Consumers are spending more than they did during Delta shutdowns

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Mr Chalmers said the economy was ‘hostage’ to government failures including the shortage of rapid antigen tests and the rollout of booster shots.

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“I think the treasurer is in such a rush to congratulate himself that he seems not to have noticed that our supermarket shelves are empty, people are struggling to work safely, we can’t get these rapid tests, the small businesses are getting shattered all around Australia as a result of these federal government failures,” Mr Chalmers said on Friday.

The government points to the unemployment rate of 4.2% as cause for confidence as the result is the lowest in 13 years and equals the fourth lowest monthly result on record.

Mr Frydenberg said the bank figures showed conditions were not as bad as his critics claimed and that a Labor government would impose higher taxes which would cost jobs.

“When Labor was last in power, non-mining investment fell 10% to its lowest share of the economy on record, while it rose 35% under the coalition despite the most great economic shock since the Great Depression,” said the treasurer.

Treasury officials estimate that consumers and employers are holding huge sums in reserve for spending or investing, with household cash savings of around $210 billion more and business cash holdings of around $210 billion. about $150 billion more than before the pandemic.

Consumer sentiment fell 2% in January in the index measured by Westpac and the Melbourne Institute, but Westpac chief economist Bill Evans called it a “surprisingly strong” result given the spread of ‘Omicron.

The government’s confidence in the outlook rests in part on big banks’ spending figures based on transactions made through their networks in recent weeks.

“While spending has come down, it’s nowhere near as bad as some have reported and we had feared,” NAB chief economist Alan Oster said Thursday.

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