Economists for two big banks are split on whether consumer confidence is rebounding as larger-than-normal tax refunds land in bank accounts.
Economists for two big banks are split on whether consumer confidence is rebounding as larger-than-normal tax refunds land in bank accounts.
Commonwealth Bank of Australia Household Spending Intentions research shows a significant lift in consumer positivity is under way.
"Spending intentions are improving in Australia, with a combination of income tax refunds and a stronger housing market leading the charge," CBA chief economist Michael Blythe said on Tuesday.
"Significantly, the homebuying spending intentions series has moved back into positive territory and this should help drive a further improvement in retail spending intentions in the months ahead."
But the ANZ Banking Group-Roy Morgan weekly Australian Consumer Confidence index paints a different picture.
It recorded a 4.8 per cent slide in people's expectations for their finances over the next 12 months, the worst result in over two years.
"While households feel okay about their current financial situation, they are clearly quite worried about the outlook, for both their own finances and the economy," ANZ economist Felicity Emmett said.
"This is a disappointing development and suggests that expectations for tax and interest rate cuts to spur the consumer to lift the economy may be misplaced."
Mr Blythe said the tax refunds flowing into CBA accounts were about 40 per cent above normal levels.
"The boost to household spending power is larger and coming through sooner than originally expected," Mr Blythe said.
"The better news is that this tax refund money seems set to flow through to consumer spending."
Treasurer Josh Frydenberg is urging the Australian business community not to overreact to fears of a full-blown military conflict between the US and Iran.
Donald Trump has declared the US is "locked and loaded" to take on Iran over its alleged role in the weekend bombings of Saudi oilfields.
The treasurer acknowledged this escalating rhetoric - along with Brexit and the ongoing US-China trade war - were weighing heavily on investors.
But in a speech to the Business Council of Australia later today, Mr Frydenberg will implore companies not to panic.
"Global trade tensions, Brexit and the recent targeting of oilfields in the Middle East give investors reason to pause," he will say in Canberra tonight
"Now in times of global economic and political uncertainty, it is more critical than ever to provide stability and certainty in our economic settings and not get drawn into overreacting."
Devastating floods, fire and drought are also hurting communities and detracting from the economy, the treasurer will tell business leaders.
"But the government's strong fiscal management and the ongoing resilience of the Australian economy should provide business with the confidence to invest, to grow, to innovate and to employ," he will say.
