JobKeeper and JobSeeker extensions are a welcome boost to consumer spending
Researchers have welcomed the announced extension of JobKeeper and JobSeeker, with new survey results showing Australians are spending less.
While credit card usage has increased, the latest Taking the Pulse of the Nation survey shows that 45 per cent of Australians are spending less, 33 per cent are spending the same, and 20 per cent are spending more (whatever the means of payment) compared to before the pandemic.
Led by the Melbourne Institute: Applied Economic & Social Research at the University of Melbourne, the fortnightly survey tracks changes in the economic and social wellbeing of Australians. The 14th wave of the survey was conducted from 6-10 July.
The survey found people are spending less in all states, and the researchers expect to see continued spending reductions in Victoria as other states recover. At the end of the year, 39 per cent of people surveyed expect to be spending the same amount as before COVID-19, but 33 per cent expect to be spending less. And among people who currently spend less, 55 per cent still expect to be spending less at the end of the year.
“This is serious as household consumption expenditure is already low,” Melbourne Institute Professor Guay Lim said.
“Household consumption expenditure has already fallen in all states, from a positive quarterly growth in December 2019 to negative values in March 2020. Further declines in spending will seriously hamper the economic recovery process.”
A Research Insight paper based on the survey shows that women are spending less than men, and expect to spend less in the future, probably because they have lost the most work. The most financially stressed people cut spending the least, which researchers say suggests they have less room to reduce spending. Older Australians are spending less now, but expect to spend more post-pandemic.
“The extension of the JobSeeker Coronavirus Supplement and the JobKeeper payment are welcome as they will protect the income of the unemployed and people who would otherwise risk losing their job,” Dr Federico Zilio, author of the research, said.
“Spending of those on Jobseeker and JobKeeper will likely reduce after September. The government could have offered higher payments for people whose spending has been most severely affected. The extension of the JobSeeker and the JobKeeper payments will help them, but they will have to reduce spending if they cannot draw on savings or borrow.”
Australians’ satisfaction with the government’s handling of the pandemic also continues to fall. Compared to three weeks earlier, the survey shows fewer Australians are satisfied with the government’s policy performance, down to 58 per from 66 per cent.
Interact with the results of the Taking the Pulse of the Nation survey on our tracker page.