Mood improving among consumers

A positive tone is emerging among Australians as the Abbott government continues its renewed focus on the economy.


“Every single day this government is focused on jobs and growth,” Prime Minister Tony Abbott told parliament on Tuesday, in what has now become a familiar line in his question time responses.

Whether or not voters are listening, among a smattering of new economic figures, consumer confidence edged higher to be above its long-term average.

The ANZ-Roy Morgan weekly consumer confidence gauge rose by 0.6 per cent, reaching a one-and-a-half month high.

ANZ economists were surprised by the result given the gyrations in financial markets last week resulting from the unexpected devaluation in the Chinese yuan.

Just a few weeks ago sentiment had plunged over worries that the economic problems of China and Greece might impact Australia.

Commonwealth Securities chief economist Craig James believes confidence is stuck in a grove that is far from negative, but he also issued a warning that politicians should heed.

“The greatest threat to consumer confidence is the negativity of major political parties,” he said.

Among other figures, motor vehicles sales are almost four per cent higher than a year ago, while the minutes of the Reserve Bank’s August 4 board meeting provided an optimistic tone.

While the minutes are somewhat dated with the central bank having released its in-depth quarterly monetary policy statement just a few weeks ago, it was a reminder that it is getting more comfortable with the present level of interest rates.

“Increasingly (it) looks like being an extended period of unchanged Australian interest rates at two per cent,” National Australia Bank’s chief economist (markets) Ivan Colhoun said.

However, amidst all this position news on the economy, there was some not-so-good news for Treasurer Joe Hockey.

The latest weekly Essential Research survey showed a further deterioration in how people perceived his performance.

While 31 per cent said he was doing a good job, 48 per cent disapproved – producing a net score of minus 17 points compared with minus 12 in July 2014.

This was despite a positive response to his second budget in May.