A new survey shows consumer confidence has hit a two-year low despite recent government tax cuts and record low-interest rates.

However, the Westpac-Melbourne Institute Consumer Sentiment Survey showed sentiment towards buying a house has hit its highest level in almost 5 years.

Westpac Senior Economist Matthew Hassan tells Ross Greenwood the tax cuts and interest rate cuts should have increased consumer confidence.

“What was most troubling about this update is that the backdrop should have been pretty positive.

“All the lead up into this looked like it should be a reasonable reading, instead we see sentiment’s gone back… that’s highlighting some real fragility.

“It’s a troubling update.”

Click PLAY to hear the full interview