The introduction of positive credit reporting is vital to help those living on the financial fringe avoid a situation where they cannot repay their debts. The government needs to act quickly to prevent more Australians falling into a debt spiral.”
The survey also found that 14 per cent said they had missed a minimum bill repayment in the past three months, (up12 per cent from six months ago). To help them repay their debt, about 82 per cent of Australians said they had cut back on discretionary spending and the number of people who have cut back on grocery bills also increased; with 47 per cent buying fewer groceries (up 4 percent from six months ago).
Mr Gration also noted people were worried about rising transport and petrol prices, which had increased by 10 per cent since last September.
The report concluded that among the 1 million Australians who were likely to apply for new credit, one in six owed more today than a year ago, 40 per cent did say they would use the additional credit to buy property. Lastly in a positive move the number of people using credit to go on holidays has fallen to 11 per cent from 18 per cent six months ago.