Aussies less concerned by this year’s Federal Budget

6 July 2015

But Federal Budget still having an overall negative impact on household finances

New research from super fund-owned bank ME has revealed a partial reversal in Australians’ concerns over the Abbott Government’s second Federal Budget, announced in mid-May 2015.

ME’s national survey of 1,500 Australian households revealed a 38-point fall in the proportion of Australians expecting the Budget to have a negative impact on their financial situation over the next 12 months, down to 29% in late May 2015 from 67% a year ago.

Following the 2014 Federal Budget, household financial comfort took a negative hit with households concerned about proposed tightening of government assistance, as well as from rising negativity around the job market, low wage growth and falls in savings.

Fast-forward to June 2015 and the extremely negative response to the Budget has significantly eased.

As a result 60% expect their household to be unaffected by the 2015 Budget compared to only 29% from the 2014 Budget.

However only 11% of Australian households expect to be better off from the 2015 Budget, compared with 4% a year ago indicating the Budget continues to have an overall negative impact on households.

ME consulting economist, Jeff Oughton said a much smaller proportion are still worried about the Federal Government’s proposed Budget reforms.

“While 29% of the 1,500 people polled still expect the Budget to have a negative impact on their financial situation, this was down from about two-thirds of Australians who were fretting in late May 2014,” he said.

Self-employed less negative than other workers

“Worries about the flow-on effects of the Budget has had less impact on the self-employed, compared with other employed persons – which could be due to the small business package.

“That said, about 21% of self-employed still expect to be worse off, compared with 34% for part-time employees and 24% for full-time employees.

This is significantly down from late May 2014, when 62% of self-employed, 70% of part-time and 59% of full-time employees expected to be worse off.”

Self-funded retires feeling better than other retirees

Self-funded retirees are also feeling less concerned (17% worse off) than those on a government-funded pension (36% worse off) or those on a combined self-funded and government-funded pension (30%).

Western and South/NT Australians are not big fans of the Federal Budget

Western and to a lesser extent South/NT Australian households are expecting the 2015 Budget will have a greater negative impact on their financial situation than any other states in Australia:

  • Western Australia: 44% worse off
  • South Australia/NT: 37%
  • Tasmania: 29%* 
  • New South Wales/ACT: 28% 
  • Victoria: 27%
  • Queensland: 22%

Gen Ys least pessimistic: Gen Ys are the least concerned cohort when it comes to the impact of the recent Budget on their financial situation over the next year:

  • Gen Y: 27% 
  • Gen X: 31%
  • Baby Boomers: 28%
  • Builders (retirees): 36%

Groups receiving Government assistance still very wary

Although concerns are easing with the majority of Australians, the negative impact of the Budget on the financial situation of Australian households more dependent on government assistance, remains higher:

  • Single parent households: 38%
  • Government-assisted retirees: 36% 
  • Tertiary students: 39%
  • Unemployed: 41%*

-Ends-

Editor notes:

* indicates low sample size.

Research was commissioned by industry super fund-owned Bank ME, based on a survey of 1,500 Australian households conducted by DBM Research in May 2015.