Fifty ways the GFC has changed Australia
So we know the GFC is here. Many of us have lost our jobs, we’re all watching our superannuation shrink faster than we can top it up, and all of a sudden bling is out and understated is the new black.
But what does a nearly recession actually look like? The Team at the Punch has come up with our list of the 50 ways the Global Financial Crisis (it’s officially capped, you know), has changed Australia.
Some of them have hard numbers to back them up – others are a sniff of the wind, observations about changes in language and society. We welcome your suggestions.
1. We’re cooking at home. Woolworths has noticed a bump in sales of cooking staples such as eggs and butter, as well as increased demand for value cuts of meat (we’re making casseroles), and for cheaper Home Brand products.
2. Our holidays are domestic. From the Illawarra in NSW to the Margaret River in WA, local tourist councils are reporting Australians taking longer than average breaks. Having scrapped the expensive 10 day overseas holiday, we’re spending less on a longer local break.
3. You squeeze your eyes shut before looking at your superannuation report. Figures released last week suggest typical super funds will have their second year running of losses, likely to be between 10 and 14 per cent.
4. We’re trying to fix our own stuff. Hardware chain Mitre 10 says there’s been a dip in demand for bigger items over $100, and a jump in sales of smaller DIY tools such as ladders, hammers, glue, potting mix and seedlings and vegetable seeds. It is likely this is good news for GPs, who are required to treat the cuts, abrasions and muscle damage people who’ve never fixed anything in their lives are inflicting on themselves doing DIY.
5. We’re trying to grow our own food (see above). Even those with the blackest of thumbs are getting in the grow-your-own lettuce craze. But you’ve got to wonder how much you’re saving on three lettuce leaves after buying the materials, spending the hours potting up and waiting weeks for your salad.
6. We’re eating more pizza. Those of us who can’t be bothered growing our own produce and painstakingly turning it into a lovely vegetable lasagne are ordering in. Business is thriving for Domino’s, which forecasts a profit increase of between 10 and 15 per cent this year. In another upside for the pizza chain, it’s finding more people coming forward looking to work as drivers to cope with the demand for extra cheese and pepperoni to help dull the pain of the GFC.
7. We’re spending less on our pets. Poor Spotty and Tabitha aren’t being spoiled like it’s 2007 anymore. Fortunately Sydney Animal Hospital reports pet owners are still forking out for emergency treatments, but those little indulgences have dropped away.
8. Women are still buying make-up, but they’re looking for value packs and sale items. Staff at the Estee Lauder counter at Myer in Elizabeth, South Australia, has found value packs increasingly popular, but: “Foundation and mascara are still our biggest sellers, women can’t live without foundation!”
9. Global warming hysteria is dead. While the debate about the validity of an emissions trading scheme in Australia continues, there has none-the-less been a marked decrease in the general freak-out level around global warming that is showing up in opinion polls. This is evidenced in a decline in news stories that use global warming as a cheap device to get to into just about any topic: global warming and the decline in comfort of my couch. As opposed to now: the economic crisis and why I have an uncomfortable couch (and of course stories like this one).
10. Game shows that give stuff to battlers like depression radio shows. The popularity of these shows has waxed and waned through the decades but Channel 9’s latest incarnation “Random Acts of Kindness” mirrors popular radio shows first invented in America during the Great Depression. The idea is just to give a battler something they want (a V8, whatever) and it also moves away from the more decadent trend of renovations programs.
11. Interest rates went down. Interest rates dropped at a rate knots in the last few months. In the last nine months the RBA cash rate has gone from 7.25% to just 3%, but that looks like it’s as low as it will go for a while.
12. Interest rates went up. The battlers at the Commonwealth Bank decided to put up their interest rate unilaterally with the bank raising their variable rate to 5.74% from 5.65% on June 15. You might also notice that it was already 2.65% above the Reserve Bank cash rate. Confused? You’re not alone.
13. More people are out of work. No confusion here. In just over a year the national unemployment rate has jumped from 3.9% to 5.7%. The national unemployment rate went up to 5.7 per cent as of June 11, according Australian Bureau of Statistics, and this meant that in May the economy lost 26,200 jobs. NSW recorded the nations highest unemployment rate to 6.4% compared to just 4.7% a year earlier. More job losses are forecast before a recovery and a return to jobs growth across the economy.
14. We’re sewing our clothes again. Rather than throw worn or torn clothes in the bin, we’re stitching them back together to save cash. Staff at Metro Sewing Centres in Melbourne were happy to confirm business had never been healthier. Bob Stiles, the chain’s managing director, was also bright as a button about business when he spoke to The Punch, but attributed it partly to the fact that “these days, kids care about how they look”, in contrast to the grungier tastes of previous generations.
15. The Bonds brand is mud. You know something is up when the company that makes our favourite undies faces a backlash as big as grandma’s cotton tails. The brand now has a dark aura around it after its decision to send 1800 jobs offshore due to cost pressures exacerbated by the GFC.
16. We’re watching more TV. Despite having more distractions than ever what with pay TV, computer games and the internet, it seems we’re staying cosy with the idiot box. TV audiences for the biggest-hitting shows are consistently higher this year compared to last. You can browse the OzTam reports for 2008 here and compare them with similar weeks from 2009 here.
17. Mystery plonk is back. Wine producers have been struggling to shift stock, so cleanskins have flooded bottle shops and cellar doors around the country.
18. The sex industry is booming. Melbourne brothels have reported a surge in visits, with one manager saying business was up at least 10% in recent months. “There are some industries that do particularly well during these types of times and anything that caters to that primal, biological instinct is obviously going to be included in that,” said RMIT business expert Kosmas Smyrnious.
19. We finally grasp the true meaning of the word “billion.” As in, $300 billion in Government debt.
20. We’re hanging out with our families again. Searches for “family activities” on Google saw a dramatic spike in June as a proportion of the total searches for the month, and it was consistently high at the start of this year. “Free family activities” is also listed by Google as a “breakout” search term, meaning it has had a dramatic rise in recent activity.
21. Romance isn’t dead, but now its more “lets go for a walk”, and less “hey honey I bought us two tickets to Paris.” See “cheap dates” as a proportion of Google searches here.
22. Mum and Dad aren’t telling you how bad it is. A Galaxy poll of baby boomers found 70 per cent of them were so worried about their own bottom line they thought they would have to delay retirement. But 62 per cent of their snotty adult kids still expected cash handouts because their parents hadn’t admitted to them how tight things are.
23. We’re less likely to die of certain causes, including road crashes. Economist Andrew Leigh looked at this in April in an article looking at how recessions can make people live longer in a number of ways. The national road death toll was down across the last four months of 2008 compared to the same period the year before - 497 people died on Australian roads between September and December 2008, compared to 538 in the same period in 2007. (Data here - PDF.) Among the possible explanations - fewer cars on the road because of reduced economic activity, and people are more likely to be at home having a few drinks rather than risking taking the car after a few at a party. Fatalities have been up in some months this year compared to last, but it’s early days in this financial crisis.
24. Yet another reason not to watch Sunrise. It doesn’t get much worse than the Reject the Recession dancers:
25. The days of the OTT wedding are (thankfully) over. The latest Sweeney research found people are planning on spending less on their nuptials, so out with the doves, three-tire cakes and Rolls Royce wedding cars and in with the buffet and sparkling domestic.
26. We understand our links to China. No, it’s not just about the Prime Minister being able to speak Mandarin - when China’s economy showed signs of slowing last year, shares in mining companies like BHP Billiton and Rio Tinto were massacred on the stock market, in anticipation of falling profits. If anyone was in any doubt before, it’s clear now that Australia’s fortunes are linked to the rise of China.
27. There’s more women working (or looking for work). BRW said in April: “In the past three months … more than 50,000 males have lost jobs and 20,000 women have found jobs.”
28. The top end of town has been humbled. Much of the government’s stimulus spending went into the retail and construction industries, but the corporate sector was left to fend for itself. Company gross operating profits have fallen by unexpectedly high margins since late last year, while retail trade and construction profits bucked the trend and rose.
29. We’re not giving as much money to charity. The Red Cross and the Starlight Children’s Foundation have cut jobs, and Starlight has cut back some of the services it provides because corporate funding has dried up.
30. Those same charities need the cash now more than ever. Anglicare says while donations have slowed, demand for its services are at capacity and there’s evidence of a significant increase in demand continuing.
31. More people are going to uni. Weirdly enrolments in business degrees have held up. Many unis are reporting increases in enrolments.
32. The Australian film industry is even worse off than normal. When finance is even tight for bricks and mortar, Aussie filmmakers are finding it virtually impossible to find financial backers. Even a cast list including Sam Worthington, Simon Baker, Joel Edgerton, David Wenham and Guy Pearce couldn’t get a planned Vietnam War epic off the ground.
33. GFC jokes aren’t funny any more. If I see one more stimulate me gag…
34. Your self-funded retiree parents have become obsessed with Aldi. You keep hearing “Look at this heater I bought for $14 darling,” and the German retailer has announced plans for a $1 billion expansion in Australian over the next three years.
35. The virtual meeting has finally arrived. It’s probably a combination of the technology being available and bosses insisting on cutbacks on travel, but video conferencing and instant-messenger driven meetings are now in widespread use and here to stay. See more about the likely impact on the IT sector here.
36. Grocerywatch is dead. They must have figured it would be too depressing for us to know exactly how much we’re being ripped off for bread and milk.
37. The national obsession with petrol prices has waned. Now filling the car is just one more financial headache in a list of many fiscal aches and pains.
38. Sydney dinner party conversation now studiously avoids the property market, the way it used to steer clear of infidelities.
39. The property craze is finally over and Perth has got some sense. The West Australian capital, bouyed by many of its residents who got cashed up working in the mines during the boom years, had seen double-digit growth in house prices during the good times. Prices fell 7 per cent between March 2008 and March this year. Nationwide, prices are down almost 4 per cent over the same period but are showing signs of stabilising in recent months, possibly thanks to the federal government’s bolstering of the first home owners’ grant. More here (PDF).
40. The country is in the red again. Your share of Australian Government Debt by 2012 will be $8303. See graph above.
41. Garage sales have become a competitor sport. And taking it to an extreme is the popularity of LETS (Local Energy Trading Systems) where members swap stuff between them without exchanging money. One man’s clapped out toaster is another man’s…
42. New parents now scoot past in a rush hoping you won’t notice their $1500 Bugaboo. Seriously, Tory paid less for her car than it costs to buy one of those fancy pants strollers that just 18 months ago were compulsory for admission to Balmoral Beach.
43. Fancy corporate parties are very uncool. Last Christmas News Ltd pulled the pin on its executive knees up – and the big banks have quick smart realised the poor imagery of swilling Moet while people are losing their jobs.
44. David Jones and Myer have been on sale since November 2008.
45. Mere mortals can afford a designer dress. Designers including Alex Perry, Josh Goot and Jayson Brunsden are hawking their frocks for up to 75% off.
46. First home buyers have the upper hand – until the First Home Owners Boost expires. Mortgage Choice says three out of four Australians planning on buying an investment property in the next two years plan to wait until the Boost finishes at the end of December.
47. James Packer pushed back his order for a $60 million Boeing Business Jet. Oh the humanity.
48. Some lucky bugger picked up a $650,000 2005 Bentley Arnage at GraysOnline for $187,000.
49. Our banks are suddenly world leaders. CBA, NAB, ANZ and Westpac now make up half of the just eight AA-rated banks in the world. Who’d have thought it?
50. Grunge is backNot Grange, grunge. The popularity of colourful and indulgent bubble gum 80s-style electro music and fashion among the kids is set to be eclipsed by a growing new grunge wave that will team up nicely with the flourishing of emo, much like goths and grunge did in the early 90’s. Just have a look have a look at the amount of Cobain smiley face sweat bands you see at the next gig.
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