Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

Nobody wins from low interest rates. What we've seen has been a consistent decline in interest rates, particularly recently with the Reserve Bank cutting official rates from 0.25 to 0.1. Of course the intention is to assist the economy in its recovery, but the challenge and the practical reality is that the cost of capital is not the problem many businesses are facing in Australia. The biggest challenges they face are COVID restrictions and their capacity to secure revenue. We have responsible—or 'restrictive', I should say—lending laws which make it harder for small businesses and households to borrow.

But who pays the price? Self-funded retirees. People who have saved and invested so they can secure their finances into the long-term future are paying a very heavy price. Young Australians who want to get ahead and buy their own first home are also finding it increasingly difficult, not just because of employment prospects but because what's happened over the past 30 years is that every time interest rates go down the price of housing goes up, so there is greater inflation of assets, which makes it more difficult to buy first in. The Reserve Bank recently announced a quantitative easing program by buying long-term government bonds, but ultimately we are tapping an empty well. The reality is that we need a number of methods to address the challenges of economic reform.