The economy has just recorded its weakest growth in decades. And virtually everyone is feeling the pinch with living standards falling for the past 18 months. The latest official statistics confirm the main reason Australia hasn't fallen into a recession is immigration. And those holding out for a cut in interest rates may have to wait a while yet.
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00:00As more Australians tighten their belts, sales at this fruit shop are falling.
00:07I've never seen things this tough before. I've been in this industry since 1985, and
00:14this is the worst I've ever seen it.
00:17To get by, his customers are giving up fresh food.
00:21People are looking more for alternatives, and so sales on frozen goods have gone up.
00:28Living standards are going backwards, and Australians are feeling poorer.
00:33Life is just this constant hamster wheel, and we're basically working just to pay off
00:38our bills as opposed to really spending time with our kids.
00:42I'm currently working about four jobs right now.
00:44There's no respite, mate. Your salaries aren't growing with cost of living.
00:49The economy grew at just 0.2% in the three months to June, and 1% for the year.
00:56Outside the pandemic, that's the weakest growth since the 1990s recession.
01:01Government spending provided a lifeline, up 1.4% on public sector wages and social benefits
01:08like Medicare and the NDIS.
01:11But individually, Australians continue to go backwards in what's known as a per capita recession.
01:17Cash-strapped consumers barely put any money aside, and household spending fell by 0.2%
01:24with luxuries like air travel and eating out taking a big hit.
01:28We know and we see in this data that people are still doing it tough,
01:32and that's why the cost of living remains our highest priority.
01:36Households are in a recession. A GDP per person recession has been going now in this country for 18 months.
01:43Economists say record levels of immigration have been keeping the economy afloat.
01:48More people coming into the country, that's more people demanding housing,
01:53demanding goods, so it's been contributing to economic growth.
01:57With more customers scrimping and saving, a lot of businesses across the nation are having to cut costs.
02:03That's precisely the outcome the Reserve Bank wants,
02:06and why it's lifted interest rates aggressively over the past couple of years.
02:10But economists say some respite may not be far away.
02:14I think a rate cut by February is definitely possible.
02:17I actually do think that we are going to get further declines in inflation,
02:21and the next two inflation reports, which will give the RBA scope to start to cut interest rates early next year.
02:28Until then, consumers just have to tough it out.