Most of us, anywayTHE federal budget appears to have shattered an emerging recovery in consumer confidence, with the Westpac-Melbourne Institute index recording one of the worst post-budget results on record.
The survey, conducted during the week of the budget, showed confidence down 4.3 per cent, undoing half of the promising 8.3 per cent gain recorded the month before.
"This is the second-biggest fall following the release of a budget in the past 10 years," Westpac chief economist Bill Evans said. "In fact the only larger fall occurred in May 2006, although the reason for that was a surprise interest rate hike just before that budget."
Opposition shadow treasurer Joe Hockey told the National Press Club the figures showed the Government had bungled the selling of the budget, spinning a story of recovery far too optimistic to be believed...
"Now is the time for us to be optimistic, but it is the time to be fair dinkum," he said. "The Prime Minister and the Treasurer have been so focused on the spin of the budget that they have undermined confidence, as revealed in this data.
"Australians know when they have been spun a magic pudding story. The Government handed out $900 cash splashes, yet Australians will be paying $500 a year interest on the debt."
An Age analysis of the components of the institute index shows that views about personal finances plummeted in budget week, with the proportion of Australians surveyed believing their finances would improve in the year ahead sliding from 30 to 24 per cent. The proportion expecting an improvement in the Australian economy over the next five years also fell, from 30 to 24 per cent.
But in apparent renewed enthusiasm for retail spending, the proportion agreeing that now is "a good time to buy major household items" climbed from 43 to 46 per cent.
Mr Hockey said the Rudd Government was the "biggest-spending government in modern history", drawing on statistics that also identified the government in which he was a minister as the previous biggest spender.
"They've spent just short of $10million an hour since the moment Mr Rudd was elected, in new spending ... Some day, some way, somehow, someone's got to pay for it."
While attacking the level of debt being run up by the Government, Mr Hockey refused an invitation to identify the level of debt the Coalition thought would be appropriate.
"That's a schoolboy argument," he said. "But I'll tell you what, it would be a lot less that what Labor is racking up."
Wayne Swan responded by saying Mr Hockey had no alternative plan and was unable to demonstrate that a Liberal deficit would be one cent less than Labor's.
The institute survey shows striking differences in the way voters responded to the budget.
Coalition voters, and both low and high income earners, lost confidence during budget week. Labor voters and middle-income earners gained confidence.
Consumer Sentiment May 2009
