Protect Yourself : Survey shows a crash in Australian confidence

Pessimism in the community is at levels last seen two decades ago when Paul Keating warned that the nation could become "a banana republic", The Australian reports.

In the past six months, the percentage of people who fear their living conditions will "get worse" has more than doubled - the biggest jump in the 23-year history of Newspoll's standard-of-living survey - as the percentage of those expecting an improvement almost halved.

Fears about living standards for the next six months are worse than voters experienced before the introduction of the Howard government's GST in July 2000.

According to the latest Newspoll survey on standard-of-living expectations, conducted at the weekend, the percentage of people who think their living conditions will get worse in the next six months has gone from just 18 per cent after the November election of the Rudd Government to 43 per cent.

In December, the percentage who thought it would get better in the next six months was 21 per cent.

That figure has since slumped to just 13 per cent as households have been hit with soaring petrol prices and two interest rate rises, taking rates to a 12-year high of 7.25 per cent.

The Reserve Bank opted yesterday to keep interest rates on hold, noting that "indicators of household spending have recorded subdued outcomes over recent months, and credit expansion to both households and businesses has weakened significantly".

This story was found at: http://www.news.com.au/business/money/story/0,25479,23955038-5017313,00.html