Thursday, March 10, 2011

First floods, now carbon tax. Confidence on the floor

The prospect of a carbon tax has being blamed for a dive in consumer confidence, which is now back down to its low at the time of the January floods.

After recovering 1.9 per cent in February, the Westpac Melbourne Institute index slipped 2.4 per cent led down by 7 per cent slide in confidence about family finances.

"While there is no specific evidence we believe the key negative for households relates to the government's commitment to introduce a price on carbon," said Westpac chief economist Bill Evans.

Asked in the survey which news items they most recalled 42 per cent mentioned "budget and taxation," up from a normal reading of around 20 per cent. Interest rates, which normally dominate news recalled, were remembered by only one in five of those surveyed...

Acting Prime Minister Wayne Swan agreed, saying the slide might be the work of the Opposition.

"One of the causes could be the scare campaign being run by many in the community who don’t want to tackle dangerous climate change and would rather put their heads in the sand and ignore it," he told reporters in Brisbane.

The confidence index has fallen to 104.1, just above the 100 mark where the number of optimists is balanced by the number of pessimists.

Labor voters remain more confident than Coalition supporters but have suffered a big hit with their confidence plunging 6 per cent in the month.

Views about whether now was the right time to buy a house slid 2.3 per cent and a car 2.9 per cent.

Home loan approvals dived 16 per cent in Queensland and 1.7 per cent in the rest of the nation.

The total owing to banks for mortgages topped $1 trillion for the first time.

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