Retailers are chasing a slice of the Federal Government’s cash handouts with major in-store special offers, says the Australian National Retailers Association (ANRA), as the one-off payments of up to $950 to consumers are hitting bank accounts from today as part of the federal government’s $42 billion second stimulus package.

"What you’re seeing is a fairly significant trend among retailers to offer consumers probably some of the best deals that they’ve seen in a very, very long time,” ANRA CEO Margy Osmond told AAP.

David Jones said on Tuesday that it was supporting the government’s initiative by offering a bonus $20 David Jones gift card for every $200 worth of store gift cards purchased between Tuesday and Sunday 15 March.

“This quarter is traditionally one of the slowest for retailers,” said Osmond.

“We welcome the Federal Government’s move to do all it can in the short term to keep spending ticking over.

“Our calculations reveal that in December and January $1.3 billion of the first cash bonus was injected directly into the retail sector.”

Osmond said she was keen to see the stimulus spread across the entire retail sector.

ANRA’s regular consumer sentiment survey shows that people are split fairly evenly between spending and saving the cash bonus.

“Our latest survey found that 22 per cent of respondents receiving the cash bonus plan to spend the money on non essential items like clothes, footwear, white goods and furniture. A further 22 per cent will spend it on general living expenses.”

Meanwhile, 8.5 per cent said they’d put the money towards their mortgage, 23 per cent will pay down debt, 8.5 per cent will spend it on a holiday and 16.6 per cent will save it (in the February survey).

ANRA expects that people who saved the first bonus might be inclined to spend the second cash payment.

Osmond said while consumer sentiment was still soft and people were worried about losing their jobs, people may be more relaxed about their mortgages because of recent interest rate cuts.

“Once people get their household balance sheets in order they’ll be willing to spend any extra cash they receive. We’re seeing this in the ACT and NSW where the lower interest rates combined with the stimulus have resulted in small gains in retail spending.”

Single-income families will receive a $900 bonus if they are recipients of Family Tax Benefit part B.

Families receiving Tax Benefit A will get a $950 back-to-school bonus for each child aged between four and 18.

Recipients of the carer payment or disability support pension, aged less than 19 years old on 3 February 2009, will also receive $950.

Eligible drought-affected farmers will receive $950 hardship payments from 24 March, the same time a $950 one-off training and learning bonus and education entry payment is paid to eligible students.

The one-off bonus of up to $900 for taxpayers, earning less than $100,000, will be paid from April.