Western Australians will continue to rein in spending as cost-of-living pressures linger and interest rates remain higher for longer, according to CCIWA’s latest Consumer Confidence Survey.
The December quarter survey, which polled almost 1,000 households, found around two in five (43%) planned to reduce spending over the next six months – a seven-percentage-point increase since September.
CCIWA Head of Policy Dr Anthea Wesley says the Reserve Bank of Australia’s (RBA) decision to pause further interest rate cuts, and the possibility of rates increasing again, is weighing on household confidence.
“Inflation is still running above the RBA’s target and households have been bearing the brunt of higher costs for several years now,” she says.
“With no further rate cuts on the horizon, it’s not surprising that more households are being cautious.”
Discretionary spending under pressure
Non-essential spending is expected to take the biggest hit, with almost half of respondents (49%) saying they will cut back on dining out and consumer goods – up eight percentage points from the previous quarter.
Households also plan to reduce spending on homewares (45%), recreation and holidays (42%) and healthcare (24%).
Looking to the festive season, spending intentions remain subdued. Nearly half of households (48%) expect to spend about the same as last year, while 35% plan to spend less. Only 16% anticipate higher Christmas spending.
Confidence edges higher despite cost pressures
Cost of living remains the dominant drag on confidence, with more than three in five households (78%) identifying it as a key concern – up 12 percentage points since September.
Despite this, overall consumer confidence in WA edged higher in the December quarter, supported by a resilient labour market.
“Overall, consumer confidence in WA climbed modestly in the December quarter, with 30% of respondents predicting the economy will improve in the next six months, and around two in five (35%) expecting it to stay the same,” Wesley says.
“The survey found the strong jobs market was driving much of this optimism, with the unemployment rate at its lowest since March 2024.”
GST concerns remain front of mind
The survey also reveals strong concern about the future of WA’s GST share ahead of the system’s scheduled review in 2026.
Nearly seven in 10 households (69%) say they are worried about a potential reduction, with concern consistent across all income levels. Only 8% are not concerned.
“This shows that people in WA deeply understand what is at stake for our State if the GST share is reduced,” Wesley says.
“That is why it is vital that the Commonwealth maintains the 2018 deal which gave WA a 75-cent floor in its GST revenue.”
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