Coalition voters surge in optimism
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 Westpac Melbourne Institute survey, taken around the recent vote, showed a sharp swing: confidence among Coalition voters jumped from a reading of 92 to 110 on a scale where 100 means optimists balance pessimists. Confidence among Labor voters fell from 127 to 114.
The jump was concentrated in the two questions about the economy: optimism about the economy one year ahead rose 9% and optimism about the economy five years ahead rose 7%. Responses about family finances changed very little.
The survey asks five questions: two about family finances, two about the economy (short- and long-term outlooks), and one about whether it’s a good time to buy a major household item. Those economic outlook questions were where confidence surged.
Not really. The proportion saying family finances had already improved fell by 2%, while the share saying family finances would improve rose by 2%, so views on personal finances were largely unchanged.
The NAB survey showed that business conditions remained unchanged while business confidence was building — a contrast between sentiment and current activity that echoes the consumer results in the Westpac survey.
Westpac chief economist Bill Evans warned some of the swing may reflect voting-related sentiment rather than real changes in household finances. In short, people can feel better about the national economy without feeling better about their own wallet.
As the article notes, confidence can only be sustained if consumers actually spend. If economic optimism isn’t matched by improved household finances and higher spending, business conditions may not follow — a risk investors should watch when assessing demand-sensitive stocks or sectors.
Treat the results as a sentiment indicator rather than proof of immediate economic improvement. The surveys show rising confidence about the economy but little change in personal finances, so investors should look for follow-through in consumer spending and business activity before assuming the optimism will drive sustained growth.
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