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Budget leaks boost consumer confidence, expose smoke tax hole

Budget Fund Investment Capital Economy Concept

Consumers are more confident after federal budget leaks reveal no major hits to households and amid speculation about a Reserve Bank interest rate cut.

The ANZ-Roy Morgan consumer confidence index rose 2.0 per cent in the week ending May 1, reversing the previous week’s losses and rising back above the long-run average.

Consumer sentiment has been volatile in the lead-up the federal budget, but ANZ head of Australian economics Felicity Emmett said the solid result was a good sign.

“With leaks around the budget suggesting no major hits to households, we expect that last week’s rally represents an element of relief,” she said.

Meanwhile, Labor has defended a $20 billion black hole in its funding after the leaked federal budget document revealed a shortfall in the expected revenue from taxing smokers.

Shadow assistant treasurer Andrew Leigh said Labor used official costings from the Parliamentary Budget Office and they will provide updated figures closer to the election.

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