Gerry Harvey issues dire warning about Australia’s future – and why we should all be worried

Billionaire Gerry Harvey has predicted Australia is heading into a ‘great big black hole’ of debt, with high inflation and no big interest rate drops for 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 huge problem going forward, because the way that we are travelling at the moment, we are heading into a great, big black hole,’ he told the Australian. 

‘That is not going to happen tomorrow. But if you’re trying to figure out five years from now, where will Australia be with the way we are behaving at the moment, we’ll be in a much, much worse position than we are today because of the cost of all of things the government wants – health, aged care, NDIS and social services – all this money they need, they haven’t got it.

‘Where are they going to get it (money) from? Are they going to borrow it, what are they going to do?’

Mr Harvey described the Aussie economy as ‘okay’ but hampered by high inflation, made worse with high government spending. 

‘Governments can’t spend all this money and throw money out there in the economy, and then expect interest rates to drop and inflation to drop. It can’t happen,’ he said.

‘And interest rates will not come down, or if they do it will be very minimal. We can be sitting here this time next year, and our interest rates might not be any different to what it is now, or it might be marginally lower, but it’s not going to be 2 per cent or 3 per cent where it was.’ 

Mr Harvey has previously slammed the Albanese government and accused it of playing politics in its ‘irresponsible’ Budget released in May.   

He said his power bills had doubled in the past two years as the government pushed renewable energy – and labelled Australia and New Zealand the worst of the eight countries where Harvey Norman operates.

‘When I look at what it costs me now to run my warehouses as opposed to a couple of years ago, it’s 100 per cent more. 

‘Anything you do at the moment in development costs is just so high and the government is not doing anything to reduce that.’

But despite Mr Harvey’s gloom about the economy, at Wednesday’s AGM Harvey Norman reported total sales were up 1.7 per cent between July and October, with same-store sales up 1.4 per cent.

At Australian stores, total sales were up 3.2 per cent, and same-store sales had increased 3.1 per cent. 

Harvey Norman chief executive Katie Page told shareholders online shopping wasn’t 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, NSW in 1982, now has 198 franchised complexes and 120 company-operated stores in eight countries.