Scott Morrison’s month of flagging middle and lower income tax cuts has helped buck a pre-budget trend of a fall in consumer confidence, an analyst says.
The latest ANZ-Roy Morgan Consumer Confidence Index has risen 0.3 per cent, to a 13-week high of 119.6, in contrast to the typical slide in confidence ahead of the budget.
“The reality is confidence has been rising steadily over the past four weeks alongside budget leaks, so in a way the good news is already baked in the numbers,” ANZ’s head of Australian economics David Plank said on Tuesday.
Over the past month, Mr Morrison has indicated lower and middle income taxpayers could be in for income tax cuts, while the July 2019 increase in the Medicare levy for the National Disability Insurance Scheme (NDIS), could also be scrapped following a lift in government revenue.
Since 2013, in the week leading up to the release of the federal budget ANZ’s average weekly confidence is 112.0 and then usually dips by 1.2 per cent on average in the week immediately following.
“Its pretty hard for a budget to boost confidence,” Mr Plank said.
Currently on the ANZ index, confidence sits well above the previous averages, helped by a labour market, that Mr Morrison said has added 1,000 new jobs every week this year as well as accommodative monetary policy and firming expectations of tax cuts.
Mr Plank said given the steady rise to the more than three month peak in consumer confidence, if the index does decline next week, it is unlikely to be due to the budget.