- Australians don’t appear to have been all that impressed with the federal budget.
- ANZ Bank’s consumer confidence index fell modestly, largely due to weaker readings on current family finances and household spending.
- Australia’s federal election will be held at some point in May.
If the Australian government was looking for the federal budget to boost confidence among Australians, it’ll be disappointing with new data released today.
Confidence levels fell, according to the latest ANZ-Roy Morgan Consumer Confidence Index.
The headline confidence reading slipped 1.3% to 113.2, leaving it marginally above average levels.
Hinting that tax relief contained in the budget missed the mark, views towards current family finances dipped 1.3%. However, sentiment towards family finances in the year ahead did provide some offset, lifting by the same amount.
Confidence levels towards the economy now and looking five years ahead did improve a touch, rising by 0.7% and 0.8% respectively.
Helping to explain the decline in the headline confidence index, views towards whether now was a good time to buy a household item plummeted by 7.4% to the lowest level since late 2015.
While a volatile sub-component in the report, much like the broader confidence index, the sharp decline is not a great sign that household spending will improve in the period ahead, especially if the decline is sustained.
“The fall in confidence last week would be seen as disappointing in Canberra given the near-term boost to household incomes delivered in the Budget,” said David Plank, Senior Economist at ANZ Bank.
“Given the usual volatility in the weekly data, we don’t believe the decline indicates a negative response to the Budget. Rather, it suggests the announcements failed to provide a boost.”
The general response to the budget was ‘meh’, in other words.
Australians will go to the polls to elect the next government in May. An announcement on the actual election data is expected to arrive at some point this week.
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