More Western Australians plan to tighten their belts in the New Year, with the cost-of-living crisis continuing to put pressure on household budgets.
CCIWA’s Consumer Confidence survey for the December quarter asked almost 1,000 households about their spending intentions over the next six months.
Just over two in five (43%) said they planned to reduce their spending, an increase of seven percentage points since September.
CCIWA’s Head of Policy, Dr Anthea Wesley, said the Reserve Bank’s decision to pause further interest rate cuts, and the potential for rates to even increase, has people rethinking their spending.
“Inflation is still running above the RBA’s target, and households have been bearing the brunt of higher costs for several years now,” she said.
“With no further rate cuts on the horizon, it’s not surprising that more households are being cautious.”
About half of those surveyed (49%) said they would cut back on dining out and consumer goods, up eight percentage points from September.
WA households also planned to cut back on spending on homewares (45%), recreation and holidays (42%) and healthcare (24%).
The survey found that nearly half (48%) of WA households planned to spend “about the same” over the festive period as they did last year, while 16% said they would spend more, and 35% expecting to spend less.
The high cost of living remains the biggest concern for households, with more than three in five (78%) of households reporting it as a drag on their confidence – up 12 percentage points since September.
Dr Wesley said despite the planned reduction in spending and continued cost pressures, most WA households were feeling confident about the economic outlook.
“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,” she said.
“The survey found the strong jobs market was driving much of this optimism, with the unemployment rate at its lowest since March 2024.”
The Consumer Confidence survey also found a high level of concern about a potential reduction in WA’s GST share, when the system is reviewed in 2026.
The majority (69%) of those surveyed said they were worried about a reduction in WA’s GST share, with the level of concern consistent across all income levels. Only 8% said they were not concerned.
“This shows that people in WA deeply understand what is at stake for our state if the GST share is reduced,” Dr Wesley said.
“That is why it is vital that the Commonwealth maintains the 2018 deal which gave WA a 75-cent floor in its GST revenue.”
