The bank’s increasing profit margins correlate to steep mortgage repayment rates for lenders, pushing more and more Australians further into debt.
Matt Comyn, Commonwealth Bank’s CEO, received almost $8 million in bonuses, taking home a pay packet of approximately $10.4million – approximately 110 times that of the average Australian worker.
The bank increased variable mortgage repayments 10 times over the 2022-23 period, with the cash rate increasing by four per cent.
Over the same period, repayments on an average home loan of $585,000 have risen an extra $1,415, alongside skyrocketing cost of living expenses, while wages stagnate.
Young Australians are feeling the effects of rate hikes much more acutely, with Australians aged 18-34 saving less than the previous financial year, despite decreased spending.
Meanwhile, Australians aged 55 and over, particularly those in the 65+ age bracket, have seen steady increases in savings alongside increased spending.
The figures highlight a deeply escalating generational divide, with older Australians reaping the benefits of interest rate hikes.
Tax expert Kristen Sobeck identified that three major groups bear the brunt of inflation: the unemployed, workers, and borrowers.
“What we know is these three groups — the unemployed, workers and borrowers — disproportionately are effectively the working age population,” says Sobeck.
“Most certainly it does seem the working-age population is kind of bearing the brunt of the inflation crisis, relative to those who don’t have a mortgage, who aren’t employed and are in the consumption phase of life.”
However, Sobeck emphasizes that while borrowers are currently experiencing extreme pressure, they still hold a privileged position when compared to Australians who are unable to secure a home deposit.
“The most vulnerable individuals in our society are the renters, or the individuals who don’t own a home.”
