Nearly nine out 10 Australians worry the federal budget will not benefit them.
Thankfully, the Reserve Bank doesn't look like adding to their concerns.
The central bank has indicated that record-low interest rate settings are likely to be appropriate for "some time yet".
The RBA, in its latest quarterly monetary policy statement, highlighted that federal and state budget cuts would be a major "headwind" on economic growth.
With resources investment on the decline, non-mining investment subdued, a still relatively high Australian dollar and falling commodity prices, the outlook was uncertain, it said.
The bank is not alone in worrying about the federal budget.
A special Roy Morgan poll, released on Friday, shows 88 per cent of individual respondents and 77 per cent of business feel it won't benefit them.
And that feeling extends to seven out of 10 Liberal supporters.
Micro business - those with fewer than five employees - are the most negative with only 20 per cent thinking the budget will be good for business.
One out of three big businesses think the same.
But they are likely to be more pleased about the RBA looking at keeping its 2.5 per cent cash rate on hold.
Macquarie Research chief economist Richard Gibbs says the bank will be looking "long and hard" at the substance of the budget when it is released on Tuesday.
Treasurer Joe Hockey does not think the budget will detract from growth "at all" in the short-term.
But earlier this week the Organisation for Economic Co-operation and Development warned him not to be too heavy handed with spending cuts, warning of their impact on a fragile economy.
The RBA expects the economy to continue to grow below its long-term trend of around 3.25 per cent until the middle of 2015.
"The unemployment rate is not forecast to begin declining consistently until after this," it said, and even then the decline is expected to be modest.
The jobless rate was 5.8 per cent in April having hit a decade high of 6 per cent at the start of the year.
Commonwealth Securities economist Savanth Sebastian says barring a surprise, record-low interest rates are set to continue.
The surprise though could come in the form of a very contractionary budget, he said.
The latest federal financial statement shows the 2013/14 budget deficit running at just over $1 billion less than forecast to March.
It was forecast to be $47 billion for the full year.
Share
