ABC Radio Brisbane. 13.5 to 9, believe it or not, there will probably be some benefit for
Queensland as a result of the Trump tariff moves. So how will this affect residents in the state?
Peta Tilse is Head of Funds Management at NatGen. I spoke to Peta Tilse early this morning
and observed that the stock market or the share market has taken a hammering.
Yeah, morning Steve. Look, all of us have superannuation,
accounts, all of those ask that work, etc. And so if you actually had a look at your account today,
it’s probably looking a bit dusty after being battered last week and yesterday. Having said that,
if you do have some cash on the sidelines, I mean, some of these super funds have been sort of taking
money out of shares in recent times because they’ve been overvalued. Well, they’re probably just
redeploying and yeah, so they’re probably just redeploying and putting more capital to work.
The other side of things too is we’ve seen the Australian dollar that absolutely got hammered
yesterday and in fact this morning, it’s still trading under 60 cents US. That’s actually really
good for our exporters. And inbound tourism as well, I understand. Correct. And it’s great
for our exporters. It also makes, it pretty much negates whatever tariff he’s just put on us.
So it’s actually making us more competitive globally. So that’s actually positive.
And then in terms of interest rates, because for those of us that have mortgages,
there’s actually more forecasts of interest rate cuts. Now they’re actually talking that in May,
we might get 50 basis points as a cut. ANZ, which has been probably one of the banks,
the majors that only thought one interest rate cut this year about a week ago. And
NAB on the other side was always expecting three. ANZ is now saying three interest rate cuts this
year. So that will bring our cash rate down to 3.35 cents. So that’s a lot lower than where we are
now at 4.1. So that will help mortgages. And yeah, and so those sorts of things will filter through
to us everyday people. My guest is Peta Tilse. She’s head of funds management at NatGen.
This is 612 ABC Brisbane. So an Aussie dollar around 60 cents US is good for our exports,
which would be good for mining and the agricultural, our farmers. It’ll be great for inbound tourism,
which should look after Queensland somewhat. It’ll slow Australians going overseas and spending
their money overseas are more likely to spend it here. In a sense, it’s sort of an irony, isn’t it?
The Donald Trump’s wild move looks like it’s killed off Peter Dutton’s prime ministerial
ambitions and it’s helped Anthony Albanese, who has been, what’s the word? Less than complimentary.
Doing a Stephen Bradbury. Thank you. So Albo’s doing a Stephen Bradbury. And of course Brent
Crude. The price of Brent Crude went down significantly as well, which will also make our
petrol significantly cheaper once the oil companies pass it through. So and that’s all to do with the
everyone’s sort of worried about what they’re calling now an economic nuclear winter. Like that’s
so dark, right? So that’s that’s sort of how they’re describing what’s what’s going to happen in the
States. But you’ve got to remember, we’re talking about two of the world’s largest economies,
which are the US and China. And if those two slow down in growth in terms of what they’re doing,
that means less demand from everybody else, what we export to those particular countries. And
whilst in the states, they’ve got a trade surplus with us, we import more from the states than we
export to them. In China, it’s not not the case. And, you know, more than a third of our exports
go to China. And so there will be kind of repercussions, I guess, in the sense that demand
will drop off. But that Australian dollar being quite soft is actually in our favour.
Isn’t that ironic? This is 612 ABC Brisbane, my guest is Peta Tilse. Peta, given what’s happened
in the United States, and there’s some rumblings about a possible recession, what does this mean for
property or house prices at all, where people, a lot of people have invested
in different areas of the property market. What do you see?
So there’s still going to be demand, Steve, because we still haven’t solved the housing crisis in
Australia. You know, the beauty of property is it’s all always bricks and mortar. It’s an asset
that will always be there for people. So I don’t think property prices are going to go down anytime
soon. And in fact, when interest rates do come lower, it sort of makes things a bit more affordable.
So it probably supports property valuations. Now, let me play you what Michael Knox, chief
economist at Morgan’s told me a couple of days ago. His argument is that we’re slightly misunderstanding
the Trump tariff. It’s not a protection move. It’s a negotiation or a trading move.
So this is not a conventional tariff war. This is an invitation to bargain and enter a bargain
for lower tariffs. So if, for example, China cut its tariffs in half, the US would cut its tariffs
in half in return. So it is, as I say, amazingly, in the case of Donald Trump, it is the beginning
of a bargaining process. That’s Michael Knox from Morgan’s. So have any countries indicated at all
that they are prepared to start talking or trading their tariffs? Well, the word is, Steve, that
over the weekend about 50 countries turned up on the US doorsteps. So they’re ready to make deals,
I believe, Israel, some of the smaller Asian countries. Vietnam, I believe. Yep. They’re all
over there ready to cut a deal. So in the scheme of things, he’s begun what he probably set out to do.
So now as an unexpected result from this, does this mean that Donald Trump’s wild move
will actually assist lower inflation in Australia? Is that what’s slowly starting to appear?
That this will actually force inflation down? They will put the recession question to one side,
but will actually lower inflation in Australia, Peta Tilse?
I guess it depends on what’s used. So, excuse me, in terms of, you know, if we’re aligned on
imports for certain major projects and things like that, well, you know, that’s going to be more
expensive. But it just, yeah, it just kind of depends. It’s not going to solve our energy
issues internally, which means we can’t really be out there manufacturing to compete for anything here.
But we can still pull out of the ground more iron ore and we can still pull, you know, get
more beef off the land, so to speak. We can do all those things, but it’s not changing our
cost of production internally at this stage because we still have various wage costs and
other factors of production, you know, cost of production.
Peta Tilse, thanks very much for your time once again.
Pleasure, Steve.
Peta Tilse, she’s head of funds management at NatGen.