Australia, you have a big, expensive problem… And if you’re reading this then it’s your fault! 121



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Australia is world renowned for many things: the Hills Hoist, wine in a box, the Cochlear Implant, rolling sentences with poor enunciation, bush bashers and unusual animals. But now we have a new global label that is much more defining and much less attractive – debt.

According to a report released by Barclays, Australia leads household debt out of all developed countries. Household debt includes mortgages, credit cards, overdrafts and personal loans for things like cash, travel, holidays and cars. According to the report, while the rest of the world is focussing on paying down debt and avoiding a repeat of the global financial crisis, Australians are doing the opposite.

Barclays Chief Economist, Kieran Davies, said this is putting us in danger of another crisis. He said, “With high levels of leverage by world standards, where debt is concentrated in the household sector, we see this as a vulnerability in the event of another global shock”.

Home loans are one thing, we’ve all had them and it’s virtually impossible to buy a home without one. This is also building an asset that is valuable and can contribute to a lifetime of wealth and a happy retirement. The problem we see here is the rest of it – the liabilities that we’re putting on debt. It’s the personal loans for holidays and cars. It’s the credit card loans for nice clothes and fancy electronics. This is where Australia has a problem.

Australians are so caught up on having the best things, having the most fancy things, having the nicest clothes and flashing cash through material objects – and all for what? We are a country that was significantly built on English colonisation due to convicts. Not all of us came to be here this way but from the very beginning of time we had a culture where the things that mattered were hard work and mateship, not at all what we own.

So where did things change? Why has this cultural shift happened and which generation is really responsible? Did we get carried away with owning nice things and keeping up appearances for the sake of publicly feeling good about ourselves? Or is it the younger generation – also known as the disposable generation who believe that cars can be written off and replaced, laptops can be smashed and returned and clothes can be worn once and never seen again?

I believe that while times have been tough for everyone, the shift in our culture has a lot to account for when it comes to our spiralling household debt. It isn’t that our earnings are so small in comparison to our cost of living; it isn’t because our government doesn’t support us enough; it’s because we have a culture where keeping up appearances and always having the latest and greatest is more important than living within our means.

Tell me, do you agree?

Guest Contributor

  1. Yes it is a bulging problem as we copy the American way of living. Put all expenses on the credit card not realising that the banks charge a further 17 odd percent interest. I see it all the time.

    2 REPLY
  2. kids want it all today and they want it now, they don’t realize that things in life never stay static and situations can change, and you can get snowed under in debt

    1 REPLY
  3. I don’t try to keep up with the Joneses.I am happy with my simple house and contents.I don’t have a credit card,i have a debit card so if i don’t have the money i can’t buy things.I think a lot of our problem stems from the fact that our children spoilt their children.Why do people need the best of everything.Is it really necessary to get a new mobile every time a new one appears on the market.I drive a 25 year old car which runs perfectly because i look after it.Some of my clothes are also 20 years old.My idea of keeping up appearances is being clean and tidy.

  4. Thankfully I can say I am not a part of this culture. I owe no one anything. I do have a credit card. However, it is an emergency use only. If I can’t afford it, I don’t buy it.
    And, I believe that most aged pensioners would be the same.
    We simply can not afford to have debt.

    4 REPLY
    • I agree we only have a credit card for emergencies and it if fully paid up at the moment so no debt

    • Agree with you here, I don’t have a credit card only a debit card and I am into delayed gratification. All the younger ones around spend like their is no tomorrow. Do not know how to save, not even 10 percent of their wages, just for a rainy day and wonder why all us older generation have things and never run out of money, coz we always have something aside, just in case.

  5. Who encourages people to increase their credit card limits, who grants the personal loans’s the very people writing this report..THE BANKS… If they are so concerned stop granting these facilities !!!!!

    6 REPLY
    • The Banks don’t twist your arm and throw the money at you! It’s about people being responsible for their own actions. Until that happens people have only themselves to blame! The greed in this country is unbelievable! People want, want, want. And expect the government in a lot of incidents to pick up the tab. People need to live within their needs! And stop whinging!

    • The Debt the Story talks about is personal debt not Government debt. If you offer children lollies they will eat them same with banks offering loans to people who can’t afford them. Not everyone has got the same control as others may have. Children have to be protected from themselves and offering people easy money (that the banks know they can’t pay back is the same. If people get a loan that the can and are able to pay back is not Debt. And if I’m not mistaken in this article its A Banks employee that is doing the whinging!

    • I agree it’s one of the objects of a Bank to make money, and also to be a good corporate citizen, and saying that, why has Barclays Bank released this report, giving the impression it is them that are ‘Whinging’

  6. In our day it was either a layby system until it was paid off or cash – nowadays they are enticed by 36 months no interest or no payments for 6 months etc and little do they realise that debt comes home to roost eventually, often at the wrong time and along with other expenses.

    1 REPLY
  7. So, why is it ‘my fault’? I don’t have any debt. We don’t buy what we cannot afford. This is the result of the ‘want it all’ generations, who can’t do without. Macmansions people.

    2 REPLY
    • I agree with you.. The only thing that one should have to pay off is their home.. A home should be just big enough to meet your needs.

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