The release of last week’s Budget has boosted Consumer Confidence by 3.6 per cent, according to the latest ANZ-Roy Morgan Consumer Confidence results.
The 3.6 per cent rise in confidence resulted in a jump to 114.6, the highest score registered since November 2014. The last fortnight has seen a 5.4 per cent cumulative rise, with the Government’s Budget and the RBA rate cut seen in May being cited as key factors behind the boost.
Warren Hogan, ANZ Chief Economist, said the results suggest Australians believe the Government is on the right track regarding the economy.
“The 3.6 per cent weekly rise in measured confidence is almost twice the average weekly move of 2.0 per cent, which indicates to us that the Budget impact has been strongly positive. This suggests to us that Australians believe the Government has got the mix of medium-term fiscal consolidation and short-term support for the economy about right. We tend to agree and will be watching just how far the Government’s fiscal policy can support sentiment over the months ahead.”
Budget packages focusing on the small business sector were highlighted as a key influence in the confidence boost. In contrast, last year’s Budget saw confidence drop to 15 per cent below the current score (99.3) when unpopular measures were announced.
Mr Hogan said the improvement in confidence should be noted with caution, especially with the delicate levels seen over the last year and a half.
“While government policy and political instability may recede as a concern for households in the near-term, we expect that job security will remain front and centre for Australians in their assessments of not just their own financial situation, but also the outlook for the economy. As such, the unemployment rate will be critical to prospects for sentiment, spending and the economic outlook.”