Australians' Unhappiness: A Deep Dive into the Cost of Living Crisis
In a surprising twist, Australians are now less satisfied with their lives than they were during the strictest Covid-19 lockdowns. This revelation comes as a shock, especially considering the financial pressures that have been mounting for years. The KPMG analysis paints a grim picture, with life satisfaction scores plummeting to 7.1 out of 10 in 2025, down from 7.2 in 2020 and a respectable 7.5 in 2019.
What's even more concerning is the prolonged nature of this decline. Unlike the temporary disruption of the pandemic, the current situation is a sustained pressure on living standards. Real wages have taken a hit, declining by 4.1% between 2019 and 2025, while median household wealth has stagnated at $700,000. These factors have left many Australians in a precarious financial position, affecting their overall life satisfaction.
The impact is particularly severe for younger Australians trying to enter the housing market. The age group 25-34 recorded the lowest life satisfaction score of 6.8, a sharp decline from 7.5 before the pandemic. This reflects the harsh reality of Australia's housing market, where high rents or mortgages coexist with declining real incomes.
The 45-54 age group also reported below-average satisfaction levels, likely due to the competing financial demands of supporting children and caring for aging parents. Single-parent households face even tougher conditions, with almost half experiencing cash flow problems and 45% reporting four or more cash flow issues.
Interestingly, the 15-24 age group has seen an improvement in life satisfaction, rising from 6.9 to 7.2. This could be attributed to the return of normal social and educational experiences after the disruptions of lockdowns. However, older Australians aged 65 and over remain the most satisfied, with a score of 7.7, possibly due to their higher rates of home ownership and pension support.
The cost of living crisis is a central concern for Australians, with 45% of respondents in a recent Sky News Pulse/YouGov poll citing it as the most important issue facing the nation. This is a significant jump from the previous poll, and it's no wonder that millennials, who are most likely to be facing the brunt of this crisis, are the most concerned.
The Albanese government's energy bill subsidies have provided some relief, but the pressure remains. With energy prices expected to surge, the government's $150 rebate is a mere drop in the ocean. The situation is dire, and it's not just about the cost of living; it's about the impact on mental health and overall life satisfaction.
In my opinion, this crisis highlights the need for a comprehensive approach to address the financial pressures on Australians. While the government has taken some steps, more needs to be done to support households and restore a sense of financial security. The future of Australia's happiness may depend on it.
