Rates expected to remain on hold

THE Reserve Bank is likely to keep the cash rate on hold as it waits on the outcome of the federal election and allows its August rate cut to work its magic.

All fourteen economists surveyed by AAP expect the RBA to keep the cash rate at the record low of 2.5 per cent when it meets later on Tuesday.

HSBC chief economist Paul Bloxham said the RBA would wait to see what happens to business confidence following the federal election, with governor Glenn Stevens having expressed concerns about weaker sentiment.

"The election will hopefully deliver some more certainty about the policy framework and objectives, whichever side wins," Mr Bloxham said.

He also expects the RBA's next move to be reliant on the Australian dollar, with the central bank more comfortable with a currency closer to 85 US cents.

National Australia Bank senior economist David de Garis said there was room for another rate cut before the end of 2013 - even if the Aussie dollar falls further - with unemployment forecast to push through 6.0 per cent.

"The RBA have made it pretty clear that even with the Aussie dollar going down, they still expect inflation to be within their target bands and so there's not going to be a barrier to another cut," Mr de Garis said.

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Rudd clashes with pastor over gay marriage

MONDAY night television is not a usual venue for theological discussion but Prime Minister Kevin Rudd showed off his knowledge of the Bible as he clashed with a Brisbane pastor over gay marriage.

Mr Rudd turned feisty after first attempting to calmly explain to the ABC Q&A audience his conversion to support same sex marriage.

"If you call yourself a Christian why don't you believe the words of Jesus in the Bible?" Pastor Matt Prater then asked.

"Well mate, if I was going to have that view, the Bible also says that slavery is a natural condition," Mr Rudd replied, to extended applause.

"St Paul said in the New Testament, 'Slaves be obedient to your masters'.

"Therefore we should have all fought for the Confederacy in the US civil war? For goodness' sake."

He said the New Testament's fundamental principle was one of love for fellow man and that people shouldn't get "obsessed" on a particular definition of love based on sexuality.

"If you think homosexuality is an unnatural condition then, frankly, I cannot agree with you."

The prime minister also pledged a Labor government would "as soon as the budget opens up" reverse changes that led to many single parents being put on Newstart and losing money.

He faced several questions on the economy, the state of the budget and his claims about the opposition's plans.

Mr Rudd told a dairy farmer he was predisposed to not let Coles and Woolworths "have the power to smash the farming sector to bits" but he'd wait to see what the competition watchdog had to say about milk prices.

The final two questioners of the night wanted to know about Mr Rudd's plans if Labor lost government and what he saw as his legacy.

"How about we get a question which ends with 'if you do win the election'?" Mr Rudd replied to laughter.

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Rudd offers health hub to woo Tassie

KEVIN Rudd will pledge a multi-million dollar health and sports science centre when he visits Tasmania, saying it will boost much-needed jobs in the north of the state.

The prime minister will be in Launceston on Tuesday to announce a $28 million contribution over four years towards a University of Tasmania's health and sports science training and research centre, if Labor wins the election.

He says the project will boost jobs in the state's north, and create 345 new jobs during construction.

Tasmania has the highest unemployment rate in Australia at 8.2 per cent.

"This is exactly the kind of shot in the arm northern Tasmanian needs," Mr Rudd says.

Once complete, an extra 700 health students, including those studying nursing and physiotherapy will be trained at the centre each year. There will also be an extra 70 teaching jobs.

Building work could start next year, but the $83.5 million project also needs money from the state government.

Mr Rudd will be campaigning in the seat of Bass, which Labor backbencher Geoff Lyons holds by 6.7 per cent.

He's facing a tough challenge from the Liberal Party's star candidate former army brigadier Andrew Nikolic.

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Businesses still gloomy about 2013

NEITHER the conclusion of the federal election nor the most recent interest rate cut is likely to stimulate Australia's slowing economy, says credit information bureau Dun & Bradstreet.

D&B's latest Business Expectations Survey, released on Tuesday, showed that expectations for sales, investment and employment in the last three months of 2013 are flat and at a low level.

Many companies had found the last year tough and now were focusing on reducing debt, controlling expenses and managing their core operations.

The biggest barrier to growth was rising operating costs.

Cash flow was also a significant issue, with companies taking much longer to pay bills.

"Business expectations for the final quarter of the year have fallen flat in a sign that the economy's long-awaited revival will not occur in 2013," D&B said in a statement.

"The outlook for the remainder of the year suggests that businesses do not view the conclusion of this month's federal election as a potential springboard for the economy.

"Businesses also appear to consider the Reserve Bank's latest rate cut as reason for continued caution, rather than investment."

The percentage of businesses expecting increased sales has fallen from 18 per cent in the previous quarter to 11 per cent in the fourth quarter.

Only two per cent of businesses plan to lift spending in the next quarter, and only three per cent intend to hire new staff.

The services and the wholesale sectors were the least positive.

The manufacturing sector was the most positive, buoyed by the falling value of the Australian dollar.

D&B chief executive Gareth Jones said business expectations had been tracking downwards and were only just stabilising at a low level.

"The year-end outlook for businesses is not particularly cheery," he said.

He said businesses will be hoping for a traditional pick-up in consumer spending in the New Year and the summer months.

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Labor to lose four or five Qld seats: poll

A SHARP fall in Labor's primary vote across seven Queensland electorates since the 2010 election would result in the loss of four, possibly five, seats, a new poll shows.

The Australian newspaper reports there has been a swing against the government of almost five percentage points on a two-party preferred basis in Moreton, Petrie, Lilley, Capricornia, Blair, Rankin and Oxley.

The Newspoll shows Labor's primary vote is 38 per cent, down from 42.4 per cent in August 2010.

The coalition's primary vote in the seven Labor-held seats is 42 per cent, up from 39.8 per cent at the last election, meaning it would gain Moreton, Petrie, former treasurer Wayne Swan's seat of Lilley and Capricornia, if the swings are uniform.

Blair is also at risk.

Earlier polling that suggests Prime Minister Kevin Rudd could also lose his seat of Griffith means there is a strong possibility Labor will retain just two seats in Queensland - those of Rankin and Oxley.

The paper says Mr Rudd's home state is meant to offer Labor a springboard to claim coalition seats, but this now appears unlikely, particularly Brisbane, held by a margin of 1.2 per cent, and Forde, held by a 1.7 per cent margin.

Forde is being contested by former Queensland premier Peter Beattie.

Both Mr Rudd and Opposition Leader Tony Abbott have equal voter dissatisfaction in the seven seats of 49 per cent, however, Mr Abbott trails Mr Rudd as preferred prime minister 47 per cent to 40 per cent.

Across the seven seats, Mr Rudd's satisfaction rate was 42 per cent, while Mr Abbott's was 44 per cent.

The Newspoll was conducted from last Tuesday to Sunday.

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