Christmas Cheer For Families
The Age
Tuesday December 2, 2008
SOME Australian families with two children and a mortgage could be looking at savings and cash bonuses of up to $650 a week through December.
But economists are uncertain how much of the extra cash weary consumers will inject back into the economy in the lead-up to Christmas and how much of it they will save.Today's expected rate cut of at least 0.75 percentage points will take another $150 off the monthly cost of servicing a $300,000 mortgage if fully passed on. It would bring total savings since mortgage rates peaked in August (at 9.6 per cent) to $530 per month or $132.50 per week.Falling petrol prices have also meant more money for families. According to CommSec, average families are saving about $17 a week in unleaded fuel costs since August.And from next week, millions of pensioners and low and middle-income families will also benefit from $8.7billion of government hand-outs.On Monday, everyone receiving Family Tax Benefit Part A will receive a one-off payment of $1000 for every child in their care. If spent over the month, the average family with two children is immediately $500 a week better off.This, coupled with savings from petrol and interest rate cuts since August, could mean total savings of up to $650 a week in December for some families with two children and a $300,000 mortgage.CommSec chief economist Craig James said the extra cash would help many families."They are probably saying that if this is a significant downturn ... then bring on more days like this, because we have had rates coming down, petrol prices falling in a heap and the Government seemingly falling over itself to be able to put dollars in people's hands," he said.Harvey Norman chief Gerry Harvey believes most of the hand-outs will be spent.On the other hand, AMP Capital Investors' Shane Oliver said fear of unemployment was casting a pall over spending confidence. -- With PETER MARTIN
© 2008 The Age
