OZ Consumers: No Choice But To Cut Spending?
The first national ‘Consumer Pulse Report’ from Choice Magazine reports major consumer cutbacks on spending in the face of rising bills, which comes days after the latest ABS report noting retailer turnover up 0.6pc in June 2014, itself up 5.5pc from June 2013.
The Choice report shows 46pc of surveyed Australians reporting cutting back on essential spending and 62pc on non-essential spending, with 57pc putting clothing and entertainment at the top of the list of household cuts.
The survey, which was conducted before the repeat of the carbon tax with 1001 consumers aged 18-75 over the 13th to the 25th of June 2014, says the cutbacks are taking place in the face of rising bills over the last year.
Choice CEO, Alan Kirkland, said: “Almost one-in-three respondents told us they find it difficult to get by on their current income, with one-in-five saying they have scraped through to payday by living off credit or borrowing from friends or family.
“This reveals some striking concerns with cost-of-living, which is perhaps not surprising at a time when inflation is outstripping sluggish wages growth, retail sales are fragile and the political debate remains focused on household expenses,” Mr Kirkland says.
The report notes “the squeeze is hardest on low-income households, renters and parents with school-aged children”, with 84pc surveyed concerned over high electricity prices, 81pc concerned with high fuel prices and 77pc concerned with food and grocery prices.
Mr Kirkland noted that: “With such a drawn-out debate over the carbon tax it is not surprising to see electricity at the top of the list, although clearly prices have been driven by a number of factors, including rising infrastructure costs.
“We also identified government spending cuts as the main consumer worry, perhaps reflecting the federal political debate, with the future of billions in budget savings, including family payments, still unresolved.”
“We found that 45 per cent of renters report difficulty getting by, compared to only 25 per cent of mortgage holders, with the majority indicating they cut back on essentials last year,” Mr Kirkland concluded.
The full Choice Consumer Pulse findings are available here.
Below is a Choice Magazine infographic on the survey findings.