Australian consumer confidence gets modest budget boost

SYDNEY, April 10 (Reuters) - A measure of Australian consumer confidence bounced modestly from one-year lows in April as a give-away budget from the government boosted optimism on the future even as family finances were being squeezed right now.

Wednesday's survey showed the Melbourne Institute and Westpac Bank index of consumer sentiment rose 1.9 percent in April, only partially retracing March's sharp 4.8 percent slide.

The index was down 1.7 percent from a year earlier at 100.7, meaning optimists now just outnumbered pessimists.

The survey of 1,200 people was conducted as the coalition government of Prime Minister Scott Morrison announced an annual budget full of infrastructure spending and tax breaks.

The government faces an election in May and is still trailing in opinion polls despite the budget.

The biggest improvement in sentiment was recorded among coalition voters, which jumped 6.1 percent.

"The key issue will be whether this boost from the Budget is sustained," said Westpac chief economist Bill Evans.

"Persistent weak wages growth; falling house prices; and the perceived rising cost of living are all weighing on consumers."

That drag was evident in a measure of family finances compared to a year ago, which fell 4.9 percent in April. A measure of whether it was a good time to buy a major household item also eased 2.0 percent.

In contrast, the outlook for family finances over the next 12 months rose by 4.1 percent. The index of economic conditions over the next 12 months rose 6.2 percent and that for the next five years by 5.9 percent.

Sentiment toward the beleaguered housing market improved, with the time to buy a dwelling index firming 2.4 percent to a four-year peak.

The index has risen 33 percent from its mid-2017 low and is back around the long-run average of 120. There was also a sharp rise in expectations for house price gains, a surprise given values have been dropping for months. (Reporting by Wayne Cole Editing by Shri Navaratnam)

2019-04-10 02:42:57

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