Consumers need to see jobs budget working

Consumer confidence has already come off the boil after the initial support for Treasurer Joe Hockey's second budget.

A worker cleans a window of a small business

Consumer confidence has already come off the boil after the initial support for the 2015-16 budget. (AAP)

Economists are warning that voters will want to see an improvement in the jobless rate if the post-budget boost to confidence is to be maintained and lift spending.

Treasurer Joe Hockey may have seen a modest rise in his approval rating since the budget, but already confidence has come off the boil after the solid gains in the past couple of weeks.

Releasing the latest weekly ANZ-Roy Morgan consumer confidence gauge on Tuesday - which showed a one per cent fall in the past week - chief economist Warren Hogan believes a lift in confidence is unlikely to be sustained if key budget measures fail to clear parliament.

"More importantly, confidence amongst consumers requires job creation and a stable, or better still, falling unemployment rate," he said.

Consumers could be disappointed on both fronts.

The budget itself forecasts the jobless rate reaching 6.5 per cent in a year's time, higher than the recent 12-year peak of 6.3 per cent, even though it is supposed to be a budget for jobs.

The National Centre for Social and Economic Modelling defended its decision not to include any second-round effects in its Labor-sponsored analysis of this and last year's budget because it forecasts a relatively unchanged jobs market.

An interim analysis was finally posted on the internet 24 hours after Prime Minister Tony Abbott challenged Labor to release the report, after the opposition issued a selective summary only.

Even then, Mr Abbott disputed its findings that showed low income families will be worse off after the budget.

"It has been used and abused by members opposite," he told parliament on Tuesday, pointing to the Labor benches.

The government is also facing Senate opposition to its childcare measures because they are linked to savings elsewhere.

But reports suggest the government may be ready to compromise on a plan to slash Family Tax Benefit Part B, possibly increasing the cut-off age for children to 10 or 12 years when the benefits cease rather than six.

However, a new survey has found over half of voters back the government's controversial plan that will prevent new parents double-dipping paid parental leave.

Commonwealth Securities chief economist Craig James just wants political parties to get the budget through parliament.

"Then get out of the road and allow Aussie consumers and businesses to get on with life," he said.


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Source: AAP


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