By Patrick Avenell
SYDNEY: The Australian Retailers Association (ARA) has immediately praised the Reserve Bank for cutting the cash rate by 100 basis points – equivalent to a full 1 per cent reduction to interest rates.
The ARA executive director, Richard Evans, said this was great news for retailers, as consumers should have more money to spend on gifts this Christmas. This is the most important time for consumer electronics retail industry, with many stores looking to make up their year targets with a boon period over the next three months.
Evans, however, did little to inspire confidence in his own prediction, as the words he uses are eerily similar to US Presidential candidate Senator John McCain’s (R-Arizona) now infamous “fundamentals of the economy” speech.
In a statement released today, Evans said, “Regardless of whether banks pass on this interest rate cut, the RBA’s decision today is a very strong sign that our leading financial regulators believe the underlying foundations of the Australian economy is strong”.
Compare that with McCain’s statement from 15 September at a rally in Florida.
“There has been tremendous turmoil in our financial markets and Wall Street. People are frightened by these events. Our economy I think, still, the fundamentals of our economy are strong…,” said McCain.
If it turns out that Evans is indeed taking his cues from McCain, members of the Australian Retailers Association might well start to worry just how much the executive director knows about the economy.