Retailers can start rubbing their hands together with consumer confidence soaring in the past month.
But before Scott Morrison starts punching the air too, new figures point to the 8.5 per cent jump in confidence being more to do with the Reserve Bank cutting the cash rate for the first time in a year, rather than in response to his first budget.
Sharp increases to confidence from rate cuts are not unusual - the last four having resulted in an average 6.6 per cent gain, according to the Westpac-Melbourne Institute consumer confidence survey for May.
"Supporting this view has been a stunning 15 per cent increase in the confidence of those respondents in the survey who currently have a mortgage," Westpac chief economist Bill Evans says.
As usual, the May survey also asked respondents what impact they expect the federal budget will have on their finances.
This time around scored minus 22.4 per cent, indicating more are saying a deterioration than an improvement.
However, the treasurer can draw some consolation that this was the second-highest result since 2010, albeit only fractionally better that the minus 22.5 per cent in 2015.
It was a hefty minus 56.1 per cent in 2014 in response to former treasurer Joe Hockey's first budget that proved such a disaster to implement.
The highest result since this question was first posed in 2010 was in response to Labor treasurer Wayne Swan's third budget in that year, with a result of minus 17 per cent.
Other new figures on Wednesday were somewhat dated by the Reserve Bank's cut in the cash rate to a record low of 1.75 per cent last week.
The number of new mortgages taken out by owner-occupiers fell 0.9 per cent in March, while loans to investors remain comfortably below their recent peak.
JP Morgan economist Tom Kennedy said this was consistent with the Reserve Bank's view that the housing sector poses less of a threat to financial stability than a year ago.
"Lending trends are now unlikely to be an impediment to further RBA easing, which we expect in August," he said.
In an election campaign that has already seen sparks fly over property investment tax concessions through negative gearing, the data showed just 14.2 per cent of mortgages granted in March went to first home buyers, the lowest in 12 years.
Labor plans to limit negative gearing to investment new properties, which it says will help first time buyers, while the coalition will leave it intact fearing changes would hurt house prices.
Share
