Today the Reserve Bank of Australia (RBA) cut the official cash rate by 25 basis points - from 2.5 per cent to a new record low of 2.25 per cent.
This is good news for families and small business. It’s good news for the economy and it’s good news for jobs.
This is the first interest rate cut in 18 months and will put an extra $750 a year into the pockets of a typical Australian family with a mortgage of $300,000.
The cut comes on top of recent falls in the price of petrol – saving the typical Australian family around $80 per month compared with the middle of last year.
In 2014 the Abbott Government scrapped the carbon tax, which is saving families around $550 a year. Labor, under Bill Shorten, has already committed to bringing back the carbon tax (which contributed to electricity prices doubling while they were in office).
While interest rate decisions are solely a matter for the RBA, the Government’s strong actions to fix the Budget are providing more room to move.
The Government will continue to repair the Labor mess and get the Budget back on track so that the RBA has the capacity to move on interest rates in the future should it need to.
Reducing the deficit means that interest rates will stay lower for longer.
The Government is working hard to keep inflation low and stable, by reducing the cost of living for all Australians.
This rate cut will help lift confidence and unleash the entrepreneurial spirit of Australians, which will lift growth and prosperity.
So not only is the cut good for families, it is also good for small business.
I urge the banks to immediately pass on this rate cut – across their customer base – including to credit card holders, mortgage holders and small businesses.