The uncertainty surrounding Tony Abbott's future will keep the pressure on the Reserve Bank to cut interest rates again, economists believe.
Royal Bank of Canada head of strategy Su-Lin Ong believes that despite the loss of a Liberal leadership spill motion the prime minister's position has been considerably weakened.
This means the government has no political capital for reform in the medium term to boost long-term economic growth.
"Weaker business confidence is likely to keep pressure on the RBA to do the heavy lifting and supports further easing (in monetary policy)," she said.
The central bank last week cut the cash rate for the first time in 18 months.
Australian Chamber of Commerce and Industry boss Kate Carnell says the government must now get on with running the country.
"Recent political instability has been poisonous for business and consumer confidence," she said in a statement, adding business had been reluctant to undertake job-creating investment and consumers reluctant to spend.
Australian Retailers Association chief Russell Zimmerman was pleased Australians did not have to witness the "revolving-door" style of leadership of previous governments.
There must now be a sound economic path that improves productivity and certainty, he said.
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