EDITORIAL: What a big week

By: Chris Smith


It has been a big week in the Australian bussing world with three conferences in three states, a global financial

It has been a big week in the Australian bussing world with three conferences in three states, a global financial meltdown, the fallout of the introduction of new truck industry oriented fatigue rules and today, the Reserve Bank of Australia just dropped the cash interest rate by a percent.

The RBA has slashed the official cash rate by 1 percentage point to 6 percent, as economic uncertainty delivers an upside for borrowers.

The Reserve was tipped to cut the cash rate by just 0.5 percentage points.

The last time the RBA cut interest rates by 100 basis points was in May 1992. That decision was one of five cuts of 1 percent in succession, reducing the rate from 11.5 percent to 6 percent in just over 12 months.

International financial markets have taken a hammering of late, the proof of the RBA’s decision will be in how the Australian economy behaves in the next six to 12 months.

If the economy is over stimulated it will be a disaster with inflation, if it is under stimulated, also disaster in the way of recession.

For operators, as the interest rates may be going down, the oil price has gone down, but the dollar is also down and so it hasn’t really changed the price of fuel.

What we know is with a weaker dollar, already rising steel prices will rise further and so will all imports, including buses.

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