The Turnbull government will be heading into the election on July 2 with most householders seeing their mortgage bills a bit cheaper, following today’s RBA decision to cut the cash rate to 1.75%.
Despite how economists may agonise over the problems with low levels of inflation or the structural issues with low-interest rate environments, aspirational middle Australia loves low prices and rate cuts almost more than sport and beer.
If the RBA’s intended sugar hit to the economy has an immediate effect, then the confidence surveys should reflect that, giving ammunition to the Turnbull government’s pitch that it can underpin economic confidence.
But as we learned in 2014, the budget has the power to destroy confidence in far greater measure than the RBA.
Over to you, Treasurer.
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