BUSINESS SLAMS RBA FOR HOLDING INTEREST RATES

Written on the 5 July 2012

BUSINESS SLAMS RBA FOR HOLDING INTEREST RATES

THE Reserve Bank of Australia (RBA) has left the base borrowing-rate unchanged at 3.5 per cent.

The decision sparked criticism from businesses planning to pass additional costs of the new Carbon Tax onto customers.

The Australian National Retail Association (ANRA) says an interest rate cut was needed to help restore consumer confidence, which it says has been unsettled by the new tax that began on Sunday.

ANRA warns the RBA’s inaction will prevent customers from spending as they wait with “bated breath and sealed wallets for the impact of the carbon price to hit family budgets”.

“It is not yet clear how much the carbon price will carve into family spending, nor how much the promised government assistance families manage it will loosen purse strings,” says ANRA CEO Margy Osmond.

“Unless there is some light at the end of the tunnel for homeowners in the form of future rate cuts, retailers will continue to struggle in light of low consumer confidence and shoppers too concerned about their finances to come in-store.”

Master Builders Queensland also denounced the RBA decision to keep rates on hold, saying it fails to send a strong signal that interest rates will not increase.

“We believe the market is just starting to turn and a further reduction in interest rates would have been a strong incentive for buyers who are holding off,” says construction policy director John Crittall.

However, the bank defends its position and says the outlook for inflation is unaffected by anticipated effects of the Carbon Tax.

“The [RBA] board judged that with inflation expected to be consistent with the target [up to 3 per cent over two years] and growth close to trend but, with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate.” says governor Glenn Stevens in a written statement.

The RBA previously reduced the borrowing rate in May and June by 75 percentage points during the two-month period.


Latest News

THE 2017 MELBOURNE TOP 50 COMPANIES REVEALED: NUMBERS 40 TO 31

Our countdown to the 2017 Top 50 Melbourne companies continues with the next 10 on the list from 40 to 31, which f...

HEALTH INSURER NIB ACCUSED BY ACCC OF MISLEADING ITS MEMBERS

THE COMPTITION regulator has launched proceedings in the Australian Federal Court against NIB Health Funds Limited (N...

CANNABIS COMPANY SECURES PERMITS FOR NEW PLANTS TO BEGIN CULTIVATION

MEDICAL Cannabis company Cann Group Limited (ASX: CAN) will receive its first plant material and start cultivation of...

CHARTER HALL SNAPS UP SALAMANDER BAY CENTRE FOR $174M

RETAIL investment trust Charter Hall (ASX: CQR) has purchased the regional Salamander Bay Centre in New South Wales f...

Related News

HEALTH INSURER NIB ACCUSED BY ACCC OF MISLEADING ITS MEMBERS

THE COMPTITION regulator has launched proceedings in the Australian Federal Court against NIB Health Funds Limited (N...

AFTERPAY GOES TRANS-TASMAN WITH TRADE ME DEAL IN NEW ZEALAND

AFTERPAY Holdings Ltd (ASX: AFY) has entered into an agreement with New Zealand trading site Trade Me Group Ltd (A...

STARTUP SUCCESS BOILS DOWN TO PERSONALITY, SAYS EXPERT

THOSE who own startups will know that there are many essential qualities of a good entrepreneur; their tenacity, fina...

SLATER AND GORDON TAKES SPOTLESS TO COURT

SPOTLESS Group (ASX: SPO) has been hit by a class action launched by Slater and Gordon (ASX: SGH) in the Federal C...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter