ARA urges rate cut | IR News

ARA urges rate cut

Posted Date: 18/01/2013

By Inside Retail

The Australian Retailers Association (ARA) said the 0.1 per cent increase in unemployment reported by the ABS was a neon sign to the RBA and banks that interest rates needed to come down in February if retailers were to cope with weakened employment figures and consumer confidence.

ARA executive director, Russell Zimmerman, said retailers wouldn’t be able to cope with the increased consumer reticence brought about by reduced employment levels and the RBA needed to factor this into a decision to cut interest rates in February.

“The increase in unemployment is the first and most palpable sign Australians will retreat further away from spending amid fears for their own jobs, not to mention rising taxes, utility costs and the cost of living," Zimmerman said.

“Soaring unemployment levels is a neon economic sign Australian households will come under further financial pressure as well as save their dollars ‘just in case’. As a $243 billion cornerstone of Australia’s economy, retailers simply cannot take on the burden posed by an unstable economy. A recent report from ACCI predicted a softening of the labour market and job losses of up to 20,000 in retail trade," he added.

“The retail sector alone is responsible for 1.2 million jobs, so consumers bypassing the stores will have direct consequences on retail, and other industries such as manufacturing and construction will lose jobs.

“The ARA is calling on the RBA to ensure a rate cut is made in February along with banks and urging both major political parties pursue an economic reform agenda in the lead up to the federal election."

Zimmerman last week urged banks to pass on RBA rate cuts in full and swiftly to consumers.

“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 percent, 2.5 percent and 1.5 percent respectively and has resulted in the Australian dollar being driven to record consistent highs affecting the economy,” Zimmerman said.

Keywords: ARA, interest rate

Comments:

Friday, January 18, 2013 by Luke Scott

The current figure does not show the true pain felt by both employees and employers as it does not truely show the reduction in hours many are facing. If you work 1 hr per week you are not "classed" as unemployed so are not included in the total. As a business we have reduced all our staff hrs to cut costs deal with the slow down and we see no sign that this will change in the near to mid future. we have not "sacked" anyone but noone is on full hrs.

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