The collapse of the Australian consumer: a remedy


Symptoms of a collapse in consumer spending include four successive quarters of declining per capita retail sales volume, to the September 2019 quarter.  Declining new vehicle sales to private buyers for nearly two years to October provides confirmation of the breadth of the slump.

The recent cuts in interest rates, boosted personal income tax returns, and lower income tax rates have had no measurable impact on consumer spending so far.

Causes of this damaging slump are easily identified: low income growth and a fall in residential property prices.  There are, however, several causes of low income growth and these are identified in this report.

My report identifies the characteristics of those consumers who are most willing to spend.  These have been deserted by recent monetary and fiscal policy and should be the targets of immediate stimulus.  The forms this remedy should take are described and an implementation strategy is outlined.

My report uses proprietary consumer tracking data which measures consumer willingness to spend by demographic.

Industries exposed to consumer spending have an interest in understanding how to stimulate spending and recommending our strategy proposals to the Treasurer and the Governor of the Reserve Bank before they make any more mistakes.  Industries which would benefit include retailers and their suppliers, service industries, media companies, and media agencies.

My report is available at


Australia’s population outlook


Population growth is an important driver of economic growth, lifting both demand and productive capacity.  Growth is currently 1.6% per year and may be falling.  The peak growth rate was 2.2% in 2008.

Peak births?  Births may have peaked in 2018, at 314,900.  The 1971 peak of 274,400 was not exceeded until 2007 despite significant population growth.  Fertility peaked in 1961 at 3.55 and the arrival of the oral contraception pill quickly caused a rapid decline.  Fertility has averaged 1.85 since 1985.

Peak deaths? The increase in the number of deaths has slowed recently and deaths may be at a peak.

Peak life expectancy? Not yet: life expectancy is still increasing at all ages.

Peak natural increase?  Natural increase (births minus deaths) appears to have peaked at 165,200 in 2012.

Peak net migration?  The peak was 315,700 in 2008.  The trend is currently rising, but not fast enough to break the record for several years.

Our report projects Australia’s births, deaths, net migration, and population for 2020 and 2021.  It also discusses the uncertainties surrounding births and net migration.

Charlie Nelson