Christian Edwards
(Australian Associated Press)

Reserve Bank of Australia boss Philip Lowe says there should be no surprises when he makes his quarterly statement on the health of the economy this Friday.

Speaking in Adelaide on Tuesday after the RBA held Australia's official cash rate at its record low 1.5 per cent, Dr Lowe said his upcoming Statement on Monetary Policy "should not contain any surprises".

"This year and next, our central scenario remains for the Australian economy to grow a bit faster than 3 per cent," he told an RBA board dinner function.

While unemployment is lower and lower inflation is returning to around the middle of the target range, the bank expects any progress on these fronts to be gradual.

Dr Lowe said the nation's weak household spending and sluggish wages growth remain a concern for the economy.

"While we might like faster progress, it is encouraging that things are moving in the right direction," he said.

The Reserve Bank board is also closely monitoring global risks including the management of China's "very significant" build-up of debt.

The other prominent concern Dr Lowe flagged was the possible escalation of protectionist measures in the United States and elsewhere.

"The very clear lesson from history is that this would be bad for growth," Dr Lowe said.

"As a country that has prospered through openness, Australia has a lot resting on this not happening."

Dr Lowe said if the economy met the expected performance of a steady gain in wages and inflation, and a gradual reduction in the jobless rate, it was "reasonable to expect that the next move in interest rates will be up".

Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)

Workers may be getting a little excited about the prospect of a tax cut in next week's federal budget to help with their cost of living pressures, but new figures suggest it is retirees who may need a greater helping hand.

Consumer confidence, according to one survey, has risen for three straight weeks heading into next Tuesday's budget where personal income tax cuts are expected to be its centrepiece.

However, despite this better mood, respondents may have been a little surprised by the benign result of the latest quarterly inflation figures released last month, particularly if they are struggling to make ends meet in a low wage growth environment.

The consumer price index, which measures a basket of goods and services, rose just 0.4 per cent in the March quarter for an annual rate of 1.9 per cent, below the Reserve Bank two to three per cent target band.

However, the Australian Bureau of Statistics also produces its cost of living indexes every three months, which measure the impact of inflation on various households.

They gauge how much after-tax incomes need to change to allow different types of households to purchase the same quantity of consumer goods in a given period.

For employee households, the cost of living is calculated to have grown at a slightly higher rate than the CPI would suggest, increasing at 0.5 per cent for an annual rate of two per cent.

The bureau blames this on a 2.8 per cent increase in education fees at the start of the new school year and a 1.1 per cent rise in transport costs through rising petrol prices.

This assumes employee households are raising children and need to travel to and from work while enjoying falls in international holiday travel if they took advantage of winter off-peak sales.

However, age pensioner households are deemed to have a greater reliance on health products and services, which rose 5.5 per cent in the March quarter.

The bureau also calculated such households would have endured a 0.7 per cent increase in housing costs, including electricity.

Overall, pensioners would have seen a cost of living increase of 0.8 per cent over the quarter, double the quarterly rate of CPI.

(Australian Associated Press)

Australian taxpayers will be spared a future tax hike as the Turnbull government scraps an $8 billion increase to the Medicare levy.

The increase, a signature measure of the 2017 federal budget, was aimed at covering the costs of the National Disability Insurance Scheme.

But Treasurer Scott Morrison is set to release better-than-expected tax receipts to show the extra 0.5 per cent hike is no longer needed.

"All planned expenditure on the NDIS will be able to be met in this year's budget and beyond without any longer having to increase the Medicare levy," he will tell business economists on Thursday.

Mr Morrison will say tax receipts up until February were running $4.8 billion higher than estimated in December, thanks to company profits, a temporary commodities boost and a jobs boom.

The treasurer will again accuse Labor of leaving a $57 billion shortfall in NDIS funding when it left office.

"The reason we proposed to increase the Medicare levy was only to fully fund the gap left behind by Labor on the NDIS," he will say.

"We no longer believe we need to do this."

Negotiations over the government's bill have stalled in the Senate.

Labor had proposed to restrict the 0.5 per cent Medicare levy increase to those earning more than $87,000.

(Australian Associated Press)

More than a third of Australians are treading water financially, with many struggling and often running out of money for food or bills, new research shows.

The ANZ's latest financial wellbeing snapshot, released on Thursday, reveals only about a quarter of all Australians have "no worries" when it comes to money.

The majority of the 3,578 people surveyed by the ANZ say they are "struggling", just "getting by" or describe their finances as "bad", with little confidence in the immediate future.

Of those, 13 per cent are "struggling" and often run out of money for food or bills.

While 23 per cent say they are "getting by", the majority describe their finances as "bad" or are not confident about the next 12 months.

Restaurateur and artist Miranda Scherger considers herself one of the "lucky" ones.

When the 32-year-old started to feel the pinch a few years ago, she was able to move back in with her parents in regional Victoria.

"I was living in Melbourne for a few years and got myself into a lot of debt," Ms Scherger told AAP.

"There was one point where I had no savings and it felt like I was going backwards."

Ms Scherger now thinks she's doing "okay" financially.

About 24 per cent of Australians have "no worries" when it comes to money, the majority of whom are aged at least 50, and have substantial savings and investments.

After paying off the bulk of her debt, Ms Scherger falls in with the 40 per cent of Australians who say they are "doing okay".

According to the report, financial wellbeing for people such as Ms Scherger depends not just on socio-economic status and income, but on their state of mind.

That means how people feel about their money situation right now and going forward.

Despite having what she calls an "average" wage, Ms Scherger is now comfortable enough to start looking at buying a house in the country.

"I don't have a huge amount of debt," she said.

"I'm able to save a good amount of my wage. I have a financial plan and I'm good at sticking to it."

Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)

The International Monetary Fund says the global economy is enjoying its strongest performance since the start of the decade.

In its latest World Economic Outlook released on Tuesday, the IMF says the global upswing that began in mid-2016 has become broader and stronger, led by faster growth in the Euro area, Japan, China and the US.

"The partial recovery in commodity prices should allow conditions in commodity exporters to gradually improve," the Washington-based institution said, as it made a modest upgrade to Australia's outlook.

The IMF stuck to its most recent world growth forecast of 3.9 per cent for both this year and next.

This is the strongest pace since the growth spike in 2010 which initially followed the 2008-2009 global financial crisis.

It now sees Australia growing at three per cent in 2018 compared to its previous 2.9 per cent prediction made in February, while keeping 2019 at 3.1 per cent.

Such growth should help the Australian jobless rate ease to 5.2 per cent in 2019 and close to what the Reserve Bank believes to be "full employment" at five per cent.

The unemployment rate was 5.6 per cent in February.

However, the IMF warns future growth prospects look challenging for advanced economies faced with ageing populations and low productivity growth, making it hard for household income growth to return to their pre-GFC pace.

It also says interest rates may need to rise more quickly than expected if excess demand emerges, which would stress highly indebted countries, firms, and households.

Escalating trade restrictions and retaliation is another risk to the outlook, it said, noting the first shots in a potential trade war involving the US have now been fired.