Consumer and business confidence isn't as low as many think, the head of the Reserve Bank says.
Confidence is crucial to spending and investment, which is needed to drive economic growth as the benefits of the resources boom fade, and RBA governor Glenn Stevens says it is not as low as the media reports.
"It's not that bad," he told a parliamentary committee on Friday.
"It's not great, and it is not the ebullient consumer and business community that we had from the late `90s through to 2006, but I'm sorry, that is not coming back."
He said businesses will invest more at some point, but employment growth has still proved steady in the past year.
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