The latest GDP print (1 March 2017) suggests an improvement in confidence amongst households and firms. Much of this comes from a slowly improving terms of trade that has helped to raise profits, but there remains a risk into the future from continuing low real wage growth. Further cuts in the cash rate will not make much difference at the margin to improving confidence, but care is needed to avoid counterproductive pre-emptive rises in the rate. Confidence improvements should instead come from fiscal innovations in Canberra.