Aussies Lead World in Personal Debt.....

[MMC]

Australians are proud to be leaders when it comes to sporting achievements or new inventions, but the leading position no one wants to hold is that in the race to be the nation with the highest personal debt. Unfortunately for Australia, personal debt Down Under has overtaken even that of the typically credit-hungry U.S., according to Reserve Bank of Australia figures.

To compare Australia's position on the debt leader board to the U.S., each Australian adult is currently in debt to the value of around US$56,000, compared to the debt of American adults of US$44,000. Australians' mortgage, credit card debt and personal loans total over AU$1.2 trillion, which is an increase of 71 per cent from just five years ago.

However, it is not simply the fact that Australia is leading the world in personal debt that deserves attention, but also the amount of debt. Thanks to recent stimulus packages and first homeowner boosts, Australia's personal debt has risen to 100.04 per cent of the annual GDP; this is the first time debt has exceeded 100 per cent, and Australians are now living beyond their means, often dangerously so. Interest rates in Australia have been low for some time, and the Australian government has been providing financial assistance to those who need it, meaning many Australians are now stretched very close to their limits in terms of debt. If interest rates keep rising as predicted, Australians could have a financial crisis of their own when they can no longer meet their repayments.

Some are also saying that Australians have reason to be worried because Prime Minister Kevin Rudd has maxed out the national credit card, too, so to speak. Offering Australians stimulus packages to the value of AU$42 billion, the Australian government was proud at the time that these cash injections were some of the biggest, relative to population, in the developed world. However, this government spending has consumed the entire budget surplus and left the country with a substantial deficit.....snip~

Aussies lead world in personal debt

Dang.....and here I thought they said Americans were the worst. As 1-4 in the US Credit Card Debt has risen.

 

[GottaGo]

That's a heavy load of personal debit, $56k or $44k.

One would think that people would have learned something from the meltdown....

 

[MMC]

That's a heavy load of personal debit, $56k or $44k.

One would think that people would have learned something from the meltdown....

Yeah it is GG......they were just talking about how people here have gone more to their credit cards to pay for house expenses and bills. Due to being out of work or having hours cut back.

Then I saw this with the Aussies. Seems the Keynesian economics didn't play out.....huh. Which is why they have gone with the Conservatives now.

 

[PeteEU]

Sorry bull**** article that tries to promote the idea that all debt is bad.

Mortgages should never be counted as they are covered by the value of the home and other secured loans (car loans for example) since there is security in that debt. If you dont pay your car payments, then they take your car.

The critical debt is the unsecured debt, aka credit card debt.

And on credit card debt the numbers are a tad different.

The average credit card holder in the US owes just shy of 5000 dollars.

Ranking the states: Credit card debt

The average credit card holder in Australia owes just shy of 4000 dollars US

https://www.moneysmart.gov.au/borrowing-and-credit/credit-cards/credit-card-debt-clock

 

[MMC]

Sorry bull**** article that tries to promote the idea that all debt is bad.

Mortgages should never be counted as they are covered by the value of the home and other secured loans (car loans for example) since there is security in that debt. If you dont pay your car payments, then they take your car.

The critical debt is the unsecured debt, aka credit card debt.

And on credit card debt the numbers are a tad different.

The average credit card holder in the US owes just shy of 5000 dollars.

Ranking the states: Credit card debt

The average credit card holder in Australia owes just shy of 4000 dollars US

https://www.moneysmart.gov.au/borrowing-and-credit/credit-cards/credit-card-debt-clock

Aussies slightly less confident about personal finances.....

People are slightly less optimistic about what the future has in store for their finances compared to this time last year, results of a new survey show.

The second annual Westpac Australia Day Index revealed an 11-point decline in confidence over the past 12 months, despite people being generally more upbeat about the economy as a whole.

Three in five Australians are still optimistic about their finances, with the decline mainly driven by people who do not feel they have enough control over their money management.

Respondents also said they believe fewer opportunities are available to them, such as the ability to create wealth and pursue the career they had hoped for.....snip~

Aussies slightly less confident about personal finances

Looks like they aren't the only ones with all that Hope.

 

[PeteEU]

Aussies slightly less confident about personal finances.....

People are slightly less optimistic about what the future has in store for their finances compared to this time last year, results of a new survey show.

The second annual Westpac Australia Day Index revealed an 11-point decline in confidence over the past 12 months, despite people being generally more upbeat about the economy as a whole.

Three in five Australians are still optimistic about their finances, with the decline mainly driven by people who do not feel they have enough control over their money management.

Respondents also said they believe fewer opportunities are available to them, such as the ability to create wealth and pursue the career they had hoped for.....snip~

Aussies slightly less confident about personal finances

Looks like they aren't the only ones with all that Hope.

Oh that has nothing to do with my point. I come from a country of pessimists basically where our national pass time is to complain over stuff, and yet we are the happiest country on the planet and would not trade it for anything. People are a strange bunch, and confidence in an issue suddenly changes depending on how you ask the question and when you ask.

Now the Aussies might be realizing that their whole economic boom the last decade or so, is based on their mining industry and that has its consequences in many ways, including housing bubbles, consumer debt and so on, but the reality is that the Aussies are far better off (for now at least) than a number of industrialized nations.

 

[MMC]

Oh that has nothing to do with my point. I come from a country of pessimists basically where our national pass time is to complain over stuff, and yet we are the happiest country on the planet and would not trade it for anything. People are a strange bunch, and confidence in an issue suddenly changes depending on how you ask the question and when you ask.

Now the Aussies might be realizing that their whole economic boom the last decade or so, is based on their mining industry and that has its consequences in many ways, including housing bubbles, consumer debt and so on, but the reality is that the Aussies are far better off (for now at least) than a number of industrialized nations.

Yeah, and they have come down from the number one spot since their Elections and change over. Still its not so great here even though they did say less use was taking place.

For the US last quarter they said 5325 for the credit card debt. Plus the Fed said we reached 5 billion last quarter of 2013.

 

[PeteEU]

Yeah, and they have come down from the number one spot since their Elections and change over. Still its not so great here even though they did say less use was taking place.

For the US last quarter they said 5325 for the credit card debt. Plus the Fed said we reached 5 billion last quarter of 2013.

Well American's have always been very optimistic and some times way too optimistic and basically in denial. It is a huge positive at times and a serious problems at others. American optimism has driven the country forward for centuries.. the can do attitude, but that can also be overdone as we have seen with everything from over extending in wars and massive financial bubbles and living in denial while things fall apart around them. American's are very good at talking themselves up so to say and that is one of the things I love about America.. optimism and a drive to move forward.

On the flip side you have a place like Germany and large parts of Europe who learned a hard lesson during the depression and WW2, that scared them forever and made them highly pessimistic and having little real drive which shows in consumer consumption, confidence and so on. As soon as an economy is supposedly in trouble in Europe according to media, most Europeans stop spending.. a rumour can set that off and getting confidence back and spending is damn hard. I remember in Denmark over a decade ago, where we were in one of those periods of pessimism and consumer confidence and spending was down. The economy was not bad at all, unemployment was falling and so on, but people were fearful of spending because what if. The government did a tax cut and said now things are going to change.. and nothing happened. Why? Because people used the tax cut to pay off debts. So they had to do another tax cut before any real impact on overall spending and confidence happened. Not so with Americans.. they are spending like no tomorrow even in recessions relative to what Europeans do. If Europe had been hit as hard as the US was in 2007-09, then consumption numbers would have collapsed and not recovered yet. That did not exactly happen in the US... yes consumption went down, but it did not per say totally collapse and it has regained much of what it has lost now. That would simply not happen in Europe due to our pessimistic attitude.. and since Australians are wanna be Europeans then that attitude has been some what exported but thankfully not totally.

 

[MMC]

Well American's have always been very optimistic and some times way too optimistic and basically in denial. It is a huge positive at times and a serious problems at others. American optimism has driven the country forward for centuries.. the can do attitude, but that can also be overdone as we have seen with everything from over extending in wars and massive financial bubbles and living in denial while things fall apart around them. American's are very good at talking themselves up so to say and that is one of the things I love about America.. optimism and a drive to move forward.

On the flip side you have a place like Germany and large parts of Europe who learned a hard lesson during the depression and WW2, that scared them forever and made them highly pessimistic and having little real drive which shows in consumer consumption, confidence and so on. As soon as an economy is supposedly in trouble in Europe according to media, most Europeans stop spending.. a rumour can set that off and getting confidence back and spending is damn hard. I remember in Denmark over a decade ago, where we were in one of those periods of pessimism and consumer confidence and spending was down. The economy was not bad at all, unemployment was falling and so on, but people were fearful of spending because what if. The government did a tax cut and said now things are going to change.. and nothing happened. Why? Because people used the tax cut to pay off debts. So they had to do another tax cut before any real impact on overall spending and confidence happened. Not so with Americans.. they are spending like no tomorrow even in recessions relative to what Europeans do. If Europe had been hit as hard as the US was in 2007-09, then consumption numbers would have collapsed and not recovered yet. That did not exactly happen in the US... yes consumption went down, but it did not per say totally collapse and it has regained much of what it has lost now. That would simply not happen in Europe due to our pessimistic attitude.. and since Australians are wanna be Europeans then that attitude has been some what exported but thankfully not totally.

Mornin' Pete :2wave: .....thanks for explaining that out. Wish I was as optimistic about our consumer spending. They have played with the numbers to much.....that most just go with whats being said in the news. Which you can tell by what we have up around here. Especially form those that lean left. To hear them and the Democrats talk.....All is Well. When in reality it isn't. Which would be going to the numbers and how its all Jazzed up for both sides talking points.

Myself working in the Industry of News print.....I am up on catching the conflicting reports that have been coming out. Wish I could get them up side by side. As they come across whats Trending or Hot News.

 

[Gazza]

That's a heavy load of personal debit, $56k or $44k.

One would think that people would have learned something from the meltdown....

What meltdown?

Since the rest of the world dropped their ice cream on the pavement, Aussies have enjoyed wage increases and property value growth well in excess of any nominal increase in personal debt.

One of the main reasons for such a huge jump in personal debt is because people are jumping on the bandwagon and buying relatively cheap property.

Only now is the rule of supply and demand pushing up prices to their affordable ceiling.

Sure, personal debt has increased hugely, but so has the ability to service the debt. ( low interest rates and increasing wages)

On top of that, our stocks are (mostly) performing well and it's not too difficult to insure against over exposing ourselves to undesirable asset to debt ratios.

We are in a good place.

 

[GottaGo]

What meltdown?

Since the rest of the world dropped their ice cream on the pavement, Aussies have enjoyed wage increases and property value growth well in excess of any nominal increase in personal debt.

One of the main reasons for such a huge jump in personal debt is because people are jumping on the bandwagon and buying relatively cheap property.

Only now is the rule of supply and demand pushing up prices to their affordable ceiling.

Sure, personal debt has increased hugely, but so has the ability to service the debt. ( low interest rates and increasing wages)

On top of that, our stocks are (mostly) performing well and it's not too difficult to insure against over exposing ourselves to undesirable asset to debt ratios.

We are in a good place.

The USoA housing and financial meltdown. It hasn't been pretty, and we still haven't recovered.

Glad you are in a good place, many Americans aren't.

 

[Gazza]

The USoA housing and financial meltdown. It hasn't been pretty, and we still haven't recovered.

Glad you are in a good place, many Americans aren't.

Yep. I get that and I feel bad for you.

I bought some property in Phoenix AZ about 4 years ago and, so far, I'm in negative territory. Not so much because the property value has decreased but because it costs so much to maintain. Every time a tenant moves out I have to spend thousands to get it back to a habitable state.

I have faith in the American economy, long term.

 

[PoS]

That's a heavy load of personal debit, $56k or $44k.

One would think that people would have learned something from the meltdown....

There wasnt much of a meltdown in Oz, the recession thats plaguing the US and Europe right now was weathered down pretty well by the Aussies, I guess thats why.

 

[MichaelW]

That's a heavy load of personal debit, $56k or $44k.

One would think that people would have learned something from the meltdown....

Australia wasn't affected by the GFC. Unlike in the US and Europe, Australia saw a boom in mineral exports to China during the worst of the period.