Discretionary Spending Growth Hits Three-Year High of 6.7%

New research from Credit24, conducted by Primara Research using ABS data, reveals discretionary household spending grew 6.7% annually in June 2026, the fastest pace in exactly three years and the highest level outside the Covid-era surge in over a decade of data. Only the Covid-era period itself, from March 2021 to mid-2023 and peaking at 39.9%, saw discretionary spend grow faster.

With inflation at 3.8%, that puts growth 2.9 percentage points above the headline rate, a gap not seen since March 2023, when discretionary spend was up 13.2% against 7% inflation.

Non-discretionary spend, the essentials households can't avoid, grew just 4.6% annually. Discretionary spend, the spending households don't strictly need to make, is growing faster still.

Where the Growth Is Concentrated

Primara Research's analysis since February, when the fuel crisis took hold, shows total spend up 2.7%. Transport leads, and discretionary spend follows close behind, not the non-discretionary essentials a fuel crisis would suggest:

• Transport: +5.3%, new vehicles and air travel, not just fuel
• Recreation and culture: +3.7%
• Furnishings and household equipment: +3.2%, and up 6.6% in the ACT
• Non-discretionary spend overall: +1.8%

Food, alcohol, health and hospitality are all still growing, just more slowly, losing relative share of the household budget rather than shrinking outright.

"The growth isn't spread evenly. Transport, recreation and furnishings are growing faster than everything else, at exactly the point a fuel crisis should be hitting those categories hardest," said Peter Drennan, Head of Research and Data at Primara Research. "The ACT number is a good example. Canberra is known for interstate relocation, and a new job there still means furnishing a home, whatever's happening to petrol prices."

"Growth running this far ahead of inflation hasn't happened since early 2023, and it's happening now despite a cost of living crisis that should be squeezing budgets hardest," said Drennan. "This is an average. Overall discretionary spend is higher, but that hides real range at both ends, some households have plenty of room to spend on non-essentials, others have very little and are doing it tough."