Well, if your in business, say for instance you sell shoes, if they gave you zero interest, would you borrow and build a warehouse and fill it with stock if there was no way your going to sell that stock ?
Probably not. They may increase their stock levels a bit if they have been running them lower of recent times.
There are a number of reasons why lower rates currently might help stimulate businesses to spend/borrow while the rates are low.
It depends a lot on how the business is travelling, staff levels and so on. There may be businesses who would like to refurbish their premises, buy a much needed new piece of equipment - which they couldn't afford due to cashflow issues, put more money into advertising. Lower rates help in these areas; it may be small, but it also may be a large difference. Lower rates may simply mean a business can catch up on their tax debt etc; decrease overall debt and improve cashflow - they may not necessarily borrow anything.
In my case; this is exactly the benefit of the lower rates - I can smash my debt more quickly, and improve cashflow - even without any improvement in my turnover.
If you did, even at no cost loans, there is ongoing new costs with doing such. You also need the turnover to repay even zero percent loans.
If I could borrow money at zero percent right now, I could buy a bit more stock, a bit of new equipment etc. Obviously I would need to be careful of the amount, but because it is zero percent, I have no pressure to repay it in a short time.
Business also needs to need expansion to borrow and grow or improve, they also need to know short term idiotic government who only thinks of now wont start changing the goal posts every 5 minutes & that is what everyone has done for a long time now.
There are no leaders with vision, just people bickering and protecting the self.
Totally agree, and this is one of the reasons why businesses are not expanding/buying extra stock/employing more staff etc, and why folks are not spending; there is little confidence about the next 5 years.
I personally think we need to have 5 year terms of Government, with no possible Leadership changes in that time (unless the PM is arrested for something, or impeached, etc) - much like the USA.
Hopefully then, we would actually see something get done, instead of one year of campaigning and wasting loads of dollars, a second year of trying to get something done (and failing), and the third year of gearing up for the next elections and spending a shiddload more money again on the next campaign..
The Senate has to be dispanded as well; so the Gubbs of the day can get stuff through - it might the wrong thing they get through, but at least give something a good crack and see what happens. It can't be much worse than what we are currently having to put up with every bloody year.
Currently they are continually treading water and achieving stuff-all, and then blaming each other for their failures, and then spending half their time trying to pacify the disillusioned public and justify their level of inactivity with lies and half truths and avoidance of truth....pathetic situation.
I really think they could go to zero and it wont matter much, it is not the lever it needs to be & all it seems to be doing is potentially going to cause headaches for those with housing if they keep cutting.
The issues with housing as a result of rates fluctuations have always been there. This is part of the whole game of r/e. Rates went up to 18% several years ago, and many folks got badly hurt, yet the rates kept going up.