Client Testimonials

Bob Taber & his staff have looked after our financial needs since 1986. His expertise & diligence have always been greatly appreciated, we are so lucky. Many thanks.

As a widow I am very satisfied and very confident knowing all my financial investments and accountancy affairs are looked after.

 

We are extremely pleased and satisfied with the service we have received. The staff are always friendly & helpful. "A breath of fresh air!!"

Been a client since the 1960's and always been very happy in all Cutcher & Neale have done.

We have a productive, personalised & professional relationship with our contacts at C&N. They go above & beyond to provide service that is excellent (timely, accessible & open). Thank you so much.

Economic Update - Why the Official Cash rate was left unchanged






The RBA has again decided to leave the Official Cash Rate (OCR) on hold. This is because changes to interest rates, via the OCR, are the major determinant of future economic activity. The OCR is again on hold because it is already low enough, possibly too low, to spur a rebound in economic activity.

The latest Building Approval numbers suggest economic recovery is on its way.

Overlapping the interest rate cuts and the recovery in Building Approvals shows how effective the lower rates have been.



One could argue the recovery in building approvals can be attributed to the First Home Buyers Scheme (FHBS), but this is probably not entirely the case. When you consider it takes some time for a building application to be approved, sometimes up to six months to get through Council, you can see the recovery started to occur prior to the FHBS boost. 

Approvals bottomed in December 2008 which, given the lag in the approval process,  was before the 'boost' to the first home buyer scheme was announced in mid-October 2008. Instead the positive turn in house building sentiment mid 2008 likely coincided with a view at that time interest rates had peaked and could even fall by the end of 2008; which actually happened.  

In short, it was too high interest rates that got the economy into the slowdown but very low interest rates (and huge fiscal stimulus) are getting the economy out of it.

Yesterday's release of a 0.4% GDP growth also reinforces this. In other words, Australia has not experienced 2 consecutive months of negative GDP growth, so has avoided a recession thus far.