Discretionary spending in the ACT was down 4.7 per cent through the year to June, the steepest decline of any Australian jurisdiction. Photo: File.
Canberrans are spending more money on essential items such as food and cutting back on clothes and home furnishings, the latest Australian Bureau of Statistics data shows.
According to the ABS’s indicators for June 2023, household spending in the ACT through the year increased by 1.3 per cent, slightly below the national average of 1.8 per cent.
Although household spending was higher than a year ago, it’s a much smaller increase than in previous months.
“This was the smallest growth in household spending since February 2021,” said Ben Dorber, ABS head of business indicators.
“Spending on discretionary goods and services was down for the third straight month, falling 0.7 per cent over the year [nationally], as households adjust to cost of living pressures.
“Non-discretionary spending rose 4.2 per cent, however the growth rate has been slowing since January, when it reached 21.0 per cent.”
Discretionary spending in the ACT was down 4.7 per cent through the year to June, the steepest decline of any Australian jurisdiction. Canberrans are spending considerably less on clothing and footwear, with spending down 14 per cent from a year earlier. Households in the ACT are also spending less on alcohol, tobacco and recreational activities.
At the same time, the ACT’s non-discretionary spending was also the highest in the country, up 6.4 per cent. Spending on healthcare and food increased the most, at 5.9 per cent each, followed by transport at 5.3 per cent. While not necessarily essential, spending on hotels, cafes and restaurants also grew 4.5 per cent in the year to June.
Canberra Business Chamber CEO Greg Harford told Region that while interest rate hikes had impacted consumer confidence in the ACT, there were also some more local-specific factors at play.
“The Canberra Business Chamber is hearing that consumer confidence in the ACT has dipped recently on the back of higher interest rates, and a bit more uncertainty for some firms that service the Federal Government,” he said. “We think spending has slowed, although we don’t yet have up-to-date numbers on that.
“Looking ahead, a lot depends on whether the Reserve Bank of Australia will continue to keep interest rates where they are. The business community will be hopeful that there are no further increases in rates, and that they start to come back over the coming months – this will help support improvements in both consumer and business confidence.”
At the same time, the ACT recorded one of the highest annual rates of wage growth in the country, at 4 per cent, behind only Western Australia at 4.2 per cent and above the national average of 3.6 per cent.
However, across the country, wages are still being impacted by cost of living and labour market pressures.
Notably for the ACT though, the ABS pointed out that public sector wages were starting to pick up.
“Public sector wages rose 0.7 per cent over the quarter, with annual growth of 3.1 per cent the highest recorded for the sector since March quarter 2013,” the ABS said. “Enterprise agreement bargaining outcomes, together with regular scheduled rises drove the increase in public sector wages.”
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