Whether it's our grocery baskets, the price of petrol, the instability of Australia's housing market, or just the general squeeze of inflation — it seems that Aussies cannot stop discussing the rising cost of living.
In the r/Australia subreddit, user u/nomorewigstofly asked: "When was the last time the economy was this bad? Do you remember what happened and what you and other people did to cope?"
In the comments, Aussies across the generations came forward with their opinions on the current economic climate, their memories of past recessions, and advice for coping with inflation.
Here are some of the best responses:
1. "Downturns do not necessarily mean inflation. I don't think we've had inflation on this scale in decades! Inflation is the real kicker to the everyday person. Rates are rising faster than home prices are dropping — increasing unaffordability across the board. Rents are exploding. Haven't even touched the prices of necessities (food/fuel/power), which are going ballistic."
"'Downturns have happened, yes, but not many have impacted the everyday person as much as this. Most likely, everyone will be fine, apart from a few people who are over-leveraged and some zombie companies. But it's not fun, especially with all the fear, uncertainty, and doubt flying around."
2. "I lived through the early '90s recession, but I suspect that was mild compared to what's coming. Felt like the worst of it lasted about five years. We got through it with a lot of cooking at home, growing our own food, sharing a car with siblings well into adulthood, and knowing all our neighbours — there are not a huge number of problems a group of people can't fix among themselves."
"I tended to work in hospitality at the time and would salvage food getting thrown out, so I lived like a king. Also, high interest rates tended to translate as high savings rates at the banks, so having savings but no debt meant I'd get a bit of extra cash.
"Good news with the current downturn: There's a lot of available employment, which isn't always a given in recessions.
"Bad news: The cost of living (housing, water, electricity, transport) is ridiculous and can't be handled with a few small income streams on the side, or a bit of humble grafting. A lot of the advice from previous recessions, like what I gave above, won't apply: Far more people now live in flats and units, so can't have gardens, and debt has been rewarded to the point where people don't have substantial cash savings.
"Best advice: The economic downturn won't hit the country evenly or everywhere at once. A lot of spots will do it rough, and some will prosper. If you're in a bad spot, move — the earlier, the better."
3. "If you want a comparison, in the late '80s, we had interest rates of 17%, unemployment was rising (and would go over 10% by the early '90s), plus inflation was 7–8%. In some ways, it was worse than today — house prices and rents were more reasonable, but that was no good if you didn't have a job."
"There were also a couple of bank collapses where people lost their savings. Cost of living went through ups and downs. Housing and rent was relatively cheaper, HECS was low (it had just been introduced), but other things like clothes, cars, and electronics cost more. The price of cars almost doubled between the mid-'80s and 1990.
"In fact, most of the '80s had a recession of some sort. But the music was awesome, so there's that."
4. "Coming off the prosperity of the last two or more decades (with a financial crisis sandwiched in the middle), these economic times seem bleak. But I think relative to the past 50–100 years, the next few years won't be too turbulent. Governments have been spending other people's money for years, so there's bound to be a correction."
5. "I think younger people trying to get into the property market now are seeing what the money they thought they needed a decade ago can actually get them today — and it's quite disheartening, on top of the rising cost of living. So maybe for that reason, it feels like things are worse, even if interest rates right now aren't really that high compared to what they were."
6. "I bought my first house when rates were nearly 7%, and it wasn't hard. That's because I was earning a good wage in 2009, but houses were considerably cheaper. I was making $70,000 as a call centre agent, which was very solid money for that job at the time and still is. I make a lot more than that now, but it doesn't feel like it."
7. "The difference for younger generations looking to buy property is the average loan-to-income ratio. Yeah, my folks' generation suffered interest rates of 10%+, but the loans were often no more than two to three times their yearly income. Now 7 to 10 times isn’t uncommon. There are a lot of people who are going to get ruined."
8. "For me, I can't remember a time when the economy was good. It's been a complete catastrophe my entire adult life — the 2007–08 recession; deindustrialisation and automation; the rise of gig-economy jobs; the devaluing of tertiary degrees and the rising costs of attaining one; completely unaffordable housing, extortionate rent, and the high cost of living; once-in-a-lifetime floods happening every other week; the 2019–20 firestorms; an out-of-control pandemic, depression, and now inflation."
"I don't know what to tell you, kid. It's bad, it's been bad for a long while, and at this point, I'm convinced things are going to get worse. Capitalism is in terminal decline."
9. "Cheap loans and over-leveraging have just hidden ever-increasing inequality. Screwing down the working class, rent-seeking every industry, casualising every industry, insane consumerism. I feel like I’ve watched Australia turn into America over my lifetime, and I fucking hate it."
"The Labor Party has watched over this. While they are still a much better alternative to the LNP, I don’t think they represent the working class at all. They are a bunch of fucking lawyers with good intentions, but no representation of actual punters. I hope there is a general strike and unions start to represent people in government in the future."
10. "Inflation this time was almost a certainty. The supply-side shock really just accelerated it. A lot of people forgot that many central banks (ours included) turned on the money printers in the last couple of years. If you look at how much money is in circulation, right now, we're close to double our 2019 level. The real problem is that despite all that extra money in the system, it's not making its way to the average individual."
11. "I have endured recessions in Australia, and budgeting was the biggest tip, as was knowing what were necessities and what were luxuries. I was renting during the recession, so rent was a must, as was food and transport. I did not have money for eating out (anything, even a coffee)."
"One fortnight, I could pay rent and food; the next was rent and private health insurance. So I had to make my food budget last a month — shopping at the cheap supermarket and buying things on special and clear-out.
"No buying clothes or treats, but I could cook, and that’s how I saved on costs. I made all my food. Meals, biscuits, cakes, you name it. Friends would have me over for meals, which really helped too."
12. "The current generation is the first generation since the industrial revolution to have less wealth than the generation before it. Most of our wealth is either stored in offshore banks (thus not circulating) or the housing 'industry' (an industry that produces nothing and hires no one, with profits only being put into more houses to rent or offshore banks)."
"Minimum wage is rising slower than inflation — and inflation isn't solely affected by other things going up. It's most affected by money not circulating.
"Current generations won't even see most of the wealth returned to the economy in any reasonable way until the older generations pass it down via their wills — and even then, that just means 50- to 60-year-old people getting money they needed when they were 20, in order to get the economy started and have a chance at a career, and businesses changing owners, but not spending habits."
13. "Cut your expenses, pool your resources, move in with family if you can, and rent your property out if you have one (we couldn't do this, for various personal reasons). Don't be precious, don't be proud. Ask everyone you know for opportunities; embrace hand-me-downs and handouts."
14. "Lentils, chickpeas, rice, herbs, and spices are great. Get into home brewing and use the local library. Everything else — from coffee out to Netflix — can get ditched if it has to be. It's not fun, but you get used to it. I find using the library and home brewing are actually pretty enjoyable."
15. "Interest rates rising is a good thing. We need to lower inflation and start rewarding savers over spenders. The reason inflation is so high is that too much free money was splashed around during COVID-19, and now we need to get it back under control. High interest rates are always a good thing."
16. "It all depends on your work status. Last recession (2007–08), I had just finished school and was struggling to get a job. It was horrible. This recession, I'm working in a trade that seems to be in demand post-COVID, and the experience is completely different."
"Hang in there and do the best that you can to get set up in your career, if you haven't already. Recessions are definitely more brutal for people in entry-level jobs.
"Also, listen to advice, but be critical at the same time. It's very easy to blindly follow advice from relatives or friends, only to regret it later. Good luck!"
17. "Lived through the '80s shit fight, and it made me what I am now: a tight-arse who only uses credit for housing. I haven't had a credit card since about '97 and never borrow or do direct debit for things. I save for stuff, and if I can't afford it now, I'll wait. I try to grow as many fruit and veg staples as possible and live quite simply. Keep your outgoings as low as you can. Reassess all of your insurance, memberships, etc. Cut loose everything that isn't essential. You will notice how much you waste on bullshit."
18. And finally: "I suggest you do some research on the history of Australian recessions so you gain a grasp of just how common downturns are in the scheme of things. You will discover that there have been many ups and downs. I am surprised by how many people believed that house prices only go up, interest rates will always stay low, and think that the government has an infinite credit card to hand money out. I feel like Australia got drunk on cheap credit, thinking the fun would and should last forever."
What do you think, Aussies? Is the current economic climate cause for mass concern? Or do you believe it's a case of riding out the highs and lows? Let us know your thoughts in the comments below!
