(Australian Associated Press)
Consumers have finished 2015 feeling more confident compared to the start of the year.
However, worries about possible changes to the GST hurt consumer sentiment slightly in December, with the Westpac/Melbourne Institute index falling 0.8 per cent.
The indexed just managed to remain positive at 100.8 points, indicating there are still more optimists about the economy than pessimists.
“The index has held on to most of the gains from last month’s surprise four per cent lift and is 10.7 per cent above its levels this time last year,” Westpac chief economist Bill Evans said.
When asked to recall the top news story they heard, the number of respondents that named the topic of budget and taxation almost doubled since September.
Mr Evans said this topic was also viewed as considerably less favourable.
A proposal to raise the GST to 15 per cent could be up for review when Prime Minister Malcolm Turnbull meets with state premiers this week.
“Presumably, speculation around tax changes, particularly with respect to the GST, is beginning to unnerve respondents,” he said.
News about economic conditions, interest rates and international conditions were the other top issues on consumers’ minds, the survey found.
Commonwealth Bank of Australia economist Diana Mousina said while news heard by consumers was negative across all categories, there was significant improvement in the employment and Australian dollar components of the index.
“This makes sense given the positive employment data of late, the higher Australian dollar over recent weeks and the stability in interest rates,” she said.
“Business and consumer confidence has improved over 2015 – a positive sign for activity in 2016.” Mr Evans said people’s assessments of their finances have almost fully recovered after deteriorating last month following mortgage rate rises from the banks.
“But expectations for the economic outlook have been pared back, albeit with these components still well above their October levels,” he said.
“All components have increased over the last year with gains ranging from eight per cent to 13.4 per cent.”
But confidence around the housing market continues to slip, with sharper falls in sentiment in NSW and Victoria, Mr Evans said.
December is only the fourth month out of the last 22 that optimists have outnumbered pessimists.