I have spoken about this before but it bears saying again, because it is fundamental to understanding the current economic situation.5 After a period in which high levels of confidence, macroeconomic stability, easy availability of credit and rising asset values saw Australian households borrow more and save less, households have over recent years changed their behaviour in respect of spending, saving and borrowing.
They have gone back towards what was once considered as “normal”.6 This really had nothing to do with the resource boom. But it has had important implications for some key business sectors. Financial institutions are finding that growth in credit is now a single-digit number, not a double-digit one as it had been for so long.