Further sign Australians happy with budget

Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

 

If there was any doubt Australians were happy with Treasurer Josh Frydenberg’s tax cutting budget, another gauge of confidence has soared and suggests optimists are back in the driving seat.

The Westpac-Melbourne Institute consumer sentiment index jumped 11.9 per cent to 105 points to its highest level since July 2018.

“This is an extraordinary result,” Westpac chief economist Bill Evans said.

He said the index has risen 32 per cent over the last two months and is now 10 per cent above the average level seen in the six months prior to the pandemic.

He believes the rise was a combination of the budget, success containing COVID-19 and the expectation the Reserve Bank is likely to further cut interest rates when its board meets in November.

Since 2010, the survey has conducted a post-budget question to assess how households think it will impact on their finances.

For this budget there was a positive net balance of 9.5 per cent, suggesting a clear majority believe it will improve their finances.

“We have never seen a budget response that showed a net positive balance until now,” Mr Evans said.

However, federal Labor believes the government has not done enough to ensure the country is on track back to full employment.

In his first public speech since the budget, shadow treasurer Jim Chalmers will tell the National Press Club the nation needed a plan to kick-start the economy out of recession while redefining the future.

Instead it will be a budget remembered only as Australia’s most expensive missed opportunity.

“What the Liberals served up last week wasn’t just uninspired and unimaginative, it was unworthy,” he says .

“Unworthy of the moment and the challenge before us and unworthy of all those Australians who’ve carried us through this crisis.”

For all the talk that these are unprecedented times, he argues, the problems gripping the economy existed long before COVID-19 arrived and the solutions will need to endure long after it’s gone.

“The big risk here for our country is that Australia might miss this once-in-a-generation chance to dig deep, to do something meaningful and lasting,” Dr Chalmers says.

He says while the government has made much of its new fiscal strategy, its last one promised a surplus in the first year and every year but delivered only deficits.

It also promised to pay down debt but instead it has multiplied it.

“All those crates of ‘back in black’ mugs at Liberal Party headquarters tell the story of a government that put souvenir sales ahead of substance,” Dr Chalmers says.

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