"The challenges for the new government are already pretty clear and defined. Abbott went to the electorate vowing sound economic management and to implement his core promises, so he will need to be seen to be making progress in those areas quite quickly."
- Zareh Ghazarian, a political analyst and lecturer at Melbourne's Monash University
The Australian Dollar plunged to the lowest level in six weeks against its U.S. counterpart on Tuesday, hitting 0.9324, as traders were disappointed with weaker-than-expected business confidence, while separate report showed Australians are getting less optimistic about Tony Abbott and his pledge to revive the economy.
A monthly report from the National Australia Bank showed a gauge of business sentiment plunged to 5 in October, following a reading of 12 a month earlier that was a three-and-a-half year high. Nevertheless, any reading above zero still indicates improvement in current business conditions. Australian companies are benefitting from low interest rates and improved demand from country's largest trading partner- China. However, businesses are still reluctant to take on new staff, adding more pressure on policymakers as they are trying to revive the resource-rich economy as activity in the key mining sector cools.
Another worrying sign for the government is Prime Minister's falling popularity, as he lags on his own promises to implement structural reforms in order to boost growth. Satisfaction with Abbott among Australians tumbled to 45% from 47%, while the level of dissatisfaction jumped to 38%. Despite all pledges and shifts in monetary policy done by the RBA, next year the economy is likely to see below-trend expansion and a rise in unemployment.
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