When asked whether households should be worried about a per capita recession,Chalmers said the occasional quarter of negative per-capital economic growthwas “not especially unusual”.
Shadow treasurer Angus Taylor said it was clear from the data that the only factor driving the economy was population growth.
“Australians on a per-person basis are seeing a recession,and there’s a lot of pain,” he said.
“They’re having to dig deep in their pockets,and they’re having to dig deep into their time to make ends meet.”
The ABS figures show mortgage interest payments cost households $82.8 billion during the 2022-2023 financial year,double the amount in interest payments the previous financial year.
Loading
In the June quarter,households paid $24.5 billion in interest payments. Across the same period last year,they paid just $11.9 billion.
Those bills have skyrocketed after the Reserve Bank board began aggressively raising interest rates in May last year,taking the official cash rate from 0.1 per cent to 4.1 per cent by June this year.
Given the delayed effect of Reserve Bank rate rises,Commonwealth Bank economists Belinda Allen and Stephen Wu said interest rate costs will continue to rise.
“Debt-servicing costs as a share of income will reach record highs by the end of this year,” they said.
In response to rate rises and high but falling inflation,household spending through the June quarter was just 0.1 per cent,the worst quarterly result since the depths of the pandemic.
Allen and Wu said on a per-person basis,household spending had gone backwards.
“The population grew by 0.7 per cent in the quarter while total consumption rose by just 0.1 per cent,” they said.
Households cut spending on home furnishings,recreation and culture by 2.5 per cent,offset by large increases in expenditure on rents.
Loading
AMP deputy chief economist Diana Mousina noted the data showed spending on essentials rose by 0.5 per cent over the quarter,due to rising rents,energy bills,and insurance and financial services costs,while spending on non-essentials fell by the same amount.
This has eaten into the amount that households have been setting aside in savings. The household saving ratio fell again for the seventh consecutive quarter to 3.2 per cent,the lowest since June 2008.
Cut through the noise of federal politics with news,views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weeklyInside Politics newsletter here.