Undecided election unnerves consumers
Political instability in the wake of a deadlocked federal election has given Australians the jitters, while industry groups have urged politicians to form a stable government.
The ANZ-Roy Morgan consumer confidence index edged down 0.9 per cent last week, with levels slipping in the past fortnight after reaching a two and a half year high.
ANZ head of Australian economics Felicity Emmett says uncertainty following Saturday’s cliffhanger election and concerns over the global outlook dragged sentiment down.
“Over the coming weeks, confidence could be affected if the government fails to secure a majority and a minority government proves difficult to form,” she said.
“This uncertainty around the political outlook will likely remain a key influence on household confidence in the near term.”
While consumers’ views towards their future finances dipped 5.1 per cent, overall levels remain well above the long-run average.
And there was a bounce in views about the economic outlook following sharp losses the previous week.
Households’ view of the 12 month economic outlook lifted 4.7 per cent, but levels are still below the long-term average despite picking up this year.
The measure on whether now is a good time to buy a major household item fell 2.5 per cent.
While the vote counting continues, Russell Zimmerman executive director of the Australian Retailers Association (ARA), urged whichever side wins to work with the cross benchers to achieve stability.
“Obviously, what you want to see is a very strong, stable government that will build confidence,” Zimmerman said.
“Whatever government gets in – whoever that may be, majority or minority government – they need to make sure they work with the cross benchers, the same with the senate, and ensure that we get good strong stable government which will give confidence back to consumers,” Zimmerman said.
Zimmerman highlighted that several issues which affect retailers are outstanding, including changes to the company tax rate outlined in the 2016 budget which has yet to be passed, and the commitment made by the Abbott government to remove the GST-free threshold on low value goods bought from overseas.
“One would be hopeful that the government would continue with that [removing the LVIT] … It would be extremely disappointing if that did not happen,” Zimmerman said.
The National Retailers Association and ARA have also both raised concerns that reinstating the Australian Building and Construction Commission, which impacts retail via the cost of shopping centre construction, may not pass the new senate.