Minister hopes spending will buoy economy

Assistant Treasurer Michael Sukkar is confident the Australian economy can overcome the challenges being posed by the Omicron variant of coronavirus with households having the security of huge savings.

Mr Sukkar says new data shows households have built up $48 billion in offset mortgage accounts and more than $170 billion in other savings accounts during the pandemic.

“So that’s $220 billion of economic firepower that’s there – it provides a great foundation to continue to support our economic recovery,” Mr Sukkar told Sky News on Monday.

“It means more discretionary spending because you’re paying less on your mortgage than you would otherwise, with money sitting in your offset account.

He concedes these are extraordinarily difficult times for many Australians with the evolution of the pandemic that has seen the emergence of the highly-contagious Omicron strain over the past six weeks.

But he says Australians have overcome the challenges posed by COVID-19 over the past two years and is confident they will do it again with Omicron.

The Australian Bureau of Statistics will release its first data of the year this week, including retail sales for November on Tuesday.

Economists are expecting another strong result of around five per cent, building on the 4.9 per cent increase in October as NSW, Victoria and the ACT all emerged from extensive lockdowns.

However, an analysis by ANZ last week showed spending in the week to January 5 was at its lowest level since the Delta lockdowns as consumers showed caution about being in public places.

This has been compounded by staff shortages, while supply chain disruptions are leaving some supermarket shelves bare.

The ABS will kick-off the week with the release of building approvals for November.

Commonwealth Securities chief economist Craig James expects this could show a five per cent increase, rebounding after two months of decline.