Billionaire Gerry Harvey has claimed there’s no reason to be ‘afraid’ as the cost of living rises and interest rates rise in the largest rise in two decades.
The chairman of Harvey Norman, who is worth more than $2.6 billion, said residents should not panic and will “survive” any additional financial pressures.
“We have the lowest interest rates in a century, now they are rising from next to nothing … they have never been this low,” he told 6PR Mornings on Friday.
The Reserve Bank of Australia raised its spot interest rate from 0.25% to 0.85 on Tuesday, the largest rate hike in 22 years.
Billionaire Gerry Harvey has claimed there’s no reason to be ‘afraid’ as the cost of living rises and interest rates rise in the largest rise in two decades
The Reserve Bank of Australia on Tuesday raised its spot interest rate from 0.25 percent to 0.85 – the largest rate hike in 22 years.
The rebound exceeded expectations from financial experts who predicted a small increase of 0.25 percent instead of 0.5 percent.
Mr Harvey said the rise was still manageable and pales in comparison to home loans taken out decades ago – with the RBA setting interest rates at 17 percent in 1990.
“Then I talk to people who paid off their houses under those circumstances — not much, by the way — but we all survived,” he said.
“When interest rates eventually go up to whatever they go… maybe two or three percent, don’t be surprised if they go to five, six, or seven.
“If so, we’ve survived with things like that in the past. Let’s not panic too much.’
Inflation has risen by 5.1 percent, making it the fastest growth in 21 years.
Aussie families struggle with some fruits and vegetables that are up 50 percent since the start of the year, gasoline prices over $2 a gallon and wholesale utility bills skyrocketing 141 percent.
Mr Harvey argued that residents should not panic as there was no shortage of opportunities to monetize 400,000 vacancies in the employment sector.
“Stay very optimistic, go out and do your very best, work hard, stay optimistic and then it will hurt a little bit and then it will be good for you.
“That happens every recession,” he explained.
“Work hard every day, seven days a week.”
Aussie families are struggling with some fruits and vegetables that are up 50 percent since the start of the year, gasoline prices over $2 a gallon and wholesale utility bills skyrocketing 141 percent
How much more do YOU have to pay on your home loan?
$500,000: Monthly repayments up $133 from $2,410 to $2,543
$600,000: Monthly repayments up $159 from $2,890 to $3,049
$750,000: Monthly repayments up $199 from $3,610 to $3,809
$1 million: Monthly repayments up $265 from $4,810 to $5,075
Data based on variable rate increasing from 3.11 percent to 3.61 percent
“Now we’re panicking because the interest rate goes from one, two or three,” he said.
“So there will definitely be people getting hurt, but the reality is you can’t get people to work for you right now, every coffee shop has a sign outside that says please come work for me.”
Harvey backed calls to raise wages after Prime Minister Anthony Albanese emphasized raising the minimum wage during his election campaign.
However, he warned that some companies may not be able to survive if they were forced to pay their employees more.
He also told Australians to start buying shares because prices were low.
“Now if everyone is telling you when the world is going to end, get in and buy, because most people get scared.”
Mr. Harvey and his company came under fire for long refusing to repay millions in taxpayer-funded JobKeeper payments they received during the pandemic, despite huge profits.
The most significant rate increase since 2000 will add $133 per month to a $500,000 loan over 25 years, and $265 per month to a $1 million loan.
Chris de Bruin, Chief Executive of Westpac Consumer and Business Banking, said the bank understands it is a difficult time for its customers and that anyone who “needs a little extra help or is in financial difficulties” can speak to their specialist teams for staff.
The shocking decision by the RBA is only the second rate hike in 11 years after the central bank moved from a record 0.1 percent level in May to curb soaring inflation.
It is widely predicted that further rapid rate hikes will follow each month until at least the end of the year, as treasurer Jim Chalmers admitted the cost of living crisis will become ‘more difficult’ for any Australian.
Mr Harvey claimed residents should not panic as there was no shortage of opportunities to monetize 400,000 job openings in the employment sector
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