Interest rate rise deepens financial stress

With the Reserve Bank of Australia raising interest rates for the first time in more than two years, St Vincent de Paul Society Victoria Interim Group CEO Charlie Spendlove warns the impact will be felt most deeply by Victorian households already walking a financial tightrope.  

Across Victoria, more than 30,000 people are currently experiencing homelessness, and alarmingly, almost half of low-income households are now living just one crisis away from homelessness and long-term hardship. 

Demand for support and services that St Vincent de Paul Society Victoria provides is increasing, while costs are rising. Higher interest rates have flow on effects for renters, not just mortgage holders, which is intensifying pressure on essential household budgets.   

Charlie Spendlove, Interim Group CEO of St Vincent de Paul Society Victoria said, “Any interest rate increase will add further pressure to households already struggling to stay afloat and we know there is already a razor-thin line between living in a low-income household and experiencing homelessness.” 

"We’ve seen a nearly 10% increase year on year in the number of repeat callers to our emergency assistance call centre. This tells us people aren’t bouncing back after receiving support and financial stress has become their ongoing reality.  

More families are being forced to make impossible choices between paying rent or putting food on the table, and overwhelmingly, rent is winning, with spending on food, utilities and healthcare being cut back. Last year alone, calls seeking food assistance rose by 50 percent,” she said.

St Vincent de Paul Society Victoria continues to provide practical support through food and essential goods, rental assistance and household items. However, demand is outpacing resources and rising costs mean assistance reaches fewer people in need. 

The Society advocates on a wide range of issues affecting people experiencing disadvantage including income support, cost of living pressures and access to essential services.

Some examples of reform that St Vincent de Paul Society Victoria is advocating for and could make a real difference for the people who need support, include:  

• Increase working-age payments so they meet the cost of essentials, consistent with Economic Inclusion Advisory Committee advice.   
• Improve indexation so payments keep pace with living costs.   
• Increase Commonwealth Rent Assistance and review its design to better reflect actual rental costs.  
• Debit and credit card surcharges impose avoidable costs on low-income households.