Inflation is expected to remain under control until 2012 even though consumers continue to hold on to their money. The Reserve Bank of Australia (RBA) revealed its favorable outlook on the inflation rate and on the economy in the minutes of its August meeting.

Inflation is expected to stay within the two to three per cent target band before economic growth strengthens next year. The bright forecast brought RBA to maintain interest rates at 4.5 percent. Changes are unlikely until economic data become concrete.

For one, small businesses are experiencing difficulties due to a cautious consumer market. Consumers are saving for expected rainy days even though they know bank interest rates remain the same. In June, the Australian Chamber of Commerce and Industry's (ACCI) small business survey showed a growth index of 47.4. Slipping below the 50-level signals belt-tightening measures.

Efforts to curb the negative effects of a protracted return of investment in retail have focused on wages and salaries. The Melbourne Institute noted a slowdown in wages growth, especially, among women. The results of the private survey came in as Australia's first female prime minister, Julia Gillard, appealed to 50 workers at a mining equipment company to consider the Labor party's economic reforms when they vote on August 21.