The data to prove Australia's economy is failing its young

As the cost of living crisis continues to bite for millions of Australian households across the country, the experience for other households could scarcely be more different.

While stereotypes of irresponsible young people living off $15 coffees and smashed avocado on toast are legion on social media, the data from CommBank iQ presents a completely different perspective.

Through CommBank iQ’s Cost Of Living Report, the level of monthly per capita spending (ex-housing) and per capita spending growth is revealed broken down by age demographic generally in 5 year increments, with the exception of 18 to 24’s and those 75 and over.

On this metric every household demographic by age with the exception of those aged 65 and over are going backwards in per capita terms.

It’s worth noting that this graph is based on spending growth being deflated by the headline CPI, which is distorted lower by the impact of electricity subsidies. Without this distortion outcomes would be weaker across the board and will in a vacuum deteriorate as the electricity subsidies feed out of the CPI.

If we shift the focus to the nominal level of spending per capita (excluding housing), some unexpected outcomes are revealed.

At a per capita level, Australians aged 70 to 74 are now outspending the 18-24, 25-29 and 30-34 age demographics.

Meanwhile, people aged 65 to 69 are now outspending all other age demographics who are 44 or under.

In short, the traditional curve of household consumption by age has been flipped on its head.

The trend seen in the CommBank iQ data is also seen the research conducted for advertising and communications firm WPP Australia & New Zealand.

Their report ‘Ageless & Booming’ revealed that over 50s now account for 64 per cent of new car purchases and 55 per cent of all travel spending.

According to research conducted for communications and advertising firm WPP Australia & New Zealand, over 50s now account for 64 per cent of new car purchases and 55 per cent of all travel spending.

“The over 50s Australians outspend millennials in entertainment, auto, health, travel and almost every other category”

“When it comes to buying consumer goods online, the over 50s spend about $40 billion more than millennials and Generation X each year.”

Despite the perception that Gen Y was the biggest spending generation, the WPP report concluded that:

“The over 50s Australians outspend millennials in entertainment, auto, health, travel and almost every other category”

“When it comes to buying consumer goods online, the over 50s spend about $40 billion more than millennials and Generation X each year.”

The Takeaway

Older demographics spending more as they retiree with greater and greater superannuation balances indicates that conceptually things are going to plan.

The issue is its not going to plan for younger demographics in aggregate who are reliant on employment income, rather than the proceeds of an inheritance, superannuation or home equity.

As the simple goal of housing and decent living standards increasingly rise out of reach of millions of Australians, the current status quo will become ever more socially and politically problematic.

In all likelihood the current economic growth strategy will end up ending badly, even for many of those who are currently benefitting from it. a substantial challenge for policymakers and

The data to prove Australia’s economy is failing its young

The Takeaway