Official rate cut must be passed on ASAP: ACCI

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Australian Chamber of Commerce and IndustryRetail banks must pass on the full reduction in official interest rates to business as soon as conditions in financial markets ease, a leading business lobby group says.

The Reserve Bank of Australia’s (RBA) quarterly monetary policy statement shows that prior to last week’s official rate cut, only 69 basis points of the 125 basis points in cuts since September had been passed on to small business by major lenders.

Larger businesses fared only slightly better after receiving an 80 basis points reduction.

The RBA also slashed its growth forecasts to 1.5 per cent for the 2008-09 financial years.

“The full official rate reduction must be passed on when conditions in financial markets ease,” Australian Chamber of Commerce and Industry (ACCI) spokesman Greg Evans said in a statement.

“The cost and availability of credit combined with changes to lending criteria are becoming serious business impediments and will exacerbate the impact of the slowdown.”

ACCI believes an additional fiscal stimulus, including tax measures to encourage spending and business investment, supported by significant cuts in interest rates, will be necessary to bolster confidence.

AAP

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2 COMMENTS

  1. Pass the rate cuts on in full, hang on a minute….. that would put the obscene year on year record profits of our banks in doubt, gee we can’t have that can we?

    All other businesses have to cop the downturn in the ecomony and post smaller profits, but not the banks , they just all align themselves together and speak the same dribble , and our soft government is exactly that, soft.

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