The political uncertainty of having a minority government in Australia is not a particular problem for the economic outlook, Reserve Bank of Australia assistant governor Philip Lowe said on Thursday.

After his speech on the economy in Sydney, the top central banker said business investment plans were based on long-term horizons and would be relatively unaffected by short-term political uncertainty.

Prime Minister Julia Gillard is set to form a minority government after two independent legislators Rob Oakeshot and Tony Windsor had decided to back her, and gave the center-left Labor Party a second three-year term of rule in Australia, ending more than two weeks of political impasse.

Dr Lowe said that "While there are continuing uncertainties about the near-term outlook, there is more optimism about medium-term prospects than there has been for some time."

"The prices of commodities have risen substantially. Investment in Australia is high and Australian assets are again viewed as attractive by international investors."

"The investment that is taking place in the resources sector is really motivated by long-term growth in Asia."

According to Dr Lowe, most of these have a horizon of decades and the "day-to-day movements in the political cycle are not particularly important in that investment."

With Reuters