PM wants to avoid repeat of Delta response

Strong prices for coal exports helped drive Australia's Sept quarter trade surplus to a record high.
Strong prices for coal exports helped drive Australia's Sept quarter trade surplus to a record high.

Scott Morrison is doing all he can to avoid repeating the stiff measures taken to battle the Delta variant of COVID-19 as the nation now faces the new Omicron strain.

But the government has delayed its reopening of borders to international visa holders, skilled workers and international students from December 1 to December 15 as a "prudent and temporary" measure.

"None of us want to go back to those long quarantines, and all of those sorts of issues," the prime minister told reporters in Canberra on Tuesday.

Wednesday's release of the national accounts for the September quarter will show the impact of the lockdowns and restrictions in NSW, Victoria and the ACT fighting Delta.

It's expected the economy contracted by about 2.5 per cent in the quarter, which if correct, would be the second largest decline on record.

More up to date data is pointing to a sharp recovery with retail spending and employment rebounding.

However, National Australia Bank economist Tapas Strickland said the recent emergence of the Omicron variant does pose a significant risk to the rebound.

"It is too early to assess how severe the variant is and whether current vaccines provide a high level of protection," he said.

News of Omicron has already hit sentiment with the weekly ANZ-Roy Morgan consumer confidence index - a pointer to future household spending - falling 1.3 per cent.

However, that didn't stop Australians spending more than $8 billion across the four days of the Black Friday-Cyber Monday weekend, according to a NAB analysis of merchant transactions.

While a weak result is expected for the national accounts, it will include some bright spots.

The Australian Bureau of Statistics said the current account trade surplus was a record $23.9 billion in the September quarter, with net exports contributing one percentage point to economic activity.

ABS head of international statistics Andrew Tomadini said the surplus was driven by strong prices for exports of coal and other mineral fuels as well as greater volumes of agricultural exports.

"Import volumes fell this quarter as global supply chain pressures began to be felt in Australia," he said.

More up-to-date figures showed building approvals tumbled 12.9 per cent in October as a result of a 37.5 per cent slump in dwellings excluding houses.

Approvals of private sector houses rose 4.3 per cent.

Separately, the Reserve Bank of Australia data shows demand for home loans remains strong.

Housing credit for owner occupiers grew by a further 0.7 per cent in October to an annual rate of nine per cent, the fastest pace since August 2016.

The ANZ-Roy Morgan survey also found inflation expectations rising by 0.2 percentage points to 4.8 per cent and closing in on a recent seven-year high of five per cent.

Other research shows cost of living pressures are starting to bite with more than half of Australians experiencing some sort financial stress.

The survey of 3000 Australians by data analytics platform Your Financial Wellness found many would struggle in a financial crisis.

Mortgage stress - as defined by more than 30 per cent of income being required to repay a mortgage - is expected to lift from 27 per cent to 42 per cent of respondents if interest rates were to rise by two per cent.

A survey by financial services firm Findex of more than 500 small and medium sized enterprises also found over half of firms are concerned about their ability to retain staff over the next 12 months.

Australian Associated Press