Australia’s consumer sentiment index fell 4.7 per cent in October after the Reserve Bank of Australia lifted the cash rate to 4.6 per cent, its highest level in 15 years. The Westpac-Melbourne Institute index dropped to 80.4 points, the lowest reading since April. Confidence took a sharp hit after the rate decision.
Of the 40 per cent of people surveyed after the increase, confidence plunged 20 per cent to 67.2 points. That marked the worst reading this century. The post-rate-rise result was far weaker than the broader index, which also fell during October.
The cost of the rate rise
The latest figures show how confidence changed after the Reserve Bank’s move. The broad index shed 4.7 per cent from the previous month; the group surveyed after the cash rate increase recorded a 20 per cent fall. These are separate readings: 80.4 points for the overall index and 67.2 points for the post-rise group.
The broader result was described as the lowest since the 1990s recession, also called the early 1990s recession, and as a 30-year low. The report also said October’s reading was the weakest since April. Those descriptions compare the decline with different reference points cited in the reporting; the figures don’t identify any additional causes for the fall beyond the timing of the rate rise.
Political pressure grows
The fall signalled rising voter unease and discontent with the Albanese government’s economic management. It dealt Treasurer Jim Chalmers a fresh blow. The reporting also cited fresh warnings of years of sluggish growth ahead, adding to the economic concerns surrounding the confidence figures.
The survey results carry an economic measure and a political one: an index decline and a signal of voter dissatisfaction. The source reports no further breakdown of that unease and doesn’t specify how many respondents expressed dissatisfaction with the government. It also gives no figures on the expected length or scale of sluggish growth beyond the warning that years of it may lie ahead.
The 4.6 per cent cash rate, the 4.7 per cent monthly fall in the broad index and the 20 per cent decline among those surveyed after the rate increase are the central reported figures. The broader index reached 80.4 points; the post-rise group’s index stood at 67.2. Together, they document a sharp loss of consumer confidence in October and a deterioration in the political outlook described in the reporting. The article gives no migration, demographic, sovereignty or institutional-transfer figures, and identifies no nationalist or dissident response to the rate decision.