Harvey Norman CEO Warns RBA Jumped The Gun With Historic Rate Cuts

Harvey Norman CEO Gerry Harvey has labelled the Reserve Bank Of Australia’s rate cuts as “overkill” and says the lender should have kept something up its sleeve in case the pandemic accelerates again in Australia.

Harvey, who founded the $5.5 billion electronics retailer, told the Australian Financial Review he believes the interest rate cuts, which saw the RBA slash rates to a record low of 0.1%, was a poor economic move.

“I think it’s overkill. I would have thought at the moment things are really going along quite nicely and you would need to have something in reserve,” he said.

Harvey did acknowledge there was no ‘perfect playbook’ for handling the economic firestorm which was a consequence of the coronavirus pandemic.

But the retailer boss says consumer spending is on an upturn and Australia is in a better position than most countries, including the UK and the US.

“The goods we have in our stores are selling like crazy, like never before,” Harvey added.

He also said the shift in rates would not make a major difference to consumer spending as the rate was already extremely low, while he was confident the RBA’s $100 billion of bond buying would be a significant move.

Meanwhile, Australian Retailers’ Association CEO Paul Zahra applauded the RBA’s move and said the rate cut would be crucial in helping the retail sector recover after a nasty few quarters.

“Consumer confidence is king in this final quarter as we build towards a retail recovery,” Zahra said.

“Anything that puts more cash in the pockets of Aussie shoppers or increases their propensity to spend will help those Christmas dollars to work harder,” he said.