Australia's ‘tenuous middle class’ is slipping into poverty

As news from the Middle East continues to have knock-on effects all over the world, I know I’m not the first to connect global events to vulnerabilities here in Melbourne. I’m also not the first to draw the line between geopolitics and food insecurity.

What makes this moment unique is that at the same time as rising fuel prices, we're also seeing interest rate hikes, plummeting home ownership, national and international crop breakdowns, all resulting in cost-of-living increases that just keep coming.

The world today exists in a state economists call the polycrisis, and the most recent fuel shocks have brought it more acutely to our shores. Where our country historically relied on our vast isolated wealth to protect us from the worst economic shocks, the recent food security crisis in our regional communities shows that the wall has begun to fall.

People are experiencing food insecurity who never have before. We’re seeing it reflected in the headlines, and in our operations at Alex Makes Meals. These are people living neither beyond nor beneath their means.

They might have a mortgage, a family, two incomes, with kids at school. From the outside, they won’t necessarily look like they’re experiencing hardship. But between rent and mortgage hikes, the rising cost of groceries and fuel, and bills that don’t stop coming, they find themselves living paycheque-to-paycheque.

They might have some savings as a buffer, but after the last five years of back-to-back economic shocks, they certainly haven’t been adding to the pot. They’re doing everything ‘right’, but precariously so.

We sometimes refer to this group as the ‘tenuous middle class’.

Compounding crises

Over the past few months, we’ve had two particularly bad external factors hit our country at the same time.

There’s inflation in general, the rising interest rates and the rising cost of living that we’ve all seen reflected on supermarket shelves. Then there’s the war in the Middle East driving up fuel prices, and creating huge additional costs for those who rely on their vehicles for work, schooling and lifestyle.

Many families would be able to survive one of these factors. Maybe they would be pushed to their limit; maybe they would have to cut back on luxuries, but they would manage.

However the cost of living crisis has kept the average family at their limit since 2022. Facing fuel price hikes, they risk falling into the kind of poverty that it’s hard to escape again.

It’s not necessarily fuel prices driving people into food insecurity. It’s also not really housing stress. It’s both of those things happening at the same time.

Food is the first thing to go

It’s a common misconception in the food relief sector that we primarily service the unhoused population, or those struggling with addiction and mental health challenges. Of course we serve these groups, but they make up only a fraction of our total recipients.

The biggest increase is at the other end of the scale. We're seeing a huge uptick in people experiencing food insecurity for the first time; the folk prioritising fuel, bills and their rent or mortgage ahead of the food shop.

We’re seeing this most clearly in regional Victoria, where fuel prices are already in the hundreds of dollars per week. With a 40% rise in petrol costs, regional families are copping hundreds in unavoidable expenses: the cost of driving to work, school, the grocery store.

So, as people reach the limits of their finances, food becomes the only thing it feels reasonable to cut back on, without falling into debt or risking their home. Food is the last expense that can wait.

For most of us, there are no wage increases coming in the near future. Peace in the Middle East seems even further away. Even if things stabilise within the next six months, that’s a long time for a person to maintain the same pace and energy levels as when they were eating three meals a day.

This will influence their wellbeing, their families and their jobs. And it’s a common experience. So inevitably, it will influence the economy, too.

Prevention through community empowerment

The poverty line is a ledge, and it’s hard to know exactly how many people are on the precipice. What we do know is that at last count (all the way back in 2023!) 3.7 million Australians, one in seven, are already living below the poverty line, including 757,000 children.

When things get tough, we all take a step backwards.

Those in extreme need suffer even more. Those already receiving food relief find themselves relying on it. Others slip from comfortable living to seeking support for the first time.

Food relief organisations like ours will never stop serving the most vulnerable. So when shocks like this happen, more people fall into our remit. The pool only ever gets bigger.

We have seen demand skyrocketing, with new partners looking to provide our meals to their communities, and existing partners asking for more supply.

And with more people requiring food relief, it’s more important than ever that it’s delivered in a way that’s respectful, accessible and dignified.

That means meeting people where they are — metaphorically, in terms of addressing a (hopefully) short-term need, but also physically, ensuring they don’t have to drive for miles to access support.

By empowering and enabling community programs, we can make food relief easy to come by, while also connecting people to other resources: resources that can provide additional support, or even just a listening ear and understanding, and resources that can help prevent them slipping further into poverty.

There’s no silver bullet here, and no one simple fix. For all of us, circumstances outside of our control have us tightening our belts.

For some of us, there’s no more slack to give.