The political instability in Canberra, culminating in yesterday’s leadership ballot which saw Malcolm Turnbull fending off a leadership challenge from Peter Dutton and winning a ballot vote 48-35, has hit Australian consumer confidence.
The ANZ-Roy Morgan Australian Consumer Confidence Index fell a sharp 3.5 per cent last week, its third straight weekly fall.
And with more than 40 per cent of Mr Turnbull’s own party voting against him, there are now questions of whether he can survive another ballot. Ministers have offered resignations and there are rumblings of another challenge.
Yesterday’s political instability also saw the Australian sharemarket recording its worst session in five months with the S&P/ASX 200 index falling 60.6 points, or 1 per cent to 6284.4. The index tumbled below the 6300 mark for the first time in a week.
While the ANZ-Roy Morgan survey was carried out before the ballot, it followed the results of the latest Fairfax-Ipsos poll which showed a collapse in the Coalition vote, leaving it trailing Labor by 55 per cent to 45 per cent on a two-party-preferred basis.
It’s a figure that could cost the government 20 seats in a general election.
ANZ’s head of Australian economics David Plank said the figures were disappointing given the fall in unemployment last week but the numbers pointed to community concerns about the political scene.
“The decline in confidence may reflect the impact of the messy political debate locally and the associated slump in support for the current Turnbull government, as revealed in the recent Fairfax-Ipsos poll,” Mr Plank said.
“The sharp fall in future (rather than current) conditions provides some evidence of this. The considerable media focus on the impact of the drought may also have affected sentiment.”
He said households’ views towards economic conditions have been trending down since late June and in four week moving average terms, sentiment around future conditions has fallen below its long term average.