Business is booming.

Easing of restrictions and new government payment buoy spending

1


Those who received both payments spent 28 per cent more than normal last week while those who received neither spent 15 per cent less than normal.

The number of unemployed receiving JobSeeker, previously called the Newstart Allowance, reached 1.3 million at the end of April having increased by around half a million since the onset of the crisis.

The supplement, which effectively doubles JobSeeker, will apply for the next six months at a cost of $14.1 billion.

There are also steps to ease restrictions on movement and socialising that have encouraged additional economic activity.

Improved mobility meant spending on toll roads was 9 per cent higher than the previous week while taxi and rideshare spending was up 6 per cent.

The tracker, which draws on a database tracing the consumption patterns of hundreds of thousands of consumers and businesses, showed health-related spending was 9 per cent higher than the previous week as more people attended appointments at allied health services, such as physios.

Spending at cafes also improved although it remains 46 per cent below normal.

A boom in food delivery triggered by the shutdown continued with spending 213 per cent above normal in the week of April 27-May 4.

Demand was also very strong for online gambling, home improvement, office furniture and pet care.

Simon Bligh, the chief executive of illion, said the easing of restrictions had given consumers more confidence.

“As we see restrictions further easing over the next few weeks, we believe there will be greater spending across discretionary and entertainment categories,” he said.

“Higher income people will also start to open their wallets for more discretionary items – something they have not been doing over the last few weeks.”

Loading

AlphaBeta director, economist Andrew Charlton, said the results underscored the crucial role government stimulus payments have played in supporting the economy.

“The government can see in real-time how impactful its coronavirus supplement has been, helping low income earners increase their discretionary spending,” he said.

In addition to JobSeeker recipients, the supplement is being paid to those receiving the Partner Allowance, Widow Allowance, Sickness Allowance, Youth Allowance, Austudy, ABSTUDY Living Allowance, Parenting Payment, Farm Household Allowance and the Special Benefit.

Dr Charlton said spending patterns during the crisis had underscored the value of targeting government stimulus payments to lower income earners because they are most likely to boost activity by spending the money, rather than saving it.

Sign up for our Coronavirus Update newsletter

Most Viewed in Business

Loading



Source link

Comments are closed.