The new budget of Australia Prime Minister Tony Abbott has led two-thirds of Australians to believe they were "worse off" in the coming year. According to the latest ME Bank nation survey of financial comfort levels, Australians found the budget the "biggest blow" to households' expectations on record.
After Treasurer Joe Hockey has announced the budget almost three months ago, the Australian government has yet to pass its key policies. Only an increase in the top marginal rate was approved in Parliament.
The survey found that 46 per cent of households are continuously saving money. About one-fourth of respondents said they could not save $3,000 if they are faced with an emergency.
The survey also suggests the Abbott government has failed to make the budget appeal to voters and make them believe it will deliver long-term benefits. Mr Abbott and his government may need to convince the people who are used to the government's generous welfare benefits that Australia's debt has worsened, justifying the need for reductions on spending, including welfare.
ME Bank consulting economist Jeff Oughton said the budget has only added to the problems facing ordinary Australians.
"Household income has been negatively impacted by relatively low average wage growth, moderate job gains, rising unemployment and corresponding falls in job security," Oughton said.
Mr Abbott believes his government's budget reforms will "ultimately" pass the Senate but admits he may encounter difficulties ahead. He said the budget will be approved since there is "no credible alternative" for controlled spending.
He said reforms were difficult but "necessary" as his government had inherited a "debt disaster" and undeliverable spending promises. Mr Abbott blamed former prime ministers in the Labor party and declared he doesn't underestimate the obstacles ahead. He reiterated his budget will pass since there was no other alternative on the table.
He insisted the country may experience years of economic stagnation if the debt and budget deficit are not addressed at once.