Business is less likely to be hiring while confidence is being undermined by the persistent political squabbling over the budget.

Job seekers could be the hardest hit if the federal government continues to struggle to get its first budget endorsed.

As a fresh political row erupted over Treasury modelling suggesting the poor would be hardest hit by the budget, a new survey shows business confidence is being undermined by such squabbling.

The Australian Chamber of Commerce and Industry’s latest business survey for the June quarter shows declining confidence, soft conditions, weak profits and a reluctance to employ or invest.

The chamber’s chief executive office Kate Carnell said there was no doubt that confidence has taken a hit since the budget and in those circumstances nobody is hiring.

“If employment figures are as these expectations show then the government won’t meet their employment projections for the budget,” Ms Carnell told reporters in Canberra on Monday.

Official labour force figures for July will be released on Thursday.

However, the government can at least draw some comfort that people appear to be shopping again, coinciding with a recovery in consumer confidence, after it, too, initially fell sharply in response to the budget.

Retail spending jumped to a record $23.2 billion in June, growing in all jurisdictions apart from the ACT, which is expected to suffer most by budget cuts to the public service.

But Treasurer Joe Hockey has dismissed as “deliberately misleading” a report that the government was fully aware of the impact the budget would have on poorer households.

Treasury numbers, obtained by Fairfax newspapers under Freedom of Information, shows an average low-income family loses $844 per year in disposable income from budget changes, while middle-income earners forgo $492.

A high-income family is down by only $517.

But Mr Hockey said these figures do not take into account the fact that high-income earners paid more tax than those on lower incomes.

“It also fails to take into account the massive number of concessional payments, such as discounted pharmaceuticals … discounted transport, discounted child care that goes to lower-income households,” an angry Mr Hockey told the Nine Network.

Shadow treasurer Chris Bowen said Mr Hockey should admit his budget is fundamentally unfair and accused him of having a “glass jaw” for attacking the media.

“This is a government that is addicted to secrecy,” Mr Bowen told reporters on the Gold Coast.