Enjoy our low interest rates and prices – they’ll be gone sooner than we think

Last week was the swan song event for the outgoing governor of the Reserve Bank of Australia, Glenn Stevens. He’s pretty much the only government employee that has had any real and sustainable role in helping the country – business owner, employee and shopper alike – ride the economic and financial roller coaster since May 2008.

His interest rate policies have helped no end too. It’s led us to a thing called ‘disinflation’, which is apparently a bad thing. It’s when prices fall. I’m struggling to see that as a bad thing. As a result of this, we also have had big asset value growth with our homes, making us wealthier.

Aussie Home Loan’s John Symonds believes there’s another 20% increase in house prices to come, and even if we don’t own our own home, we have plenty of shiny new rental properties to choose from and our rents have hardly moved in the past five years.

Our hourly wages have gone up about 10% in that time. In the shops we’re enjoying low and falling food, clothing and car prices. Last month the retail sales data from the Australian Bureau of Statistics saw sales rise only 0.1%. That’s value, not the volume of stuff we’ve bought. There are more of us living here than 10 years ago, so we’re buying more oranges, apples and pears.

Our investments directly or via superannuation funds have seen stable sharemarket dividend returns, if not share prices.

So why is everybody so concerned about our country’s economic wellbeing? Why are there so many chicken littles calling that the sky is about to fall in?

Come on Australia, lets go shopping for the big stuff. Buy that boat, scooter, motorbike, caravan or jet ski. Upgrade your car; buy a classic one for weekend. Live life. Why? Because low prices and low interests rates will come to an end, sooner than we realise. This coming Christmas is probably our last cheap one.


The US created 250,000 new jobs last month. That’s job creation in a single month – close to a quarter of a million jobs for the second month this year. Hourly labour rates went up by 2.4%, which is twice the inflation rate. If they do that for the next six months there will be 1.5 million more jobs in the US by Christmas.

If US hourly rates continue to go up, then US interest rates will go up and US prices will rise. Then US company profits will rise and US salaries will continue to rise. We’ll have a little, good old-fashioned inflation once again. It’s good for the global economy. And our little Aussie economy, at the bottom of the world, will just tag along as the US grows as we always have. Our prices, salaries and interest rates will then rise too.

The glass is definitely way over half full at the moment. Drink deep.

Kevin Moore is a retail expert and the chairman of Crossmark Asia Pacific Holdings and Mirador Retail Technology. He is also the founder of TheRoadToRetail.


Notify of
1 Comment
Newest Most Voted
Inline Feedbacks
View all comments
David Caruso
5 years ago

Great positive spin on the Aussie economy. I think a little at odds of what is happening in the real world and would probably suggest the average Aussie would not be in a position for the call out to go shopping ‘for the big stuff’. With that said I might be living in a different dimension of the universe as you.

SmartCompany Plus

Sign in

To connect a sign in method the email must match the one on your SmartCompany Plus account.
Or use your email
Forgot your password?

Want some assistance?

Contact us on: support@smartcompany.com.au or call the hotline: +61 (03) 8623 9900.