Australian confidence plummets

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Australians’ confidence in the economy has plunged this week after Qantas announced a huge loss and subsequently will dump over 1000 employees, and the fate of iconic Australian car-maker Holden becomes uncertain.

The weekly Roy Morgan Consumer Confidence Rating fell 5.5 points this week, driven by respondents having less confidence in economic conditions in Australia over the next year.

The research and polling company’s executive chairman Gary Morgan puts the decreasing consumer confidence down to Qantas announcing last week a huge loss of $300 million for the latest six month period, and the subsequent near future lay-off of over 1000 employees.

The uncertain fate of iconic Australian car maker Holden, which is believed to be on the verge of closing down its Australian manufacturing operations, also contributed to the bad news.”

Now just 29% – down 6% – of Australians expect ‘good times’ for the Australian economy over the next twelve months and 31% – up 5% – expect ‘bad times’.

Australians are also less confident about their personal finances over the next year with 16% of Australians expecting to be ‘worse off’ financially this time next year, compared to 39% that expect their family to be ‘better off’ financially.

Only 52% of Australians – down 3% – say now is a ‘good time to buy’ major household items while 18% – up 1% – of Australians say now is a ‘bad time to buy’.

Also, 34% – down 2% – of Australians expect ‘good times’ for the Australian economy over the next five years compared to 22% – up 2% – that expect ‘bad times’.

The Roy Morgan November employment statistics show 2.4 million Australians – nearly 20% of the workforce – are either unemployed or under-employed.

Morgan says industrial relations reform must be at the top of the Government’s agenda, if Prime Minister Tony Abbott wants to avoid leading a one-term Government.

“At present, there is no sign that the Abbott Government understands that unemployment in Australia will rise significantly over the next few years if the Australian labour markets are not freed up.”

Australian employers are hesitant to hire at present due to the over-regulation of Australian labour markets combined with the uncertain economic outlook, Morgan says.

“By signalling an intent to reduce labour market red tape the Abbott Government will immediately reduce the cost of hiring new workers and restore confidence to employers that the Government is committed to really reducing the cost of doing business in Australia.”

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