Tax plan worries Aussie consumers

Jittery financial markets and uncertainty surrounding the proposed mining super tax has hit Australian consumer sentiment, which has fallen for a second consecutive month.

The Westpac-Melbourne Institute consumer sentiment fell by 5.7 per cent despite the Reserve Bank leaving the cash rate unchanged.

The index had dropped 7 per cent last month after the central bank raised the rate for a third consecutive month. The cumulative 12.3 per cent fall during May-June was the largest two-monthly fall since March 2008.

"[The index fall] seems to reflect a mixture of concerns about deteriorating conditions abroad, financial market turmoil and uncertainty around the Government's proposed resource super profits tax," Westpac chief economist Bill Evans said.

Budget and tax headed the most recalled news item at 55 per cent, the highest proportion for both since the introduction of GST.

"The perception was negative with a clear majority of those recalling the issue saying they viewed it as unfavourable," Evans said.

Other categories that registered a high recall were economic conditions (48 per cent), interest rates (34 per cent) and international conditions (32 per cent).

Evans expects the Reserve Bank to hold rates steady next month, but he sees the risk of another move in August when the CPI is released.

- AAP