Australia consumer confidence edges higher in July

458766207RP004_Melbourne_sh
Getty Images

A measure of Australian consumer sentiment improved modestly in July as worries about family finances eased, a survey showed on Wednesday, though the depressing impact of an unpopular federal budget continued to linger.

The survey of 1,200 people by the Melbourne Institute and Westpac Bank showed the index of consumer sentiment rose a seasonally adjusted 1.9 percent in July, from June when it had inched up only 0.2 percent.

The index still has not fully recovered from May's 6.8 percent dive which followed a budget of welfare reforms, cutbacks and increased charges for services.

Read MoreChina keeps close watch as Abe visits Australia

The index reading of 94.9 for July was down 7.1 percent on the same month last year and means pessimists still exceed optimists.

Then and now: 25 years of change in Australia
Then and now: 25 years of change in Australia   

The survey's measure of sentiment among supporters of the Labor opposition is down 25 percent on a year ago at 83.9. In contrast, the index for supporters of the Liberal National government has risen by 25 percent to stand at 116.1.

The largest improvement in July came in the survey's measure on the outlook for family finances over the next 12 months, which jumped 12.3 percent though from very low levels.

Read MoreAustralia central bank keeps rates steady, as expected

The index of family finances compared to a year ago rose 1.9 percent and that for economic conditions over the next 12 months increased by 3.9 percent.

Consumers remained cautious on the longer-term outlook, however, with the index of economic conditions over the next five years dropping 3.8 percent.

A measure on whether it was a good time to buy a major household item also dipped 2.1 percent.