Business leaders hail rate cut
THE Reserve Bank of Australia has cut 50 basis points from the official interest rates from 4.25% to 3.75%.
The bank said in a statement that the decision was based on information received over the past few months that suggests economic conditions have been weaker than expected.
"Recent data for inflation shows that after a pick up in the first half of last year, underlying inflation has declined again and was a little over 2% over the latest four quarters. CPI inflation has also declined, from about 3.5% to a little over 1.5%," the bank said in a statement.
For an average loan NSW of $397,000 this represents a saving of $25.22 a week.
The last time the board met on the first Tuesday of April it decided to leave the cash rate unchanged at 4.25%.
Tweed Chamber of Commerce president Rory Curtis said the change in the cash rate would not directly impact on a whole lot of people on the Tweed.
"It's just not the demographic. Most of the people living on the Tweed are self-funded retirees or people on the pension," Mt Curtis said.
"What it will do is build some consumer confidence."
Mr Curtis said it would have been better for the bank to take baby steps to build up confidence.
"A .5 drop will cause excitement in the short term, but to build confidence it would be better to have consistent small cuts," Mr Curtis said.
Murwillumbah Chamber of Commerce president Toni Zuschke said businesses were in trouble and whole percentage cuts were required.
"The dollar just doesn't stretch," Ms Zuschke said.
"Businesses are discounting just to get a cut of the dollar but that is unsustainable.
"I think they really need to do what they did in the 90s and slash it."
Ms Zuschke said the retail figures were worse that during the recession years in the 1990s.