Posted to Adelaide Now (5/10/2011) on 5/10/2011 at 9:51 PM
Commenting on “Australian consumers starting to spend again”
http://www.adelaidenow.com.au/business/australian-consumers-starting-to-spend-again/story-e6frede3-1226159410714
With closer examination, ABS figures show that many household items including carpets, furniture, goods for renovation etc increased the most while departmental stores suffered. This can be explained easily - many houses had to refinish and repair after severe storms and floods during the same period.
The departmental store spending decline is due to online purchases, much of the money went overseas. For argument sake, even if only 25% of the $22b spent on online were overseas purchases and if the government had collected GST, it would have a windfall instead of a shortfall of $550m.
While many items are subject to currency fluctuations, it is not the case for cafe/restaurant prices. Commonsense tells us that no matter what happens to foreign exchange, cafe/dine-out meal prices can only go up but never down. If the patronage remains unchanged, the total spending will still increase, theoretically by the same percentage as the price.
I have written often about the state of Australian economy, and tempest is yet to come. I believe the China's forward orders for our iron ore and coal will be less, coupled with lower price offered, the next quarter export income will NOT be rosy
Commenting on “Australian consumers starting to spend again”
http://www.adelaidenow.com.au/business/australian-consumers-starting-to-spend-again/story-e6frede3-1226159410714
With closer examination, ABS figures show that many household items including carpets, furniture, goods for renovation etc increased the most while departmental stores suffered. This can be explained easily - many houses had to refinish and repair after severe storms and floods during the same period.
The departmental store spending decline is due to online purchases, much of the money went overseas. For argument sake, even if only 25% of the $22b spent on online were overseas purchases and if the government had collected GST, it would have a windfall instead of a shortfall of $550m.
While many items are subject to currency fluctuations, it is not the case for cafe/restaurant prices. Commonsense tells us that no matter what happens to foreign exchange, cafe/dine-out meal prices can only go up but never down. If the patronage remains unchanged, the total spending will still increase, theoretically by the same percentage as the price.
I have written often about the state of Australian economy, and tempest is yet to come. I believe the China's forward orders for our iron ore and coal will be less, coupled with lower price offered, the next quarter export income will NOT be rosy
