Rita Panahi:
Joining me now is deputy executive director at the Institute of Public Affairs, Daniel Wild. Dan, Australia has one of the highest interest rates among advanced economies. In fact, only Iceland is higher. What is going to be the impact of this latest rate increase?
Daniel Wild:
Well, we are facing a perfect economic storm. As the RBA governor outlined, productivity is doing nothing. We’ve also got living standards that are stagnant. We’ve got basically no economic growth when it comes to a per capita assessment of it, which is what matters to people’s back pockets. We’ve also got rising inflation. So this is a real problem. We have a very weak supply side of the economy where we’re less able to generate wealth. At the same time, we have more demand coming into the economy through massive government spending, as well as mass migration, which is contributing to big demand. So we’re having a slowing economy, but rising prices. So this is stagflation. This is what happened in the 1970s. So the RBA governor has basically indicated we’ll get at least a couple of more rate rises coming up, probably more than that over the cycle. So we’re going to be in for a lot of pain over the coming 18 to 24 months.
Rita Panahi:
Well, the pain seems to be disproportionately impacting a small group. Say around approximately 35% of Australians have a mortgage. And why do we just use this blunt instrument to punish that group? It really is a disincentive for people to enter the housing market. We’ve already had four increases and already talk of more to come.
Daniel Wild:
Well, that’s very true. That’s right.
Rita Panahi:
This year!
Daniel Wild:
That’s very true. Well, from the RBA’s perspective, it’s the only tool that they have as an institution. So they have to use the cash rate to get the inflation between 2% and 3%. That’s what they have to do. This is why the key issue here is with the government. The government is spending too much money. They’re doing absolutely nothing to increase economic growth. I mean, I couldn’t tell you one single policy that this government has to actually increase the size of the economic pie. I could tell you a hundred policies they have to redistribute the pie to all their sectional interests and their favourite interests, but they’re not growing the economy. So this might sound basic, but the government does not have the basics right. If you don’t get the basics right, everyone will suffer.
Rita Panahi:
Well, their only idea of growing the economy is to import more people.
Daniel Wild:
Exactly.
Rita Panahi:
But as you said, on a per capita basis, that doesn’t help us at all. Now, Jim Chalmers made 10, 10 separate references to the Iranian war in his response to the rate rise. This is incredible.
Jim Chalmers:
Made worse by the war in the Middle East. The war in the Middle East. Turbocharged by a war on the other side of the world. Australians are paying a very hefty price for that war in the Middle East. Re-escalation of the war in the Middle East. A big driver of that is the war in the Middle East. Prolonged war in the Middle East. A main driver of inflation in our economy and indeed around the world is the war in the Middle East. Re-escalation of the war in the Middle East. War in the Middle East. Re-escalation of the war.
Rita Panahi:
You can smell the desperation really. I mean, he would have Australians believe we are more impacted by this war than just anywhere else in the world.
Daniel Wild:
Well, that’s right. I mean, this is a man under the pump. He’s really under the pump at the moment. And look, he’s right to say the war makes it worse. Yes, that is true. But the war is not the cause of our problems. The problems that we have insofar as government policy is concerned is as we’ve outlined, as the RBA governor has outlined, as many other economists have outlined, spending growing faster than the economy is growing. If government spending is going faster than the economy, then prices are going to rise. So the government either has to reduce spending growth, increase economic growth, or a combination of the two, and they are doing neither.
Rita Panahi:
Dan, more worrying economic data with inflation at a three-month high on 4%, but the prime minister was in a positive mood. He was here in Victoria with the premier, Ben Carroll, and he seems to think Victoria is ahead of the curb when it comes to the housing sector.
Anthony Albanese:
If you want to invest in investment property, you’re not only investing in your future wealth and an asset for yourself, and good on you for doing that, you’re investing in an asset and future wealth for the nation because you’re helping to boost supply. And I’ve got to say the Victorian government here have been ahead of the curve in what they’ve been able to achieve.
Rita Panahi:
“The Victorian government ahead of the curve,” the man is either delusional, in denial, or he’s misleading Australians deliberately. He’s gaslighting Australians deliberately. The housing crisis is arguably far worse in Victoria than anywhere else.
Daniel Wild:
Well, that’s right. I don’t think Albanese knows what he’s talking about. I mean, he knows all about his own property portfolio, of course, but knows nothing about what’s happening in the lives of Australians. So I think you’re quite right. We have the National Housing Accord, which has been a total disaster. They haven’t met one single monthly target. This has been going for more than two years. So not one target has been met in two years, and Albanese is once again trying to gaslight the country and saying that everything is going fine. Everything is not going fine.
Rita Panahi:
Oh, seriously-
Daniel Wild:
The houses are not getting built, people are not getting into them. And as you know, the prices, even though prices are declining, the home ownership is not going up. There’s a big problem here.
Rita Panahi:
No, and first-home buyers are reluctant to enter the market for good reason because the housing sector is in crisis. You can hardly blame them for not taking on a massive mortgage and entering the property market right now. And he mentioned Victoria. Reserve Bank of Australia data shows Victoria had the largest share of borrowers suffering from high mortgage burden at 9.7%. That means spending more than 30% of their pre-tax income on mortgage repayments. And that was before the latest rate hike. Tasmania followed with 8.9%, and New South Wales and the ACT were on 8%. Dan, one Victorian financial counselling service has been forced to turn away new clients because it can’t keep up with demand. That is so sad.
Daniel Wild:
Well, it’s sad, and it says it all, doesn’t it? That so many people are now in financial desperation, as you say. You’ve got mortgages, mortgage rates are going to keep going up, but bills are going to keep going up. There’s no sign that energy bills are going to come down. There’s no sign that the price of groceries are going to come down anytime soon whatsoever. So pretty much every step along the way in terms of the things that people have to buy, you have to buy food, you have to pay for rent or a mortgage, you have to pay for your bills, prices for those things are actually going even faster than the headline 4%. So these are things you can’t get out of. You can get out of your luxuries and your things, but you can’t get out of your basic necessities.
Rita Panahi:
And the prime minister’s notion there that people investing in new property are nation-building, is that going to encourage anyone to make a enormous financial decision as in I’m doing something for the country, not just for my own economic future? It seems so naive if that’s what he actually thinks.
Daniel Wild:
Well, not everyone can get a nice property near a golf course and then have that paid for by the government to be maintained, can they? Like he can. So he’d know all about that, wouldn’t he?
Rita Panahi:
Lucky coincidence.
Daniel Wild:
Oh, I’m sure-
Rita Panahi:
That’s all that was.
Daniel Wild:
… he had nothing to do … I’m sure he knew nothing about it. But no, look, you’re right. At the end of the day, if the numbers don’t make sense for people who want to invest, then they’re not going to invest in it. I mean, this is just very straightforward, I would’ve thought.
Rita Panahi:
Now, the Greens have had a big day. They’ve elected New South Wales Senator David Shoebridge as their new leader following the sudden resignation of Larissa Waters. Shoebridge beat out Senator Mehreen Faruqi and Sarah Hanson-Young for the job. The final results were Shoebridge with seven votes, Faruqi with four, Hanson-Young was eliminated on the primary vote. That is just terribly sad. She’s been there the longest, I think, Dan. Victorian Senator Steph Hodgins-May won the deputy leadership. What is this going to mean for the direction of the Greens?
Daniel Wild:
Well, they’ve got a middle-aged white bloke who’s just beat out a woman of colour. So I mean-
Rita Panahi:
That’s-
Daniel Wild:
… this is a bit of a-
Rita Panahi:
… toxic really.
Daniel Wild:
Toxic for them, isn’t it? I don’t know how they’re going to-
Rita Panahi:
That’s very toxic. I feel a little bit triggered myself. I need to take a minute. Exactly. And you’ve got two women there who arguably have … Well, not arguably. Who definitely have high profiles, have more impact in the media. Sarah Hanson-Young has been there longest. Why aren’t they leading the Greens? Have the Greens got a woman problem?
Daniel Wild:
Well, that’d be a good question to put to the Greens, I think. But I do think that the Greens are becoming an irrelevant force in Australian politics. Their high point was a few years ago, and they did have pretty effective political leadership for some time and agree with what they were saying, but they were effective at driving a lot of the national debate. They are not doing that. One Nation is now driving the debate. It is interesting actually. So you had the Greens that were sort of driving Labor, and now, One Nation is driving the national debate. I don’t think the national debate has been driven by Labor or the Coalition for some time now.
Rita Panahi:
Absolutely. Greens have been very successful in pooling Labor more to the left, and One Nation is now arguably doing that with the Coalition. But what the Greens do have with their voters is preference discipline. Their preferences go to Labor, it gets Labor elected. We’re probably not going to see that with One Nation. We certainly haven’t had that experience. Will we see the sort of coalition and partnership on the right that Labor and the Greens have where this unofficial partnership serves Labor brilliantly?
Daniel Wild:
You won’t see it in the short term. I don’t think you’ll see that at the next federal election. You will probably see higher preference discipline from One Nation to the Liberals because a lot of One Nation voters are defected liberals, which is a bit different to what it was pre-Bondi. So I think it’ll be a bit higher, but I think after the next federal election, you will start to see more of a formalisation of a coalition on the centre right because it’ll be clear that there’s no other way of getting rid of Labor unless they do that.
Rita Panahi:
Absolutely. If they don’t get their act together, we are going to have leftist governments with very low primary votes, but still winning quite comfortably. Dan Wild, thank you so much for your time.
Daniel Wild:
Thank you.
This transcript of Daniel Wild talking on The Rita Panahi Show – News24 from 30 September 2026 has been edited for clarity.
