Worrying news flow around the looming federal budget has dragged consumer confidence below the long-run average for the first time in nearly two months, and it's likely to get worse.
The ANZ-Roy Morgan consumer confidence index fell 1.2 per cent last week, and has fallen 2.6 per cent over the previous three weeks.
"Confidence is likely being weighed down by the discussion around tax and other policy reforms which are in the spotlight in the lead-up to the Commonwealth budget in May," ANZ's head of Australian economics Felicity Emmett said.
"This uncertainty is likely to intensify over the coming weeks."
Ms Emmett said the Turnbull government's ability to communicate a credible economic platform will be a key driver of sentiment in coming months.
But, while recent losses on stockmarkets may also be weighing on confidence, jobs market conditions could be giving consumers reason to smile, she said.
"The dip in the unemployment rate to 5.8 per cent in February is likely to be providing some comfort to households," Ms Emmett added.
But the jobless rate will likely need to fall further to spark stronger growth in confidence and consumer spending, she said.
Consumers were more stressed about both their own hip pockets and the wider economy, the survey showed.
Respondents' views toward their current personal finances plunged 5.5 per cent, and views on the near-term economic outlook fell by two per cent.
But households were more optimistic about their finances over the next 12 months, with the sub-index rising 0.6 per cent.
