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

SPOTLESS REJECTS DOWNER'S 'HOSTILE' $1.2B BID AS IT PROMISES A STRATEGY RESET

CLEANING and catering services company Spotless has rejected a $1.26 billion takeover bid from mining services firm D...

EXCLUSIVE INTERVIEW: MEGAPORT CEO VINCENT ENGLISH ON GLOBAL EXPANSION AND HOW TO SCALE UP A BUSINESS

THE RAPID expansion of Megaport (ASX: MP1) continues with the Brisbane-based company announcing a major partnership d...

BRISBANE ENTREPRENEUR BREAKS BARRIERS IN ECO-BUSINESS

TRACEY Bailey believes that if every person understood the true social and environmental cost of every product the...

DOMINO'S PIZZA EMPLOYEES OFFERED A SLICE OF THE PIE

DOMINO'S Pizza (ASX: DMP) has launched an employee share acquisition plan which will give its 26,000 staff the...

Related News

FURNITURE DISRUPTOR SET TO SHARE HIS ONE OF A KIND BUSINESS MODEL

IT'S no secret that Australians love homemaking. Their ceaseless quest to create the perfect place to call hom...

WEEDING OUT THE ASX'S BURGEONING CANNABIS TREND: 8 COMPANIES TO WATCH

A NICHE is budding on the ASX in the form of medical cannabis, an industry which has been on the country's rad...

FRESH CLASS ACTION TO REVEAL ANOTHER SIDE OF SLATER AND GORDON DOWNFALL

ACA LAWYERS has issued a formal letter of demand to Andrew Grech (pictured), managing director of Slater and Gordo...

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter