Mark Bouris takes on RBA, and explains why a recession can help Australia if needed

Outspoken businessman, Mark Bouris, has taken on the Reserve Bank and shared his views on a future recession in Australia. Listen to the podcast.

Entreperneur Mark Bouris says the Reserve Bank of Australia should not overlook the merits of a recession, if needed to protect our living standards.

The Yellow Brick Road Executive Director has told a new podcast inflation needed to be brought under control quickly to ensure people did not lose their homes and could still put food on the table.

He acknowledged the US Federal Reserve’s aggressive approach to cutting interest rates, as hard as the short-term impacts might be on Americans.

“I don’t think our Reserve Bank is showing the same amount of tenacity towards chasing this reduction in inflation as much as the US is,” Mr Bouris said on the Something To Talk About podcast, hosted by Samantha Armytage.

“The Reserve Bank’s job is to look after the welfare of all Australians as well as a prosperity of all Australians.

“So, recessions control inflation. The thinking around this is that you’ll never forget it. And from then on, you’ll have a certain caution around how you spend.”

Yellow Brick Road Executive Chairman Mark Bouris believes recessions play a critical role in controlling inflation. Picture: The Australian

LISTEN TO THE PODCAST EPISODE BELOW:

Echoing former prime minister Paul Keating’s infamous statement, “this is a recession that Australia had to have”, Mr Bouris said the Australian recession in the early 1990s was effective in keeping inflation steady from 1995 through to 2022.

But controlling inflation was even more important in the current climate, Mr Bouris said, with frivolous spending at an all-time high, thanks to internet shopping and credit card use.

“We’ve got to build this caution a little bit more than we have in the past because it’s too easy to spend today,” Mr Bouris said.

Mr Bouris spoke to Samantha Armytage about the recession, among other things, on her Something To Talk About podcast. Picture: Richard Dobson

Mr Bouris said while he understood the theory of “a recession we have to have”, he hoped it did not come to that.

But he conceded if inflation wasn’t controlled, young people and lower socio-economic demographics would be hit hard.

“Because they can’t afford to buy food and/or find a house to rent. And we have a rental inflation environment going on at the moment.

“Also, their lifestyle, their standard living gets affected, because they can’t find a house to rent which is near where they work, which means they’ve got a lot more travelling to do … it’s a nightmare for them,” he said.

Mr Bouris said earlier interest rate rises of 50 basis points pointed towards a future recession, however RBA’s decision to increase rates by just 25 basis points in October changed things.

“By (increasing interest rates) by only 25 basis points, I got some encouragement out of that.

“I’m hoping they’re thinking, well, we’ve done enough rate rises hard, fast, at half per cent,” he said.

“We’ll stop, wait till February, see what the lag effect does, and hopefully we’re back under control by the end of February. That’s what I’m hoping will happen.”