With Little Urge To Splurge, Shoppers Dream Of A Tight Christmas
Sydney Morning Herald
Wednesday October 29, 2008
THE Government's cash handouts designed to boost a precarious pre-Christmas economy may backfire, with more than half of eligible Australians saying they do not plan to spend the money.
The rescue package announced two weeks ago will give between $1000 and $1400 to millions of families, pensioners, carers and veterans in early December, with the Prime Minister, Kevin Rudd, urging recipients to plunge the money back into the weakened economy by spending it.In a survey of 1000 people conducted by the Australian National Retailers Association, however, fewer than one in 10 said they would spend the money on Christmas gifts or on festive entertaining. The highest priority would be meeting ordinary living expenses (17.3 per cent), followed by paying off debts such as credit cards and personal loans (13.65 per cent), saving the money (12.95 per cent) or putting it towards a mortgage (12.3 per cent). When the 34.6 per cent who said they did not qualify for the one-off payment were removed from the equation, the survey showed that almost 60 per cent were not planning to return their windfall to the economy.The association's chief executive, Margy Osmond, said the findings showed that consumers were being exceptionally cautious with their money in response to the global economic crisis, and pointed to a clear need for another interest rate cut."Retailers are being squeezed on two sides. Consumers are hesitant to spend which is hitting their bottom line, and at the same time retailers are paying more for their products because of the reduced buying power of the Australian dollar," she said.The survey findings were fairly consistent across the five capital cities, with respondents in Sydney showing a slightly higher inclination than the national average to either put the money towards the mortgage or in the bank. On a national level, people aged between 35 and 44 appeared to be showing the most mortgage stress and were also the least likely to be planning a Christmas splurge. More than a third of those over 65 said they would use the money to meet living expenses.
© 2008 Sydney Morning Herald
