Consumer confidence hit a nine-year high in the first three months of the year.
The Westpac McDermott Miller consumer confidence survey for the March quarter has risen to 121.7 from 120.1 the previous quarter.
A figure above 100 means there are more optimists than pessimists.
The survey shows the number of households expecting better economic times in the next 12 months rose to a near record, although optimism for five years out slipped from the previous survey.
Consumers' sentiments about their own finances are also improving, along with their willingness to spend.
Westpac economist Felix Delbruck said the overall picture was rosy, but was not yet where it was in the mid 2000s.
"The interesting question was always how much of that optimism would translate into stronger spending," Mr Delbruck said.
"On that score, the survey is also trending up but it's maybe not quite so spectacular, so it asks people 'how do you feel about your own finances, how do you feel about spending'. That's improving, but it's not quite where it was back in the mid 2000s."
