By Eric Johnston
A RESERVE Bank board member says the federal government's proposed resource rent tax combined with economic jitters coming out of Greece are starting to hurt consumer confidence.
Jillian Broadbent, while avoiding being drawn on her views on the planned tax, yesterday acknowledged a strong correlation between activity across the mining sector and the rest of the economy, including construction in non-mining states.
''There is a confidence that does flow through to lots of parts of the economy,'' Ms Broadbent told a conference of the Stockbrokers Association of Australia.
Financial Services Minister Chris Bowen defended the tax to senior stockbrokers, arguing it was in the national interest.
''We are determined to introduce a resource super profits tax because it's the right thing to do for the nation,'' Mr Bowen said. ''We think we've got the rate right and we're happy to sit down with the industry to talk about the issues.''
Mr Bowen said there were no plans to introduce a similar tax on banks or other industries.
Ms Broadbent, one of the RBA's longest-serving board members, painted an upbeat picture on the outlook for the Australian economy despite rising concerns over Europe's debt problems.
She said Australia was approaching the peak of its V-shaped recovery from the global downturn.
She told the conference the pace of Australia's recovery would slow down while equity markets remained skittish. But Australia's recession had been mild, largely as a result of the federal government's stimulus response to the global financial crisis.
''We are probably close to the top of the 'V' in the economic recovery,'' she said.
Ms Broadbent said Australia's terms of trade were now being driven by high prices for commodities such as iron ore and copper, which would produce a windfall in coming years.
While she was broadly positive on Australia's economic outlook, she said world growth of 2 per cent in 2011 was still achievable, despite questions over the pace of economic recovery in Europe.
Ms Broadbent said Australia was well positioned in terms of its national balance sheet and cash flow, giving its economic upswing some durability.
Despite problems in European markets, she also ruled out the prospect of a double-dip slowdown here.
She questioned whether Europe would be able to hold on to the single euro currency in the long term given the lack of fiscal and monetary controls between European countries.
Ms Broadbent has sat on the RBA board since 1998. She is also a director of the Australian Securities Exchange and Coca-Cola Amatil. She was previously a director of Woodside and Qantas.