The uncertain times have made Australian consumers less of a spendthrift and all the more of the conservative shopper preferring to stay clear of debts and save as much from their pocketed incomes.

With news of new taxes that may bring upward price adjustments on retail goods and services, consumers in Australia would rather put their money in bank deposits, pay down debts, and buy real estate as the top choices shown in the survey done by Westpac Bank (ASX: WBC) and the Melbourne Institute.

The survey of 1,200 people by Westpac Bank and the Melbourne Institute released on Wednesday had taken into account the current spending pattern of domestic consumers and showed their general sentiment in the next 12 months.

Overshadowed by pessimism the survey's, index of consumer sentiment fell 2.6 percent to 101.2, on top of a 1.3 percent drop in May. This left the index down 0.6 percent on June last year.

"It appears that despite steady interest rates and falling petrol prices concerns about the introduction of a price on carbon are rattling households," said Westpac chief economist Bill Evans.

The caution of consumers is one reason markets have priced out much chance of a rise in interest rates for the remainder of the year.

Of the five components of the sentiment index, the largest decrease of 6.2 percent came in that reflecting economic conditions next 12 months. The index of conditions for the next five years dropped 3.7 percent while that for family finances compared to a year ago eased by 2.0 percent.

The only measure to rise was that for family finances for the next 12 months which edged up by 1.1 percent.

In a negative sign for retailers, the measure of whether it was a good or bad time to buy a major household item also fell 2.1 percent in June, though it was still up over 10 percent on this time last year.

Overall, the expectations index fell by 3.1 percent to 97.4, and the current condition index declined by 2.1 percent to 106.9.

The survey also showed a further shift in preferences toward low risk investments. The proportion of respondents who nominated bank deposits as the wisest form of savings rose to 32 percent in June, from 27.1 percent in March.

Likewise, the proportion nominating "pay down debt" as the wisest place for savings rose to 23.9 percent, from 22.6 percent. With a report from Reuters