One in five Australians who have lost their jobs to coronavirus would run out of savings within a week, a survey showed.
Economists are expecting Australia’s jobless rate to surge to the highest levels since the 1930s Great Depression as the COVID-19 pandemic forces the closure of businesses, ranging from pubs and clubs to gyms, travel agencies and department stores.
Financial comparison website Finder said those with little savings were the most vulnerable, especially as unemployment doubled within coming months, possibly leaving 2.3million Australians without work by Easter.
One in five Australians who have lost their jobs to coronavirus would run out of savings within a week, a survey showed. Pictured is a Centrelink queue in Brisbane on March 24, 2020
Finder’s monthly online Consumer Sentiment Tracker survey of 11,118 consumers in March revealed 19 per cent of them would run out of money within a week.
Almost a third, or 31 per cent of those surveyed, would be unable to last a month with the money in their bank account.
The average cash savings of all respondents was $28,727, however, the median cash savings stood at just $1,500, which would barely pay off a mortgage in Australia’s big cities.
Finder insights manager Graham Cooke said 380,000 Australians were particularly vulnerable if they lost their job.
‘This health crisis is having a devastating impact on the financial well being of Australian households and that’s directly linked to having very little cash in the bank before it hit,’ he told Daily Mail Australia on Monday.
‘Nearly 20 per cent of Aussies were living week-to-week before the pandemic and those numbers have only climbed since.’
Financial comparison website Finder’s monthly online Consumer Sentiment Tracker survey of 11,118 consumers in March revealed 19 per cent of them would run out of money within a week
Australia’s major banks are giving business borrowers a six-month reprieve on their repayments while the federal government is barring landlords from evicting tenants.
Finder’s chilling findings
Almost 20 per cent of Australians were living week-to-week before the coronavirus pandemic and those numbers have only climbed since
Only 22 per cent of regional residents could live off their savings for more than six months
More than half or 52 per cent of people in regional Australia live pay-to-pay
In the capital cities, it’s 43 per cent
Source: Finder survey of 11,118 Australians in March 2020
That leaves home borrowers in a precarious position should they lose their job.
Nonetheless, Mr Cooke said newly unemployed Australians should seek a help from their bank or utility provider if they were suddenly unable to pay their mortgage or household bills.
‘If you can’t pay your bills, or could really use some short-term relief, call lenders and utilities that you owe money to and ask them what help is available,’ he said.
Those who still have a job are encouraged to cut back on unnecessary spending and shop around for a lower credit card or mortgage rate to build their bank savings.
‘For those still in employment, it is possible to start building an emergency fund now,’ Mr Cooke said.
‘To do this, minimise spending and look for places to save money in all areas of life – particularly financial products.
University of Technology, Sydney industry professor Warren Hogan, a former ANZ chief economist, is predicting a 17 per cent jobless rate by Easter, more than triple February’s 5.1 per cent level. Pictured is an empty restaurant at Sydney’s Circular Quay
‘A tiny difference to an interest rate can lead to savings in the hundreds of dollars or more.’
CORONAVIRUS CASES IN AUSTRALIA: 4,559
New South Wales: 2,032
Western Australia: 364
South Australia: 337
Australian Capital Territory: 80
Northern Territory: 15
TOTAL CASES: 4,559
From tomorrow, 6.5million Australians are receiving $750 in their bank accounts as part of a broader $17.6billion stimulus package.
The recipients include those who were already unemployed, aged and disability pensioners, students and apprentices, and parents getting tax benefits.
From April 27, the unemployed are receiving for six months a $550 coronavirus supplement in addition to the $565.70 a fortnight JobSeeker Payment.
University of Technology, Sydney industry professor Warren Hogan, a former ANZ chief economist, is predicting a 17 per cent jobless rate by Easter, more than triple February’s 5.1 per cent level.
Should that scenario materialise, the number of Australians without work would surge from less than 700,000 to more than 2.3million as another 1.6million people lost their job.
The jobless rate would far surpass the aftermath of the 1991 recession, leaving Australia with an unemployment level last seen during the early 1930s when one in five workers were officially counted as being without work.
Many more gave up looking for work and weren’t included in the statistics.