Interview on ABC News, Afternoon Briefing 

Tuesday, 11 August 2026

Topics: interest rates; Reserve Bank of Australia; inflation; data centres; AI Royal Commission.

E&OE……………………..

Patricia Karvelas: For a view from the opposition, I'm joined by the Shadow Treasurer, Tim Wilson. Welcome.

Tim Wilson: Thank you for having me, Patricia.

Patricia Karvelas: Rates have been held today. This will come as a relief to Australians with a mortgage, said the Treasurer. He's right, isn't he? People will be relieved that they haven't gone up today.

Tim Wilson: No, Australians actually want interest rates to go down if they've got a mortgage. The government has continued to stoke inflation by engaging in ongoing spending. They can't help themselves, and they're engaging in a kind of game of interest rate chicken with the RBA. The RBA has said very clearly that today they had a discussion about whether to hold or increase rates, and unfortunately, it doesn't mean that we're all in the clear. Until government controls spending, we're going to have the risk of interest rate rises.

Patricia Karvelas: Where's the evidence that the government could do something very suddenly in the next period that would have an impact on interest rates?

Tim Wilson: Well, it comes down to how much spending is in the economy. Too much money chasing too few goods contributes to inflation. The government is the one who's borrowing from the future and spending today. The Reserve Bank Governor has made it clear that government spending is directly linked to aggregate demand, which is the very complicated way of saying the government's spending money, that's why we have continued upward pressure on interest rates. At the last meeting of the Reserve Bank, they only had a discussion about whether to hold rates. At this one, they talked about holding or increasing rates.

Patricia Karvelas: Okay, on one specific element which I thought was worth talking about with you: the AI boom seems to be putting pressure on inflation. Does that worry you?

Tim Wilson: Well, I think we need to be cautious. AI is going to have multiple impacts on the economy, including on potentially employment, certainly investment right now with the investment in data centres. That is having a contribution to the overall economy. But I don't think we should be jumping to too many conclusions, both because there's pushback against those investments, secondly, because it will be part of a conversation about the future of the Australian economy and the creation of jobs, and particularly backing small businesses. So, I don't think that is the core problem. The core problem is the government can't stop its spending addiction, and that's why Australian households continue to live with high inflation and higher interest rates.

Patricia Karvelas: The Reserve Bank Governor, though, said that it's an issue of resources, like how many construction workers do we have? They're being diverted. She said there's some evidence to this data centre explosion instead of residential housing. We don't want that, do we?

Tim Wilson: Well, what we've seen, actually, is a mass diversion of skills for things like housing to a lot of public projects…

Patricia Karvelas: I am going to point you to the Reserve Bank Governor's comments on the data centres today. She's been very clear that those construction workers are going to data centres, not residential housing. She says there's some evidence of it. Does that worry you?

Tim Wilson: Well, I will finish my answer, which is that we've had a historical issue around people being diverted from residential housing towards a lot of public projects, particularly in states like Victoria, which have contributed to inflation. That's been a long-run thing. She's now identified a short-run thing. I'm not contesting it, but it does have an overall impact. But at the end of the day, the government continues to spend money, push up pressure on inflation, and that's why Australians are at risk of either holding or an increase in interest rates. Take as an example, last census day, which was in August 2021, the underlying inflation rate was 2.1%. Today, it's 3.6%, on this [census] day. Until we get that under 3%, Australians will continue to live with the risk of interest rate rises.

Patricia Karvelas: Just a final question before we say goodbye: AI, should there be a Royal Commission on AI?

Tim Wilson: Well, I'm not sure that going to lawyers to say how should we deal with public policy is necessarily the best way forward. I think it's incumbent on all politicians, state and federal, including myself, to be actively engaged in both understanding what artificial intelligence is going to do for the future of the economy and to help steer that conversation. At the moment, I don't see much of that from the government. They're creating an office, but they're not actually engaging with, I think, taking the community with us, both in terms of education, but particularly backing small business to be a pathway to growth.

Patricia Karvelas: Tim Wilson, it's always good to have you on the show. Thank you.

Tim Wilson: Thank you, Patricia.