Budget shakes consumer confidence

There’s no doubt about it now. Last week’s Federal budget has shaken consumer confidence throughout Australia.

A Roy Morgan poll, taken on the eve of the budget last Monday, showed Labor was still riding high then, with 60-40 support, on a two party preferred basis.

But an AC Nielsen poll, published earlier this week, showed the Coalition trrimming  that gap.

But the real story was to emerge from a Westpac Survey of Consumer Confidence, released yesterday.

It showed that consumer confidence plunged 4.3 per cent in May, the second biggest monthly fall, in a post budget period,  ever.

Westpac’s chief economist, Bill Evans, said the Federal budget was clearly to blame.

But he added:”The fall, while large for a receent post budget period, is not particularly significant in the context of the volatility we have seen over the last decade..”

The latest fall follows a rise of 8.3 per cent in April.

But Australians’ view of their finances now, compared with a year ago, plunged 7 per cent this month.

The public is even more pessimistic in assessing their situation now, with their likely situation in 12 months’ time.

No less than 7.2 per cent saw their prospects dimming over that time.

But the Prime MInister Kevin Rudd, said it would be “irresponsible” for the government to step back now from the challenges

Speaking on Adelaide radio, Mr Rudd said:”We therefore have taken a responsible strategey to support the economy now because of this global recession.”

However Mr Rudd also said his government would also be taking the equally responsible path of returning the budget to deficit over the medium term

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