It’s only taken a few days for Treasurer Joe Hockey’s ‘horror’ budget to have an impact on people’s willingness to spend.
ANZ-Roy Morgan Consumer Confidence fell 3.2 per cent in the week the federal budget was handed down and has dropped 14 per cent from four weeks ago when leaks about government spending cuts and the debt levy started to appear.
ANZ predicts that consumer spending will improve this year, but the federal budget may slow the speed of the recovery in household consumption.
ANZ head of Australian economics Justin Fabo said the survey suggests that people might reduce their spending in the short term in response to the budget.
“The persistence of this fall will be important to the assessment of the consumer spending outlook,” he said.
“The indirect impacts of these announcements on consumer confidence could prove to be more important.”
The ANZ-Roy Morgan survey was conducted over the weekend of May 17-18 and involved 1,000 face to face interviews.