Treasurer Joe Hockey has urged Australian banks to pass on the RBA rate cut “immediately”.
In a media release following the RBA’s decision to cut the official cash rate by 25 basis points, Mr Hockey said it was good news for families and small business.
“It’s good news for the economy and it’s good news for jobs,” he said.
“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, Mr Hockey said.
“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,” he said.
While official cash rate decisions are solely a matter for the RBA, the government’s actions to fix the Budget are providing more room for the central bank to move, Mr Hockey said.
“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,” he said.
“Reducing the deficit means that interest rates will stay lower for longer.”
Mr Hockey said the rate cut will help lift confidence and unleash the entrepreneurial spirit of Australians, which will lift growth and prosperity.