Cost Pressures Widen Generational Divide: IAG Report

• NSW consumers show stronger sentiment than the national average, with 61.6% positive (vs.58.4%) and 59.2% optimistic about the year ahead (vs.56.7%), reinforcing a resilient outlook within the state.
• 40.7% of people demonstrate relative financial strength and say they are in a net positive position (vs.39.4% nationally) and the highest financial optimism at 37.8% (vs. 32.6%).
• NSW consumers are actively adjusting to cost pressures, with 51.6% delaying major purchases and 45.5% taking on additional work or side income, indicating proactive financial management.
• While one in two Australians (52.7%) are factoring climate risk into decisions about where they live and work; in NSW, this figure rises to 55.8%.

Queensland

• Queensland consumers' national mood closely mirrors the national average, with 58.5% reporting a positive outlook (vs.58.4%).
• Queenslanders are more likely to be prepared to tackle unexpected risks (70% vs. 62.8% nationally), including climate change-driven extreme weather events.
• 51.1% of Queenslanders report closely following local emergency services weather updates - the highest in the country, and to take steps to mitigate against climate risk such as maintaining and repairing their home and having an emergency plan in place.
• Consumers are more likely to have adjusted spending habits in response to the current cost-of-living challenges by using discounts or rewards more often and reducing or cancelling paid subscriptions.

South Australia

• South Australian consumers are among the most likely to agree that climate change is increasing extreme weather risk (68% vs. national 62%), and less likely to feel confident their home is protected against extreme weather (50.2% vs. 53.1% nationally).
• They are more likely to take proactive steps to protect their property, such as cleaning gutters, roofs or drainage systems to reduce fire, storm or flood risk.
• Climate risk is dominated by extreme heat in the state, with concern caused by exposure to heatwaves the highest in the country (48.8% vs. 38% nationally).
• Overall, 53.1% of South Australians report a positive personal outlook (57.7% vs.58.4%) and are more likely than people in other states to have put money aside for unexpected expenses (55.7%).

Victoria

• Victorians are feeling the pressure of rising costs and increasing risks, with 50% of consumers reporting a positive outlook compared to 58.4% nationally.
• Exposure to risk is elevated in Victoria and people report feeling more anxious than those living in other states, at nearly 1.5 times the national average (12.2% vs. 8.6%). 13.7% having experienced a safety incident such as crime or vandalism (vs. 10.7% nationally).
• Overall, Victorians report feeling less prepared to deal with unexpected risks or events than the national average (60.3.% vs. 62.8%).
• Almost one quarter of Victorian consumers say they have been impacted by bushfire (24.6% vs. 20.6% nationally).

Western Australia

• Western Australians are emerging as the most resilient and optimistic in the country, with 60% feeling positive about Australia today, compared with 58% nationally.
• Just 22% of people in the region report holding a negative view - the lowest of any state.
• Exposure to extreme weather events is low in WA, evidenced by just 53% of residents having experienced an extreme weather event (vs 66.6%).
• Lower perceived climate risk may be preventing households from taking proactive steps to prepare - leaving some households more exposed when extreme weather hits.

SMEs:

• Australian small and medium-sized enterprises (SMEs) are navigating a period of sustained pressure and uncertainty. While business confidence remains relatively resilient, underlying operating conditions have become more complex and challenging.
• Nearly two-thirds of SMEs have experienced a significant disruption in the past year as cost-of-living pressures, climate volatility and economic uncertainty intensify.
• Climate-related disruption is also emerging as a prominent business risk. Nearly half of small businesses (48%) report being impacted by extreme weather in the last 12 months and gaps persist in key areas including business continuity planning and maintaining backup suppliers.