The confidence gap continues. Unemployment may be rising and our Prime Minister preaching the need for concerted international action to avoid real economic horrors but it seems the Australian people remain quite sanguine about the future. The Roy Morgan consumer confidence survey shows a real gap between the pessimistic views of the governors and an optimism among the governed.

Interviews on the weekend of March 7 and 8 put the consumer confidence rating at 97.3 and, while this is 12.2 points lower than it was a year ago, it was up on the previous week — trending higher over the last month.

Pollster Gary Morgan says Australians are more confident about their financial situation with increasing numbers (34%, up 1%) expecting their family to be financially better off in a year’s time. He comments:

Cheques from the Rudd Government’s second stimulus bill are starting to arrive in Australian bank accounts from this week which is likely to improve Australians’ confidence. It is worth remembering the weekly Roy Morgan Consumer Confidence Rating rose for seven straight weeks (November 22/23, 2008 — January 10/11, 2009) around the time the cheques from the Rudd Government’s first stimulus bill started arriving from December 8, 2008.

Despite last week’s announcement of the worst Quarter of growth for 8 years — a contraction of 0.5% in Australian GDP during the December Quarter, Australians are showing resilience in the face of dire economic news.

This message that Australians are nowhere near being at panic stations appears to be influencing the Liberal-National coalition in its approach to the global financial crisis. The tendency of Opposition Leader Malcolm Turnbull and Shadow Treasurer Joe Hockey is to question the need for massive government spending to stimulate economic growth and to concentrate instead on the debt that will have to be repaid sometime in the future. Not that this line has so far done much good for the Coalition’s opinion poll standings.

The latest Morgan reading of voting intentions, also taken on the weekend of March 7 and 8, puts the two party preferred position at Labor 60.5% to the Coalition on 39.5%. That L-NP is five percentage points lower than the last poll before Brendan Nelson was sacked as Liberal Leader.

A significant fall by Labor. The most significant aspect of the weekend Galaxy poll published in the Courier Mail on the Queensland election is the sharp drop in the proportion of voters who think Labor is likely to win. That number is down from 64% a fortnight ago to 58% and with Liberal National Party Leader Lawrence Springborg unable to help himself from acting like a winner I expect a further decline before voting day on Saturday.

This is taking away the prospect of a sizeable underdog impact contributing to Labor’s defeat.

The Crikey Queensland Election Indicator this morning has Labor as a 67% chance of winning to the LNP’s 33%.

Paul Keating’s forecast coming true? The meeting of Group of 20 Finance Ministers in England at the weekend was hardly likely to end with a declaration that there continue to be big differences of opinion about what should be done to stop the world-wide recession getting deeper and going for longer but there was very little in the final communique to suggest that there will be any substantial agreements when the heads of government meet early next month. This preliminary talk fest has, however, made one thing clear: China, with the support of other developing countries, is beginning to flex its financial muscles.

Just as Paul Keating predicted in that forthright and informative interview on Late Line and in his article for The London Financial Times reprinted in Crikey, part of the price for continuing to buy American Treasury bills will be a greater say in how the International Monetary Fund and the World Bank are run.

The China Daily reports this morning that Brazil, Russia, India and China, or BRIC, said in a statement on Saturday: “We call for urgent action with regard to voice and representation in the International Monetary Fund (IMF) in order that they better reflect their real economic weights.”

Currently, developed economies dominate international institutions. For example, the voting rights of BRIC countries in the IMF are 9.62 percent of the total, which accounts for about half of the voting rights the US holds.

According to the schedule set at the weekend meeting, the next review of IMF quotas should be concluded by January 2011.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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