West Australians are ahead of the eastern states in terms of day-to-day finances.
Research by ME Bank released today has revealed West Australian households are the most financially comfortable in Australia.
The Household Financial Dynamics Report found West Australian households to be above the national average in terms of financial comfort with a rating of 5.57 out of 10, as opposed to a national average of 5.2.
The report took into account factors such as changes in a household’s financial situation over the past year and anticipated in the next year, confidence in the household’s ability to handle a financial emergency, short-term cash savings and long-term investments as well as amounts of debt and net wealth.
ME Bank chief executive Jamie McPhee said the result indicated that the economic boom in WA was having an effect at the average household level.
“Western Australia is the only state in the country to come in above 5.5 in terms of household financial comfort,” he said.
“The exact factors driving this relative comfort are unclear, although it’s obviously likely that the mining boom is playing a big role.
“As things stand, there is a big gap between WA and the least financially comfortable state in the country, Queensland.”
Queensland ranked the lowest in terms of household financial comfort with a rating of 4.81.
Access Economics director Chris Richardson said while the mining industry had positively affected WA; it was not enough to boost Queensland’s rating which he said had probably suffered due to the floods and cyclone.
He said even if every year was not a good year in finance, WA was well placed because if its mining industry.
“Industrialisation and urbanisation are trends you can sell into for years to come,” he said.
Mr Richardson said WA’s positive results in the report would likely include a split between the haves and the have nots in the state.
WA Council of Social Service chief executive Irina Cattalini agreed.
She said while the study showed that WA households were experiencing higher levels of financial comfort than other states that was not the experience for all households.
“Recent ABS data shows that lower income households are experiencing much higher rates of financial stress than others,” she said.
“While the WA economy is strengthened by the mining boom, not all West Australians are sharing in this prosperity.
“Cost of living increases over the past two years, many of which are linked to the resources boom, have put financial pressure on many West Australian households.”
Australian Bureau of Statistics figures from 2009/2010 show more than 19.4 per cent of low income families were unable to pay utility bills on time, 14.6 per cent could only afford second hand clothing most of the time and 27.8 could not afford a night out once a fortnight.
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