The Westpac-Melbourne Institute Index of Consumer Sentiment fell by 0.2 per cent in March, but economists and retailers are still confident in the economy.
Westpac chief economist, Bill Evans, has commented that “on the face of it this is a surprisingly good result. Since the last survey the consumer has been bombarded by a stream of disturbing news”.
“Normally we would have expected a solid fall in the index given the strength of negative news,” he said.
In addition to this, Margy Osmond from the Australian National Retailers Association has remained confident that the second round of stimulus payments, which are hitting bank accounts from today, will spur on the retail sector.
“We welcome the Federal Government’s move to do all it can in the short term to keep spending ticking over,” she said.
Recipients of Family Tax Benefit Part B and recipients of Tax Benefit A with a child aged 4-18 years old will start receiving payments of up to $900 from today, and Osmond comments that this plus the additional payments which will be distributed throughout April will keep the retail sector in positive ground.
“Our calculations reveal that in December and January $1.3 billion of the first cash bonus was injected into the retail sector,” Osmond said.
The ANRA also expects that people who saved the first bonus might be inclined to spend the second cash payment. ANRA research has found that consumers are split fairly evenly between spending and saving the cash bonus.