Retailers have urged the new Abbott government to hit the ground running to help boost confidence heading into the Christmas shopping season.
Their plea came as the central bank minutes for its September 3 board meeting suggest further interest rate reductions are looking less likely.
Prime Minister-elect Tony Abbott says “day one” for his government is when it is sworn in on Wednesday, a week and a half after securing power.
Australian Chamber of Commerce and Industry chief executive Peter Anderson said there is considerable experience in the ministry so it shouldn’t take them too long to get started.
“We shouldn’t have to wait months for the ministers to find their way,” he told Sky News.
Australian Retailers Association executive director Russell Zimmerman says it is crucial for the government to support small business as soon as possible.
The recent surge in consumer and business confidence is reflective of the government’s commitment to also address issues such as the carbon tax, competition policy and red tape, he said.
“The commitment to finally address these ongoing issues is music to the ears of struggling retailers … after what has been an exceptionally challenging year,” he said in a statement.
However, Abbott has also indicated the government won’t be rushing out a mid-year budget review until possibly January, much later than the usual.
The Mid-Year Economics and Fiscal Outlook was released in October last year, but more often it is issued in November.
“Despite all the ranting about the budget emergency, suddenly it is not an emergency and we can push back the date of next budget update … into the January holiday period,” Labor frontbencher and former finance minister Penny Wong told ABC radio on Tuesday.
“There is only one reason you would do that and that is to try and have less attention on the promises you are about to break.”
The Reserve Bank of Australia (RBA) board minutes showed members expect economic growth to remain below trend for now, but says the housing market is responding to low lending rates.
The RBA left the cash rate unchanged in September after cutting to an all time low of 2.5 per cent in August – a total of 225 basis points of reductions since late 2011.
Such stimulus was still likely to take some time to have its full effect on demand.
“These conditions would, over time, help the economy negotiate the prospective downshift in resources investment via a switch to other sources of demand,” the minutes said.
A further decline in the exchange rate would be helpful in this aim.
Members agreed the bank should “neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them”.
Financial markets wound back expectations of another rate cut, but Westpac chief economist Bill Evans still favours a reduction in November.
By then the board will be able to assess a number of issues, not least whether business and consumer confidence holds up following the “exuberant reaction to the election result”.
