Qlders cutting back as cost of living pressure starts to squeeze

With Australia entering a “per-capita recession”, the stricter spending habits of Queenslanders have been revealed.

Queenslanders have been tightening their belts, cutting back nights out and furniture as rents and power prices put a squeeze on finances.

The amount being forked out for rent jumped more than 11 per cent in the June 2023 quarter, compared with that of the same period last year, while the amount going towards electricity and gas rose a whopping 23 per cent.

But the state’s economy is performing among the best in the country, as government spending on road and rail projects pumps money through the system, according to Australian Bureau of Statistics data released on Wednesday.

Cost of living pressures are continuing to rise, forcing Queenslanders to tighten their belts.

It was also revealed that while the national economy avoided technical recession, it did enter a “per-capita recession”.

A per-capita recession is when the economy has gone backwards after population growth is taken into account.

Treasurer Jim Chalmers said while households were under pressure from rising cost of living and interest rates, the economy was proving resilient, playing down the importance of the per-capita recession, but the Opposition argued the economy was “shuddering to a halt”.

Another financial hit is coming, with about 500,000 people expected to come off low, fixed-rate mortgages on to higher interest rates before the end of the calendar year.

China’s economy is also slowing, which will have flow on impacts for Queensland which is

Queenslanders spending remained flat in the three months to June, with the amount households were spending increase just 0.3 per cent.

While cafes and restaurants saw some benefit, with Queenslanders still willing to go out for a meal increasing their spending there by 1.7 per cent.

But they cut back in other areas, including slashing spending on cultural and recreational activities, as well as on furniture.

The state’s economy increased 1.3 per cent in the June quarter, compared to 0.8 per cent in NSW and 0.7 per cent in Victoria, while only South Australia matched Queensland’s growth.

Mr Chalmers said consumer spending was week because interest rates were higher and people were being “buffeted” by higher prices in the economy.

Treasurer Jim Chalmers

“Australians continue to pull back on discretionary spending to make room for essentials and also to cover mortgage repayments,” Mr Chalmers said.

“The combination of higher interest rates, slowdown in China and other factors, all of these things are buffeting our economy.”

Opposition treasury spokesman Angus Taylor said the data showed the economy was “shuddering to a halt”.

“The only thing propping up this economy now is record levels of population growth. Take that away and the economy will be well and truly in recession,” Mr Taylor said.

“This is having a huge impact on Australian families, Australian businesses.”