Retail group upset that Reserve Bank leaves interest rates on hold

The Reserve Bank of Australia today left the cash rate unchanged at 3.5 per cent, effectively keeping interest rates on hold.

Here's the National Retail Association executive director Gary Black discussing what this means for the retail sector:

“Political debate around the economy focuses only on the aggregate result, which simply masks the reality for a lot of sectors,” Black said. “From a policy perspective, we have a Government which is naturally inclined to talk up the economy and try to boost confidence – and that’s understandable.

“However, if the Government is focused only on talking up the economy, it’s less likely that they’re going to be examining policy options around stimulating those parts of the economy where conditions are bleak, and for many have never been bleaker.

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“Retail has always been a good barometer of the health of the Australian economy.  When you talk to people in retail and service-sector businesses, many of them will say turnover is down by up to 30 per cent compared with last year.

“Mining and resources may be performing well right now, but they do not offer the employment opportunities to low-skilled and part-time workers that retailers do. Thos jobs are at risk because of the long-term downturn in retail sales.

“I think there’s an argument that if you had the time over again the stimulus package would be better spent now than at the start of the GFC.

“In the absence of government stimulus, then really rate cuts are the only other mechanism.  Sadly, the RBA has missed an opportunity today to deliver that much-needed stimulus.”

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