Kevin Rudd is in New York with Penny Wong fighting valiantly to fix the world’s climate.
Meanwhile, back home, “Financial stress for families on the rise”, writes Ruth Pollard in the SMH:
Stable unemployment figures and wafer-thin economic growth are masking an unfolding story of mortgage stress, rental problems and homelessness as the real impact of the downturn bites.
Financial counsellors say in the past 12 months their client base has shifted significantly from mostly long-term unemployed to those who, after a lifetime of employment, are out of a job and struggling to pay their mortgage or worse, feed their family.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
The shift has been profound. The number of clients who are employed but in financial stress has increased by 36 per cent in the past six months, while mortgage stress has risen by 60 per cent, said Sherrie Wilkins, a financial counsellor at the Far West Credit Counselling Service in Broken Hill.
“Their cases are much more difficult to manage,” she says. “They have massive utility bills, credit card bills and other debts — I have got clients who are suicidal, clients who are depressed and on medication, who have already lost their house, or worried they will lose their house.”
Ms Wilkins has seen parents go without food to feed their children — telling them they are on a diet rather than admitting that even buying groceries is a struggle — and people driving in unregistered cars, too broke to afford the fee but unable to get to job interviews any other way.
This is a real reason for the Reserve Bank to hold its fire on interest rates and for the stimulus package to be continued. The rising exchange rate is not such a reason, as it is largely irrelevant for inflation over any reasonable time frame.
We know the official unemployment rate greatly understates underemployment. We suspect mortgage stress is on the rise as recent new home owners morph into Australia’s subprime borrowers. The practical impact of this will rapidly escalate when the RBA begins to hike interest rates.