KEY POINTS:
Australia's confidence has taken a further battering as more bad news on petrol prices and housing continue to push the cost of living to the top of Prime Minister Kevin Rudd's political agenda.
Demands for direct Government action to cut prices at the nation's petrol pumps are growing even as Rudd casts blame on oil exporting nations and rejects demands for a cut in the fuel excise.
And while Labor retains its strong lead over the Opposition in the polls, a Nielsen poll in Fairfax newspapers showed yesterday that voters are becoming increasingly disillusioned with Rudd's fuel price strategies.
The poll also indicated that Australians may also be casting a nostalgic look back over their shoulders, by resurrecting former Treasurer Peter Costello as the preferred Opposition Leader and continuing to regard the Coalition as the better economic manager.
Concern at the rising cost of living has soared with successive interest rate rises that have pushed up mortgage repayments and hammered household budgets under pressure from escalating food and petrol bills.
In Sydney, householders also learned yesterday that their water bills would climb by 17 per cent next month, and by a further 13 per cent by 2012 to help pay for a new desalination plant and other programmes to ease the city's water crisis.
New forecasts suggest that even fewer Australians will be able to afford to buy homes and will continue to pay rents that have skyrocketed over the past year. Rudd has launched incentive schemes to encourage developers to build hundreds of thousands of low-rent units in a bid to ease demand on the market, but the Housing Industry Association has warned that 2008-09 will be a flat year at best for new residential construction.
Economic forecaster BIS Shrapnel yesterday predicted that population growth of an expected 1.5 per cent over the next 12 months would override Government measures and higher interest rates. It said record net migration was underpinning strong demand for housing and would push capital city house prices up by between 14 and 22 per cent by 2011. This would drive median house prices to A$650,000 ($813,000) in Sydney.
The latest Roy Morgan consumer confidence rating reported a 17-year record plunge, with 45 per cent of Australians believing they were worse off than a year earlier. Almost 40 per cent foresaw bad financial times in the next 12 months.
Yesterday's Nielsen poll gave Rudd a clear warning that the nation expects relief. It said 78 per cent wanted the Government to act on petrol prices, with two thirds demanding that Rudd reduce the excise on fuel.
Rudd has rejected the call by Opposition Leader Brendan Nelson to cut the excise by 5c a litre and instead intends launching the internet-based petrol price monitoring scheme Fuelwatch to deter oil companies from unfairly raising their prices.
But 56 per cent of Australians were unhappy with Rudd's performance on fuel prices, and only 22 per cent supported Fuelwatch. Rudd said the Government had heard the message that motorists were hurting.
Costello remains the preferred Opposition Leader with 37 per cent compared to 29 per cent for shadow treasurer Malcolm Turnbull and 19 per cent for Nelson. The ratings mirror the last Nielsen poll on Liberal leadership. A Newspoll in April put Turnbull ahead on 25 per cent, Costello on 23 per cent, and Nelson on 15 per cent.
