Latest / Best of Business / Perspective with Heather du Plessis-Allan: Today's OCR cut comes better late than never

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Perspective with Heather du Plessis-Allan: Today's OCR cut comes better late than never · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk set B.
• 0:12
  Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Good news. The Reserve Bank has finally done the thing
• 0:19
  Speaker 2: many of us thought was necessary, and they've gone for
• 0:20
  Speaker 2: a double cut in the ocr of fifty basis points.
• 0:23
  Speaker 2: That's the good news. The bad news is that they've
• 0:25
  Speaker 2: been forced to do it because they didn't do it earlier,
• 0:28
  Speaker 2: as in, they haven't cut as quickly as they should have.
• 0:30
  Speaker 2: I mean, think back to July and they actually chose
• 0:33
  Speaker 2: not to cut at all, which was clearly a mistake
• 0:35
  Speaker 2: at the time, but became even more of a mistake
• 0:37
  Speaker 2: when we saw the shock GDP number that followed, and
• 0:40
  Speaker 2: that we saw that in the three months before that decision,
• 0:43
  Speaker 2: the economy had actually contracted by a whopping zero point
• 0:45
  Speaker 2: nine percent and the Reserve Bank hadn't really noticed at all.
• 0:48
  Speaker 2: And the bad news, I suppose again, is that they
• 0:51
  Speaker 2: could have cut a double cut last time, when two
• 0:53
  Speaker 2: of them on the Monetary Policy Statement said we should
• 0:55
  Speaker 2: go double cut, but more of them said, now, let's
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  Speaker 2: just go with a single cut. So they've gone with
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  Speaker 2: a double cut today, vindication for two. It would seem
• 1:02
  Speaker 2: we're going to stick to the good news, though, which
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  Speaker 2: is that finally the Reserve Bank has caught up with
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  Speaker 2: the rest of us. The economy is cooked and we
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  Speaker 2: need to do something, so they have delivered it. They
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  Speaker 2: admit that this is a signal. The signal is it's
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  Speaker 2: okay to go out and spend and invest because they've
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  Speaker 2: realized finally that people are freaked out.
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  Speaker 1: Right.
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  Speaker 2: There have been too many predictions of green shoots just
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  Speaker 2: before the economy falls again, which freak people out. There
• 1:25
  Speaker 2: have been too many bad surprises which freak people out.
• 1:27
  Speaker 2: Business confidence is shot. Look at the qbso yesterday. Consumer
• 1:32
  Speaker 2: confidence is also yet slightly increasing, but still really negative.
• 1:36
  Speaker 2: People are holding onto their money, they're saving instead of spending.
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  Speaker 2: They're worrying instead of investing. This cut is a circuit
• 1:43
  Speaker 2: breaker that's supposed to snap us out of a fair
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  Speaker 2: our fear. Now, there are some who worry that we
• 1:48
  Speaker 2: are actually already so freaked out that even this cut,
• 1:51
  Speaker 2: given how big it is, could spook us all over again.
• 1:54
  Speaker 2: It's possible, maybe it would happen, but I think what's
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  Speaker 2: more likely is that it's going to give the assurance
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  Speaker 2: that people need and the assurances that the people in
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  Speaker 2: charge of the economy actually realize how bad things are
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  Speaker 2: and are prepared to be bold. And finally, they are
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  Speaker 2: prepared to be bold. And I'll tell you what, it's
• 2:08
  Speaker 2: better late than never.
• 2:10
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