Australians spent bonuses on paying off debt
According to a recent survey Australian consumers have largely decided to use their bonus from Kevin Rudd’s economic stimulus package to pay off debt rather than to revive the economy.
According to a recent report many Australian consumers have ignored the Prime Minister’s requests to spend money from his economic stimulus fund to revive the flagging economy, deciding instead to use the cash bonus that was distributed last month to pay off debts such as loans and credit cards rather than spending money in order to try and boost the economy.
Kevin Rudd, the Prime Minister, hoped that his ten millions dollar stimulus package would go some way towards reviving the economy through increasing consumer spending, but with many people deciding to safeguard themselves through getting rid of debt with the money from the bonus it seems that the plan may not have quite had the desired effect as hoped by the PM.
One thousand people were recently interviewed with regards to the issue, and the majority had decided to use the cash to pay off some or all of their debts, according to the report. One industry official said: “Coming into 2009, consumers are not in a mood to spend up big. Gloomy forecasts and the threat of jobs losses have made Australians wary. As the Government contemplates another stimulus package, the early evidence is that consumers will not spend windfalls in a ‘big bang’.”
She went on to state: “Three-quarters of mortgage holders are trying to reduce their loan more quickly by maintaining higher levels of repayment. Even those mortgage holders … taking advantage of lower interest rates by reducing their payments are being cautious, using that spare cash to retire debt or help with living expenses.”