Date: May 5, 2015
The National Retail Association (NRA) has cautiously welcomed today’s Reserve Bank decision to cut the official cash rate for the second time this year, which has taken it to an all-time low of two per cent.
NRA CEO Trevor Evans said there was evidence that the February rate cut had prompted an increase in consumer activity, with that month’s retail trade figures showing moderate growth in spending in discretionary categories.
“We always welcome extra cash in the pockets of consumers, and hopefully today’s rate cut will again boost spending in Australian retail stores,” Mr Evans said.
“However, consumer confidence is also critical for strong retail sales, and if today’s rate cut raises concerns about the strength and future direction of the economy then we run the risk that some of the benefits could be undone.”
Mr Evans also said a sizeable amount of any additional spending could go offshore due to the ongoing failure of State and Federal Governments to close the GST loophole for on-line purchases.
“The fact is that today’s rate cut by the RBA may have the effect of stimulating economies other than Australia’s, if consumers decide to do their extra spending on-line in order to avoid Australian taxes and charges.
“If politicians and policy makers are serious about boosting domestic economic activity, then they should move to close the GST loophole which encourages Australians to shop from overseas businesses.
“This would provide an instant boost to local spending, generating higher levels of employment and economic activity.”
The NRA is Australia’s largest and most diverse retail industry organisation, and has been representing the interests of the retail, fast food and broader service sector for almost 100 years.
Media contact: NRA Media Team (07) 3240 0163