Australians are yet to be convinced about Treasurer Scott Morrison's "better days ahead" budget mantra.
Consumer confidence after last week's budget has dropped to its lowest level since September 2015 and follows opinion polls showing voters believe they will be worse off because of its measures.
The weekly ANZ-Roy Morgan consumer confidence index fell 2.6 per cent and now sits firmly below its long-run average.
Voters have largely given a thumbs up to key budget measures such as the increase in schools' funding, a levy on major banks and the housing affordability package.
"But consumers appear to be responding to the big changes in the budget that will hit their hip pockets, such as the proposed 0.5 percentage point increase in the Medicare levy in two years' time," ANZ senior economist Jo Masters said.
The survey found household expectations about their long-term economic conditions tumbled 5.5 per cent.
Ms Masters believes consumers may be more sensitive about their finances in an environment where low wage growth is viewed as "increasingly endemic".
The March quarter wage price index - the Reserve Bank and Treasury's preferred measure of wages growth - is due for release on Wednesday.
Economists expect wages grew at a subdued 0.5 per cent in the March quarter, keeping the annual rate at its lowest level for at least 20 years at 1.9 per cent and below the inflation rate of 2.1 per cent.
The minutes from the Reserve Bank's May 2 board meeting, also released on Tuesday, said although it seemed unlikely that wage growth would slow much further, wage pressures were expected to rise only gradually.
Such a subdued outlook has left economists questioning the budget forecast for wage growth of 3.75 per cent by mid-2021.
The central bank reiterated the labour and housing markets warranted "careful monitoring" but otherwise, given it released its in-depth quarterly statement shortly after the previous board meeting, the minutes gave few fresh insights for the interest rate outlook.
"The RBA is likely to keep rates on hold for some time as it judges the effectiveness of recent macro-prudential policies in controlling housing risks and monitors momentum in the labour market," National Australia Bank economist Tapas Strickland said.
