It has been a far more challenging time of late for individuals, businesses and authorities with COVID-19 outbreaks in multiple states. With up to an estimated 16 million Aussies under lockdown restrictions at the same time, support and assistance programs have been ramped up on several fronts. It was in this scenario that the RBA Governor Philip Lowe made multiple statements in regard to RBA Monetary Policy in the first week of August.
The monthly meetings of the RBA (Reserve Bank of Australia) Board and the subsequent decisions regarding the official cash rate hold significant importance for various sectors, including truck buyers and transport businesses. The August decision, in particular, can have implications for these stakeholders. This decision reflects the broader economic outlook and can influence the financial landscape for businesses, especially those impacted by lockdowns.
In our update, we aim to provide you with the latest key data surrounding the economic conditions. This includes insights into how the ongoing lockdowns and restrictions may be affecting various industries, including the transport sector. We also cover the available support measures that have been put in place to assist businesses facing challenges during these times of uncertainty.
Furthermore, we will elaborate on how we, at Jade Truck Loans, are actively working to assist our customers. This involves providing information, guidance, and tailored solutions to navigate the current economic conditions and make informed financial decisions, especially when it comes to truck financing.
RBA August Decisions on Rates and the Economy
On August 3rd, the RBA Board convened and announced its decision to maintain the official cash rate at its current level of 0.1%. This decision also encompasses the continuation of the existing bond buying program. For borrowers, this decision implies that lending rates will remain unchanged due to the steady official cash rate.
In the official statement accompanying the rate decision, the RBA Board reiterated the specific economic conditions that would prompt a rate increase. These conditions include the requirement for inflation to be within the range of 2% to 3% and for unemployment to decrease from its current levels.
Moreover, the statement offered clarity on the inflation target, specifying that the desired inflation range needs to be sustained well into the 2% range over several quarters. With the current inflation rate at 1.75%, it's anticipated that the conditions for a rate hike may align around 2024.
Acknowledging the ongoing uncertainty stemming from the current COVID-19 outbreaks and subsequent lockdowns, the statement noted that these factors have disrupted the recovery process. The health situation and lockdown measures are expected to lead to a contraction in GDP during the September quarter. However, the RBA remains optimistic about a prompt rebound based on previous experiences where outbreaks and lockdowns were followed by rapid recoveries. In a reassuring stance for businesses, the RBA expressed confidence in the Australian economy's robust growth projected for 2022.
Dr Lowe appeared before the House of Reps Standing Committee on Economics on 6 August, via teleconferencing, noting in his opening remarks that such hearings were part of the accountability process for the RBA. In his opening speech to the committee, Dr Lowe went through the themes in the RBA’s Quarterly Statement on Monetary Policy which was due for release later that day.
The Quarterly Statement essentially explains the rationale behind the RBA’s rate decisions and outlines the direction for monetary policy. In what might be received as a relief to many business operators, in his appearance, Dr Lowe said he did not expect the current extended lockdown in Greater Sydney to result in a recession and predicted that recovery would be solid over towards the end of 2021.
Assistance for Businesses in Lockdown
While the RBA’s rate hold, predictions and outlook are reasonably positive for businesses, those currently in both extended and snap lockdowns may be seeking financial assistance and support in the short-term.
Individuals who have lost work can apply for support through Services Australia.
Business support is being provided through state governments:-
- The Queensland Government has announced waiving of various fees and charges in some industries, especially hospitality and providing support in other ways.
- In a media interview, FNQ-based MP Warren Entsch stated that he was in talks with the Tourism Minister Simon Birmingham to seek support for tourism businesses that had been impacted by the NSW and Victoria lockdowns.
- Victorian businesses can review the ongoing COVID-19 support measures at
- The NSW Government is offering a range of grant programs. The eligibility criteria for some programs have been amended to include comparing 2021 figures with 2020 as well as 2019. So if you didn’t meet the criteria on an initial review it may be worth revisiting the detail at https://www.service.nsw.gov.au/covid-19
Support is often amended and updated when restrictions change. So if your business is impacted, it may be worth checking in regularly for the latest packages.
How We Are Assisting Truck Businesses
Jade Truck Loans continues to provide truck loan products to our customers. Our banks and non-bank lenders are offering relief to borrowers and loan holders should contact their lender if they require repayment relief.
- We continue to provide services to those seeking to acquire new trucks during this challenging period. If you have a loan application currently being process, our consultants will be proceeding with that process.
- We are maintaining our Best truck loan rates commitment across our loan portfolio.
- We are providing ongoing lending services for low docs and no docs truck loan applicants.
- Assistance for those seeking truck finance with poor credit.
- Refinancing services for those seeking to review and restructure existing truck loans.
Rest assured that we will be actively monitoring developments throughout the country and their potential effects on the lending landscape. Our attention will be directed towards the upcoming RBA meeting set for early September, as it holds the potential to influence the financial environment.
Our commitment to keeping abreast of these events means that our customers can rely on us to provide the latest information and insights. We have made our services easily accessible through online channels and over the phone, ensuring that you can confidently proceed with your new truck purchase while also gaining access to our competitively priced loan quotes.
Contact Jade Truck Loans on 1300 000 003 for a quote on a truck loan.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.
