Rate decision could be undermined by Budget

by Adam Smith05 May 2015
The RBA’s rate cut decision could be overshadowed by the release of the Budget, it has been claimed.

At its meeting today, the Reserve Bank cut the official cash rate to a new low of 2%. But 1300HomeLoan managing director John Kolenda said any stimulus delivered by the cut could be undermined by the release of the Federal Budget.

“With so much uncertainty about what will be delivered by Treasurer Joe Hockey in next week’s budget, this latest rate cut may not give the domestic economy much of a boost,” Kolenda predicted.

Kolenda said the RBA’s decision to cut rates may have been ill-timed in light of the Budget release, given uncertainty over the government’s fiscal position ahead of the release.

“The RBA may have been better off hanging on for another month and assessing the impact of the budget,” he said.


  • by Perth Broker 5/05/2015 3:22:36 PM

    John stop trying to be a journalist and remain a broker. This sort of scaremongering stuff is what we as brokers do not need.

  • by Greg Altmann 5/05/2015 3:26:59 PM

    Rate relief will help the home owner. The government has been giving so many mixed messages that any reliance on the treasurer to 'do the right thing' is wishful thinking. Good move by RBA.

  • by MCC 5/05/2015 6:05:55 PM

    John, that may be so if u believe ''Monetary Policy'' is having an actual impact now, but there are many in the camp that believe it cannot assist in an environment of high 'under employment' & low inflation , low growth. U are probably right about one thing , looking at fiscal restraint via the budget will certainly not assist growth in any industry. A famous actress one said ''buckle up we are in for a bumpy ride''.