The Executive Director of the Australian Retailers’ Association, Russell Zimmerman, said today the decision by the Reserve Bank of Australia to cut interest rates by 25 basis points – the first easing of monetary policy since August 2016 – would aid struggling retailers by ensuring consumers had more disposable income to spend.
Commenting on the RBA’s move to cut official rates – which was justified with references to sluggish increases in employment, wages and inflation – Mr Zimmerman said the ARA believed the decision bolstered a number of recently-announced changes that should help to kickstart growth in retail spending.
“We’ve known for quite some time that retailers are doing it tough, with retail sales growth figures for 2017-18 the lowest since the Australian Bureau of Statistics started keeping records 50 years ago,” Mr Zimmerman said.
“Trade figures for April that were released this morning, whilst still reasonably robust on a year-on-year basis, show further significant deterioration on the March numbers,” he added.
Mr Zimmerman said that with a 3% increase in the minimum wage, imminent tax cuts, and now the RBA’s cut to interest rates, there was a comprehensive suite of measures that should help boost consumer spending.
“There has been a lot of discussion – from government and media – about the underperformance of the retail sector relative to other sections of the economy, which we have been saying all along,” Mr Zimmerman said.
“Today’s cut should consolidate other stimulatory changes that will filter through over the next few months and, we hope, give struggling retail business owners an opportunity to catch a break.” Mr Zimmerman concluded.
Tuesday, 4 June 2019
