Wednesday, June 19, 2024

Increase in interest rates ‘will be the end for many small businesses’

Retailers have accused the Reserve Bank of Australia Board of moving too quickly to increase interest rates on 7 June, saying the “heavy-handed” approach has not allowed time for last month’s increase to have an impact.

National Retail Association CEO Dominique Lamb says the RBA should have waited for at least a full month’s data to judge the impact of the previous rate rise before moving again so quickly.

“We know that the inflationary pressures in the economy are being driven by external factors such as skyrocketing fuel and power prices, as well as the impact of recent flooding on fresh food.

“These are already having a significant impact on spending and on the viability of many retail businesses,” Ms Lamb said.

“Couple that with the looming national wage rise, and the increase in the superannuation levy from July 1, and you have a looming disaster for thousands of small business owners – many of whom will also confront increases in their overdrafts and loans as a result of today’s decision.”

“Many business owners believed the promises of the RBA not to move on interest rates until at least 2023.

“For some, it was the assurance that helped them to get by through Covid, floods and other disasters. This decision today will almost certainly be the last straw for many of them,” she said.

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