Australians no happier ‘despite being better off’

Reuters/Sydney

Australian Prime Minister Julia Gillard gives a speech in Brisbane yesterday

Australian consumers are finding it tough to crack a smile as lower interest rates and upbeat economic data at home fail to dispel fears about the future amid a tide of negative international news, a survey showed yesterday.The survey of 1,200 people by Westpac Bank and the Melbourne Institute showed its index of consumer sentiment rose a tiny 0.3% in June to 95.6, adding only marginally to May’s 0.8% increase. A reading under 100 indicates pessimists outnumbering optimists.“This is another disappointing result,” said Westpac chief economist Bill Evans. “Clearly other factors are dominating rates in the minds of consumers - those factors are concerns about the domestic economy and international conditions.”The Reserve Bank of Australia (RBA) last week cut interest rates by a quarter point to 3.5%, the second easing in as many months, in part to cushion sentiment from concerns about the European debt crisis and global growth.The flow of domestic data has also been upbeat with official figures showing the economy grew a surprisingly rapid 1.3% in the first quarter while employment beat all expectations in May.But consumers surveyed regarded the economic news as mostly “unfavourable”, particularly on conditions abroad. The weight of worry took a toll on the survey’s measures of the future, whether for the economy or family finances.Yet respondents were actually more upbeat about their current circumstances saying their finances had improved markedly in the last couple of months.They also seemed to have the confidence to spend, with a measure of whether it was a good time to buy a major household item jumping 7.5% in June. Likewise, sentiment towards buying a car or a home improved, showing the impact of falling borrowing costs.