Received

Consumers remain down in the dumps ahead of another close interest rate decision that could pile even more pressure on households.

Confidence as measured by ANZ and Roy Morgan each week has returned a below-80 result for the 14th week in a row.

The index edged 0.4 points lower, with confidence about future financial conditions sinking to its lowest point since the COVID outbreak in March 2020.

Confidence among mortgage holders and renters has been trending lower than for those who own their homes outright, but last week homeowner sentiment fell 4.6 points.

For renters, confidence improved 3.2 points, and one point for those paying off their homes.

But an interest rate hike in June, which most observers agree is a possibility, could unwind these gains.

The Reserve Bank board is due to meet on Tuesday to discuss a mixed bag of data over the past month, including a stronger-than-expected monthly inflation reading.

Monthly inflation data, which can be volatile, came in at 6.8 per cent in April, up from 6.3 per cent in March.

The central bank will also weigh up signs of an easing but still robust jobs market, as well as fresh wage data, which revealed pay packets growing at 3.7 per cent in the March quarter.

Wage growth alone is unlikely to worry the RBA, which is comfortable with wages hitting a peak of four per cent annual growth.

But Governor Philip Lowe remains concerned about unit labour costs - the difference between wages growth and productivity growth.

Dr Lowe told a federal parliamentary hearing last week that sluggish productivity growth, not wages, was complicating the RBA's job of returning inflation to its two to three per cent target.

Some economists have also flagged the Fair Work Commission's minimum wage decision as a possible cause for concern that could push pay packets higher than the RBA can manage.

But Workplace Minister Tony Burke said the minimum wage rise of 8.6 per cent would not lead to higher inflation.

"Some people effectively (have wanted) to blame workers for any decision that the Reserve Bank might make," Mr Burke told ABC Radio.

"The people affected by the annual wage review are the people on the lowest incomes. They're the people relying on it."

Shadow treasurer Angus Taylor said the government needed to prioritise bringing down inflation.

"The sad reality is the Reserve Bank is under enormous pressure now to raise interest rates," he told ABC TV.

Balance of payments data released by the Australian Bureau of Statistics revealed a growing trade surplus in the March quarter.

The current account balance lifted by $581 million to $12.3 billion, with the higher trade surplus in part offset by a higher net primary income deficit.

Australia's trade surplus improved by $2 billion to hit $41.1 billion over the first quarter of 2023.

The net primary income deficit rose by $1.6 billion to $28.5 billion.

The balance on goods and services is expected to subtract 0.2 percentage points from economic growth in the March quarter.

Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said March quarter national accounts data, due on Wednesday, was shaping up to be stronger than earlier thought.

"This is a slightly stronger outcome than we expected, and means first-quarter growth may not be as gloomy as we initially expected," he said.

© AAP 2023

Treasurer Jim Chalmers has sought to allay concerns of a recession in the wake of a 12th interest rate hike.

The 25 basis point increase brought the cash rate to 4.1 per cent and in total the bank has delivered 400 basis points of rate hikes since May last year.

But Dr Chalmers said neither Treasury nor the Reserve Bank were forecasting a recession.

Asked if Australia was in danger of falling off its narrow path to a soft landing, he said he still expects the economy to grow but more slowly.

"We've been upfront that we expect a substantial slide in the economy, over the next 12 to 18 months, and that is the inevitable consequence of higher interest rates while at the same time as the global economy is a precarious place," Dr Chalmers told reporters in Canberra.

He flagged weakening spending numbers, easing construction figures and the first signs of cooling in the labour market as indications the economy was starting to lose steam.

But some observers warn the latest interest rate hike has put the recession-free landing at risk.

Commonwealth Bank economist Gareth Aird said the chances of "keeping the economy on an even keel" as the RBA returned inflation to target had been diminished.

"The risk of a hard landing for the economy has grown today," he wrote in a note.

He said the tightening cycle had been "incredibly aggressive" and there would be more pain to come for borrowers.

"Mortgage repayments will rise to a record high as a share of household income as the big number of ultra-low fixed rate loans continue to roll-off over the year."

The treasurer said the national accounts, due on Wednesday, would reveal more about the state of the economy.

Economists are anticipating a growth slowdown in the March quarter but clues contained in a string of data releases suggest it may be stronger than first envisioned.

Net exports came in stronger than expected but are still tipped to take about 0.2 percentage points off GDP.

Government finance data, also released on Tuesday, show total government spending lifting 0.6 per cent over the March quarter and adding about 0.2 percentage points to growth.

Consumer confidence as measured by ANZ and Roy Morgan each week also showed consumers remained down in the dumps, with the index returning a below-80 result for the 14th week in a row.

The index edged 0.4 points lower, with confidence about future financial conditions sinking to its lowest point since the COVID-19 outbreak in March 2020.

Confidence among mortgage holders and renters has been trending lower than for those who own their homes outright but last week homeowner sentiment fell 4.6 points.

For renters, confidence improved 3.2 points, and one point for those paying off their homes.

© AAP 2023

Australia has a mountain to climb to get to cheaper energy bills, but the federal government is confident its planned transition to renewables will help bring costs down.

Yet some industry leaders are unconvinced and warn wholesale prices could remain high for at least the next few years.

Despite the government's commitment to increase renewable energy projects, Alinta Energy chief executive Jeff Dimery told The Australian he could not see how enough could be built to compensate coal-fired power stations being phased out.

Transgrid chief executive Brett Redman told the masthead that while renewable projects were on track, he expected the challenge would be to build batteries and other capabilities to bring new power supply to the grid.

From July, residential customers will see price increases of 19.6 to 24.9 per cent, depending on their region, while small business customers face a rise of between 14.7 and 28.9 per cent.

In response to expected power price hikes, the government committed $3 billion towards direct energy relief in the May budget.

Eligible households include pensioners, veterans and other concession-card holders, recipients of the carer allowance and family tax benefit, and people in existing state and territory electricity concession schemes.

But a pre-election promise to slash $275 off power bills by 2025 could be off the cards if coal and gas energy sources are not replaced at a faster pace.

Financial Services Minister Stephen Jones admitted the government had some catching up to do when it came to Australia's clean energy transition.

"We wouldn't be in the situation today if ... the former government hadn't been so destructive in their approach to energy, and in particular renewing our energy generation and transmission system," he told reporters in Canberra.

"We've got a lot of catching up to do ... it's a big mountain to climb (and) that's why we put so much emphasis on renewable energy, offshore wind, hydrogen, rebuilding the transmission system, all of this work has to be done."

Shadow treasurer Angus Taylor insisted inflationary pressures were coming from a "cocktail of policies" presented by the government.

"What's very clear is the broad mix of policies, the fiscal policies, what we saw in the budget, industrial relations, energy policy ... are all combining to create a situation and a set of circumstances where inflation is coming from Canberra," he told ABC News.

But Government Services Minister Bill Shorten said energy prices were lower than they would have been if no action had been taken.

"When we look at our capping of gas prices and other matters, Labor hasn't wasted a day," he told Nine's Today Show.

"History doesn't grant a re-run ... and it just takes a while to put in place the new infrastructure."

© AAP 2023