Billionaire Gerry Harvey has predicted Australia is heading towards a “big black hole” of debt, with high inflation and no major falls in interest rates over the next 12 months.
The Harvey Norman co-founder, 84, made the comments after the retail group’s annual shareholder meeting on Wednesday.
“Debt is a big problem going forward, because the way we’re traveling right now, we’re heading into a huge black hole,” he told The Australian.
‘That’s not going to happen tomorrow. But if you’re trying to determine in five years’ time where Australia will be with the way we’re behaving at the moment, we’ll be in a much, much worse position than we are today because of the cost of everything the government wants – health, people care. seniors, NDIS and social services – all this money they need, they don’t have.
‘Where are they going to get it (the money) from? Are they going to borrow it? What are they going to do?
Harvey described the Australian economy as “doing well”, but hampered by high inflation, compounded by high public spending.
‘Governments can’t spend all this money and throw it into the economy, and then expect interest rates to go down and inflation to go down. “It can’t happen,” he said.
‘And interest rates will not fall, or if they do, they will be minimal. We may be sitting here next year and our interest rates might be no different than they are now, or they might be marginally lower, but they won’t be 2 percent or 3 percent like they were before.
Billionaire Gerry Harvey has predicted Australia is heading towards a “big black hole” of debt, with high inflation and no major interest rate falls over the next 12 months.
Harvey previously criticized the Albanian government and accused it of playing politics in its “irresponsible” budget published in May.
It said its energy bills had doubled in the past two years as the government pushed renewable energy, and rated Australia and New Zealand as the worst of the eight countries where Harvey Norman operates.
‘When I look at what it costs me now to run my warehouses compared to a couple of years ago, it’s 100 per cent more.
“Everything being done right now in terms of development costs is very high and the government is doing nothing to reduce it.”
But despite Harvey’s pessimism about the economy, at Wednesday’s AGM, Harvey Norman reported that total sales rose 1.7 percent between July and October, with same-store sales increasing by a 1.4 percent.
In Australian stores, total sales were up 3.2 per cent and same-store sales were up 3.1 per cent.
Harvey Norman chief executive Katie Page told shareholders that online shopping was not a threat to the retailer, but simply gave customers more flexibility to browse, order and pick up items.
Harvey Norman, co-founded by Harvey and Ian Norman in Auburn, New South Wales, in 1982, now has 198 franchised resorts and 120 company-operated stores in eight countries.