As the cost of living rises and interest rates rise for the first time in two decades, billionaire Gerry Harvey claims there is no cause to be concerned.
Residents should not be ‘panicking,’ according to the Harvey Norman chairman, who is worth more than $2.6 billion, and will’survive’ any additional financial constraints.
‘We have the lowest interest rates in a century, but they are suddenly rising from near zero… ‘They’ve never been this low,’ he said on Friday on 6PR Mornings.
On Tuesday, the Reserve Bank of Australia hiked the cash rate from 0.25 percent to 0.85 percent, the highest level in 22 years.
Financial analysts had predicted a slight increase of 0.25 percent rather than 0.5 percent, but the increase blew them away.
Mr Harvey claimed that the rise was still manageable and that it was nothing compared to home loans taken out decades earlier, when the RBA fixed interest rates at 17% in 1990.
‘Then I talk to people who paid off their house under those circumstances – not many by the way – but we all survived,’ he said.
‘When interest rates finally go up to whatever they’re going to go… might go to two or three per cent , don’t be surprised if they go to five, six or seven.
‘If it does, we’ve survived with those sorts of things in the past. Let’s not panic too much about it.’
Inflation has surged by 5.1 per cent marking the fastest rate of growth in 21 years.
Aussie families are feeling the pinch with some fruit and vegetables up 50 per cent since the start of the year, petrol prices over $2-a-litre and wholesale energy bills skyrocketing by 141 per cent.
Mr Harvey claimed residents should not panic as there was no shortage of opportunities to make money with 400,000 vacancies in the employment sector.
‘Keep very optimistic, get out there and do the very best you can, work hard, keep optimistic and then it’ll hurt a bit and then it will come good on you.
‘That’s what happens every recession,’ he explained.
‘Work hard everyday, seven days a week.’