Why Australians Are Still Cautious Spenders (Despite Good News on Rates and Inflation)
Australians Are Still Playing It Safe with Their Money
In April, many retailers were hoping for a lift. With back-to-back long weekends—Easter followed by Anzac Day—and some relief from rising interest rates and inflation, expectations were high. But the reality has proven otherwise: Australian households remain cautious, with consumer spending barely moving the dial.
According to the latest data from the Australian Bureau of Statistics (ABS), household spending increased by just 0.1 per cent in April. That’s after a 0.1 per cent drop in March and a modest 0.2 per cent rise in February. In other words, spending is barely keeping pace, and for many sectors, it’s going backwards.
So, what’s going on?
Small Gains, Big Concerns
Most of the modest bump in spending came from categories like health, hotels, cafes and restaurants. Dining out and cultural activities saw a slight increase—Aussies did enjoy their time off—but key retail areas like clothing, footwear, and cars took a hit. Spending on goods fell even as services showed a small improvement.
Robert Ewing from the ABS summed it up as a “steady result”—a polite way of saying there’s no real momentum. Year-on-year, household consumption is up 3.7 per cent, but when you factor in population growth, the story is flat at best.
A Country in Per Capita Recession
What makes this more concerning is that it follows news from earlier in the week that Australia is now officially in a per capita recession. GDP growth for the March quarter was only 0.2 per cent, and 1.3 per cent for the year. But after adjusting for population growth, output per person actually fell by 0.2 per cent.
This matters. Because while the economy as a whole is growing slightly, individuals and households aren’t feeling it. In fact, they’re tightening their belts.
The Confidence Gap
The Commonwealth Bank's spending tracker echoed the ABS findings. Despite April’s so-called “super holiday” period, senior economist Belinda Allen described the spending lift as “underwhelming.” She pointed to ongoing low consumer confidence as the main reason why Australians are saving more and spending less.
Even with income tax cuts, falling inflation, and lower interest rates, many households are still in a conservative mindset. The global economic climate and domestic cost-of-living pressures have taken their toll.
“There’s still a bit of caution out there,” Allen said. “Households are continuing to save at a higher level than you would expect.”
What It Means for Business and Lending
For businesses, these numbers are sobering. Retailers and service providers counting on a post-Easter surge have been left disappointed. For private lenders and credit providers, it’s a signal that consumers are still wary of taking on new commitments.
But there’s also opportunity. In uncertain times, flexible finance solutions that are tailored to the needs of cautious consumers—especially those offered by non-bank lenders—can provide real value. At Renown Lending, we understand that Australians want to feel safe, secure, and supported before they make major financial decisions. That’s why our property-backed lending solutions are designed with transparency, speed, and trust at the core.
Final Thoughts
Despite positive headlines about falling inflation and rate relief, Australia’s economy is still under pressure—particularly at the household level. The average consumer isn’t ready to celebrate just yet. They’re waiting for something more than a long weekend. They want stability. They want confidence. And they want to know the good times are here to stay before they start spending again.
Until then, slow and steady may be the new normal.
Written by Kalpi Prasad
Founder of Renown Lending. Specialist in private credit, asset-backed lending, and economic trends affecting everyday Australians.
