The Australian Retailers Association (ARA) is calling on consumers to inject funds back into the economy after the RBA’s interest rate cut of 1.0 percentage point and the Federal Government’s Household Stimulus Package were announced yesterday.

ARA executive director Richard Evans said the RBA and the Federal Government are doing their job to stimulate the economy, but it’s up to single workers and working families to inject funds back into the economy and save their jobs.
 
“Around 8.8 million Australian families and singles are expected to receive payments of up to $950 from March this year as part of the Household Stimulus Package, but to save jobs this money needs to flow through the economy.

The Federal Government has given everyone benefiting from this stimulus package – single-income families, working Australians earning 100,000 a year or less, students, farmers, and families with school children – the opportunity to stimulate Australia’s economy.

“Economic recovery is in the hands of Australian workers at the moment. If they spend the government stimulus package they will save their jobs; if they save it or spend it irresponsibly all working Australians will suffer. That is the clear responsibility that comes hand-in-hand with the government’s bonus,” said Evans.

“As well as cash bonuses, the five successive rate cuts since September last year are saving home owners (with an average $350,000 standard variable mortgage) between $700 and $900 per month. But many home owners are choosing to reduce their debt by paying off their mortgage at a faster rate despite interest rate cuts.

“What we’re saying to consumers is, if you’re saving on your mortgage repayments, by all means use some of this extra cash to reduce your debt but also spend some to inject funds back into the economy and save your jobs. Our message is: save $500 and spend $200 to save your job.

“The RBA has done its job with five successive rate cuts since September last year. The Federal Government has done its job with two economic stimulus packages since December. It is now up to cashed-up consumers to inject funds back into the economy and save their jobs,” said Evans.

Evans said the small business tax break of an additional 30 per cent deduction for eligible depreciating assets costing $1000 or more, would help the 80 per cent of independent retailers who turnover less than $2 million per year.