Miners and Government employees were the big winners of Covid with high and, most importantly, stable incomes. However, counter-intuitively, they are now leading the charge to file for Debt Agreements. A Debt Agreement is a formal, negotiated alternative to Bankruptcy. To do a Debt Agreement, as opposed to Bankruptcy, you need stable income. So COVID-19 Debt Agreements reflect those cities with stable and high incomes. Adelaide, Perth, and Canberra top the cities with the highest average debt.
‘FIFO and government money are major factors behind the COVID-19 Debt Agreement landscape,’ said Beyond Debt’s Ben Paris.
Adelaide debtors have the most debt in the country, with each debtor having an average total debt of $58,355.45. This high amount of debt is fuelled by a combination of stable FIFO incomes and low accommodation costs. “People will borrow as much as they can. If people earn more, they just borrow more,” said Beyond Debt’s Ben Paris.
Canberra is a close second, with the average debtor owing on $56,417.83. Canberrans enjoy the highest average incomes and most stable incomes in the country, with 42 per cent of the ACT’s workforce employed by the government, the highest of any state.
Perth comes in bronze medal position with debtors there owing an average of $53,998.02. Stable FIFO incomes have also been the primary driver.
By contrast, Melbourne had the lowest level of debt, with the average Melbournian debtor owing just $34,135.42. Victoria has the highest unemployment rate of the east coast cities and the least exposure to mining. The lockdowns have also hit Melbourne particularly hard.
City Average Debt
Internal Data from Beyond Debt’s clients.