Faster economic growth boosts confidence

Colin Brinsden, AAP Economics Correspondent
It's expected that last week's strong economic growth figures have lifted consumer confidence

Strong economic growth and signs of improvement in the jobs market after a slow start to the year should give Australians something to cheer about, even if their pay packets aren't necessarily getting any fatter.

Wednesday's monthly Westpac-Melbourne Institute consumer confidence index - a pointer to future retail spending - will respond to last week's national accounts which showed annual economic growth accelerated to its fastest pace in almost two years.

Last month respondents the sentiment survey gave a nod of approval to the planned personal income tax cuts in the May budget.

Should the tax legislation pass the federal parliament when it sits between June 18 and 28, the multi-faceted tax plan kicks-off on July 1 with a new low and middle-income tax offset.

However, Westpac senior economist Andrew Hanlan does not expect this to have much of an impact on spending.

That's because those entitled will only receive the offset - up to $530 for a single person - when they complete their tax returns next year.

"It won't be until 2019 that you'll see some cheques back in the mail," Mr Hanlan says.

More immediate will be a modest increase in the upper threshold for the 32.5 per cent marginal tax rate from $87,000 to $90,000 which all start for July 1.