Western Australians are cutting back on dining out and socialising as cost-of-living pressures and rising interest rates weigh on confidence.
CCIWA’s September Consumer Confidence Survey found 62% of the almost 1,000 households surveyed are experiencing at least one form of financial stress, although the outlook has improved slightly since the start of the Middle East conflict earlier this year.
CCIWA Chief Economist Dr Daniel Kiely said interest rate increases were having an impact, even before last week’s rate hike.
“Interest rates are now the highest they’ve been in 15 years, and with the prospect of more hikes before the end of the year, we can expect that pressure to increase,” he said.
Among the households surveyed:
- 38% said expenses had exceeded their income each month
- 20% had been unable to pay bills on time
- 80% said the cost of everyday items was having a big impact on their budgets
- 60% said interest rates were weighing heavily on their confidence
Hospitality set to feel it most
Around half of households said they would cut discretionary spending over the next six months, with Kiely expecting hospitality to feel the impact.
“58% of those surveyed said they would cut spending on cafes and restaurants over the next six months, which could have a significant impact on the sector heading into the festive period,” he said.
“Many consumers have told us they also planned to reduce spending on socialising, with 55% saying they’d spend less at bars, pubs and clubs.”
GST concerns remain
The survey also found WA consumers had strong concern on how a cut to the WA’s GST share would impact them. Almost 70% said it would have a “moderate” or “significant” negative impact on the State’s economy over the next few years.
Asked which consequences would concern them most:
- 47% said higher State taxes or household charges
- 43% said reduced healthcare services
- 29% said reduced cost-of-living assistance
More than 20,000 people have now signed CCIWA’s petition calling for the GST safety net to remain in place.
Kiely said people in WA clearly understood what was at stake.
“Despite promises from the Prime Minister that there would be no change to the GST while he is in office, it’s important to recognise that the GST deal is still under scrutiny from the Productivity Commission,” he said.
“The GST safety net helps to pay for the services and infrastructure we use every single day and without it, WA would be worse off.
“WA’s economy keeps the entire nation strong, but in order to do that we need to be able to support the population and businesses with the infrastructure and services that support such economic growth.”
CCIWA will continue to advocate for WA’s fair share of GST revenue. Learn more about our GST campaign.
Economic insights for WA businesses
CCIWA’s Consumer Confidence report is available to CCIWA Complete, Advantage and Corporate Members.
For more, see our Economic Insight page.
