Financial data reveals if 30-year-old millennials are worse off than their parents

The cost-of-living crisis puts long-held dreams further out of reach. Data shows how this happened.

In 1995, at the age of 30, Jochem Van Der Kwast had the great Australian dream in his grasp.

“It was still the quarter acre lot. The Hills hoist, that kind of paradigm,” he says.

Jochem worked a few days a week selling kitchens, making around $70,000 a year, and in 1995 it was enough to support his wife, two kids, and a mortgage on a home on the NSW Central Coast.

“It had a steep driveway, that explained why we got it for $196,000, but it was a four-bedroom brick house with spectacular views,” he reflects.

“Nothing really weighed on me, it felt easy.”

When Jochem’s daughter Clementine Van Der Kwast looks through her family photos, it feels bittersweet.

“I wish I could afford to live the life my parents did.”

The 33-year-old Newcastle academic earns an above-average income and thought she would be more financially secure by now.

“I would love to have a child, but I don’t think I could do it as one person with the costs of childcare and everything … which is quite sad,” she says.

Clementine doesn’t think she’s alone in feeling like everything is on hold.

“The Australian dream is over. I think that’s symbolic of a past time. I don’t think the world’s been like that since 2001.”

To understand why 30-somethings like Clementine are feeling like they’re in a losing financial race, the ABC took a look at the data.

An analysis of five factors — housing, healthcare, debt, tax, and income — reveals the age group is caught in a perfect economic storm.

‘Further away than when I started’

Today’s 30-34 year-olds are the first generation in more than 47 years where most people don’t own a house.

In the 1990s, recession pushed interest rates to 17 per cent. Despite the steep repayments, most 30-somethings were able to purchase a home.

When it comes to housing affordability, Greg Jericho, chief economist at the Australia Institute, says today’s cohort has it worse than those in recession because property costs have surged past incomes.

“The reality is that the cost of the loans was much smaller, because house prices were much lower, but also relative to what they were earning, it was much lower,” Mr Jericho says.

“It’s not about comparing interest rate with interest rate.”

In 1990, the average mortgage was about three times the yearly wage for a 34-year-old. Now it’s eight times.

[Ratio of mortgage size to earnings has grown to 1:8.4]

Young people are entering the market later due to higher property costs and repaying a loan is getting harder — particularly if they entered the market in 2021, when house prices peaked.

[Loan repayments have grown to more than 50% of annual earnings]

With more people potentially paying off their loans into their 50s and 60s, Mr Jericho says he’s concerned Australia’s retirement system will fall short.

“The pension is based around the belief that most people will own their home outright, not have to have a regular income that can meet loan repayments,” he says.

“We don’t have a system that can cope with a situation that is actually going to be more common. At the moment, single retirees who are renting or paying off their home loan — they are living in poverty.”

This uncertainty has been on Harry Payne’s mind. He turned 30 a few months ago, and like many people his age, he’s now thinking about the rest of his life a lot more.

His small horticultural business based in Woy Woy on NSW’s Central Coast has been thriving. After paying off staff wages and costs, he’s managed to save up $70,000 with his partner for a house deposit.

“I’ve been saving for a house for about five years. And I’m further away than when I started,” he sighs.

He was raised in the suburb of Tascott where his father Andrew built a kit home on land he bought for $30,000 back in 1987.

Andrew opted for a block of land instead of a house due to high interest rates, but he was also excited to build.

Harry’s been looking to purchase a home around Tascott and Woy Woy, but the houses are regularly fetching more than $1 million.

“The repayments were going to be $1,800 a week for 45 years. That’s our whole income.”

Lately, he’s thinking he’ll buy land two hours drive away and build slowly over the next few years while continuing to rent.

“We can’t afford in our area, it has to be in the middle of nowhere — but my work’s here. I’m stuck here because if I move my business and start over we won’t be able to afford the mortgage repayments,” he says.

“I need that income.”

‘A story of no progress’

The incomes of 30-somethings fell in 1996 as a result of the recession.

“Life has never been cruisy for any generation. The early 1990s recession was well beyond anything that millennials have really had to deal with in their adult working life in terms of unemployment … but there was a recovery,” says Mr Jericho.

In 1998, incomes started to recover. But within a decade, the 2007 Global Financial Crisis (GFC) flattened incomes of 30-somethings, this time for nearly 15 years.

The ABC has used two different datasets from the Grattan Institute and exclusive data from the Household, Income and Labour Dynamics in Australia (HILDA) survey to track the disposable incomes of 25-34 year olds, adjusted for inflation, over the past three decades.

[Disposable income chart]

Professor Roger Wilkins, the HILDA survey co-director, says the expectation was that incomes of this age group would have grown over time.

“They’re more educated than their predecessors so you’d expect them to earn more, but since the early 2000s, it’s been more or less a story of no progress in real incomes,” he says.

While most age groups flatlined, older generations are often better cushioned due to having other sources of income, according to Grattan Institute research.

For younger groups, the stagnation coincided with the continued rise of house prices that began in the late 90s, pricing them out.

“I think a home is just so central to what people hold dear about establishing a life,” says Professor Wilkins.

Essential costs like housing, food, healthcare and transport have soared, but other expenses like furniture, clothes, entertainment and travel have gotten cheaper.

Clementine feels like it’s the costs that matter to her future most that keep going up. She’d started talks with a potential donor and researched foster care, but cost-of-living concerns have paused her motherhood plans.

“I’ve also seen people who are going back to work sooner after having a child, say, four months because they absolutely have to.”

More than ever, women in their 30s are working, which you think would lead to a better quality of life. But with more double income households, prices have also increased.

“We’ve just got less time because we’ve got a requirement for more work now as a household,” says Emma Dawson, executive director at thinktank Per Capita.

Ms Dawson thinks that things that could ease stress, like paying for cleaning services, isn’t within budget for many.

“We keep hearing, ‘Everything’s great, the economy is growing,’ but if your life isn’t getting better, what’s the purpose of all that growth?”

While it’s hard to quantify how many are making decisions based on finances solely, more than ever, households aged 25-34 are delaying a family or foregoing marriage.

They’re also going to the doctor less.

‘They can’t help me’

Harry’s GP bulk-billed him for many years up until three years ago. The out-of-pocket costs means Harry no longer gets regular check-ups.

[GPs are bulk billing fewer patients]

By law, private health insurance cannot cover out-of-hospital medical services like GP visits or specialist consultations.

Medicare covers part of these services but the gap has been growing over time — from 2022 to 2023 the gap for a six-to-20-minute consultation grew from $25 to $35, according to a RACGP survey.

Harry has continued to pay out of pocket to see psychiatric and psychology specialists for his developmental disability, but it’s taking a toll.

“I spend 20 per cent of my wage at the doctors each year to keep me stable and functioning,” he says.

“I’m paying myself $900 a week, my rent is $500, the costs of my medical are just so much … sometimes I’ll miss an appointment to balance it.”

Harry had a disability pension card but when he started working more, those discounts disappeared.

“They count me as disabled and it was good, a lot of discounts and my car rego paid. But now because I make ‘so much money’ as a disabled person, they can’t help me. You kind of think: ‘Was I better off making less?'”

He and his partner grow their own vegetables to lower food costs, and sell plants for extra cash.

“Money doesn’t go as far anymore, my partner and I would earn more than my parents did at this age, but I feel like I can’t stop working,” Harry says.

“Sure my parents didn’t go overseas, but they had holidays. They didn’t work their arses off every day, they had a life.”

‘Bearing all the consequences’

Higher education was free in Australia from 1974 until 1989, after which the Higher Education Contributions Scheme (HECS or HECS-HELP) was introduced.

For 30-somethings who started studying in the 2000s, higher education is costing a lot more than their parents.

What bothers Sunshine Coast veterinarian Dr Anna Sri is that the politicians who have increased the burden of HECS repayments are largely part of a generation who have never known what paying it feels like.

“There’s politicians who had free education that are now making us pay, well, they’re the ones doing well now so they could be the first ones to pay it back,” she says.

“I feel like this generation is bearing all the consequences of poor decisions made by previous ones.”

The likelihood of a 30-something having a HECS debt hasn’t changed since the 90s (about half) but when they’ll be expected to start repaying it has. The cost of degrees has also become much higher, making HECS debts for 30-34 year-olds balloon by 10 times since 2001, according to HILDA survey data.

In the early 90s, you were forced to repay HECS only once you reached average earnings. Now, repayments start far earlier — at 67 per cent of the average.

[Repayments start earlier at 67% of average weekly earnings]

The income threshold to begin paying HECS debt was lowered in 1997 to $20,701 by the Howard Coalition government to reduce spending on the higher education system.

However, after a review and public debate in 2004, these measures were reversed. In 2019, another Coalition government again lowered the threshold as a budget measure.

Mark Warburton, from the Centre for the Study of Higher Education at the University of Melbourne, says the threshold for repayment is too harsh on people making a modest income.

“Out of that $5 billion that is repaid every year. Most of that is repaid by people earning $60,000 to $90,000. We’re not talking about uber rich people,” he says.

He says the initial concept of HECS was never envisioned to be repaid for everyone, only for those that could afford it.

“It was never meant to be a loan system, it’s a social policy, and I think it should take into account a person’s circumstances,” he says.

“The way it interacts with the social security system, and the way it interacts with the tax system, means that there are a pile of people who are on very modest earnings, who virtually get nothing out of working more.”

For Dr Sri, the cost of her investment in her study to be a vet is now hitting $93,000 and will keep increasing with indexation.

“I haven’t been working enough to pay it down, as I’ve been pursuing my PhD as well. It doesn’t stop if you need to take time off and I think that’s a concern, particularly for women.”

HECS was introduced on the basis that education would help Australians have better career outcomes, but Dr Sri says that’s no longer a given.

“For some vet positions, there’s an expectation for a PhD but then the salary doesn’t really change much,” she says.

Dr Sri says the difference between 10 years and 20 years experience doesn’t show in vets’ salaries.

“Unless you own a practice, the wages are capping out at about $140,000 for people with 25 years experience and extra qualifications. That’s well below other medical professionals with high HECS debts.”

Footing the bill

For Clementine, tax is the issue that really makes her think the system is broken.

“I don’t mind paying tax in theory, but I don’t like it when billionaires and companies exist and yet it’s the people making 90 to 180k that pay the bulk of the tax. I think that’s disgusting.”

According to the ATO’s 2021 release, those with taxable incomes of $90,000-$180,000 paid 36.8 per cent of net tax and those over $180,000 paid 31.6 per cent.

When it comes to those in their 30s, Grattan Institute data shows that in 2016, 30-year-olds contributed twice as much to support older Australians’ living standards than Boomers did at 30. And that’s adjusted for inflation.

The data projections expect 30-year-olds in 2041 to be paying nearly four times more, aligned with budget trends tabled in the Australian Government’s 2023 Intergenerational Report.

[Australians are contributing more to support over 65s]

Kate Griffiths, a deputy program director at the Grattan Institute, says this generation has contributed more to support older generations because health and pension costs have grown, and, in part, because more well-off, older Australians are paying less tax.

“Carving older Australians out of the tax net at the same time as increasing benefits to them just enhances the pressure on working Australians to foot that bill. There’s been no major changes to policy settings to rebalance that,” she says.

Age-specific tax concessions introduced since the 90s include the low income aged person rebate, the senior Australians tax offset, tax-free super and the seniors and pensions tax offset in 2012. Prior to this, age played a smaller role in the tax system, particularly at higher incomes.

“I think the tax system should be based around wealth foremost, that makes sense,” says Clementine.

Ms Griffiths believes older generations care for their kids and grandkids coming up, and the choice is up to government to reform and cut wasteful spending.

“So [the government] fully funds the spending that we want to have. And also potentially look at where that spending can be reduced so that it’s structurally sustainable and it’s still there, for younger Australians when they are retiring.”

‘I’m not even close’

When Clementine thinks about the year she turned 30, she remembers having a feeling that anything was achievable.

“By 31, that feeling turned into … something more cautious. I think my whole demographic is becoming quite cautious compared to, say, my parents’ generation,” she says.

Harry keeps mulling it over in his head. He could have the dream but at a cost he’s not sure he wants to pay.

“It could be possible if I work myself ragged — but is that the Australian dream?” he says.

He thought by 30 he’d have a house without stress, have a stable income and enjoy time off here and there.

“I’m not even close … and it sort of feels like I’m trapped there.”

Reporting and photography:

Data:  and

Design and digital production:

• HECS: Data on HECS-HELP repayments is based on 2023 research by Mark Warburton of the University of Melbourne using data from the ABS (2021), ATO (2022) Norton, A. and Cherastidtham, I. (2016)
• TAX: Net benefits for households 65+ include both cash and in-kind transfers minus taxes
• TAX: Data for tax contributions is based on ABS 2019 analysis using ABS Government Benefits, Taxes and Household Income; ABS Australian Demographic Statistics; and ABS Population Projections
• TAX: Projection of healthcare cost based on Productivity Commission estimates