Economy faces gloomy outlook

According to the latest Consumer Pulse Report released by Choice this week, consumer confidence is at a three-year low. The national survey found that one third of Australians rated the economy as poor – a figure which rose from 25 per cent in September. Participants who rated the economy as good dropped from 35 per cent to 28 per cent.

The Consumer Pulse Report was designed and analysed by Choice and conducted with 1037 consumers aged 18-75 years between 2 and 8 December 2014. Final data was weighted to represent the overall views of Australians.

“Almost one-in-three respondents told us they thought the economy was either fairly or very poor, showing many Australians are concerned at the bigger economic picture as the year draws to a close,” says Choice CEO Alan Kirkland. “This no doubt reflects the gloomy economic news of recent weeks, with the release of weaker than expected growth figures and discussion of an income recession.”

The cost of electricity remains the top household concern at 79 per cent, followed closely by the cost of food and groceries at 78 per cent and the cost of fuel at 71 per cent.

“The cost-of-living picture remains stark for many Australians heading into Christmas,” Mr Kirkland says. “While concern over electricity has eased slightly, this was offset by an increase in concern over food and grocery costs. Anxiety over university fees is back to the levels it reached in June, following the Federal Budget, with 87 per cent of students worried about these costs.”

The survey shows 71 per cent of Australians cut spending on entertainment in the past 12 months, while 67 per cent had cut spending on clothing, and a further 66 per cent planned to cut holiday expenditure.

The quarterly Choice Consumer Pulse Report follows last week’s Westpac-Melbourne Institute survey of consumer sentiment, which also ranked consumer confidence at a three-year low, with unemployment numbers also rising slightly.

Australians are worried about further Government spending cuts (28 per cent), levels of savings and investments (24 per cent) and the value of their superannuation (18 per cent). With further budget cuts, a possible income recession and higher unemployment numbers expected to be announced in the Government’s Mid-Year Economic and Fiscal Outlook (MYEFO) on Monday, Australia’s economic future seems gloomy.

Read the Choice Consumer Pulse Report media release.

Opinion: Is cutting jobs the answer?

Choice’s Consumer Pulse Report is telling us something of which we were already aware: that our economy is struggling and will do so for the foreseeable future.

Within 12 months of the Coalition taking power, consumer confidence has fallen dramatically – surely not the sentiment the Government was expecting when it promised to return our budget to surplus within the same timeframe.

The MYEFO is being released today and our economic prospects look grim, with unemployment, which is currently 6.3 per cent, set to rise while economic growth is expected to remain steady at about 2.5 per cent per annum.

The Government will slash further public sector jobs from 175 government agencies over the next year, as well as look to enforce further policies that may raise the cost of health care and education. The rising sentiment among many Australians is that the current Government is failing to deliver on the ‘surplus promise’ within the first full year of winning office. But that’s just another broken promise to add to the already growing list. Now, if it would just concentrate on growing our economy instead…

If consumer confidence is to improve in the foreseeable future, the Abbott Government needs to make plans for economic growth based on good employment with decent wages and conditions. Cutting jobs to save money is just not the answer fro which Australians are looking. How is that supposed to give us confidence in an already unsettling economic climate?

“Unemployment is already higher than the 6.25 per cent forecast in the federal budget and that figure could well be revised even higher in Monday’s budget update,” said ACTU president Ged Kearney. “The longer we go on with an unemployment rate with a ‘6’ in front of it, the worse the social and economic outlook will be for Australia.”

How do you view the current state of our economy? Where have you had to cut back your spending? Do you feel the economy is heading towards a gloomy future, or do you have hope that it can be salvaged with the government’s current budget?

Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?