The latest NATSEM-AMP Report on spending and income in the year 2020 is actually upbeat, as I outlined for Tuesday's Canberra Times:
Retailers concerned that Christmases will become quieter as the population ages can rest easy..
A study to be issued today by the National Centre for Economic Modelling at the University of Canberra finds that by 2020 we will be spending far more than ever before, much of it on the same things.
By 2020 four out of every 10 households will be headed by a person aged over 54 years. But despite this, the typical household is expected to spend 22 per cent more each week than it does today, adjusted for inflation.
Australia's increased population is expected to push up total household spending by 50 per cent in real terms.
The Natsem Income and Wealth report prepared for the AMP finds that some expenditures will lag. Spending on baby food will increase by only 27 per cent; spending on toys by only 38 per cent.
But other spending will climb steeply.
We are likely to spend about 60 per cent more on medicines, 61 per cent more on hospital and nursing home fees, and 62 per cent more on health insurance an increase of $3.8 billion a year over what we are paying now.
We will also be gambling much more. Natsem says our spending at the TAB will triple; our spending on instant lotteries will climb 80 per cent. We will be reading more with our spending on newspapers climbing by 66 per cent, despite the internet, and we will be drinking more, with spending on alcohol climbing 54 per cent, somewhat above the 50 per cent increase in total spending.
According to Natsem's projections there is little reason to worry about our ability to afford the extra spending. Our income is expected to increase by a couple of percentage points more than our spending, implying extra saving.
