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Help Victorians struggling with housing and e. . .

Help Victorians struggling with housing and energy costs

By Emma O'Neill.
Published on the VCOSS Voice on 5 March 2018.


Financial stress is on the rise, and it’s no surprise to many Victorians.

Housing and energy costs have far outpaced wage growth over the past decade. Most rental housing is unaffordable to people on low incomes, particularly single person households and single parents with children relying on income support.

Income support payments have not kept up with the cost of living. The Newstart Allowance, for example, falls short of a healthy living income by $96 a week for a single person, $58 a week for a couple with one child, and $126 a week for a couple with two children.

This mismatch between costs and income leaves people teetering on the edge, having to reach out for help, make trade-offs on essentials to survive, and resort to unaffordable credit. ‘Tess’ explained these types of struggles in VCOSS’ Power Struggles report.

Tess’s story
Tess is a sole parent who cares for her young son, studies, volunteers and receives the Disability Support Pension.Every few months Tess gets food vouchers from a charity, “so I could sacrifice the food money to pay the bills… when I get an electricity or gas bill it just stumps me, and then rent on top of it.”Providing her son with good food and sports opportunities are priorities for Tess. She never puts credit on her phone and rarely goes out socially. She says the following about her financial circumstances:

“I don’t sit and actually think about it but I think it gives me anxiety in the back of my mind because it’s like, every day, if I go and buy the milk I’m pricing the milk. I price everything. And just trying to hold on… I feel like we’re just keeping afloat most months, but every four or five months we will crash a bit.”

The Victorian Government can help families meet their essential needs, and prevent financial problems escalating with a comprehensive new financial wellbeing package, including a plan to expand emergency relief, financial counselling and no-interest loans.

Emergency relief services provide people food, clothing and bill payment assistance, and help them build their financial stability. These services offer much more than ‘band-aid’ measures. They help people get back on their feet long-term.

While more people are needing emergency relief in the face of severe housing stress, unaffordable utilities and other cost of living pressures, Victoria remains one of the few states and territories not directly funding emergency relief, even though our housing and energy costs are amongst the highest in Australia.

While more people are needing emergency relief in the face of [many] cost of living pressures, Victoria remains one of the few states and territories not directly funding it.


Financial counselling services are also under pressure. Demand for services has grown, but funding has not. Energy costs are partly driving this demand—taking up 40 per cent or more of most financial counsellors’ caseloads. A funding boost would help more people better deal with rental and mortgage stress, debt problems, the financial effects of poor health, and job loss. This helps prevent people’s financial stress snowballing into much larger, costlier problems.

No Interest Loan Scheme (NILS) loans can also be a lifeline, financing essential household appliances, education and medical expenses, and diverting people away from loan sharks.

The Victorian Government can ensure more people benefit from NILS loans by building on 2017-18 investments like the Morwell ‘Good Money’ store, operated by Good Shepherd Microfinance. For every dollar invested in a NILS loan, $1.59 worth of social and economic value is created.

Another part of a financial wellbeing package would be a Financial Inclusion Action Plan to guide investment in services and bring together government, private sector and community sector groups to identify initiatives and gaps, and coordinate action.

Sky-high housing and energy costs and spiralling household debt levels necessitate a new, turbocharged financial wellbeing package that helps people through tough times. Many of the tools already exist; so let’s enable community services to meet demand, prepare for the future, and expand programs that are proven to work.

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