The Australian National Retailers Association (ANRA)’s latest consumer survey reveals that the government’s stimulus package generated a moderate spurt in Christmas spending but most of the bonus has been used to relieve debt and ease cost of living pressures on families.

Since October, ANRA has been surveying consumers on their spending plans for the cash bonus. There has been a consistent trend with most consumers choosing to use the bonus to cut debt or for living expenses.   
“Coming into 2009 consumers are not in a mood to spend up big,” said ANRA CEO Margy Osmond.
“Gloomy forecasts and the threat of job losses have made Australians wary. As the government contemplates another stimulus package, the early evidence is that consumers will not spend windfalls in one ‘big bang’.     
“What has changed over the survey period is the shift by mortgage holders to spend more of their bonus on Christmas gifts and entertainment. As interest rates fell, mortgage holders splurged more of the bonus on Christmas.”  
However new ANRA research shows that mortgage holders are not reducing their mortgage repayments. Three quarters of mortgage holders are trying to reduce their loan more quickly by maintaining higher levels of repayment.   
“Even those mortgage holders who are taking advantage of lower interest rates by reducing their payments are being cautious, using that spare cash to retire debt or help with living expenses,” said Osmond.   
ANRA warns that retailers are now entering what is traditionally the quietest time of the year. There is always a retail hangover in February and March but 2009 promises to be the worst in many years.   
“The need for further interest rate cuts and government stimulus activity is crystal clear. About 45,000 retail jobs were lost in the year to November 2008 and more will follow unless consumer confidence and spending are revived.”