Where Has All The Money Gone?

Australia is one of the best places in the world in which to live and we are one of the wealthiest nations on the planet and yet retail sales are dramatically down and consumer sentiment is cautious to say the least. So, where has all the money gone?

Here perhaps is a stab at some of the answers: a recent study commissioned by the ACTU shows that “Almost a quarter of Australian workers, or 2.2 million people, are in casual employment”

Casual employment has a significant way in which consumers operate. When you only know that you are going to work when you get a text message to call you in the next day at 4.00pm in the afternoon it makes sense to ‘put money away for a rainy day’.

Over the last 5 years internet shopping has grown to point of forcing bookshop chains and record retailers into liquidation or dramatic rationalization. This retail activity now is based somewhere other than the shopping centre or high street, probably somewhere overseas.

The cost of our love affair with domestic communications in the form of perhaps four mobile phones in a family home as well as high speed internet and cable TV is a huge step up in domestic expenditure from the old days of just a single telephone line into the house and that’s not counting the cost of all of the hardware required to run it!

Consumer caution has led to a significant decline in credit card debt which must mean that people are spending less.

Over the last decade there has been a significant growth in the number of children attending fee paying schools and private school fees have outstripped inflation to the extent that they are tipped to exceed $30,000 per year at the top end by 2013.

Many middle managers are all too well aware of the recent high profile restructuring of major companies and the headline failure of prominent building firms

“All my middle management friends are really scared of redundancy”

So, as we spend more on communications, school fees and online, the more some of us are forced work casually, is it really surprising that we are saving more and spending less?