A report this morning that some people with ‘mortgage stress’ are living on rice reminded me of those days back in 2007 when Kevin 07 was constantly going on about that and the general financial pressures on ‘working families’.
While of course through bad luck and imprudence there are always some households doing it tough, some of us were always sceptical about Labor claims on financial stress (eg here and here) .
The latest HILDA statistical report on trends in financial stress over 2001-2007 confirms that these 2007 Labor claims were gross exaggerations, and that the overall trend was clearly towards less financial stress.
‘Financial stress’ was reporting one or more of: unable to pay utility bills on time, asked family or friends for financial help, unable to pay rent or mortgage on time, had to pawn or sell something, asked welfare agency for help, went without meals, unable to heat home.
There was a time when Kevin Rudd could successfully argue that black was white. By last week he could barely argue that black was black.
Andrew Norton 
I’m always dubious about these financial stress measures, since in my student days, some of my friends used to spend their money on slightly less than legal substances and then go and get free stuff like food from various sources (no doubt some of it is real, but it’s hard to know what the real numbers are, and hard to know what is self-inflicted). That’s an extreme case, but the eating pet food etc. stories are common enough. I’m also dubious about mortgage stress, which has many definitions (not least of which is the silly 30% of income rule). I personally feel more sorry for those that will never own houses because they are too poor, yet people seem to shed more tears for the former group than the latter.
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As for living off rice — well, what a silly analogy. A fair chunk of the world does it quite happily. It’s probably healthier than eating a big steak every day.
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But are you allowing for the vaguaries of human memory?
Your graph indicates that for 4 of the family types (couple with children, non-elderly couple, elderly lone person and elderly couple) the incidence of financial stress had increased between 2006 and 2007.
Sure, the stress in 2007 was lower than the levels of the early noughties, but for these groups it was trending upwards, which must have been a worry. And memories of how bad things had been in the recent past could have fueled worries about how much worse the rise could get.
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Alan – True, for some 2007 was worse than 2006. And there probably was a negative trend in the subsequent years. But the element of truth in Rudd’s claim was more that there are always some people doing it tough, while the overall falsehood was that in general things were better in the later Howard years than they had been in a long time.
In one of the posts I linked to I warned that Rudd was creating expectations that he could not meet in this talk. While the GFC probably gave him his get out of jail excuse for not meeting the financial expectations he created, it was part of the pattern of setting up expectations that could not be met that helped bring him down.
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One major reason why governments have so much trouble introducing and implementing new policies (GST, ETS, RSPT) is that people are generally pretty comfortable. Galbraith called this “the culture of contentment” or some such.
Of course there are plenty of aggravating factors in peoples personal and professional lives. Loneliness or bad neighbours, being passed over for promotion or given the sack. But these seem distant to political concerns.
About the most aggravating factor that is within the control of politicians is simply the number of people now crammed into the city. The most miserable part of peoples day is commuting or running about between schools and shops, or otherwise queuing for stuff on phones, at banks, in hospitals etc.
But the high rate of immigration is not something that liberal editorialists want to fuss over too much as their jobs depend on retail turnover and eyeballs on-line.
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Something quite strange has been happening to sole parents. Not only are a fairly wide range of their hardship and poverty indicators falling, the proportion of them in work has absolutely soared in the last decade (see ABS 6224.0).
Just to anticipate facile explanations, this trend clearly predates the welfare cuts they faced from 2006. Maybe it’s cheap and available childcare that’s done the trick. Or maybe it’s a compositional effect – different classes of women are becoming sole parents these days. Whatever the case there’s a PhD thesis in there somewhere.
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