Interest rates remain on hold

The State’s leading business membership organisation, Business SA, responded to today’s decision by the Reserve Bank Board of Australia to maintain official interest rates at 4.50 per cent.

Business SA Chief Executive Officer, Peter Vaughan, said it is essential that interest rates remain on hold.

“We expected interest rates to remain on hold and we welcome this decision by the Reserve Bank,” Mr Vaughan said.

“There is no doubt that interest rates have increased too soon and this is evident in the current levels of business and consumer confidence.

“The six interest rate rises since October have had a major impact on the local business community’s ability to emerge from the downturn.

“Small businesses across South Australia have been hit hard by the previous interest rate rises as the Reserve Bank has attempted to cool off the eastern states.

“The cost of doing business has also increased from July 1 following a rise in labour costs from wage increases and Modern Awards.

“Results from the June quarter Commonwealth Bank Business SA Survey of Business Expectations released today, indicate that business confidence has decreased 26 per cent.

“Businesses must be able to build momentum and interest rates must remain on hold to allow business and consumer confidence to recover.

“Locally, our unemployment rate remains above the national average and the latest retail data indicated South Australia had the largest decrease in retail trade in May.”