Australians are more miserable now than during the Covid pandemic, as rising costs and tax changes stretch budgets to the limit. Fresh Westpac-Melbourne Institute figures show consumer sentiment fell 2.9 per cent to 80.6 in June—well below the optimistic threshold of 100. Westpac’s Matthew Hassan warned households are already changing their behaviour, even as the economy grows modestly. Australia eked out 0.3 per cent growth in the March quarter, down from 0.9 per cent in the previous quarter.
Consumer Sentiment Plummets
The survey reveals purchasing attitudes are downbeat, with the “time to buy a major item” subindex rising just 0.9 per cent to 86.4—still weak historically and far below the long-run average of 123. Hassan noted buyer restraint is “clearly still the order of the day.” Cost-of-living subindexes point to fears of inflation returning aggressively. Family finances fell 7.5 per cent to 67.3 compared with a year ago, and 12-month hopes plunged 8.5 per cent to 85.1.
Economic Outlook Grim
Australians are also negative about the broader economy, though fears are slowing. The five-year economic outlook slipped 3.2 per cent to a new three-year low of 86.5.
Happiness Worse Than During Covid Lockdowns
KPMG research found Australians were happier during the pandemic than today. Analysing ABS social survey data, life satisfaction has fallen over six years. KPMG urban economist Terry Rawnsley linked the decline to deteriorating household finances: “Real wages are down, household consumption flat, median wealth flat—five years of financial stress, versus a short, sharp shock during the pandemic.”
Young and Middle-Aged Feel the Pinch
Those aged 25–34 recorded the lowest life satisfaction at 6.8, down from 7.5 in 2019—the largest drop of any group. Rawnsley said this reflects the housing market reality: high rents or large mortgages alongside falling real incomes. Australians aged 45–54 also reported low satisfaction, as the “sandwich generation” faces pressures caring for ageing parents and supporting children whose wealth has flatlined. Those 65 and over saw no change in satisfaction between 2019 and 2025, while 15–24-year-olds have bounced back but still remain below 2019 levels.
Financial Stress Worsens
More Australians than ever report severe financial stress. One-fifth of households cannot raise $2000 within a week, up from 19.5 per cent in 2019. Over a quarter have experienced cash flow problems or engaged in dissaving—drawing down savings or increasing debt. Australians struggling with at least one bill has risen sharply over the past decade.
Rawnsley warned there is no quick fix: “Improving life satisfaction requires sustained focus on real incomes, housing affordability, and financial resilience.”
