CHART: How Australians feel about the government dictates their view on the broader economy

Prime minister Malcolm Turnbull. Photo: Mark Metcalfe/ Getty Images.

The ANZ-Roy Morgan consumer confidence index just dipped for the third straight week, and this time Federal parliament could be to blame.

ANZ’s head of Australian economics David Plank noted that in addition to low wage growth and higher energy costs effective from July 1, Australian consumers last week also had to deal with increased uncertainty from the dual-citizenship debacle.

“The current controversy surrounding dual-citizenship in Parliament may have also weighed on sentiment, especially views about future economic conditions,” Plank said.

In view of that, this chart from ANZ economist Charelle Murphy is particularly interesting:

Since 2010, it’s revealed a strong correlation between voter satisfaction with the incumbent government and how confident consumers are feeling.

Since the 2016 election the Turnbull government’s approval rating has been slowly falling, and consumer sentiment has followed suit.

The chart shows that despite occasional volatility, over the long-run how Aussie consumers feel about the economy closely tracks how they feel about their government.

It will certainly be worth monitoring if the current government’s two-party Newspoll rating remains stuck below 50%.

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