Can confident business carry dour consumers? (members)

Last week saw the continuation of a recent divergence that’s going to play a very significant role in determining Australia’s growth rate in the year ahead. Consumer confidence remained weak but business confidence remained strong. Indeed, Westpac’s Red Book offered a spectacular chart illustrating that this divergence is now at its widest ever:

Why is this? Does it matter? And, which side of the sentiment coin is going to prevail in the economy?

I see four main reasons for the divergence – politics, debt, technicals and capacity utilisation – and each suggests a different outcome for the struggle.