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Confidence undermines Abbott's scare campaign: Swan
15/08/2012 - Federal Treasurer Wayne Swan says a jump in business confidence is yet another blow to Opposition Leader Tony Abbott's scare campaign over carbon pricing. Colin Brinsden
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The latest National Australia Bank survey, released on Tuesday, showed business confidence rose to just below its long-term trend, with its index up seven points to four points in July, compared with minus three previously.
"This probably reflects positive developments in Europe, rate cuts from the RBA (Reserve Bank of Australia) and the passing of the carbon price hurdle on July 1," the report said.
A spokesman for Swan said this was a significant lift in business confidence.
"The data out today is yet another blow to Mr Abbott's crumbling carbon pricing scare campaign," the spokesman said.
However, business conditions deteriorated in July and are now below their long-term trend, the NAB report said.
It noted there were big falls in conditions for retailing and wholesaling, reflecting the end of the government payments to households in preceding months which included the new schoolkids bonus.
Based on these figures, it points to an annualised gross domestic product (GDP) growth rate of 2.5 per cent, significantly below trend of about three per cent.
However, it hasn't stopped the bank from upgrading its near-term growth forecast for 2012 to 3.6 per cent, from 3.1 per cent previously, but has downgraded its 2013 forecast to 2.9 per cent, from 3.3 per cent.
"With the full impacts of the RBA's 125 basis point of rate cuts since November 2011 yet to be realised, it seems reasonable to expect further stimulus to flow through to interest-rate sensitive sectors of the economy in coming months and quarters," the bank said.
As such, it believes the economy may no longer require a further near-term rate cut interest rate by the RBA.
"But this is a line-ball call and depends on forecasts being achieved," the report says.
"We see rates on hold until mid-2013, then up moderately."
Swan used parliamentary question time to remind members of economic reports published during the winter break.
"In recent weeks we have seen more evidence of the outstanding economic performance of the Australian economy," Swan told parliament.
The jobless rate for July fell to 5.2 per cent, annual inflation hit a 13-year low and consumer retail spending is more healthy.
"When other developed economies around the world haven't got back to where they were at the start of the global financial crisis, our economy is 10 per cent bigger," Swan said.
The economy does face challenges from a high dollar.
"But we on this side of the house are proud of the gold medal winning performance of the Australian economy," he said.
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ross | 15/08/2012 12:36 1
I believe that Australians are finally awake to the bull...t spin Swan and his mob are constantly putting on every report and survey put out by the government or private sectors. The NAB report clearly said "business conditions deteriorated in July and are now below their long-term trend" and yet this goose turns it around by selectively taking information from the report to claim business confidence is improving. He talks about the "outstanding economic performance of the Australian economy" without crediting the mining boom and the miners whom he has openly attacked. These are the people who took risks over the last decade or two to put the mining industry in the position it is today and who are frankly responsible for the 10% increase in our economy. This increase had absolutely nothing to do with Rudd/Gillard/Swan's policies, as can be seen by the state of our manufacturing industry, which can be directly related to their failed policies. I cringe when I see him and the government taking credit for "the gold medal winning performance of the Australian economy". Spin kings!!!
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