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Conditions for Australian manufacturers have rebounded in the first three months of the year but high power prices, inflationary pressures and intense competition for workers are clouding the forward outlook.

The quarterly industrial trends survey from the Australian Chamber of Commerce and Industry and Westpac revealed a modest expansion in business conditions in the context of a trend downturn.

The survey's actual composite index - a gauge of business conditions - lifted from 49 in December to 55 in March, with the survey revealing expansions in output and new orders and a modest increase in employment, in line with expectations.

A result above 50 indicates industry is expanding.

Despite the improvement, the gauge remains below the mid-2022 high of 65.

The expected composite eased from 54.9 to 52.1, suggesting earlier tailwinds are fading and headwinds from high inflation and rising interest rates are intensifying and weighing on the outlook for demand.

The 52.1 reading is the lowest reading since 2014 outside the pandemic low of mid-2020.

ACCI chief executive Andrew McKellar said there was no sugarcoating the outlook for the manufacturing sector.

"While conditions improved modestly in the opening quarter, sentiment amongst manufacturers remains pessimistic as they face a cost crisis of persistently high power prices, elevated inflationary pressures and an ongoing skills shortage," he said.

On the household sector, gloomy economic conditions have been weighing on confidence, with ANZ and Roy Morgan's weekly survey sinking for the fourth month in a row.

Consumer confidence lost 0.5 points to 76.5, marking the third consecutive week below 80, with three of the five subindices down and "time to buy a major household item" falling 3.5 points to its lowest level since April 2020.

"The index, in four of the past five weeks, was among the 10 worst results since the COVID outbreak," said ANZ senior economist Adelaide Timbrell.

And many mortgage holders with fixed-rate loans are yet to feel the full effects of hikes, RBA analysis shows, with about 880,000 fixed loans due to expire this year.

But for first-home buyers, this environment of higher inflation and interest rates has shaved months off the time it takes to save a deposit.

While higher mortgage rates and inflation are weighing on borrowing capacity - and subsequently home prices - Domain analysis shows improving interest rates on savings accounts and higher pay packets have driven down saving times for entry-priced homes in every capital city except Adelaide.

Accumulating a lump-sum deposit remains one of the main barriers to ownership but the deposit-saving period for standard entry-level houses is six months shorter compared to this time last year.

For units, these conditions have contracted the period by two months.

Sydney and Canberra experienced the most dramatic decreases, cutting 13 months from the typical savings period.

But despite this, a couple aged 25-34 trying to save a 20 per cent deposit on an entry-priced house in Sydney would still take six years and eight months to get a start.

In Canberra, it would take six years.

At the same time, rising rates have lifted the cost of servicing a loan, complicating the affordability picture.

The minutes from the RBA's March meeting, to be released on Tuesday, will likely offer some hints for future interest rate decisions following a softening in tone in recent communications.

© AAP 2023

Climate Change Minister Chris Bowen has used the release of a new United Nations report to push for the urgent passage of the safeguard mechanism.

As negotiations continue in parliament over the future of the mechanism, the UN report warns Australia and other developed countries to achieve net-zero emissions a decade earlier than promised.

UN Secretary-General Antonio Guterres says "warp speed" action is needed for further climate action and to limit warming to 1.5C.

The latest Intergovernmental Panel on Climate Change report says the world has a last chance to make meaningful cuts to emissions.

Mr Bowen said on Tuesday the report was an urgent reminder of the need for climate action, which the safeguard mechanism was part of.

"If passed, our safeguard reforms will come into effect in just 101 days from now, and with only 82 months left before 2030, it is critical that we seize every possible day of the remaining decade to drive down emissions," he said.

"Ten years of denial and delay has increased the threat of climate change to our health, environment, economy and national security.

"The government is acting rapidly to urgently turn this around."

The safeguard mechanism would apply to the country's 215 biggest emitters and aim to reduce emissions by 205 million tonnes by 2030.

The coalition will oppose the safeguard, meaning the government will need the support of the Greens and two other crossbenchers to pass.

A Greens call to stop opening new coal and gas projects has been ruled out by Mr Bowen.

But Greens Leader Adam Bandt says Labor's vote went backwards at the last election while votes for his party and independents went up because Australians want meaningful action on climate change.

"We still have not heard a convincing explanation from the government about why they want to keep opening up coal and gas lines, we are still in discussions ... (and) we will look at all solutions," he told reporters in Canberra on Tuesday.

Mr Bandt said the Greens understood they would not get everything they wanted, but the government needed to also be flexible on its position.

"We've put an offer on the table and, as we were very clear from the beginning, it was an offer and it wasn't an ultimatum," he said.

Tasmanian senator Jacqui Lambie said while the safeguard wasn't perfect, it was a good starting point.

She called on the Greens to also back the safeguard bill.

"I'm worried that it's going to fall over and it'll be the Greens' fault," Senator Lambie told ABC Radio.

"You need a starter point ... we can keep working on reducing those emissions as we're going along.

"(The Greens) can continue their fight over coal and gas, but for goodness sake, if that's what you're standing on and you don't get anything through at all, then we're back to where we started."

Mr Bowen said voting down the safeguard would eliminate any chance of meaningful action of climate change.

"There is a rapidly closing window for transformative climate action both here and around the world," he said in a joint statement with Assistant Climate Change Minister Jenny McAllister.

"This report makes it clear - this decade is the critical decade for action. And the parliament has a choice this fortnight to seize that opportunity or to squander it."

© AAP 2023

Senator Jacqui Lambie has warned the Greens will be held responsible if a bill to bring down emissions in Australia fails.

Greens leader Adam Bandt said he was open to negotiations over the safeguards mechanism, but demanded a ban on new coal and gas projects, which the government has rejected.

Senator Lambie said she was "sick and tired" of the party's tactics and argued the legislation was needed to create a starting point for change.

"I'm worried that it's going to fall over and it'll be the Greens' fault," she said.

"You need a starter point ... we can keep working on reducing those emissions as we're going along.

"The Greens can continue their fight over coal and gas, but for goodness sake, if that's what you're standing on and you don't get anything through at all, then we're back to where we started."

The mechanism would apply to the country's biggest emitters and aim to reduce emissions by 205 million tonnes by 2030.

The coalition opposes the safeguard, meaning the Labor government needs the support of the Greens and two more crossbench senators.

Climate Change Minister Chris Bowen used a UN report on climate change to stress the need for immediate action.

"It is critical that we seize every possible day of the remaining decade to drive down emissions," he said.

"Ten years of denial and delay has increased the threat of climate change to our health, environment, economy and national security."

Independent senator David Pocock said while the government wanted the safeguard passed in the next fortnight, it needed to be fine-tuned.

"We need to get it right," he told reporters.

"This is a really big piece of climate policy, and let's be clear, we currently have a safeguard mechanism, it's just not working.

"We've got a crossbench urging the government to simply ensure that it delivers what they say it's going to deliver."

Resources Minister Madeleine King said gas was needed as part of the transition to renewable energy.

"In order to decarbonise, the world needs our resources industry and our critical minerals," she said.

"No gas means no processing of critical minerals and therefore no batteries for the storage of renewable energy, and that makes our pathway to net zero emissions all the more difficult."

Carbon Market Institute chair Kerry Schott said the safeguard mechanism was needed to ensure certainty in industry.

"We need the safeguard mechanism to get through to become more attractive for investors," she told the National Press Club.

"A safeguard mechanism isn't going to fix everything. It is one piece of legislation. So it is very important this relatively slender bill gets through.

"At least we will have the policy in place and we can be moving forward."

© AAP 2023