Prime Minister Julia Gillard wants Australia to be a "winner" in a changing global economy, but many households will be feeling far from medal holders after a widely expected interest rate cut failed to materialise.
The Reserve Bank of Australia (RBA) left the cash rate unchanged at 4.25 per cent at its first board meeting of the year on Tuesday, despite financial market economists widely predicting another cut.
RBA governor Glenn Stevens said lending rates had already declined to close to the medium-term average after back-to-back reductions of 25 basis points in both November and December.
"With growth expected to be close to trend and inflation close to target, the board judged that the setting of monetary policy was appropriate for the moment," he said in a statement after the board meeting.
"Should demand conditions weaken materially, the inflation outlook would provide scope for easier monetary policy."
Treasurer Wayne Swan believes the central bank "struck a balance" between an uncertain global economy and strong domestic fundamentals when it decided to leave the cash rate on hold.
"The Reserve Bank is acutely aware the challenges to our economy from the global situation," Mr Swan said.
Opposition treasury spokesman Joe Hockey said the clear message from the RBA was that the economy was "fragile".
"That just proves that now is not the time to introduce an economy wide carbon tax," Mr Hockey told reporters in Canberra.
"Everyday Australians were looking for some interest rate relief today, it didn't come."
But economists do not believe the RBA has finished cutting interest rates just yet.
"Despite two rate cuts, more needs to be done given likely developments in the labour market and the ongoing soft credit and sentiment data," Westpac chief economist Bill Evans said.
"The recent sharp rise in the exchange rate is set to further damage manufacturing, tourism and even retail and is likely to feed back onto an already weak labour market."
The Australian dollar jumped almost one US cent after the RBA announced its rate decision.
Other economists felt that the central bank had missed the opportunity to bolster confidence among both businesses and households.
"A rate cut today would have been appropriate for current economic conditions, but sadly that decision was not taken," Housing Industry Association chief economist Harley Dale said.
Still, online bookmaker Sportsbet believes there is a good chance of a rate cut at the March RBA board meeting, with odds at $1.50, compared with $2.20 for punters who think the rate will stay the same.
Ms Gillard reiterated that she wants the economy to be the centre of debate this year, faced with changes in the world economy in the wake of the global financial crisis and "spectacular growth" in the Asia region.
"We will seize those opportunities for Australia's future," she told parliament.
"I want us to come out a winner in this time of change in the global economy and in our region."
Opposition Leader Tony Abbott was happy to make the economy the focus of debate.
Rallying coalition MPs before the first parliamentary sitting of the year, he said the opposition was "on a mission for our country".
"They (the government) say they want the focus to be on the economy. If I can plagiarise, `Make my day,'" Mr Abbott said, quoting Clint Eastwood's phrase from his Dirty Harry films.
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