Latest / Best of Business / Chris Small: ABC Business Sales CEO on the impac of the OCR being cut to 2.5%

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Chris Small: ABC Business Sales CEO on the impac of the OCR being cut to 2.5% · Best of Business

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• 0:16
  Speaker 2: So fifty points it was the RB said it was
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  Speaker 2: a message or a signal there could be more to come.
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  Speaker 2: Next month was yesterday the circuit break of the economy needed.
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  Speaker 2: Chrismaller's ABC Business sales CEO back with us. Chris, Morning,
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  Speaker 2: wry Mikey doing very well. Indeed, you're walking a bit
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  Speaker 2: taller this morning. Does the world seem like a different
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  Speaker 2: place to you?
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  Speaker 3: Yeah? Absolutely. I think that yesterday was a slight shot
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  Speaker 3: considering how conservative that group of people have been start
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  Speaker 3: and so my sort of feedback from business owners was
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  Speaker 3: very positive. And remembering that majority of you know, small
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  Speaker 3: and medium sized businesses and you do have bank loans,
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  Speaker 3: and the majority of those business loans are actually on floating,
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  Speaker 3: so that means those impact savings from that decline and
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  Speaker 3: the OCO will be immediately felt, which can only be.
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  Speaker 2: Positive, fantastic. So how real has that been, because that's
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  Speaker 2: been the political argument. You know, if you look at
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  Speaker 2: the interest rates X number of months ago business interest rates,
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  Speaker 2: now you're saving wine number of dollars. If that's real
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  Speaker 2: for a business owner has that helped during this period.
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  Speaker 3: Yep, look, it certainly help. I think more important than that,
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  Speaker 3: So yep, the cash, the cash benefit is important, but
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  Speaker 3: the more important thing is the mental lift that it
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  Speaker 3: gives a business owner. So he not only feels better
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  Speaker 3: about his own business he saving interest costs, but it's
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  Speaker 3: also you know, if they're to consumers, they start to
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  Speaker 3: feel a lot more confident about making investment decisions because
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  Speaker 3: that consumer eventually is going to drop off a fixed rate,
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  Speaker 3: move down to a four percent rate from a six
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  Speaker 3: percent rate, more discretionary income. Suddenly they want to know
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  Speaker 3: some of their discretionary income increases and they're going to
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  Speaker 3: spend more. So it's it's meant it's the mental state
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  Speaker 3: that it gives the business exactly.
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  Speaker 2: So how do you split those two things? Am I
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  Speaker 2: feeling better because I'm paying less on my mortgage as
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  Speaker 2: the business owner or was it really for me as
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  Speaker 2: the business owner about the customer who feels better and
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  Speaker 2: will come into my shop?
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  Speaker 3: Definitely the latter. I mean, when you think about a business,
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  Speaker 3: interest costs are really owning a small portion of someone's
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  Speaker 3: actual business, and you definitely that they want people coming
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  Speaker 3: to this fate. If you ask a business, ow, do
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  Speaker 3: you want a decline and costs and an increase in review,
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  Speaker 3: They've going to increase in revenue every day of the week.
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  Speaker 3: So that's that's really the most important thing.
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  Speaker 2: Does it make a lot of difference depending on whether
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  Speaker 2: you export stuff or whether you're relying on a local.
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  Speaker 3: Yes, well, obviously if you're exploring stuff, you're not. You
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  Speaker 3: know that you're talking about an overseas consumer. Was really
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  Speaker 3: it's it's going to really help the business that's more
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  Speaker 3: focused on the domestic consumer because either ones are going
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  Speaker 3: to be effit from the decline and mortgage rates. Having
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  Speaker 3: said that, though, the indirect indirect arm result of the
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  Speaker 3: Sacram jenneral is also a lower keV dollar, so that's
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  Speaker 3: going to help Eric Waters too. So it's a double sword,
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  Speaker 3: which is great.
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  Speaker 2: Do you need more next month?
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  Speaker 3: The more we can get, the better. I mean, my
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  Speaker 3: worry is in six months we're out of bullocks. So
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  Speaker 3: we go again next month we're down to two twenty five,
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  Speaker 3: we go on fee, we go down to two, and
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  Speaker 3: then you and I are talking this time next next
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  Speaker 3: year and we're still going why is the economy flat?
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  Speaker 3: That that's when we're a real worrying point because we
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  Speaker 3: really will be out of bullets. But I don't think
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  Speaker 3: that will happen. I think we get down to two
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  Speaker 3: twenty five or two caught that neutral, and we should
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  Speaker 3: have home loan rates in the threes. That's a great
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  Speaker 3: position to be in for New Zealand.
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  Speaker 2: Merry Christmas Chris Small, who's ABC Business sales CEO.
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