Rate rise a blow for business

Submitted 19/11/2009

Migration for Business Growth

 

The State's leading business organisation, Business SA, responded to the decidsion by the Reserve Bank Board of Australia to increase official interest rates to 3.5 per cent.

Business SA Chief Executive Officer, Peter Vaughan, said that the consecutive rate rises have been implemented far too soon,

"The economy is still fragile and these consecutive rate rises are doing no favours to the many businesses that remain under pressure," Mr Vaughan said.

"The banks certainly need no encouragement to raise interest rates and this latest rise will put a major dent in the business and consumer confidence that ws beginning to emerge.

"It has been a very challenging year and the last thing we need hearding towards Christmas is for consumer sentiment to fall away and businesses to suffer."

"Interest rate rises hit everyone across the board and this will have an impact on the confidence of the many small businesses across the State"

"The economy must be given time to get back on track and it is disappointing that these rate rises have been implemented at the first signs of recovery from a major global financial crisis.

"There is the expectation that unemployment figures will continue to rise which confirms there are issues still being faced by business.

"We certainly acknowledge the importance of keeping inflation under control, however the Reserve Bank should wait for definite signs of recovery in economic condistions before acting prematurely."

"The Federal Government's mid-year economic and fiscal outlook 2009-10 released yesterday confirms that there is still a long way to go for economic recovery."