Australia is one of the happiest nations in the world, but ask people what they think about the economy and their smiles will quickly turn to a grimace.
A United Nations report has found Australia to be the joint-ninth happiest country on Earth with New Zealand.
However, new figures show confidence in the Australian economy has dropped to its lowest level in almost a year, weighed down by rising unemployment and the continued weak pace of wages growth.
The ANZ-Roy Morgan consumer confidence index fell for a third straight week, declining one per cent after the latest jobless rate unexpectedly jumped to 5.9 per cent, the highest point in just over a year.
ANZ head of Australian economics David Plank expects the unemployment rise will have further dampened income expectations.
The Reserve Bank has warned if subdued wage pressures persist it would have implications for consumption growth and the risks posed by the high level of household debt.
Shadow treasurer Chris Bowen says the federal government has repeatedly ignored such warnings, instead backing the Fair Work Commission's decision to cut Sunday penalty rates.
"'The government's pursuit of cuts to penalty wages is not just an ideological driven, out of touch view, it's actually bad economics." Mr Bowen told AAP.
Treasurer Scott Morrison says Labor thinks the money "just falls from the sky" to pay people's wages.
"Those opposite simply don't get it, that if a business doesn't make money, they can't pay people wages," he told parliament.
The political argy-bargy comes at a time when a separate survey by the Economist Intelligence Unit found both Sydney and Melbourne as two of the most expensive places in the world.
The Reserve Bank's minutes of its March 7 board meeting also warn of a continued build-up of risks associated with the housing market.
The central bank says house prices are rising briskly in some markets, but declining in others, while the growth in rents is the slowest for decades.
"Borrowing for housing by investors had picked up over recent months and growth in household debt had been faster than that in household income," the minutes say.
Highlighting the variants of house values, new Australian Bureau of Statistics figures show there was a 10.3 per cent per cent jump in Sydney prices last year and 10.8 per cent surge in Melbourne, yet in Perth they fell 4.1 per cent and Darwin they tumbled seven per cent.
Housing affordability will be the centrepiece of Mr Morrison's May 9 budget.
The issue will be a key talking point when the treasurer meets his state and territory counterparts in Canberra on Friday.
But he has made it clear the federal government won't be bankrolling any state tax changes, such as stamp duty, at a time when the their debt positions are a lost less than the commonwealth's burden.
"This fundamentally is an issue for the states," Mr Morrison told Sky Business.