The Reserve Bank Board's decision to lower the cash rate to 1.25% today has been welcomed by Australia's largest business network, the Australian Chamber of Commerce and Industry.
"Lowering the cash rate will provide a timely shot-in-the-arm to stimulate parts of the economy that have been struggling," Australian Chamber CEO, James Pearson, said today.
"Lower interest rates should encourage both business investment and household spending, providing more impetus to keep the economy driving forward.
"It is now vital that banks pass on the interest rate cut in full. This will ensure the greatest benefit is gained from today's decision.
"Many small businesses have been doing it tough over the past year, faced with slowing economic growth and weaker consumer spending.
"Profits, outside of the mining sector, were only 2.5% in the year to December.[1] As a result, business investment has turned down since the beginning of the year, with recent ABS data showing total new capital expenditure in the March quarter 2019 down 0.6%.[2]
"The Reserve Bank Board's decision, in combination with increased political certainty following the election, will provide business with more confidence to invest, create more jobs and wealth for the benefit of all Australians."
The Australian Chamber is Australia's largest network of employers, speaking for over 300,000 businesses employing millions of Australians in every sector of the economy, in every corner of Australia. Our Small Business is a Big Deal campaign gives voice to what small businesses need from the federal government, and our Getting on with Business recommends ways to make Australia the best place in the world to do business, so that Australians have the jobs, living standards and opportunities to which they aspire.
[1] ABS, Business Indicators, Australia, December 2018 (Cat. No. 5676.0)
[2] ABS Private New Capital Expenditure and Expected Expenditure, Australia (Cat. No. 5625.0)
