Consumer confidence jumps after tax cuts

ANZ-Roy Morgan consumer confidence surged by 5.9 points this week, reaching 84.4 – the highest level since January.

The jump, the largest in over three years, follows the implementation of Stage 3 tax cuts, significantly boosting consumer sentiment.

Significant increase in consumer confidence

This week’s rise marks the most substantial weekly increase since mid-April 2021.

Despite this positive development, the index has remained below 85 for a record 77 consecutive weeks.

Compared to the same week last year, consumer confidence is up by 9.2 points and is now only 2.7 points below the 2024 weekly average of 81.7.

Consumer confidence increased in most states, with Queensland leading the way.

New South Wales, Victoria, and South Australia also saw strong gains, while Western Australia experienced a slight decline.

Positive movement across the ANZ-Roy Morgan index

All five questions in the index showed positive movement this week, contributing to the overall increase:

• Current financial conditions: 22% of Australians (up 2ppts) say their families are “better off” financially than this time last year, while 49% (down 4ppts) say their families are “worse off.”
• Future financial conditions: 33% (up 3ppts) expect to be “better off” financially next year, while 32% (down 3ppts) expect to be “worse off.”
• Short-term economic confidence: 12% (up 4ppts) expect “good times” for the economy over the next twelve months, compared to 33% (down 4ppts) who expect “bad times.”
• Medium-term economic confidence: 13% (up 3ppts) expect “good times” for the economy over the next five years, while 20% (down 2ppts) expect “bad times.”
• Time to buy major household items: 23% (up 3ppts) say now is a “good time to buy” major household items, while 47% (down 2ppts) say now is a “bad time to buy.”

Perspective from ANZ

ANZ Economist Madeline Dunk (pictured above) commented on the significant rise.

“ANZ-Roy Morgan Australian consumer confidence recorded its largest weekly rise since April 2021, jumping 5.9pts to hit a six-month high,” Dunk said. “The improvement in confidence was broad-based, with each of the subindices increasing by at least 5pts.

“Notably, households’ confidence in their current financial situation was the second highest since early-2023. This suggests households may be starting to see a boost to their incomes from the Stage 3 tax cuts and other cost-of-living relief measures.

“The next few weeks will be important in determining whether this is the start of a sustained recovery in consumer confidence.”

Visit the ANZ-Roy Morgan Consumer Confidence webpage.

Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.