This week's interest rate cut should play an important role in restoring confidence in the struggling retail sector, the Premier, Lara Giddings, said today.

Ms Giddings said today's soft retail statistics from the ABS made it all the more important for the big banks to pass on the .25 basis point cut in full.

Retail turnover fell 0.5 per cent to $423 million in trend terms in August, continuing a tough period for the retail sector.

"There is no denying that times are incredibly tough in the retail sector at the moment," Ms Giddings said.

"Household savings levels are at an all time high and online shopping is also having an impact on traditional stores.

"That is why is it so important to build confidence and encourage consumers to start spending again.

"If passed on in full, this week's interest rate cut would save the average homeowner around $30 a month.

"With economists forecasting further rate cuts in the coming months, I am hopeful that retailers will receive a much needed shot in the arm in the lead up to the New Year.

"The Government is also doing its bit to support the retail industry, including establishing the Digital Ready Program to help retailers establish an online presence.

"Creating jobs is also a key to building confidence which is why I was pleased to join the Federal Government and representatives of Norske Skog today to confirm a joint $84 million investment in the Boyer Mill.

"The upgrade will secure the future of 330 direct jobs and 900 indirect jobs, along with the creation of a further 100 jobs in the construction phase,

"Major businesses are also showing confidence in the future of retail in Tasmania, with Bunnings recently starting construction on its new store in Burnie, which will create 100 permanent jobs, and the redevelopment of the Cat and Fiddle arcade in Hobart nearing completion.

Ms Giddings also acknowledged a minor fluctuation in building approvals for the month of August.

There were 168 dwellings approved in August, which is one less than the previous month.

Ms Giddings said this was offset by positive news in the non-residential building sector, with approvals up 30.9 per cent the previous year to August 2011. 

Ms Giddings said the Liberal Party's relentless negativity did nothing to address the economic challenges confronting Tasmania.

"Tasmania doesn't need negative carping from the likes of Will Hodgman, it needs leaders prepared to acknowledge the problems while working to build jobs and opportunities for the future.  That is exactly what the State Government is doing."