Fin24

Fedusa disappointed by rates decision

2012-05-25 08:23

Johannesburg - The Federation of Unions of SA (Fedusa) said it was disappointed by the SA Reserve Bank's decision on Thursday to keep the repo rate unchanged at 5%.

"This decision represents another missed opportunity to cut interest rates to stimulate consumer spending and economic growth," Fedusa general secretary Krister Janse van Rensburg said in a statement.

"The double whammy of increased transport costs and food prices are really having an effect on the disposable income of hard-working South Africans."

Janse van Rensburg said the monetary policy committee could have taken greater care to consider this.

The policy of inflation targeting had a negative effect on working citizens.

"It punishes them for rising prices determined by our uncompetitive market by maintaining high interest rates," he said.

Workers were becoming vulnerable to price increases set by the monopolies.

"They become the unwilling pawns in a game of chess played by big business, and the Reserve Bank should do more as referee," said Janse van Rensburg.

The goals set by the National Development Plan and New Growth Path would never be reached if the economy failed to create more jobs to sustain the increasing demand for greater fiscal space, he said.

"If we don't grow our tax base, we will certainly see serious tax increases next year which will place yet another burden on our hardworking members," said Janse van Rensburg.

 

Comments
  • anelda.bernardo - 2012-05-25 20:11

    I totally agree. Either decrease the repo rate or decrease the difference between the repo rate and the prime lending rate to stimulate growth, but it is long over due.

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