Post-Federal Budget blow for Malcolm Turnbull as consumer confidence hits 2-year low

Consumer confidence has tumbled following the Federal Budget to its lowest level in nearly two years.

The ANZ-Roy Morgan Consumer Confidence Index for the week to May 16 slumped 2.6 points to 109.4, which is its lowest level since September 2015.

But the indicator still remains above the 100-point level separating optimism from pessimism.

ANZ head of Australian economics David Plank says the sharp fall could be a reaction to some Federal Budget measures, such as the proposed 0.5 per cent boost to the Medicare levy.

“This week’s sharp fall in consumer sentiment follows two weeks of relatively stable readings,” Mr Plank said.

“It is possible that the sharp falls in confidence around personal finances reflect last week’s Commonwealth Budget.”

Mr Plank said consumers appeared to be worried about measures hitting their hip pockets, particularly when data released on Wednesday is expected to show record low private sector wages growth of just 1.7 per cent in the year to the March quarter.

Householders’ views of their long term economic situation posted the sharpest fall, down 5.5 per cent over the week, which offset two previous weeks of gains.

Views about current economic conditions also declined 3.9 per cent but remained slightly above April’s low.