The Consumer Confidence Index fell a further 4.2 per cent in the week ending May 4, taking overall confidence down a sharp 8.0 per cent over the past fortnight; a significant move for the index.
Major falls in consumers’ perceptions of economic conditions next year (down 20 per cent over the past fortnight) were the main drivers for the poor result.
ANZ chief economist Ivan Colhoun said the index was providing the first read of the impact of the Budget on consumers.
“The policies of most concern to the consumer spending outlook at this stage are the mooted temporary deficit reduction levy and the proposed changes to the eligibilities for welfare and pension payments.
“These policies, if introduced, would impact consumption both directly and indirectly. This index will be important to watch for the likely magnitude of the policy’s indirect hit to consumer spending – and how sustained the impact from any other Budget-related news will be on consumer confidence more generally,” Mr Colhoun said.