Treasurer Josh Frydenberg is hoping Australians hit the nation's shops and spend their tax refunds as signs grow that the surge in business and consumer confidence since the Morrison government's re-election is starting to wane.
Mr Frydenberg said he was confident the refunds, the first part of the government's 10-year, $158 billion tax package, would be recycled through the economy, along with the money freed up by the Reserve Bank of Australia's recent cuts in official interest rates.
More than 810,000 people, a record so early in a new financial year, have already submitted their tax returns, with refunds worth up to $1080 for low- and middle-income earners set to hit bank accounts from Friday.
The Treasurer said with the Australian Prudential Regulation Authority loosening loan restrictions on the nation's banks and the cut in interest rates there would be more money flowing through the economy.
"It's not up to the government to tell Australians how to spend their money. It's for them, their families, for the individuals involved, to determine their priorities," Mr Frydenberg said.
"I'm very confident this money will be used to ensure greater economic activity. It will be used at the local shop. It will be supporting local employers and local businesses.
"There are a number of things that are happening together with these tax cuts that will continue to see strong economic activity across the Australian economy."
Following the return of the government at the May 18 election, there was a lift in business and consumer confidence.
But the closely watched National Australia Bank monthly survey of business conditions and confidence show the sheen is wearing off.
Both confidence and conditions are back under their long-term average, with forward orders, a key indicator of future economic conditions, still deeply negative.
Retail remains the worst part of the economy, although trading conditions are also negative in the manufacturing, wholesale and transport sectors. Mining, aided by this year's large lift in iron ore prices, is the most confident sector, enjoying the strongest conditions.
NAB chief economist Alan Oster said while there had been a tightening in capacity utilisation, the survey showed the euphoria around the election had come to an end.
"Business confidence appears to have unwound its spike in May, which we think was driven by a short-term election bounce and increased optimism around a renewed interest rate easing cycle by the RBA," he said.
"Forward-looking indicators suggest that there is unlikely to be a material improvement in conditions over the next few months, with forward orders remaining very weak. This suggests the pipeline of demand is weak and is consistent with below-average confidence."
Confidence is not only waning in the business sector, with the ANZ-Roy Morgan weekly measure of consumer sentiment also showing a dip.
One of the biggest falls was in the question on whether it was a good time to buy a major household item.
ANZ's head of Australian economics, David Plank, said confidence was down despite the RBA's cut to interest rates last week.
"The passage of the tax cuts has also not been an immediate boost to sentiment," he said.
"We need to put this in context, however. Consumer confidence rose sharply in the prior weekand is above average, so some consolidation is not completely unexpected.
"Confidence also fell immediately following the June RBA rate cut, suggesting the immediate take-away from monetary easing is not necessarily positive."
- SMH/The Age