(Australian Associated Press)
Spill-happy politicians could be partly to blame for weak consumer spending, with a new report suggesting upheaval in Canberra is worrying people already dealing with rising mortgage rates and stubbornly weak wage growth.
A consumer study by Deloitte Access Economics and price comparison site comparethemarket.com.au has found domestic politics is the second biggest concern for Australians after international relations.
With 77 per cent of the 3,000 respondents citing Australian politics as a concern, pessimism has apparently eroded confidence in personal finances.
The report says 57 per cent do not believe the value of their investments will improve in the next 12 months and 47 per cent think the value of their home won’t improve in the same period.
Sixty-seven per cent believe their ability to pay bills will be worse in a year and 65 per cent say they don’t think their incomes will improve.
With a federal election looming, Rob Attrill, comparethemarket.com.au’s banking general manager, said uncertainty about future government policy will hit investor confidence and have knock-on economic consequences.
“If someone is uncertain about their budget, job or income prospects, then they will typically reduce their spending to prepare for the future,” Mr Attrill said.
“Any uncertainty surrounding future government policy might hold people back from investing – all of these have knock-on economic consequences.”
Leadership spills, international relations, the sliding Australian dollar, falling house prices and stagnant wage growth seem to be causing anxiety for three-quarters of the population, the report said.
Mr Attrill said the results showed the effect macro economic issues can have on retail economy.
“The threat of continued out-of-cycle increases in interest rates, which have a residual effect on household income, are causing consumers to curb their spending,” Mr Attrill said.
The ANZ-Roy Morgan survey showed consumer confidence rising 1.9 per cent this week, although three of the five major components of the index fell.
“Recent consumer views on their finances and the economic outlook have been volatile,” CommSec senior economist Ryan Felsman said.
“Spending has moderated and consumers have become more cautious as the year has progressed.”