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Coalition voters turn pessimistic

Labor had a horror month of leadership farce and superannuation policy self-harm and it's a month closer to the federal election that their team is set to win, but it's the Coalition voters who turned negative last month and dragged the Westpac/Melbourne Institute consumer sentiment index down by 5.1 per cent.

As the accompanying graph shows, the gap in consumer confidence perceptions between Labor and Coalition voters is again widening after a period of rapprochement from the record July chasm – back when the sky was supposed to be falling with the start of the carbon tax and the $100 leg of lamb.

Coalition voters' consumer sentiment index dropped 5.8 points to stand at 95.8 this month – below the 100 break-even mark when the numbers of pessimists and optimists are equally matched. Labor voters' consumer sentiment firmed 0.9 to a chirpy 127.9.

For the past couple of years, Coalition voters have been the main drivers of consumer sentiment gyrations while Labor voters' confident economic outlook has remained relatively consistent. Given the size of the voting intentions demographic subset, this variation between the two classes is the most influential and most intriguing, yet the Westpac commentary with the release of main index number doesn't mention it.

Westpac chief economist Bill Evans offers various possible reasons for the index turning south this month – Cyprus, the stock market correction, talk of interest rates perhaps rising – but it is curious that only Coalition voters are moved.

It's not hard to propose excuses for some of the subset movements. By far the biggest demographic swing this month was the outlook of tenants plunging 18.7 points to 93.6: rising rents and news of higher housing prices will do that. The outlook of mortgagers and outright owners only dipped 2.5 and 1.3 points respectively and remained in positive territory.

The extent of whip-sawing in some of the demographic subsets suggests the danger of relatively small sample sizes, but the voter intention numbers should be fat enough to have weight.

While Coalition voters apparently were concentrating on the possible negatives, recent economic news has been reasonably good. Trade balance, retail sales, jobs growth and housing approvals have all been positive (although the too-good-to-be-true labor force numbers will be tested later today). The Reserve Bank left interest rates unchanged again, but maintains an easing bias in its rhetoric with no suggestion that the current historically low rates might turn up any time soon.

Maybe Joel Fitzgibbon did it with his suggestion that, if you climb the ladder of opportunity to household income of $250,000 a year, you'll still be struggling.

Michael Pascoe is a BusinessDay contributing editor.

9 comments

  • Well things are starting to deteriorate pretty quickly and once again the experts are surprised. I remain as bearish as ever. I only hope the Abbott lead government make the hard decisions that need to be made. We have enormous potential as a country but are hopelessly governed. It is a race against time. I think the economy will continue to deteriorate. Business confidence is fading fast, consumer confidence will plunge. It will be ugly. It is ugly under the surface. Maybe Coalition supporters know a bit more than the average punter?

    Commenter
    Brisbane Bear
    Location
    Brisbane
    Date and time
    April 11, 2013, 2:54PM
    • Ah, there is nothing quite like the consistency of LNP HQ (aka Brisbane Bear) to talk down our economy...

      It'd be treason in any other country.

      What the stats clearly show is the coalition supporters now realise that the '3 word soundbite' approach doesn't work when you have to put out substantive policies, and the world can see how myopic and self-serving conservative policies actually are.....

      Commenter
      realist
      Date and time
      April 11, 2013, 3:57PM
    • I doubt either of the political parties have the gumption and the honesty to recognize that devaluing the Oz dollar will do more to stimulate exports (and therefore manufacturing) than any other single action. Every manufacturer from food to cars who has got into financial trouble blames the high dollar. So can we not think for ourselves and toss out these wonderful economists ? Even the assistant Reserve Bank Governor thinks that that low interest rates will stimulate manufacturing - but what do you do with your manufactures when the dollar is too high to export them ?

      Commenter
      michael
      Location
      myrtleford
      Date and time
      April 11, 2013, 4:28PM
    • "Maybe Coalition supporters know a bit more than the average punter?"
      pfftt...get your hands off it.
      Abbott is a disaster waiting to happen. Going by his little love in with Australia's wealthy and leading elitists at the IPA (and the media and Opposition say that the ALP wage class war!), good policy according to this crowd equals:
      • Public broadcasting - gone. The ABC to be broken up and sold off, SBS to be fully privatised.

      • Corporations to be allowed to make secret payments to political parties.

      • Medicare gone for most Australians.

      • A return to WorkChoices, just by another name.

      • The clean energy fund and the renewable energy target - scrapped.

      • Funding for sport and arts - including the Australian Institute of Sport - axed. Same for science, with the CSIRO to be privatised.

      But then again, probs not bad for the "coalition supporters" as it will be the thin elite that make the $$$ at the end of the day, and surely that is great for the Markets and economic growth. You may be right after all, the Coalition Supports do know a little more than the average punter.

      Commenter
      Con B
      Location
      Glenorie
      Date and time
      April 11, 2013, 5:05PM
  • Oh BB (a.k.a. coaltion troll) didn't you tell us it was all going to come crashing down last year? And in the first few weeks of this year? And...never mind. If you can see beyond your wheelbarrow, you might realise nothing much will really change after September 14.

    Commenter
    reader
    Location
    Melbourne
    Date and time
    April 11, 2013, 4:37PM
    • You only have to read the comment pages and read the Labor followers comments to find out why their consumer confidence is unchanged, they are halfwits who believe everything is humming along nicely, what increasing debt ?, what blunders ?, there are none so blind than those who do not wish to see. Swan says at $300 million in debt we are one of the lowest in the world, this doesnt make it right, you still have to live within your means as does every individual in Australia.

      Commenter
      HAC
      Date and time
      April 11, 2013, 4:51PM
      • So should it be a surprise that coalition supporters are less confident, after all they are by and large the small business people and investors who are bearing the brunt of the Labor Governments mismanagement.

        It is very unfortunate that small business and investors have lost confidence since they are the ones who are innovating, investing and driving the economy. They are also the ones who know customers are not coming into the shop or not ordering goods. They are the ones who are struggling to be competitive with the overvalued dollar which is arguably a direct result of the overinflated deficits and mammoth government borrowing.

        Why would there be confidence when every day we see evidence of industry closing, job losses and class warfare attacks by that luminary Wayne Swan not to mention our esteemed Prime Minister who doesn't seem to recognize the responsibility which comes with her High Office.

        Confidence will return after 14 September and it would return a whole lot earlier if the so called independents facilitated an early election now.

        Commenter
        Ian
        Location
        Liverpool
        Date and time
        April 11, 2013, 4:52PM
        • I would suggest Coalition voters have two major worries which could make them more pessimistic than ALP voters:
          1. Maybe PM Gillard will pull a rabbit out of the hat and win the Election on 14/9/13. It would indeed be the 'sweetest victory' as Paul Keating.put it so well when he defeated
          2. Maybe Tony Abbott won't be as good a PM as they hope, if he is elected.

          Commenter
          Billnix
          Location
          Western Sydney
          Date and time
          April 11, 2013, 5:02PM
          • Seems like the LNP supporters are terminal bears.
            Sharemarket flying.
            Interest rates at all time lows.
            Property prices lower and stable.
            Rents going up (good for investors bad for tenants, yet investors are likely to be the LNP supporters....go figure)
            Unemployment rate low and stable within a couple of tenths of a percent.
            Personal and Company tax rates at all time lows....anyone paying more tax as a % of their profits or income since the ALP got in should sack their accountants/lawyers.

            Negatives...high oz dollar that the government has no control over.
            Unless of course they borrowed a half a trillion dollars and pumped it into the the economy (as infrastructure), that would cause inflation to go up, interest rates to then follow up and the A$ to fall.
            This by default would get the manufacturing sector firing up, exports would increase, imports would reduce. The tourism industry would take off again as Australia becomes a viable cost effective destination.
            But NO, borrowing is now an anathema.
            And whatever happens those sourpuss LNP types would find a reason to stay pessimistic.

            Commenter
            JIM
            Location
            Bayside
            Date and time
            April 11, 2013, 5:25PM
            Comments are now closed




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