Wednesday, 2 September 2026

Topics: Nepal; housing; interest rates; inflation; National Accounts.

E&OE……………………..

Peter Stefanovic: Joining us live here in the studio, the Shadow Treasurer, Tim Wilson. There is a bit to discuss on the economic front, Tim. But I just do want to ask you your thoughts on this, I mean in the doom and gloom that has been Nepal and Tibet over the past week or so, some positivity there, the number of missing Australians has been revised down to 38. Your thoughts on that?

Tim Wilson: Well, of course, it's very welcome news and, of course, we expect our government to work with the Nepalese government to support Australians who are overseas. But our thoughts are really with those people who are still missing and it's a significant number of people, and it's a deeply concerning situation, but also should frankly be a reminder that when you go overseas, it is risky and there are consequences associated with that. It shouldn't deter people, but people need to take proper measures and get insurance.

Peter Stefanovic: Okay, let's get on to economics and this has been a central theme of our First Edition show today, is this dire warning from the CBA. Now, I've had a look through the forecasts and I've got some parts of it to pull out, we might have it for you on the screen, because I want to read parts of it to you. So, again, this is from Commonwealth Bank. Again, the significance of this is that it's Australia's largest lender, biggest bank. This is according to the CBA: Australia's housing downturn is proving faster and more widespread than expected, with price falls extending beyond Sydney and Melbourne to some of the country's previously strongest capital markets, i.e., Brisbane, Adelaide, Perth. It goes on another point: CommBank now expects peak to trough declines, 13% in Sydney and 12% in Melbourne. You do the math on a $1 million home, folks, that's $100k at least wiped off the value. CommBank still expects the housing downturn to eventually run its course, prices forecast to stabilise in 2027, however, that's based on a rate cut next year, after a rate increase this year. All pretty damning.

Tim Wilson: Damning, but by design by the government, and that's what Australians are now living with. The bit that really worried me about those forecasts, in addition to the $100,000 drop, is this assumption that we're going to see rate cuts next year. The government has an active inflation agenda. That is what is driving interest rates, and I see no evidence at all that the government is trying to slow down inflation or slow down pressure on interest rates, and so, we can't say that these numbers are going to be the final numbers.

Peter Stefanovic: Well, the government can't be entirely to blame here. Is it America's war on Iran playing a significant role as well?

Tim Wilson: Well, the key difference is the headline inflation versus the underlying inflation. The headline inflation is an Iran problem compounded by domestic inflation problem. The underlying inflation, which is 3.6%, continues persistently to be a problem for the Australian economy, and until we get that down, that's driven by government expenditure, we're not going to see an easing of pressure on interest rates.

Peter Stefanovic: Well, I mean, it's growing more and more likely, isn't it, as we get more data that there will probably be another rate rise this year. Are you kind of banking that?

Tim Wilson: Well, I'm not banking it, but I'm very concerned by it because no matter how many times we warn the government, if you keep spending money, if you keep borrowing from tomorrow to fuel today, it's going to put upward pressure on interest rates. And they've said, we've turned the inflation corner, we've turned the interest rate corner. That has clearly not been proven. The government has not been serious about inflation, it's not been serious about interest rates, and Australians are now paying the price.

Peter Stefanovic: The Housing Minister has already said this morning and, and you know, spin machines will be in full effect here, but they've already said, look, you've got to look at the big picture here, the broader picture here. House pricing was too high. It was going to become way too unaffordable for our kids in the future. And there is a point there. But that is how they are reacting to the CBA news this morning. Does that wash?

Tim Wilson: It doesn't wash at all because the price of first homes continues to rise. We're absolutely seeing a drop in the price of houses, particularly at the top end. That's what the data shows. We're seeing an increase in the cost of first homes, the ones we need young kids to be able to buy to get their foothold in the market. That's why what the government has done by design in its budget is so catastrophic. Rising rents, rising price of first home prices, while at the same time we're seeing drops in the overall housing market and smashed confidence.

Peter Stefanovic: Well, I mean, you look at the forecast that we got in the budget, there was going to be modest rises in housing and rent would only go up two bucks a week.

Tim Wilson: Everyone knows now that's just a con.

Peter Stefanovic: Gone.

Tim Wilson: But you’ve seen today…

Peter Stefanovic: What did you say, con?

Tim Wilson: Con.

Peter Stefanovic: I said gone, you said con.

Tim Wilson: Well, there you go, nice alliteration, but we need to look at it today, the former Secretary of the Treasury department is out there actively questioning the assumptions put behind the Treasurer's budget and the Treasury in May of this year. It's clear that increasingly what they said was going to happen is not what is going to happen.

Peter Stefanovic: That leads us to accounts today. Second quarter GDP figures, the expectation 1.9%. So, growth to cool. What would your response be to that, if that's true? Often it's more than that, sometimes under.

Tim Wilson: Well, it doesn't surprise because what is the government doing to incentivise investment in building the future of the Australian economy? They're not. In fact, they're doing the reverse. So, what we're seeing is inflation outstrip growth and that means Australians are getting poorer. We saw in recent data, in recent wage data, and recent household expenditure data, that real wages are going back $1,600 a year over the life of this government. That's a disaster. That means Australians’ standards of living are dropping.

Peter Stefanovic: Let's close out on this report. Sydney Morning Herald running this this morning, Penny Wong's got herself a pay rise, it seems, on par with the Prime Minister. It's a hefty 600K a year. She's Acting Prime Minister at the moment because the Prime Minister and the Deputy Prime Minister are away. News24 has been told it's neither been accepted or rejected, and she's not getting additional loading during this stint. But have you got a thought on what's a handy salary there?

Tim Wilson: I say a fair day's work for a fair day's pay. That's my position always, whether they should be getting this bump, you know, it seems pretty indulgent to me, but it's obviously a decision that's been made. But I reckon a lot of Australians who are watching their own wages going backwards right now are looking at this and saying, what's the justification?

Peter Stefanovic: All right, that's the Shadow Treasurer Tim Wilson joining us live here in the studio. Thank you, Tim.

Tim Wilson: Thank you.

[ENDS]