Australian consumer sentiment has fallen to levels rarely seen outside a recession, raising concerns that households will pull back further on spending as higher interest rates and the cost-of-living squeeze bite.
The Westpac-Melbourne Institute Consumer Sentiment index dropped almost 5 per cent this month to 80 points, well below the neutral level of 100 and among the weakest readings since the survey began in the early 1970s. The last sustained period of sentiment this low was during the recession of the early 1990s.
But there’s an important difference. Today’s pessimism is being driven primarily by the cost of living and high interest rates, rather than fears about unemployment and business failures. Pessimists now outnumber optimists in 102 of the survey’s 106 sub-groups, with higher fuel costs adding to the pressure.
Mortgage holders are being hit particularly hard after the RBA lifted the cash rate to 4.6 per cent, pushing standard variable mortgage rates towards 9 per cent.
That matters beyond household morale: consumer sentiment tends to track per-capita household spending, suggesting another headwind for economic growth.
Elon Musk is back in the trillion-dollar club. His fortune jumped by $US65 billion yesterday to just over $US1 trillion, according to the Bloomberg Billionaires Index, as the value of his stakes in SpaceX and Tesla climbed. The chart below shows just how extraordinary the rise has been: when Musk debuted on Bloomberg’s billionaires list back in 2013, his fortune was a tiny fraction of today’s. Thirteen years later, his wealth is again above $US1 trillion - with more than 98 per cent of it tied to just two companies.
Source: Bloomberg Billionaires Index
Fear & Greed Q+A today
Katrina Horrobin, CEO of the Governance Institute of Australia, and Matt Rowley, partner at General Strategic, discuss the new 2026 Australian Governance Index, what it reveals about Australians’ expectations of organisations, and why a social licence isn’t enough anymore:
“Social licence forms part of societal capital, but what societal capital says is there's actually three licences. So yes, there's social licence, which is how you impact the stakeholders. Traditionally, for example, it would be a community next to a mine site. How are they being impacted and are they giving their permission?
"But then in societal capital, you've got two others. You've also got your popular licence, and that's for everybody else. It's the zeitgeist. What does the public think and feel about your organisation or your sector, not just people who are impacted by it? And then finally, you've got public licence, and that's how you're doing with lawmakers and regulators. How are they seeing you and how are they acting on you?
“What's fascinating about those different licences is that they tend to interact on each other. So a common sort of contagion that we'll see between licences will be something blows up in the social licence. For example, it might be a retailer screwing either their customers or suppliers or something like that.
"That'll blow up as a social licence problem. Quite often that'll end up on something like Four Corners or Fear & Greed. That'll then take it into the popular licence and that'll then get into the zeitgeist, and before you know it, then the government will start saying, hang on a minute, something needs to be done about you guys, and then the public licence blows up.”
Coalition migration cuts: The Coalition plans to cut net overseas migration to 100,000 a year during its first two years in government, largely by reducing student, graduate and bridging visas, while increasing temporary skilled migration.
OpenAI apologises: OpenAI has apologised after its AI agents accessed non-public areas of five Australian government websites during internal training. The company has tightened its systems and warned that organisations need stronger defences as increasingly capable AI agents create new cybersecurity risks.
Medicare data breach: Services Australia and law enforcement agencies are investigating claims that 25 million Medicare files are being sold on the dark web, although the agency says a sample of the alleged data contained fabricated, incorrect or mismatched Medicare information.
Aussie dollar holiday winners: The Australian dollar has risen 9 per cent against the euro this year and is at its strongest against the New Zealand dollar in more than a decade, making Europe and New Zealand relatively more attractive destinations for Australian travellers.
Meloni protects voice from AI: Italian Prime Minister Giorgia Meloni has applied to trademark her voice ahead of next year’s election, becoming the first major politician known to take the step as public figures look for ways to combat AI-generated deepfakes.
Fear-o-meter
OpenAI chief strategy officer Jason Kwon before the joint parliamentary committee on AI yesterday:
“Our response here [to the Medicare breach] was not good enough.
“The reasoning for why [information wasn’t disclosed the government quicker] is we wanted to understand more of the facts before we spoke to the impacted parties, but because of the novelty of this situation, I think we have learnt our lesson that it is better to inform even with partial information to let parties know that something has occurred, and to also make sure that we’re going through all the right channels so that multiple members and aspects of government are informed of what’s happening in the situation.
Kwon said OpenAI needed to keep pace with the capabilities of its rapidly evolving systems.
“It’s not internet access by itself that’s problematic – it is sometimes the unexpected behaviour of the systems when they access the internet that can be problematic … There’s more research that’s going into this.”
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