Steep declines in two major surveys of business and consumer confidence blamed on weak GDP data and media attention on the Coalition’s economic management

This article is more than 5 years old

This article is more than 5 years old

Australians do not seem to be listening to the treasurer’s message that conditions are good for pre-Christmas spending, with two surveys showing slumps in both business and consumer confidence.



Releasing weaker than expected growth figures last week, Joe Hockey insisted Australia was “seeing improvements in consumer confidence and business confidence”. He added: “We want Australians to go out there and spend for Christmas, not just for Santa Claus but for Australia.”

“Consumer confidence data has rebounded to above long-run averages. This is a further positive sign for our retailers going into the Christmas trading season,” the treasurer said then, pointing to the ANZ-Roy Morgan consumer confidence survey rather than the rival Westpac/Melbourne Institute survey which had shown nine consecutive months of net negative consumer sentiment.

But on Tuesday, the ANZ/Roy Morgan survey also showed consumer confidence falling to the lowest level in four months, blaming “the weak GDP data and media focus on the government’s economic management last week”.

And a separate survey showed business confidence declining as well, to its lowest level since mid-2013, just before the federal election.

NAB’s November Monthly Business Survey showed confidence slipping from +5 to +1, wiping out a big rise the previous month.

The NAB’s chief economist, Alan Oster, said the weak outlook for export prices and a likely more severe deterioration in unemployment meant it was likely that the Reserve Bank would cut interest rates next year.

NAB is now forecasting economic growth in 2014-15 will be just 2.5%, down from a previous forecast of 2.9%, and that unemployment will peak at 7.75%, compared with the current rate of 6.2%.

The shadow treasurer, Chris Bowen, said confidence was falling because of the government’s chaotic management and unfair budget.

“By his words and his actions Joe Hockey is damaging confidence, and today we see the NAB survey on business confidence plunging as well, so it is time for Joe Hockey to acknowledge and accept that his chaotic management and his unfair budget is actually affecting the economy,” Bowen said.

A spokesperson for Hockey said that, in monthly terms, ANZ’s consumer sentiment index remained at around long-term average levels.

And the spokesperson pointed to other positive indicators, including retail trade figures rising for the fifth consecutive month and job ads rising in the month of November.