Symond says negative politics has stopped us spending

AUSTRALIAN consumers are being paranoid, and blustering politicians are to blame says Aussie Home Loans founder John Symond.

29/04/14 Aussie Home Loans founder and executive chairman John Symond for "Lunch with" feature at Chianti restaurant on Hutt Street. photo Calum Robertson

NEGATIVE politicians have made Australians too cautious about what they do with their money, says one of the nation’s most successful businessmen.

John Symond, the founder and executive chairman of Aussie Home Loans, says scare tactics and economic uncertainty have stopped consumers from spending despite record low interest rates, and the nation is suffering because of it.

“Australians are paying more back on their housing loans than ever before. In fact, they are paying more back than the banks and even governments want to see because they’re not spending it in shops and going out to restaurants,” he said.

Get real ... Aussie Home Loans founder and executive chairman John Symond ... “Consumers are right in having a very low outlook of our politicians”. Picture: Calum Robertson

“They’re being too cautious because they don’t have the confidence, unfortunately, because of the way our political leaders and parties have performed in the last 10 years.”

Mr Symond said both sides of politics had contributed to the negativity and economic worries. “The investment in infrastructure’s been stuff-all … It’s all very well throwing money at people but we’ve got no new bridges, no new hospitals, no new schools. You think where did it all go?”

“Unfortunately, consumers are right in having a very low outlook of our politicians.”

Political debacles

AMP Capital chief economist Shane Oliver said leadership battles and Budget brawls had reinforced a cautious mode among consumers. “A lot of it is post-GFC caution but the political debacles of the last few years haven’t helped,” he said.

Australian Retailers Association executive director Russell Zimmerman said retail sales had been affected by politics.

“When you have got negative politics you lose consumer confidence, and when consumer confidence goes down retail figures go down,” he said.

Mr Symond said Australia’s economy was “not good”, which meant the Reserve Bank would keep interest rates low.

“Interest rates are going to remain lower for longer than a lot of people think,” he said.

“I think we have entered into a low interest rate environment globally, and we will never see interest rates go anywhere near where they used to go. Consumers won’t cop it.”

Shifting markets

In the mid-1990s Mr Symond helped deliver massive mortgage savings for all Australians when the big banks were forced to cut home loan interest rates by 2.5 percentage points to match new lenders such as Aussie.

In the past few years he has sold a majority of Aussie to the Commonwealth Bank for hundreds of millions of dollars, making him the bank’s largest individual shareholder.

“My kids aren’t in the business with me, I’m 67 … and the business has never been more successful. I’d rather go out on a high and I can’t be here when I’m 100,” he said.

Positive outlook ... Aussie Home Loans founder and executive chairman John Symond says “Interest rates are going to remain lower for longer than a lot of people think”. Picture: Calum Robertson

Banks and other lenders have been criticised for keeping some of this month’s Reserve Bank 0.25 percentage point interest rate cut to themselves, but Mr Symond said there was a reason for it.

“Money markets have increased the cost of borrowing funds over the past three-to-six months by banks and others by about 10 basis points, and it was no surprise to see many of the lenders not pass on the full cut of 25 basis points,” he said.

Not all big banks kept some for themselves. ANZ said there had been no new funding cost pressure and handed its customers the full RBA cut.