Ability and willingness to spend: How well or poorly the Australian economy grows over the next year will depend upon the relative strength of household spending. Of course there are other contributions to growth in expenditure-based GDP – government consumption and capital spending, business capital spending and exports – but these all seem set on growth paths that net out to near zero growth in aggregate. Concern about potential sovereign credit rating downgrading is likely to keep the government obsessed with reducing budget deficits and growth in government spending in aggregate modest at best. The downturn in business investment spending led by the mining sector is unlikely to bottom out for at least a year. Export volumes are increasing but at no faster pace than over the past year, possibly even a little slower with only moderate improvement in China’s demand for Australia’s bulk commodities. The swing factor in the outlook for spending rests with the household sector. Reliance on a falling savings ratio......