With further signs that inflationary pressures are receding, the nation’s largest business network has renewed its call for the Reserve Bank to pause any further increases to the cash rate at its April meeting.
“While still too high, it appears inflation has now peaked and is beginning to return to more sustainable levels,” ACCI chief executive Andrew McKellar said.
“In reaching a decision at its April meeting, it’s critical that the Reserve Bank pause and take stock of the cumulative tightening that’s already in the system.
“Just like households, small businesses are feeling the pinch of rising rates and are yet to experience the full effect of a 3.5 per cent increase in just 10 months.
“Escalating interest rates mean more small businesses are struggling to keep up with loans on capital assets and buildings, as well as cover rising operational costs.
“Today’s CPI reading of 6.8 per cent is further confirmation that Australia has passed the turning point. Coupled with stagnant retail sales and falling household consumption, the signs of a broad slowdown in economic activity are becoming clearer.
“If the Reserve Bank doesn’t give full consideration to these deteriorating economic conditions they could move too aggressively and raise rates quicker than the economy can handle.
“Power prices continue to remain a key concern for business with electricity costs soaring 17.2 per cent in the last 12 months. Energy price relief in the upcoming May budget will go some way in addressing these immediate pressures but increasing energy supply must remain a priority.