Consumer confidence slides back towards post-budget lows

Westpac says negative sentiment around the budget, as well as the economy, has dragged consumer confidence down.

Confidence had been recovering following a sharp post-budget decline, but fell 4.6 per cent in the September survey to 94 points.

That is below the 100-point level that indicates when optimists equal pessimists, and also 5.8 per cent below the level of confidence seen pre-budget.

Westpac's chief economist Bill Evans says the level of confidence is now only just above the immediate post-budget low, and the survey shows it is the budget that continues to dominate people's thoughts.

"The significant topics recalled in September are: 'budget and taxation' (62.7 per cent); 'economic conditions' (53 per cent); 'employment' (29.5 per cent); and 'interest rates' (18.1 per cent)," he noted in the report.

"All four topics were assessed as unfavourable although there were some marginal improvements in 'budget and taxation' and 'employment'. There was a marginal deterioration in 'economic conditions' and assessments of news on 'interest rates' were
steady."

Mr Evans says the proportion of people recalling news about the budget this year has been the highest on record, even more than during the introduction of the GST and mining tax.

Moreover, interest in the budget has not dropped off quickly as it did during those previous years.

"Households are a little more comfortable with the budget but it continues to dominate their thinking and they remain on edge," Mr Evans added.

"Furthermore, they are still quite concerned about the domestic economy and the labour market with these concerns having deteriorated further since June."

Economic concerns

The Westpac report shows the biggest deterioration this month has been in householders' views of the economy, both over the next 12 months and the next five years.

The reading on views about the five-year outlook is the worst over the last 16 years.

Despite nervousness on the economic outlook, an increasing proportion of Australians still believe home prices will keep rising.

However, there was a steep fall in responses as to whether now is a good time to buy a dwelling.

That sub-index is now down 23.2 per cent on its peak level a year ago.

Mr Evans says that is a sign that high home prices are constraining affordability.

"As we saw in the recent housing finance statistics, the momentum in the housing markets is clearly moving towards investors who
are motivated by prospective price gains and rental yields and less affected by affordability considerations," he said.

That shift is reflected in the quarter of respondents who still name real estate as the "wisest place for savings."

http://www.abc.net.au/news/2014-09-10/consumer-confidence-slides-back-towards-po...

Swagman wrote on Sep 10^th, 2014 at 1:31pm:



So you take australians as fools swag ... just like the abbott mob does. Perhaps this is why we are all waiting with baited breath to kick one term tony out ... and out hard.

Is this the swill you speak of?

Swagman wrote on Sep 10^th, 2014 at 1:31pm:


People are also unhappy that Labor can't budget for sh!t and that Swans' incompetence as Treasurer has lead to Hockey having to make tough, unpopular choices.

They are if you ignore the many bad ones ... aye AP.