2 weeks Ago By Mike Foley, Olivia Ireland
Donald Trump’s tariff war has dealt a brutal hit to Australian consumer confidence as Prime Minister Anthony Albanese refuses to explain how the government is lobbying to gain an exemption from the US president’s import duties. Albanese used the global economic turmoil to spruik his policy agenda on Tuesday, insisting it was not a time to cut back despite the government being in a worse financial position than before other economic disasters such as the Global Financial Crisis. Prime Minister Anthony Albanese at a press conference during a visit ti Headspace in Ashfield, Sydney, on Tuesday during the 2025 federal election campaign.
Credit: Alex Ellinghausen “I’m absolutely certain that in these uncertain times, it’s not a time for cutting now, it’s not a time for the sort of retreat from policy that we’ve seen from the Coalition,” Albanese said. Asked if Australia had made any progress with the Trump administration, which has not wound back any of its planned reciprocal tariffs in this round, Albanese said: “We’ll continue to engage constructively with the US administration.” Opposition Leader Peter Dutton has also not detailed substantial spending cuts, focusing his criticism of Labor on the rising cost of living during its past three years in government, as Trump’s tariff war engulfs the election campaign and Australian consumers lose confidence.
Dutton told ABC Breakfast the potential for tariffs to further damage the economy meant his party winning the election was crucial. “I just don’t think Australians can afford three more years of a bad Labor government, and particularly if it’s a Labor-Greens government – that will see inflation come back into the system, which will force interest rates higher again,” he said. The closely watched Westpac-Melbourne Institute measure of consumer sentiment fell 6 per cent in April, after hitting its highest level in three years, but for those surveyed after Trump’s announcement confidence was down by 10 per cent.
Westpac’s head of macro-forecasting, Matthew Hassan, said consumers had been stunned by Trump’s plans. “With the situation still deteriorating, there is a clear risk of more significant sentiment declines in the months ahead,” Hassan said. Falls in consumer confidence can flow through the economy as households cut back on their spending as a result, affecting businesses.
Albanese, Treasurer Jim Chalmers and Finance Minister Katy Gallagher have made pointed references to financial markets predictions that the Reserve Bank will repeatedly cut official interest rates this year, beginning next month, as it seeks to offset the fallout from Donald Trump’s tariff war. But they have stopped short of telling the bank to slash rates. The Australian dollar plunged to five-year lows of less than US60¢ on Monday, currently trading at 60.
12 US cents as of 10.14am, while $100 billion was wiped from the Australian sharemarket. The federal budget revealed a $42.
1 billion deficit in the coming financial year, while gross government debt is expected to reach a record $1 trillion by the middle of 2026. With Shane Wright. Cut through the noise of federal politics with news, views and expert analysis.
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