"It is the government's expectation that the banks will pass on this 25 basis point rate cut in full," Mr Frydenberg said in a press conference. "What this means for an Australian family with a mortgage of $400,000 is $720 less a year in interest payments." Mr Frydenberg said the government was "focused on creating more jobs" and "ensuring the economy continues to grow". He did not outline any further stimulus plans beyond a letter written to the states asking them to explore bringing forward infrastructure spending. Loading Replay Replay video Play video Play video Dr Chalmers said Tuesday’s rate cut to 0.75 per cent highlighted "the urgent need" for the government to stimulate the economy. "After three rate cuts since the May election, record low interest rates are now one quarter of what they were during the depths of the global financial crisis," he said. "The government is leaving all of the heavy lifting to the Reserve Bank."

Callam Pickering, the Asia-Pacific economist for job search website Indeed, said it was time for governments to look at delivering their own financial assistance to the economy. Loading "Quite simply, the economy requires more stimulus. Ideally, the federal government would rise to the occasion," he said. "Fiscal policy can be better targeted in the current environment and could stimulate the economy without pushing house prices and debt higher. Unfortunately, a budget surplus has been placed ahead of jobs and growth. "The RBA will have to make do with their imperfect policy tool."

RBA governor Philip Lowe said the main domestic uncertainty continued to be the outlook for consumption, while US-China trade disputes were affecting international trade flows and companies were scaling back spending plans. Loading Dr Lowe said the sustained period of low wages continued to weigh on consumer spending. "Wages growth remains subdued and there is little upward pressure at present, with increased labour demand being met by more supply," he said. "It is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target." The Australian dollar barely moved after the decision, holding around US67¢.

Despite the cut, financial markets are still expecting the RBA to take the cash rate lower. They have priced in a cash rate of 0.5 per cent by early next year. Dr Lowe said in his statement further cuts were an option. The board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed. RBA governor Philip Lowe "The board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time," he said. Cheap money boosts property markets

Sydney and Melbourne's property markets will ride the cheaper levels of credit, as prices start to return to their pre-downturn heights. According to CoreLogic figures released on Tuesday, house values in Sydney and Melbourne jumped 1.9 per cent in September. Loading In Sydney, the median house value is now back over the $900,000 mark. It increased by $23,000 alone through September to be $34,000 above its most recent low point in May. Melbourne's median house value has returned to $729,000, a $20,000 increase on its recent low point in June. It has lifted by 3.4 per cent over the quarter but is still 1.9 per cent down through 2019. Tim Lawless, head of research at CoreLogic, said recent evidence of a strong rebound in Sydney and Melbourne housing values wasn't enough to stave off a rate cut. "A trend towards higher unemployment and a slowdown in jobs growth were likely the primary factors in the RBA's decision to cut rates to a new low, as well as concerns around persistently weak household spending, subdued wages growth and low inflation," he said.