Allianz Future Optimism Index: Australians’ optimism torn between the economy and the environment, especially Coalition voters

Allianz Future Optimism Index: Australians’ optimism torn between the economy and the environment, especially Coalition voters

Sydney, 9 August 2011

Allianz has joined forces with Newspoll to conduct a survey which measures Australians’ level of optimism about the future of the economy, environment and society, as well as their overall happiness. The results for these four measures are combined to create the Allianz Future Optimism Index.

While the overall Allianz Future Optimism Index has risen slightly to 60.4 in July 2011 from 59.9 in the first survey, which was conducted in November 2010, of more interest is how the sub-indices have moved.

Chart 1: Allianz Future Optimism Index: November 2010 and July 20111 Chart 1

Australians have become less optimistic about their economic future, with the Economy Index falling 3 points from 62 to 59 between last November and July. Interestingly, this movement is mirrored by an equivalent rise in the Environment Index from 52 to 55.

The fall in optimism about the future of the economy is driven by both an increase in the number of people who are pessimistic about the economy and a fall in the number who are optimistic about it2- see Chart 2. For example, the proportion of Australians that are pessimistic about the economy rose 5 points from 9% last November to 14% in July. While the proportion that were optimistic, fell 3 points from 29% to 26% over the same period.

Chart 2: Allianz Future Confidence Index: Changes in optimism/pessimism – Nov 2010 to July 2011
Chart 2

Commenting on the results, Allianz Managing Director, Terry Towell, said “much has changed since the end of 2010 in terms of the economic outlook, particularly conditions in parts of Europe and in the US. Debate in Australia about the environment and climate change has also reached a crescendo with the recent announcement of the details of the proposed Carbon Tax. These influences appear to be having a marked impact on Australians’ optimism about the future of the economy and the environment.”

The political divide

On most measures, there are stark differences between Coalition and Labor voters when it comes to future optimism. Interestingly, the future of the environment is not one of them – see Table.

Table: Allianz Future Optimism Index - results by voting intention

According to the Allianz Future Optimism Index, Coalition voters are significantly more pessimistic about the economy than Labor or Other voters. Similar differences are apparent in relation to Coalition voters’ optimism about the future of society in relation to crime levels and community values, and their overall future happiness, compared to Labor voters.

While the ‘Other’ category is not made up of a single political party, over 50% of the category is comprised of Green voters, which would appear to be driving the high degree of pessimism of this group of voters in respect of the future of the environment.

“The Allianz Future Optimism Index provides an interesting insight into how Australians feel about the future in key areas such as the economy, society and environment. The July 2011
survey is the first time respondents’ responses have been correlated with their voting intentions and the stark differences in optimism between Australians of different political persuasions is fascinating,” Mr Towell said.

1Note the Total Index is shown to one decimal place, but the individual indices have been rounded to the nearest whole number.
2 See below to find out how people are categorised as being ‘pessimistic’ or ‘optimistic’.

About the Allianz Future Optimism Index

The Newspoll survey on which the Allianz Future Optimism Indexes are based, asks around 1200 Australians to rate each of the following statements on a scale of 0-10, where 10 is extremely optimistic and 0 is not optimistic at all:

1. The future of the economy;
2. The future of the environment in relation to pollution and climate change;
3. The future of our society in relation to crime levels and community values;
4. The overall future prospects and happiness for you and your family.

The responses to these questions are multiplied by ten to obtain an equivalent score out of 100 and averaged to create an index score out of 100 for each question. The four subindices are then averaged to obtain the overall Allianz Future Optimism Index.

In the analysis of the survey, respondents that give a score of 8 or more out of 10 are regarded as being optimistic and those with a score of 3 or less out of 10 are regarded as being pessimistic. Results based on these definitions are given as a proportion of the demographic group in question (eg 30% of Australians are optimistic/pessimistic about the economy).

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