You’re not buying enough stuff! That seems to be the message as best I can distil it from the latest round of news about a “retail recession”. This week it came from research by the NAB that found that retail sales have dropped to levels not seen since the recession of 1991. A couple of months ago the same survey found it was at levels not seen since the global financial crisis. Seems we’re going backwards. And this at a time the Morrison government has just given us a tax cut in the expectation that we’d spend it.

We can’t be entirely sure where that money’s going. Perhaps our shopping is simply moving online, which means those tax cuts are going overseas. But it’s hard to believe that would be the best explanation because the drop in retail seems to be sharper than would be the case from something that has been happening for years. A more likely explanation is that we’re using that money to pay off debt, so that instead of sending our tax cut to the retail sector, we’re sending it to banks.

Illustration: Andrew Dyson Credit:

Which brings me to the other quietly seismic story of the week: a judgment handed down in the Federal Court after ASIC accused Westpac of irresponsible lending practices. You see, Westpac, when it was assessing whether or not you’d be able to pay back a loan, wasn’t examining what you were actually spending.

It was instead relying on something called the Household Expenditure Measure – an industry benchmark that estimates your expenses based on your location, lifestyle, family size and income. Put simply, ASIC argued that using this estimate simply wasn’t good enough in the face of data on what you might actually be spending, especially since there’s almost always a difference between the two. For what it’s worth, the royal commission into the banks agreed.