According to News Ltd Reserve Bank figures show mortgage, credit card and personal loan debts now stand at $1.2 trillion! The number is up to 71% from just five years ago and equating to $56,000 for every man, woman and child in the country.
Aussies has gone lazy, our spending binge, fuelled most recently by the federal government's First Home Owner Grant, means personal debt now totals 100.4 per cent of Australia's annual GDP. That's one of the highest ratios in the developed world.
"It's the first time household debt has cracked 100 per cent of annual GDP and it's a terrible, terrible sign," University of NSW economics professor Steve Keen told News Ltd.
It shows we are living beyond our means and many highly geared borrowers are now extremely vulnerable to further rate rises.
I cannot believe we've let it go this far. I just try to picture what people are thinking "my depth equals 99% of my income, oh what the hell, I really need that flatscreen". Seriously^^ That's like committing suicide with 99 bullets but STILL manage to shoot yourself one last time, it's absurd^^ - they are already saturated with debt and will not be able to tolerate much of an increase to their repayments.
Australia's financial headache is likely to get worse before it gets better. The country is in the midst of the peak spending season, when billions goes on the plastic, yet the Reserve Bank data dates back to October's debt levels only, so that means there are another two months of First Home Owner Grant-fuelled mortgage activity still to be taken into account.
The extra cost is expected to add billions to the burgeoning debt tally, have mercy^^
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