[SYDNEY] Australians are borrowing and spending less at the same time as firms are hiring and investing more, creating a conundrum for policy makers trying to ascertain just what the economy requires.
At the heart of the matter is tumbling property prices that are casting a pall over sentiment, compounded by a crackdown on banks that's discouraging them from lending to Australians already nervous about taking on more debt. The global backdrop of a slowdown in China, which buys one-third of Australian exports, also means there's less certainty offshore.
That's seen mortgage growth slow to just 0.2 per cent in January, the weakest monthly reading since 1984 when Australia was undertaking a sweeping deregulation program to revive the moribund economy. At the same time, credit for personal purchases dropped 2.8 per cent from a year earlier - the worst annual figure since October 2009.
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