Consumer confidence collapses after Budget, in contrast with rest of world

Westpac survey of consumers taken after Budget finds collapse in confidence, especially among the young, while confidence elsewhere in the global economy is rising; Bishop says houses too expensive

The first widespread survey of consumers and voters since the Budget on May 30 shows a collapse in confidence. Photo: Lynn Grieveson / The Kākā

TL;DR: The belt-tightening and tax-cutting Budget delivered on May 30 has not delivered the boost to confidence in the economy the National-ACT-NZ First Government might have hoped for.

A Westpac NZ survey of 1,503 consumers taken between June 1 and June 12 has found a collapse in confidence back towards covid-lockdown lows seen in late late 2022 under the Labour Government, especially among the young. Aotearoa-NZ’s consumer confidence levels are now the exception: falling while most others are rising and lower than all our major trading partners, apart from China.

Meanwhile, Chris Bishop agrees house prices are too expensive and average prices should fall. He has also signals a review of Government housing subsidies costing $4-5 billion per year, including the accommodation supplement and income related rent subsidies, suggesting something in-between those two subsidies. (RNZ) Also in housing, Chris Penk has announced an eight-week review of the Public Works Act “to make it easier to build infrastructure.”

Six things of note this morning

1. Consumer confidence crashes in NZ. It’s rising elsewhere

The first widespread survey of consumers and voters since the Budget on May 30 shows a collapse in confidence, especially among young consumers. This matches collapses in confidence about new orders, investment plans and hiring plans through May in surveys of manufacturing and services business owners and managers.