Carbon tax rattles consumer confidence

SHANE WRIGHT ECONOMICS EDITORThe West Australian Confidence among the nation's consumers has fallen again with shoppers increasingly concerned about the impact of the Gillard

Government's carbon tax. The Westpac-Melbourne Institute measure of sentiment dropped 2.6 per cent in June to be at its lowest point in two years. Despite the fall, more consumers are

confident than they are negative. But the survey found the most recalled issues affecting consumers were economic conditions, interest rates and tax. Westpac chief economist Bill Evans said

it was a major surprise for tax to be a factor in the thinking of consumers. "There have really only been three periods over the last 10 years when tax has been a significant issue for

respondents - during the period of the GST introduction; last year's focus on the mining tax and the current period," he said. "The degree of negativity from respondents about

taxation issues is large and broadly similar in the three periods. "It appears that despite steady interest rates and falling petrol prices concerns about the introduction of a price

on carbon are rattling households." Lower income earners are most concerned about the carbon tax. Confidence among people earning less tan $40,000 a year was down almost eight percent.

Confidence among higher income groups was, on average, steady. There was a 2.1 per cent drop people's confidence in their family finances over the past year, but confidence in family

finances in the coming year actually increased 1.1 per cent. The biggest single drop was in general economic conditions over the next 12 months, with confidence down 6.2 per cent. When

quizzed on whether it was a good time to buy a major household appliance, confidence was down by 3.7 per cent although it remains 10.3 per cent higher than a year ago. GET THE LATEST NEWS

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