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Minority Prepare For Tough Times Ahead


18 December 2008

Kiwis Brush Off Threat Of Financial Tsunami While Aussies Wallow In The Gloom
Minority Prepare For Tough Times Ahead

‘Some other chump will get it in the neck not me if there are tough economic times ahead’ – that’s the gist of what Kiwis think if a financial tsunami hits our shores in 2009.

However, in a rebuff to the doom and gloom merchants, most Kiwis think the economy will only get a little bit worse next year. And despite the international economic meltdown 52% think the economy will pick up in 12 months time.

Across the ditch, Aussies have a markedly gloomier, glass-half-empty outlook. Only 39% think their economy will pick up in 12 months time and they have cut back spending on a wide range of goods and services significantly more than Kiwis.

The relatively more optimistic outlook in New Zealand is one of the key findings in UMR Research’s latest surveys of public opinion about the economy in the past month . The New Zealand survey showed people are more or less evenly divided on whether 2009 will be better for New Zealand or not.

It seems New Zealanders may be in denial. Many don’t think that if the economy takes a dive it will affect them personally. For instance, while 57% think the economy will be worse in 2009, 74% think their own or their family’s standard of living will be either better or no different to 2008.

Similarly, while 72% say they are concerned about the impact of the economic meltdown on the New Zealand economy and 54% are concerned about its impact on their standard of living, 60% think things will only get ‘a little bit worse’. And while 78% expect unemployment to rise, 61% are not worried about losing their jobs.

Even so, a significant minority see tough times ahead. One in four (24%) think their standard of living will fall and the same number are worried about losing their jobs next year. A similar number (26%) think the impact of the financial crisis on New Zealand will get a lot worse and 44% think it will take two years or more before the economy picks up again.

One way some Kiwis are planning to cope is to spend less, but the Aussies appear to be squeezing their money-belts tighter.

When it comes to basics, 34% of Kiwis say they now spend less on food and groceries compared with 42% of Aussies.

The bigger hits have been spending on consumer goods with 54% spending less on them (61% Australia), eating out and going to restaurants with 49% cutting back on that (61% Australia), clothes and fashion with 44% spending less on that (61% Australia) and entertainment with 42% spending less (59% Australia).

Christmas shopping and gifts have not escaped with 48% adopting the scrooge approach (55% Australia) and are spending less this year due to the financial crisis.

Possibly reflecting Kiwis’ priorities this summer, only 39% say they have cut back on holidays (58% Australia), 35% on driving their car (37% Australia) and 27% on alcohol (38% Australia).

More Kiwis on lower incomes are spending less on food and groceries, holidays, driving the car, consumer goods and clothes and fashion. However, there is little difference between the proportion of low and high income earners cutting back on alcohol, eating out and entertainment.

Looking ahead over the next year, 48% of Kiwis say they will spend about the same overall as they did this year, 16% say they will spend more and 35% will spend less.

About two-thirds (67%) expect interest rates to go down in 2009 which will put more in the pockets of mortgage holders if they do.


© Scoop Media

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