Business leaders question whether the interest rate cut will make a huge difference

It's the first rate cut in almost three years, but some business leaders aren't convinced it's going to make much of a difference.

Regional Manager for New England North West, NSW Business Chamber, Joe Townsend said: "The big question that hasn't been answered is what difference another rate cut from the central bank would make anyway."

"There's two reasons it may not make much difference: One - for a lot of small businesses I talk to, it's not so much the cost of the loan that is the problem but rather getting finance in the first place.

"Red tape and excessive regulation on lending has made banks much more reluctant to take on risk and lend to business. Another rate cut isn't going to change that.

"Second - for those who already have a loan, there is the issue of how much of this rate cut will actually flow through to business and how quickly.

"So for most business in our region, there are far more important things that need to be addressed.

"This includes the drought and water management, energy costs, skills, better tax incentives to invest and better infrastructure."

Mr Townsend said this cut definitely needs to be passed onto consumers, in this slowing economy.