As we head into the only public opinion poll that really counts this weekend, it is worth comparing consumer reactions at the time of the Rudd Government with the last days of the first Gillard administration.
The final result will depend on the optimism of LNP voters that things will get better in a year’s time or ALP voters believing that now is not the time to take a risk with the need for more stimulus payments.
Smart companies will assume that the result will not make much different to them unless their customers are older households or young families. Now is still the time to prepare contingency plans for a significant cut in government expenditures for the next three years and a decline in consumer confidence leading to increased household savings.
Expect a slow rate of return to strong market sentiment around the globe and increasingly at home, whichever party does Treasury bidding in the next three years, and the RBA feels free to lift interest rates and maintain the credit crunch.
Before Gillard stepped up, the Futurist was asked about the declining support for Rudd and asked to predict the chances of Tony taking over. Looking at the 16 most marginal seats at the time the results suggested a hung Parliament was a real possibility, based only on our sociographic analysis of the last census figures for these seats. It showed that nine seats would go for Kevin Rudd, six seats would go to Tony Abbott and one seat (Melbourne) would go to the Greens.
With a day to go, and millions of dollars of campaign dollars gone into the pockets of the media moguls, the result has become a fraction tighter as electors respond to the threats to their wellbeing associated with the choice between alternative leaders.
Gary Morgan reports that all five consumer confidence indicators fell for the first time since May 8/9, 2010. Consumer confidence has fallen 4.4 points to 124.6 — its first fall since the start of the Federal election campaign.
In terms of the economy as a whole 39% (down 3%) say that Australia as a whole will have ‘good times’ financially during the next 12 months, compared to 18% (up 4%) that say we’ll have ‘bad times’ financially in the next 12 months. 31% (down 3%) say their family is ‘better off financially’ than a year ago compared to 27% (up 2%) that say their family is ‘worse off financially’ than a year ago.
Now 42% (down 1%) of Australians expect their family to be ‘better off financially’ this time next year compared to 12% (up 1%) that expect their family to be ‘worse off’. In the long-term, 42% (down 3%) of Australians expect Australia to have ‘good times’ economically over the next five years compared to 12% (up 2%) that expect ‘bad times’ economically. Of Australians, 55% (down 3%) say ‘now is a good time to buy’ major household items compared to 17% (up 1%) that say ‘now is a bad time to buy’ major household items.
Since the Rudd Government was swapped with the Gillard team, the US consumer sentiment has continued to decline significantly based on a survey of 5,000 US households that continue to become more pessimistic about the short-term outlook, unemployment levels that are stuck above 10% and the continuing credit crunch.
In Europe, Europeans’ consumer confidence in the outlook for the economy has dropped the most since the September 11 terrorist attacks, as soaring energy costs and the euro’s advance against the dollar rattled consumers and executives.
These results are interesting because the commentariat is fixated on each day’s rise and fall in the various polls, with a fixation on the possibility of a hung parliament with both major parties having half of the two party preferred poll results. As indicated in this column last week, there is an underlying sense of uncertainty in the electorate as to the consequences of keeping Gillard or electing Abbott.
Assuming that the global confidence crunch becomes more apparent in the next few months, smart companies will have lowered their inventory, built their customer relations capacity and planned for a slow but significant return to sustainable profitability.
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Dr Colin Benjamin is an entrepreneurship and strategic thinking consultant at Marshall Place Associates which offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship.
Email dr.colinbenjamin@marshallplace.com.au
Contact: CEO Dr Jane Shelton, Phone +61 3 9640 0099
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