The Australian Retailers Association (ARA) continues to urge for the Reserve Bank of Australia to cut rates when they make a decision for the first time this February as well as for the big banks to pass on additional cuts to reflect their lower borrowing costs.

ARA executive director Russell Zimmerman said with reports in recent days of reduced lending costs of major banks, not only should the Reserve Bank lower interest rates, but the major banks should pass on additional rate cuts.

“Australia has comparatively high official interest rates compared to equivalent performing economies in Canada, New Zealand and Norway, which have cut interest rates to 1 per cent, 2.5 per cent and 1.5 per cent respectively and has resulted in the Australian dollar being driven to record consistent highs affecting the economy,” he said.

“Since the start of the GFC Australia’s banks have not passed on full interest rate cuts because of internationally high borrowing costs, with clear evidence these costs are lowering consumer and business borrowing interest rates must be lowered.”

Also the ARA highlighted the RBA and banks play a crucial role in stimulating the economy particularly at a time when recent sale figures for November, indicating a a stall in the economy.

“While Christmas sales initially appear to have been a little better than the previous year we know some categories were down and sales growth was still well below historic levels,” Zimmerman said.

“Australia is facing significant economic head winds and the need for serious economic reform from whoever wins this year’s Federal election, in the meantime the big banks and RBA need to play their role in supporting the economy,” Mr Zimmerman said.