Australians are the most confident they’ve been since January 2014 after the central bank cut interest rates and the government announced a A$10 billion ($7.9 billion) boost for families and small businesses.
The Westpac-Melbourne Institute consumer sentiment index rose 6.4 percent in May from April and was above 100 — the point at which optimists outnumber pessimists — for the first time since February. The increase is the first strong result in the month of May since 2007, Westpac Chief Economist Bill Evans said in an e-mailed statement.
The rise mirrors a boost in poll ratings for Prime Minister Tony Abbott after his Liberal-National coalition government announced tax cuts and instant writeoffs for small firms in his budget May 12. The upbeat outlook is a turnaround after last year’s austere budget saw confidence plunge and helped trigger a challenge to Abbott’s leadership. It also supports the Reserve Bank of Australia’s view that rate cuts are boosting household spending.