Tasmania’s Chamber of Commerce and Industry has warned that the rise in official interest rates will further increase the cost of doing business.
The TCCI says business confidence is still ‘soft’ and the Reserve Bank’s decision will lessen the likelihood of businesses expanding.
Chief executive Robert Wallace says the rate rise of 0.25 per centage points to 4.25 per cent will slow the local economic recovery.
“As we were recovering from the financial crisis of the last 18 months to two years, the economy was starting to move forward,” he said.
“Yet another interest rate is certainly going to impact on input costs for business and this in turn will slow their advancement and development.”
Tasmania’s Housing Industry Association says the Reserve Bank’s interest rate rise is hasty.
The association says rates have gone up five times in the past six months, pushing up the standard monthly mortgage repayment for first home buyers by about $247.
The association’s Stuart Clues says the central bank has acted too quickly.
“To see five successive increases so shortly after what was a fairly difficult period seems at odds,” he said.
“We would have thought that it would have been more prudent just to put interest rates on hold, see how the economy’s travelling early in the year and then make an assessment.”
“A rising interest rate environment is not supportive of trying to increase the housing stock so it will put pressure on the rental market, it will put pressure on young people trying to get into the market.”
“They’re the people that can least afford it.”