When the cash rate is lowered it reduces funding costs for the banking system which in turn flows through to lower borrowing rates for households and businesses. These lower borrowing rates stimulate borrowing and economic activity. The lower cash rate also boosts the cash flow of existing borrowers. It supports asset prices, including housing prices, which boosts household wealth and hence spending.
In addition, it puts downward pressure on the Australian dollar which is stimulatory for the economy. https://www.rba.gov.au/speeches/2021/sp-dg-2021-05-06.html  3/26  5/6/2021  Monetary Policy During COVID | Speeches | RBA  The Board has reduced the cash rate target to what it assesses to be the effective lower bound of 10 basis points.