“These cuts include a 10 per cent drop in health insurance, a 7 per cent drop in utilities and a 4 per cent decrease in spending at the supermarket. This highlights the difficult choices people in this age bracket are making, with some having to make larger lifestyle changes like foregoing their health insurance altogether. The decrease in utilities spending could also suggest young Aussies are moving back in with parents or into shared accommodation to split costs.”
Nationally, spending increased by 2.5 per cent, with essentials increasing by 3.6 per cent. Consumers clocked up an average of $1,472 per month on essentials, led by increased spend on insurance (+8 per cent), utilities (+6 per cent), pharmacies (+6 per cent) and supermarkets (+5 per cent).
“Many Australians are having to allocate more of their wallet to essential living expenses, rather than other areas where they may prefer to direct their spending. The cost-of-living initiatives announced in the Federal Budget, for example the energy bill rebate, reflect the increased spending by Australians on essential items like energy,” Mr Tubman said.
Discretionary spending increased by just 1.4 per cent, led by continued growth in spending by those Australians over 60.
“The wide gap in spending patterns across age groups continues to persist, with Australians in the 60 and older age bracket spending above inflation, especially on activities like travel, which is up 11 per cent, general retail up 9 per cent and eating out, up 7 per cent,” Mr Tubman said.
Across the country, regional Australia continues to hold up better than metro areas with a 3 per cent annual uplift in spending, compared to 2.3 per cent. Consumers in regional areas more than doubled their discretionary spending compared to those living in metro areas (2.4 per cent versus 1 per cent).
“While spending in regional areas continues to outpace that of metro areas, this gap has narrowed when compared to previous quarters. This raises the question whether people in metro locations have downsized their wallets to adjust to higher prices, and what spending growth remains is now ‘the new normal’,” Mr Tubman said.
On a state-by-state basis, spending was most resilient in Queensland (+3.3 per cent) closely followed by the Australian Capital Territory at 3.1 per cent and South Australia at 2.9 per cent.
“In the Sunshine State, discretionary spend per capita on things like travel was higher than the nationwide average. While further south, Victorians have tended to reduce their spending more significantly than others when it came to homewares and apparel and didn’t increase spend as much on travel, leisure and eating out,” Mr Tubman said.
CommBank iQ is a joint venture between Commonwealth Bank of Australia and data science and artificial intelligence company Quantium, which uses de-identified payments data from approximately 7 million CBA customers –– to track spending trends.
Many Australian households are finding it harder to deal with current cost of living pressures. CommBank is supporting those who need our help with a range of initiatives. CommBank’s Cost of Living Support Hub provides a range of tools, tips and guidance to help our customers navigate current cost of living pressures.
