Australia’s economy looks set for another year of muddling through with crumbling confidence adding to the dual demons of drought and housing-related negatives that has left growth at a decade low.

In its quarterly business outlook, Deloitte Access Economics says consumer and business confidence has been “cratered” by a few causes and this summer’s bushfires will not have helped.

Partner and economist Chris Richardson says the Reserve Bank, which slashed the cash rate to a record low of just 0.75 per cent last year, hasn’t covered itself in glory in its communications with the public.

“That has left confidence worse that the economy itself, which in turn risks becoming a self-fulfilling prophecy,” Mr Richardson says in the report released on Monday.

However, he says there have been positives too, including cuts to personal income tax and interest rates, as well as a lower Australian dollar and a rebound in housing prices.

“We’re on course to keep muddling through the impacts of drought, housing-related weakness and scared consumers,” he said.

“The nation’s growth won’t lift that much from today’s decade low and we don’t expect unemployment to drop or wages to accelerate through 2020. We’ll be comfortably treading water rather than roaring into recovery.’

Shadow treasurer Jim Chalmers jumped on the report, saying this is the price Australians are paying for the ineptitude and inaction of a “do-nothing” Morrison government.

“The economy deteriorated after the government was re-elected and expert forecasters are saying don’t expect things to pick-up,” he said in a statement.

Deloitte is forecasting economic growth of two per cent in 2019/20 and 2.4 per cent in 2020/21, below the government’s respective 2.25 per cent and 2.75 per cent predictions released in the mid-year budget review only last month.

Mr Richardson does not expect the federal government to pitch in and support the economy as the Reserve Bank wants it to, and as such predicts the cash rate will be cut twice more, partly as the economy is still weak, but mostly because inflation is so stubbornly low.

“Yet we think the RBA will flinch from quantitative easing – that’s a big step,” he said.

Such easing would mean the Reserve Bank having to buy government bonds and other securities to pump money into the economy – policy action that other countries have found difficult to retreat from.