Wagga's mortgage holders might not be likely to spend more money in retail and other discretionary areas despite interest rates hitting a record low, according to financial planners.
Many Wagga investors will also have to consider moving away from low-risk investments like savings accounts and term deposits as banks slash their returns.
AKW Financial Services financial planner Julian McLaren said the average Wagga family with a mortgage would probably not see enough savings on interest rates to encourage them to spend more freely in other areas.
"It gets to a point where people are not spending, not because they are paying too much interest but because they don't fee like spending anymore," he said.
"Having a 25 basis point cut is probably not going to change that much, particularly when the banks only pass on a certain portion of that.
"The person with the average mortgage is going to continue paying the same amount ... they won't have more money to spend."
Last week the Reserve Bank of Australia cut interest rates by 25 basis points to 0.75 per cent in response to "weaker-than-expected" economic growth.
RBA Governor Philip Lowe said the bank's board "took the decision to lower interest rates further ... to support employment and income growth".
However, the banking sector as a whole can set its own rates, with most major banks opting not to pass on the full cut to mortgage holders.
Riverina MP and Deputy Prime Minister Michael McCormack called on the banks to pass on the rates cut in full.
"The Reserve Bank makes its decision independent of government, as it should, it makes its decisions after weighing up the fact and figures," he said.
"The banks need to follow suit, the banks need to look at what the Reserve Bank has done as a lead and ensure they pass on any necessary rates cuts to customers."
Mr McCormack said the Riverina was "hurting" due to the drought, but seven out of 12 councils in the electorate had received $1 million relief grants.
"As far as disposable income is concerned, we are doing our part with tax cuts. We are making sure that the tax cuts that we have offered have been legislated and people have taken advantage of that," he said.
"Businesses are paying the lowest tax rate since 1940 at 27.5 per cent on a downward trajectory to 25 per cent by 2021-22.
"We are getting on with the job of making sure that people keep more of the money that they do in fact earn."
Mr McLaren said he did not know if people in Wagga had changed their spending habits due to the current tax cuts, but he said a continuing schedule of tax relief, particularly given stagnant private sector wages, would boost the economy.
While lower interest rates can ease the pressure on those paying off a mortgage, it also reduces the incomes for people collecting bank interest off their savings.
Mr McLaren said people relying on savings interest had seen that source of income decline considerably over the past 10 years.
"Many older Australians are at the point where they have to start taking extra risks to increase their income because effectively ... their income has dropped by two-thirds and there's not many people who can tolerate such enormous reductions," he said.
Shadow treasurer Jim Chalmers accused the government of having "recklessly left the Reserve Bank to do all the heavy lifting instead of coming up with a plan to support the economy".
"The government has not lifted a finger despite the Treasurer admitting further rate cuts might be losing effectiveness," he said.