|
(By Jacob Bush - Bond University Journalism Student)
Recent interest rate rises have negatively impacted on local consumer confidence as many struggle to recover from the global financial crisis, a Varsity Lakes bank manager said.
Reserve Bank of Australia (RBA) governor Glenn Stevens released a statement on their official website on March 2 that said the reason for the recent rise in interest rates was because the Australian economy was growing.
The RBA has raised the cash rate by 25 basis points to 4.0 percent.
Varsity Lakes Bank of Queensland owner and manager David Lynch said the rise in interest rates was implemented too quickly as confidence was just starting to build in the area.
“Interest rates have gone up twice and it has dented consumer confidence,” he said.
“We are expecting another rise in interest rates around April or May, so we have to worry about consumer confidence.”
Mr Lynch said the global financial crisis had a significant impact on Varsity Lakes businesses.
“The local newsagent didn’t survive the crisis, and the local pizza shop has had three owners in the past three years,” he said.
“You just have to see all the vacancies around Varsity Lakes to see how badly it has been hurt.”
Despite the growing area, Mr Lynch said people were not confident about the economy or their financial security which made them cautious about spending money.
“From the banking point of view, people weren’t buying - they were consolidating,” he said.
“People had this wait and see attitude, and made sure they kept their job first of all.”
Mr Lynch said there were indications that people were regaining confidence in their economic situations and were starting to invest again.
“It has been quiet over the last 12 months, but we have started to see an increase in capital expenditure inquiries,” he said.
“Interest rates are still relatively cheap; people 10 to 15 years ago had rates around 17 to 20 percent.”
Mr Lynch said for businesses recovering from the global credit crunch people needed to be proactive.
“People need to plan, prepare a cash flow, look at alternative clients outside of the Varsity Lakes area, have realistic expectations and focus on service.” he said.
Flowerhunt owner Karen Hunt said she was lucky not to experience difficulties during the global financial crisis.
“It was always fairly steady, with events such as weddings, mother’s day and Valentine’s Day and it still is,” she said.
Ms Hunt said the main reason her business was financially stable was because she gave value for money.
“We gave customers free delivery for purchases over $50,” she said.
“If my customers were going to spend, we needed them to come back.
“I guess everyone needs a flower at some point,” she said.
|