“With retail sales showing no sustained growth over the past few months amid weak consumer sentiment, the RBA has played Santa Claus by cutting rates early,” he said.
“Consumers have also been granted some relief from their household budgets as they continue to grapple with increased utility costs as a result of the carbon tax and now have some freedom to start thinking about Christmas shopping.
“While rate cut decisions are no silver bullet for retail sales, the sector will at least be hopeful some of the financial pressure on shoppers eases, and this will make way for growth and employment at a crucial time of the year.
“This is not only the biggest sales time of the year for many retailers, it’s also the time when retailers are looking to put on and train extra staff, especially those reliant on flexible working hours such as students and parents.
“The ARA is urging all banks and lending institutions to pass on the rate cut to their business and consumer borrowers, who are currently under significant economic strain and need instant relief from their mortgages.
“The ARA acknowledges the RBA’s sentiment towards a more ‘accommodative’ stance in its determination of monetary policy for October, especially given negative retail growth can act as a barometer for wider economic consequences,” Zimmerman said.