Federal Treasurer Joe Hockey's first Budget has punched a huge hole in consumer confidence with sentiment tumbling to a near three year low.
The Westpac-Melbourne Institute's monthly measure of shopper confidence fell by 6.8 per cent in May, with pessimists now clearly out-numbering optimists.
The survey also found consumers are even more downbeat about the Abbot Government's Budget than they were about Wayne Swan's last Budget.
Just 3.1 per cent of those quizzed believed Mr Hockey's fiscal blueprint would help improve their family finances over the coming 12 months. Almost 60 per cent said their finances would deteriorate.
In response to Mr Swan's Budget last year, 5.6 per cent thought their finances would be in better shape while 45.6 per cent said they would be worse off.
Westpac chief economist Bill Evans said it was clear the Budget was the driving factor in the fall in confidence.
"The sharp fall in the index is clearly indicating an unfavourable response to the recent Federal Budget," he said.
"This puts the index at its lowest level since August 2011, before the Reserve Bank began its recent rate cut cycle. Since November 2011 rates have fallen from 4.75 per cent to 2.5 per cent and the index is now back below pre-rate-cut levels.”
There were huge drops in confidence among certain groups.
Confidence among Labor voters dropped by 18 per cent in the month compared to a 1.3 per cent ebb amongst coalition supporters.
People with wages between $60,000 and $80,000 suffered a 27.7 per cent drop in sentiment. There was also a 12.3 per cent fall in confidence among those with wages over $100,000.
Non-metropolitan Australians reported an 11.6 per cent fall in sentiment compared to a 5.6 per cent fall among metropolitan residents.
Mr Evans said there were some signs that consumers believed longer term the Budget may help boost the economy.
A measure of economic conditions over the next five years lifted by 11 per cent while there was a 3.2 per cent lift on the question of whether it is a good time to buy a major household item.