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One percent rate cut should provide good boost for business

16 October, 2008

The Reserve Bank’s decision to cut official interest rates by a full percentage point is great news for NSW business owners and will provide a much needed confidence boost for employers and employees alike, according to the state’s peak business group, the NSW Business Chamber.

“Business operators are under significant pressure at the moment, so this relief is most welcome for employers across New South Wales. With the economy slowing and the cost of doing business on the rise, the cut to official interest rates is a much needed confidence boost”, said Kevin MacDonald, CEO of the NSW Business Chamber.

“What’s important now is for the banks to pass on the cuts to their customers in a financially prudent and sustainable manner.”

“The banks must also take into account the margin between the official cash rate and business interest rates which has been widening. Business owners deserve this relief and we’d expect them to receive it in a responsible manner which demonstrated a competitive market for business finance.” 

A recent survey conducted by the NSW Business Chamber and Visa found over 80% of NSW businesses reported higher interest rates as having a negative impact on their business.

“Business operators have been doing it tough and while this rate cut is welcome, employers across NSW are still facing financial pressures.”

“Uncertainty in global financial markets has had a significant impact on consumer confidence, which has resulted in a decline in spending.”

“Consumers are tightening their belts and this is impacting business. The economic slowdown is not quarantined to any one part of the state, but is reflected in businesses across New South Wales.”

NSW Business Chamber has over 30,000 members and is affiliated with 110 chambers of commerce throughout NSW.

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