Coalition voters get their time in the sun
After six years of trailing, they are now on track to overtake Labor voters as the most optimistic of Australians and to remain that way for the entire life of the new government.
Labor voters remained more optimistic about the economy than Coalition voters for the entire six years of the Rudd and Gillard governments.
Before that, Coalition voters felt better than Labor voters for the 11 years of the Howard government. And before that through the Hawke and Keating years it was the Labor voters who felt best.
The latest survey, conducted in the days either side of the vote, shows confidence among Coalition voters surged from a reading of 92 on a scale where 100 means optimists balance pessimists to a clearly-positive 110.
Confidence among Labor voters dived from 127 to 114.
Asked how it could be that Coalition voters suddenly switched from being negative to positive while Labor voters went the other way, Westpac chief economist Bill Evans said not all of the switch might be real.
The Westpac Melbourne Institute survey asks five questions. Two concern family finances, two concern the economy, and the other one asks whether it's a good time to buy a major household item.
The questions about the economy were the ones in which confidence surged.
Optimism about the economy one year ahead jumped 9 per cent, optimism about the economy five years ahead jumped 7 per cent.
But when asked about family finances, views were little changed.
The proportion of Australians believing family finances had improved fell 2 per cent, the proportion believing family finances would improve climbed 2 per cent.
"While consumers say they are confident the incoming government will manage the economy better, they are not so confident as to believe their own situation will much improve," Mr Evans said.
"It's the same with business. The NAB survey shows business conditions unchanged, but business confidence building.
"The two can't coexist for long. Confidence can only be sustained if consumers spend and that can only happen if they feel good about their own finances and not just some amorphic view about the economy," he said.
Frequently Asked Questions about this Article…
The survey, conducted in the days either side of the vote, showed confidence among Coalition voters surged from a reading of 92 to a clearly positive 110 (the index uses 100 as a neutral balance between optimists and pessimists). Confidence among Labor voters fell from 127 to 114.
The survey asks five questions: two about family finances, two about expectations for the economy, and one about whether it’s a good time to buy a major household item. The jump in confidence was concentrated in the economy questions—optimism about the economy one year ahead rose 9% and five years ahead rose 7%—while family‑finance responses changed very little.
Westpac chief economist Bill Evans warned that not all of the switch may reflect a real change in people’s financial situations. Much of the movement was in broad economy expectations around the election outcome rather than in people’s views of their own household finances.
Family‑finance measures were largely unchanged: the proportion saying family finances had already improved fell 2%, while the proportion saying family finances would improve rose 2%. In contrast, expectations for the economy rose more substantially, suggesting people felt better about the economy overall but not dramatically better about their own pocketbooks.
The NAB survey showed business conditions were unchanged while business confidence was building. As noted by Bill Evans in the article, rising confidence that isn’t matched by improvements in conditions or household finances can be hard to sustain — and sustained spending is what underpins broader economic momentum.
Not necessarily. The article highlights that consumers can express optimism about the economy without feeling their own finances have improved. Bill Evans says confidence is only sustainable if consumers actually spend, and that requires people to feel better about their own financial situations, not just have a general upbeat view of the economy.
Optimism about the economy one year ahead jumped by 9%, and optimism about the economy five years ahead jumped by 7% according to the Westpac–Melbourne Institute survey results reported in the article.
Based on the article, everyday investors may want to watch indicators that show whether general economic optimism is translating into real outcomes: household finance indicators (actual income and spending), business conditions, and follow‑up surveys. The article cautions that sentiment tied to political events can be temporary unless backed by improvements in people’s own finances and business conditions.
Call 1300 880 160
Start a chat
Schedule a call
