Retailers are pleading for another interest rate cut to 2.5 per cent when the Reserve Bank of Australia meets in May.
According to the Australian Retailers Association, the cash rate should sit at around 2.5 per cent to help alleviate pressure on consumer and business borrowers.
ARA executive director Russell Zimmerman said a rate cut will help address a compromised economic situations.
“The RBA needs to cut official rates to 2.5 per cent to get variable mortgage rates to a level of 6 per cent,” he said.
“Borrowers now know they’ve been paying inflated interest on their finance for far too long compared to overseas, and banks should look to bring rates down to acceptable levels independently of any rate decision made by the RBA.
“Inflated interest rates coupled with other household pressures are frustrating for retailers who need to see incentives for customers to come through their doors, breathe some life into the economy and achieve steady, sustained growth above the inflation rate.
“Retailers were frustrated by the RBA’s April decision to again hold the cash rate at 3 per cent given they need relief from consumers’ reluctance to spend and were relying on a rate cut to keep trade figures growing steadily.”
Zimmerman also believes banks need to also take responsibility and pass on the benefit of lower funding costs.
“The ARA is calling on the government and alternative governments to address economic reform to let private enterprise make an optimal and all- important contribution to Australia’s economy as part of their election commitments,” he said.
“Political stability can only be achieved through a majority government and the September election couldn’t come soon enough."