Sydney - You have to be over 16 in Australia to have lived at a time when the economy was not bounding along on the back of the China-led resources boom.

A whole generation for whom recession was something that happened abroad is about to feel the chill of falling asset prices, fewer jobs and the quandaries that come with falling incomes. Some Australians are bumping up very heavily against the boom-to-bust reality.

"They haggle, which is normal," says Sydney luxury car dealer Nasser Elkordi of the grim-faced sellers of once prized Porches and Range Rovers. "But that only lasts five minutes before I hand over the cheque. At the end of the day, they know they have to unload."

The good times rolled on for so long that lots have been caught with massive personal debts. Getting straight means disposing of assets at a knock-down price and adopting an undreamed of frugality.

Takings at Sydney's Star City casino are down by a quarter, waiters at swank cafés complain tips are drying up, the Sydney Theatre Company is in deficit because the only dramas many want to watch are those screened for free on the monitors at the Australian Stock Exchange.

Stocks at three-year lows have prompted the grey-haired to reassess their plans for retirement. Some, watching their savings dwindle, have jumped back in the workforce. Others plan to stay in jobs for as long as they can.

Meg Lee, head of a pensioners' lobby group, is urging people to postpone full-time gardening.

"I'm certainly not trying to be a scaremonger, but it's a wise move to try and get income from wages," she said.

What might be a personal disappointment - the dream of many Australians was to retire at 55 - will be a boon to the battered economy.

The unemployment rate, about to lift from a 30-year low of 4 per cent, is helping push up wage demands and crimp business expansion plans. It's long been government policy to persuade the well-off to delay retirement.

The economy is growing at just a quarter of the rate of a year ago. Official predictions for the year are a slowing to 2.7 per cent from 3.5 per cent and unofficial estimates are that growth next year will be below 1 per cent.

Glenn Stevens, governor of the central bank, is hopeful that more people are cutting up their credit cards and vowing to live within their means.

"It's possible that we are witnessing the early part of a new phase where the household spending and borrowing dynamic is different from the past decade and a half," he said.

Morgan Stanley analyst Gerard Minack reckons household spending could contract next year as Australians rejig their finances to accord with slow growth, or no growth at all.

Retailers say cheap cuts of meat and cheap bottles of wine are what sells these days. Public transport is also in high demand. Car sales, not surprisingly, were down 12 per cent in the three months to June.

Because hard times are a new experience for many Australians, analysts debate how things will play out.

In Britain, the stalling economy has helped the traditional tea shop because it's a cheap alternative to the pub and the coffee bar.

Australian National University marketing lecturer Andrew Hughes predicts lots of new business opportunities as the consumer society tightens its collective belt. For example, bicycle repair is a burgeoning business. For the first time last year, more bicycles than cars were sold.