The Reserve Bank of Australia looks set to slash interest rates again next month possibly by as much as 100 basis points as the nation's business leaders pressure the Rudd Government for tax cuts to further shield the economy from the global financial crisis.

Minutes of the Reserve Bank's last board meeting issued yesterday reveal a deep concern with the slide in business conditions and household wealth.

The deteriorating economy prompted Prime Minister Kevin Rudd to announce a further stimulus of $300million to go to local councils to spend by next September.

''We will be asking local government to implement a speedy roll-out of infrastructure investment to deliver both immediate economic benefits and long-term community benefits,'' Mr Rudd told the gathering of about 450 mayors in Parliament House yesterday.

The local government package comes after the Government's $10.4billion stimulus package, and the $6.2billion rescue plan for the car industry.

As Mr Rudd announced details of the local government infrastructure plan, the Australian Chamber of Commerce and Industry called for a ''second tranche'' of stimulus, consisting of personal and business tax cuts, after its small business survey showed business conditions at their lowest point since the survey began in 1996.

The chamber said banks should also be more generous in cutting rates for small business.

Chamber director of industry policy and economics Greg Evans said, ''Major lenders should play their part in stimulating the economy by passing on as much as possible of the official interest rate reductions to small business borrowers.''

The chamber's September quarter small business survey showed the worst business conditions and the worst expectations since the survey began in 1996, and the Government needed to introduce tax cuts for the business sector.

''We still believe a second tranche of the fiscal stimulus package is required and that should indeed relate tax reductions for business, tax reductions that will actually encourage business investment.''