Coronavirus payments and early super push spending 17pc ‘above normal levels’

Consumer spending has shot to 17pc above pre-COVID levels following stimulus payments and early super withdrawals.

Stimulus payments and super withdrawals are landing in bank accounts. Picture: Annette Dew

Government stimulus and the early release of super savings have encouraged Australians to open their wallets, with new data showing consumer spending has shot to 17 per cent above pre-coronavirus levels.

The data from data analytics company illion and economic advisers AlphaBeta, part of Accenture, shows that from July 6 to 12, Australians ramped up spending across all categories in anticipation of the second $750 coronavirus stimulus payment made available from July 13, and the second, $10,000 tranche of early super withdrawals, available from July 1.

More than five million Australians will receive the stimulus payment and almost 800,000 repeat applications have been made by those eligible for the COVID-19 early super release scheme.

The impact of these payments on the economy is significant. When people eligible for the stimulus payment and early super were removed from the sample, average spending was 2 per cent below normal levels.

But director of AlphaBeta, Dr Andrew Charlton, said this was still a positive sign, even adding in the fact that consumer spending in Victoria is lagging 15 per cent behind the other states.

“Consumer spending across all states except Victoria has skyrocketed and this is due to stimulus and super payments,” he said.

“The most interesting part of this data is that while super and stimulus payments have accelerated spending, we are now also seeing spending creep up to pre-COVID levels from those who did not receive such support,” he said.

CEO of illion Simon Bligh called the data “encouraging” and predicted the situation in Victoria would improve over time.

“Once Victoria gets through this second wave – and assuming it is contained within the state – we will almost certainly see spending increase across all states,” he said.

The most ascendant category remains food delivery, which is 294 per cent above pre-COVID levels.

Furniture and office spending is 114 per cent above pre-COVID levels as many continue to work from and companies invest in COVID-safe office fit-outs.

Department store and online gambling spending remain just more than 50 per cent above their pre-COVID average.

As coronavirus restrictions relax across the country, there has been a sustained increase in spending on gyms and public transport services, although the categories remain 25 per cent and 57 per cent below their pre-COVID average, respectively.

Pub and venue spending has continued to increase despite the second lockdown in Victoria, sitting 24 per cent under the pre-COVID average, while road toll and travel spending are down just 13 per cent and six per cent.

Spending at cafes has now made a complete recovery, with spending 8 per cent higher than pre-COVID levels.

Another sign of a return to normalcy, AlphaBeta said, is in credit application volumes – which are now just 30 per cent below their pre-COVID levels in most states.