Glenn Stevens: Politicians Hold The Key To Solving Australia's Economic Confidence Challenge

Reserve Bank Governor Glenn Stevens.

The RBA boss Glenn Stevens has said that closing the political gaps over the federal budget is the key to boosting to Australia’s consumer confidence.

The important economic indicator collapsed in May, when the government unveiled sweeping spending cuts in welfare, health and education.

“I think the thing that’s most conducive to confidence is a sense among the community that… the political leadership on all sides has a grasp of the problem, a ­balanced sensible assessment of the issues we face and can agree on some plans to deal with it,” Stevens told The Weekend Australian in an interview.

He also said the confidence slump shouldn’t last, based last year’s pattern, if political hurdles are overcome.

The comments come as the government tries to negotiate with the new Senate. Three PUP Senators unexpectedly held up progress of the carbon tax repeal this week.

The PUP leader, lower house MP Clive Palmer, accused the government of a“double crossing” over his proposed amendment.

The government is expected to reintroduce an amended bill in the House of Representatives on Monday.

This week Westpac chief economist Bill Evan’s also said there was an “expectation that confidence will recover through 2014 as anxieties around the Budget ease. In time, those trends, along with a gradually improving global economy will lay the foundation for higher rates later in 2015.”

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