HERE I am, a few days before Christmas, caught in a fearful dilemma. And I am not alone. Millions of Australians face the same question: should I spend any money this Christmas on presents, or should I keep saving?
It is a real problem. For most of the years since World War II, Australians have been in the red. We seemed to spend more than we earned, apparently assuming that next year we would be a little better off, and that our debt would be covered up.
And luck was with us. The economy grew. Australia was a success. We mortgaged ourselves to buy houses, bought cars on hire purchase, and saddled ourselves with personal debt. But we were right. Australia is now three times wealthier than it was in 1950, and the wealth has been widely shared.
Yes, there are still poor people, and there will always be poor people, because poverty is relative. But today’s poor are not as poor as the poor of 1950, and they are not by any means as poor as the poor of Somalia.
Australia increasingly became a kind of retail paradise. Australians were quick to explore every new widget, and make it our own.
We bought thingatrons with our new credit cards, travelled to exotic places, and learned about vintages. We had the good life, and wise people wagged fingers at us about our insane levels of personal debt.
Worse, because we were so keen on debt, other, more savvy people, foreigners who saved, were coming into our country and buying up big. They were acquiring cattle runs and other icons of Australian life like (gulp) Arnott’s Biscuits. Where would it all end?
Now the worry is exactly the opposite. In the last few years we Australians have begun to hang on to our money. Savings are rising rapidly. We aren’t travelling as much as we used to, not having expensive Christmas holidays, and not buying in the same generous fashion as we once did.
And retailers are worried. There seem to be perpetual sales on everywhere. Some are calling for a ban on internet purchases, though they represent a tiny proportion of expenditure.
Is there any praise for us, we Australian savers at last responding to the call to be provident, to think of the future, and to postpone present gratification? Not a bit of it! Even Ministers of the Crown have urged us to spend, as though it is our national duty to divest ourselves of our dough.
What has happened? I think the shift has two causes. The first is that Australia escaped from the toils of the Global Financial Crisis, because we had little government debt, a relatively strong banking system and steady demand for our minerals. The second is that as individuals we are scared by the daily stories foreshadowing another disaster – this time the Government Debt Crisis.
Since we are generally in funds, so to speak, we are hanging on to them. Who knows what will happen, and what we will need to do?
Perhaps we have had our fill of widgets for the moment. It is a hard call. If there is to be another financial disaster, if Europe disintegrates, how will we protect ourselves and our families?
So here we are, or at least I am, pondering on the central existential question. How many Christmas presents do I buy – given the $5 I am grudgingly prepared to outlay this year?
Don Aitkin, political scientist and historian, served as vice-chancellor of the University of Canberra from 1991 to 2002.