Australia’s household spending trends in early 2025 reveal an increasingly cautious consumer landscape, shaped by growing economic pressures and shifting priorities, while a parallel rise in scams targeting vulnerable groups underscores a concerning challenge.
Insights from Commonwealth Bank (CommBank), Westpac, and ANZ highlight these key developments impacting individual consumers as well as business organizations in Australia.
According to the latest CommBank’s Household Spending Insights (HSI) Index, spending in Australia recently dipped by 0.2% in February 2025, reversing a somewhat modest 0.4% uptick in January.
This noticeable decline, reported on March 11, 2025, reflects significant pullbacks in discretionary categories like recreation (down 3.7%) and hospitality (down 1.7%), with Valentine’s Day failing to spark significant activity. The decline in these particular categories is now evident not just in Australia but globally as well, due to the cost of living crisis and socioeconomic uncertainty.
Essential spending, however, held steady, with utilities up 4% and insurance rising 2.9%, driven by annual renewals and rising costs. Again, these trends are consistent or largely in-line with global spending patterns because most people cannot really afford to compromise on essentials.
State-wise, Tasmania saw the steepest drop (1.9%), while Victoria bucked the trend with a 0.8% increase, buoyed by events like the Australian Open.
CommBank’s Chief Economist, Stephen Halmarick, has noted that high interest rates and inflation continue to squeeze already tight budgets, prompting Australian households to prioritize necessities over luxuries. These spending trends are being seen in other developed and underdeveloped nations as well as consumers and businesses grapple with economic challenges.
Westpac’s Card Tracker Index, which was updated on March 8, 2025, echoes this softening trend, with spending growth easing to an annualized 5.3% in January before a slight dip in early February.
Economist Bansi Madhavani highlighted a “selective enhancement” in retail, with goods and dining out ticking up, yet overall consumer confidence remains subdued.
The data suggests Australians are navigating 2025 with a lot of caution, balancing small indulgences against a backdrop of economic uncertainty.
Amid this restrained spending, scammers are exploiting vulnerabilities with growing sophistication.
ANZ’s March 2025 alert warns of a surge in impersonation scams, where fraudsters pose as trusted or seemingly legitimate entities like banks or telcos.
Reported on March 12, 2025, ANZ noted a 20% increase in such incidents year-on-year, with scammers using AI-generated voices and spoofed numbers to deceive victims.
Older Australians and those under financial strain—already stretched by rising costs—are prime targets, often losing thousands to fake investments offers or malicious payment redirection schemes.
ANZ’s Natalie Paine emphasized the emotional toll, urging consumers to verify suspicious contacts via official channels.
This convergence of cautious spending and rising fraud highlights a critical tension in 2025.
As households tighten their stretched budgets, scammers continue to prey on desperation and trust, considerably increasing potential financial risks.
With CommBank predicting potential rate cuts by May, spending may rebound, but staying alert remains key to safeguarding vulnerable consumers.