April's index figure was 118.8 following a sharp rise of 11% over the previous three months, up significantly from its low of 75.6 in April last year.
Westpac chief economist Bill Evans put May's pull-back down to "disappointment" in the Federal Budget released last week.
"No doubt the Budget achieved a positive political objective with a 1% dip in confidence amongst Coalition voters contrasting to an 8.1% fall in confidence amongst ALP supporters," he said.
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Mr Evans also said there were few "surprises" in the Budget, which "was still unable to exceed the exuberant expectations of the community".
This could be due to many major Budget items being leaked to the press in the days prior to the Budget being officially announced.
The consumer confidence index's pull-back is at odds with results seen in ANZ-Roy Morgan's weekly index released yesterday, which showed a 'post Budget bounce' instead.
All of the Westpac-Melbourne Institute index categories experienced a slight pull-back on April's results, including 'Family finances next 12 months', down 6.9%.
However, a fall is a positive in the 'unemployment expectations' index, which is at a ten-year low, meaning more people expect employment conditions to improve in the year ahead.
Mr Evans said this "suggests lingering concerns around the end of JobKeeper have eased".
'House price expectations' fell 0.1% to 163.8 in May, which is still 124.6% up on a year ago.
However, this was balanced out by the 'time to buy a dwelling' index, falling 3.4% in May - 21.6% below its peak in November 2020.
Victorians led the fall in 'time to buy a dwelling', down 20% in May, which could be due to 'fragile' property market fundamentals in Melbourne.
More to come...
Photo by Nghia Le on Unsplash
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