Not even the AFL and NRL grand finals could entice Australians to open their wallets with growing evidence people are using their stage 3 tax cuts to pay down debt.
The Commonwealth Bank’s measure of household sending, which tracks information gleaned from 7 million of its customers, fell by 0.7 per cent in September.
Spending on recreation jumped by 1.5 per cent, largely due to an 18 per cent surge in ticketing services for Brisbane’s victory over Sydney in the AFL grand final and the Penrith Panthers’ fourth consecutive NRL grand final win.
But this was not enough to offset big falls in hospitality (down 2.8 per cent), transport (down 2.5 per cent) and household goods (down by 2.3 per cent).
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There had been an increase in spending through August which prompted some speculation the stage 3 tax cuts, which started from July 1, were being used by shoppers.
But CBA chief economist Stephen Halmarick said that increase appeared due to the early Father’s Day, which fell on September 1 this year.
“It’s important to note that the only other spending categories to rise in September were all essentials, indicating that increased take-home pay from tax cuts is largely being used to pay down debt and on staples, not spending on discretionary items,” she said.
“This trend is reflected in the year to September, supporting our view that softer economic data, coupled with a further deceleration in inflation will see the RBA cut interest rates in December 2024.”