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Speaker 1: We will talk cost of living because, as we know,

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Speaker 1: the current crisis and that's what it is. If you

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Speaker 1: don't have enough money to spend on necessities, on your

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Speaker 1: shopping basket, on your fuel for your car to go somewhere,

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Speaker 1: on electricity to keep the lights on, the rent, haven't

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Speaker 1: even started on rent, it becomes an absolute nightmare. So

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Speaker 1: there's a survey that runs out of Monash Business School,

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Speaker 1: Australian Consumer and Retail Study group led by doctor Luise Zoppos.

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Speaker 1: The research finding many Australian shopers spending more on necessities

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Speaker 1: and less on life's little luxuries. No surprise, Eloi's good morning.

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Speaker 2: Good morning Matthew, thanks for having me.

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Speaker 1: Thank you. What did you find What are the key

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Speaker 1: findings in your study?

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Speaker 2: Well, we run a survey to see how Australians are

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Speaker 2: responding to the current cost of living crisis and we

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Speaker 2: found that broadly speaking, not surprisingly, people are feeling like

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Speaker 2: the essentials are costing more than at the same time

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Speaker 2: time last year. So that's your groceries, your housing, your insurance.

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Speaker 2: We found that people feel as though they're spending more

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Speaker 2: on these things than last year. And we also asked

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Speaker 2: about fairness because We're really interested in this idea of

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Speaker 2: how Australian shoppers are perceiving these prices. And over half

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Speaker 2: of the people we surveyed you housing costs and grocery

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Speaker 2: prices and insurance prices as being unfair.

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Speaker 1: Yeah, what about fuel, surely that's unfair.

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Speaker 2: Yes, any essential items in any essential category. Australians are

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Speaker 2: seeing as costing more, as spending more at the same

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Speaker 2: time last year, and as being unfair, And we were

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Speaker 2: interested in what Australians are doing about this. We recognize

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Speaker 2: that people are spending more, they're feeling these prices is unfair,

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Speaker 2: so we ask them what they're doing to try and

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Speaker 2: mitigate this and try and overcome this. And we found

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Speaker 2: that it's a really bad time for Australians to buy

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Speaker 2: big items. So many are holding off or differring purchases,

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Speaker 2: and many are just not purchasing unless they have to

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Speaker 2: do at all.

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Speaker 1: What about cutting back on the pleasures, about the buying

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Speaker 1: a cup of coffee when they're going out shopping, spending

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Speaker 1: half an hour in a cafe, enjoying that, maybe with

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Speaker 1: a chat with a friend or whatever the case may be,

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Speaker 1: but just that quality time. I suppose of enjoyment of

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Speaker 1: one of life's little luxuries.

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Speaker 2: Yeah, you're absolutely right. What we're found in our research

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Speaker 2: and in fact in broader trends over the last couple

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Speaker 2: of years, is that people are really cutting down on

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Speaker 2: that discretionary spence, So that spend that you like to

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Speaker 2: spend on that coffee, you like to go out for

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Speaker 2: that lunch, but perhaps you don't have the same budget

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Speaker 2: that you did at the same time last year or

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Speaker 2: even for a few years now. So we're finding that

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Speaker 2: people are really cutting down on that discretionary spence, so

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Speaker 2: categories like takeaway and food, even clothing. You know, when

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Speaker 2: clothing is non essential. Sometimes it obviously is essential, but

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Speaker 2: people are trying to cut their budgets anyway they can

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Speaker 2: and really looking for where they can create those savings

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Speaker 2: on items that they don't necessarily have to buy.

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Speaker 1: Okay, so discretionary spending is certainly in no doubt about that.

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Speaker 1: Did your survey take into account how long people felt

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Speaker 1: this would last.

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Speaker 2: We have been asking these types of questions for a

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Speaker 2: few years and we've been getting the same results where

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Speaker 2: people aren't really seeing the light at the end of

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Speaker 2: the tunnel, so to speak, just yet. So if you

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Speaker 2: compared the results that we got in this survey in

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Speaker 2: twenty twenty four to the same questions that were asked

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Speaker 2: in twenty twenty three, we found people are actually increasing

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Speaker 2: their responses to these questions this year in terms of

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Speaker 2: you know, for fifty seven percent of survey participants this

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Speaker 2: year since they spent more on groceries compared to the

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Speaker 2: same time last year, which was up from only forty

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Speaker 2: nine percent when we asked the same question in twenty

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Speaker 2: twenty three. So in fact, if anything, we're seeing a

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Speaker 2: bit of the opposite, where people are still feeling like

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Speaker 2: they're spending more, feel feeling like items are costing more

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Speaker 2: and they can't quite see the end of that just yet.

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Speaker 1: Yeah, that's that's interesting because that light at the end

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Speaker 1: of the tunnel, if it's there, it's a train coming

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Speaker 1: the other way, Isn't that's the worry with it?

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Speaker 2: Yeah, it is. And you know, for the first time

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Speaker 2: this year, we also asked people, are you able to

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Speaker 2: save any money? Because you know, we're really interested in

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Speaker 2: how people are having to adjust their spending habits, and

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Speaker 2: so we did find that quite a high proportion of

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Speaker 2: people are saying they're able to save something we found

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Speaker 2: eighty two percent of people in our survey said they're

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Speaker 2: able to save at least something, which we actually thought

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Speaker 2: was quite high. But when we looked into the data

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Speaker 2: a bit more, we found that just because these people

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Speaker 2: are saving something, it doesn't mean they're saving as much

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Speaker 2: as they'd like to. And the way that they're saving

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Speaker 2: is really different as well, with most people who are

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Speaker 2: saving using a traditional savings account rather than locking away

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Speaker 2: their money because they realize they may need to access that.

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Speaker 2: So people are really changing their habits with what they're tying,

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Speaker 2: what they're spending, and also how they're saving as well.

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Speaker 1: It's really interesting. Okay, the fact that it's unfair, what

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Speaker 1: judge do you use for that? What measurement do you

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Speaker 1: use to judge something is fair or unfair? Is it

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Speaker 1: just the fact that people feel ripped off? Yeah.

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Speaker 2: We simply ask people to rate how fair they think

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Speaker 2: it is on a scale are fair from unfair, which

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Speaker 2: is a really commonly used scale, And it sounds quite simple,

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Speaker 2: but you know, when you think about it, if you

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Speaker 2: were to answer something, you know instinctively whether you think

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Speaker 2: that is fair or unfair. So really we just leave

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Speaker 2: it up to the participants. To tell us about. We

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Speaker 2: ask them across categories like groceries, like insurance, like housing,

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Speaker 2: like clothing, do you think the current prices are fair

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Speaker 2: or unfair? And we really leave it in their hands,

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Speaker 2: and over half of the participants said that most categories

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Speaker 2: they are perceiving to be unfairly priced right now.

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Speaker 1: I don't know if you take into account surveys done

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Speaker 1: by other organizations, but to here in SSAY, Business Essay

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Speaker 1: which is now the Chamber of Business, runs a survey,

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Speaker 1: a business survey every quarter and has a look at

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Speaker 1: spending quarter by quarter, and it found leading into April

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Speaker 1: that spending had declined, that business confidence rather had declined

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Speaker 1: over the last three months. And that's really interesting given

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Speaker 1: that gather around here in Essay and the live golf

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Speaker 1: tournament were held outside of that after that tournament, but

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Speaker 1: people came from interstate. People came to both those events

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Speaker 1: from around the country. And you think, well, who has

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Speaker 1: got money, because there seems to be money out there.

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Speaker 1: Money is being spent, you know, families traveling the country

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Speaker 1: to come here for a game of footy in a

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Speaker 1: cost of living crisis. That says something that says money

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Speaker 1: is there to be spent and it must be, but

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Speaker 1: so many people are struggling. It seems to be a

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Speaker 1: huge gulf between the two.

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Speaker 2: It does, and you know, we've looked that the recent

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Speaker 2: consumer Confidence Index, for example, and that's also low as well.

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Speaker 2: So to your point, people are not feeling particularly confident

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Speaker 2: about the current economy in a wider context. But then

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Speaker 2: you do have some groups of people or some events,

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Speaker 2: for example, that are attracting higher spend, and so what

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Speaker 2: we're seeing is that a lot of the time, what

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Speaker 2: we're seeing is people are really being more strategic or

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Speaker 2: really being more price conscious with what they're doing. So

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Speaker 2: in order to maybe go to a certain event or

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Speaker 2: to buy that big ticket item, they may have cut

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Speaker 2: back on something else, or they're doing these things less frequently,

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Speaker 2: for example. So there definitely is some differences between groups

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Speaker 2: and socioeconomically what people are able to spend and not spend.

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Speaker 2: But we're also hearing from people that they're being a

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Speaker 2: lot more strategic. So they might be saving for that

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Speaker 2: big item also that trip, or they might be cutting

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Speaker 2: down the number of tickets to events, for example. So

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Speaker 2: people are really trying to adjust their spend. Many people

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Speaker 2: are trying to adjust their spend and being a bit

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Speaker 2: more conscious about where their money is going.

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Speaker 1: Indeed, well, we'll see where it ends up. And I

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Speaker 1: suppose the budget tomorrow night that might be a big

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Speaker 1: player in what people think moving forward.

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Speaker 2: Yeah. Absolutely, I think a lot of people have.

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Speaker 1: Their eye on that, doctor Elouise Opos, Thank you for

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Speaker 1: your time. Thanks Matthew from the Business School at Monash

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Speaker 1: unique cost of living crisis is forcing a change in

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Speaker 1: spending habit