Young generations hit hard

In “limbo land”, there is little help for those who are struggling

Australians between the ages of 20 and 40 will feel the full brunt of the cost-of-living crisis, with few to no tax concessions and government subsidies available to them to help make ends meet.

The latest cost-of-living report by the comparison site Finder underscores the extent of the problem. It says 70% of gen Z (born between 1995 and 2009) are feeling the crunch, followed by 60% of gen Y (1980 to 1994) and 45% of gen X (1965 to 1979). Baby boomers (1946 to 1964) are the least likely to be affected.

Chris Ellis, CEO of Finder Australia, says higher vulnerability from their lower savings has led to more than half of younger Australians feeling pressured to look for a second job. “Young consumers, those who are renting, paying off a mortgage or raising young children are feeling the effects most acutely.”

This demographic is stuck in that limbo land where they are earning enough not to be deemed low-income and, therefore, won’t qualify for any benefits (the average youth salary in Australia is $82,458 versus the low-income threshold of $66,667) but not earning enough to cover increased rents and higher fuel and food prices and, for students, the indexation on their HELP debt.

Mark Chapman, director of tax communications at H&R Block, says that apart from the low income tax offset, which has been around for ages and isn’t targeted specifically at young people, there is little support for them.

“If you think about the various tax concessions, such as the main residence exemption, the small business concessions, franking credits, to name just the obvious ones, they all presuppose a degree of wealth in the first place,” says Chapman.

But for a young person who is living on wages and nothing else, with potentially a large student debt to repay, as well as paying rent and other life expenses, the cupboard is bare and they are subjected to the full force of rising prices.