Gloom and doom: Consumer confidence has plummeted since the start of the year. Photo: Angela Wylie
What was a somewhat bemusing sidelight of politics and consumer confidence has now become serious: the government has so peeved Labor supporters that they've tipped the consumer confidence balance to negative.
As the accompanying graph shows from the demographic breakdown of the Westpac/Melbourne Institute consumer confidence index, Labor voters confidence has plunged below GFC levels. Joe Hockey's constant negativity and dire warnings have scared them more than the Great Recession.
As the official commentary states, the overall consumer sentiment index this month is down by 0.7 per cent to 99.5. On top of a 3 per cent fall in February, the proportion of pessimists now exceeds that of optimists for the first time since last May.
By far the biggest movement over the past year has been in Labor voters – a collapse of 33.4 per cent down to 84.5 per cent. The 13.5 rise in coalition voters' outlook has not been enough to make up for the slide in recent months.
The government might not like the people who do not support it, but the economy needs them nonetheless – particularly when the opinion polls indicate their numbers are growing.
After nothing by constant gloom and doom from Treasurer Hockey, despite the welter of favourable economic news over the past month, maybe that message is finally getting through. In an interview yesterday, he was reported as at least admitting the things were looking better than he thought they would be six and even three months ago. Maybe it's time to change the political narrative of facing a crisis that requires heroic and painful reforms.
Reforms are indeed needed, as former Treasury secretary Ken Henry is happy to remind anyone who listens, but they are affordable, manageable reforms that will improve the economy and don't require trashing it first.
Michael Pascoe is a BusinessDay contributing editor.