Watching parliamentary hearings is always fun. I usually start off eagerly anticipating a slip-up by the person being grilled, poised for a headline. But as the questions keep coming, I start to side with the person being interrogated. There are a few reasons for this.
The first is purely sentimental — I feel bad for them. It feels like a pile-on.
The second is based on a deep-rooted skepticism for politicians.
But the third is because the interrogators are essentially whining about the state of the world and want to blame it on someone.
This was most evident last week when Reserve Bank governor Philip Lowe appeared before two different groups of politicians to answer what were basically the same set of questions.
Politicians from all corners focused on rising rates and demanded to know whether the RBA had considered how expensive their decisions on the first Tuesday of each month were becoming for constituents. Not just those with a mortgage, by God, but the renters! Has the RBA even considered what it is doing to the renters? And what data does it have on renters? And why is it having lunch in the gleaming towers of high finance and not in the community halls of Western Sydney?
These circus acts are fantastic fodder for finance reporters but terrible for any productive advancement of our country. I’ve watched plenty of them over the years and not much has changed. Former Westpac chief executive officer Brian Hartzer was always my favorite. Every once in a while he would lose his composure, reminding the committee that he was trying to run a bank while darting back to Canberra every few months to questions about credit cards, home loans, and what the bank thought about farmers. I agreed with him.
And I pretty much agree with Philip Lowe too, who on multiple occasions last week told the pollies that it would get tough for those holding debt, for those who pay rent, and for those on lower incomes. These were the most honest and important statements he made, yet his interrogators refused to acknowledge them as an acceptable answer.
There isn’t enough straight talk anymore about the adjustments people need to make to their lifestyles. We’ve all had it so good for so long that even the thought of going without seems completely unjust. But the fact remains that living conditions will change as rates rise. We can’t have it all, not anymore.
The era of record-low rates is over and is unlikely to return any time soon. Quantitative easing has come to an end. It’s time to pay the piper. Depending on your financial situation, you’ll either be squeezed or spared when the music stops, and chasing equality of outcomes is incredibly foolish.
Removing Philip Lowe as RBA governor will change nothing. The only way for Australians to move forward proactively is to accept that the golden years of easy money are over and that it’s time to start living differently. Particularly if you are renting, paying a mortgage or on a lower income. Accept that things will be hard and you’ll soon find life a lot easier.
