Alan Kohler on our financial past and future

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Alan Kohler (0:41)

G'day, I'm Alan Kohler, welcome to That's Business. And this week, the interviewee is me.

In case you missed it, I'm retiring from the ABC, effective basically now. And the team here thought that it might be a good idea for the tables to be turned. And for me to be in the hot seat, to be the one to answer the questions. Carrington Clarke is going to sit in my seat and ask the questions. And I took the hot seat. And here's what happened.

Carrington Clarke (1:12)

Alan Kohler, thank you so much for joining me. Now, notoriously, journalists are the worst interview subjects. Apologies for putting you in this position. Hopefully, it's willingly. Congratulations on a stellar career here at the ABC. I know it's not completely the end for you at this point in as far as covering finance is concerned, but you have been doing this job for over 50 years.

Is there anything in finance or economics or in the markets that still manages to surprise you?

Alan Kohler (1:41)

Oh, yeah, I get surprised every day Carrington. I'm sort of constantly surprised. I mean, one of the cliches of investing in markets is that the four most dangerous words this time is different.

But the thing is, it's always different. I mean, that aphorism is designed to stop you thinking that valuations don't matter anymore or that the old rules get chucked out. But that's fair enough and it is true, but it is also always different.

Carrington Clarke (2:15)

Yeah, that's being thrown around a lot at the moment with artificial intelligence which I want to get to with you in deep. But why was now the right time for you to pull the pin on this particular gig?

Alan Kohler (2:25)

Oh, look, it's been a long time. I'm 74

I love the ABC and I actually do really like going to the studio most days. But I think it's time to not have to do that and get made up and all that. I mean, I think in a sense, it's to some extent, it's a matter of wanting to work from home.

Carrington Clarke (2:51)

Yeah. Well, there you go. That has been one of the big transitions in the last year, well, since COVID, right? People have the ability to be able to do a lot of this stuff from home. I want to get you to kind of give us a scorecard on some of the big changes that have happened in the time you've been watching the economy and finance.

What do you think was the worst economic decision that you witnessed?

Alan Kohler (3:11)

The worst economic decision? I think with the benefit of hindsight, the worst economic decision was the decision by John Howard and Peter Costello to change the way capital gains tax is calculated, and applying a 50 percent discount at the end of 1999, which I think changed Australia, and they didn't think it would.

I think they thought it would change Australia for the better. I mean, the idea was that it would encourage people to buy shares, but what happened was that it kicked off 25 years of outsized house price growth. I mean, I'm not saying that's the only reason that house prices rose so rapidly after the year 2000, but that certainly started it, I think, and it's the smoking gun. I think that the increase in house prices, I mean, maybe I'm a bit obsessed with house prices because housing is because that's kind of what I wrote a book about and have spent a lot of time looking at, but I do think that the increase in house prices has changed the country for the worst.

Carrington Clarke (4:18)

Well, I think you and most of the country is pretty obsessed with housing and I think particularly this year, it feels like the thing that I speak about maybe the most along with fuel costs and oil costs, but why is housing in particular so kind of society shaping? Why does it have such implications broadly for the way that we live?

Alan Kohler (4:42)

Because everyone needs a house. I mean, shelter is one of the fundamental human rights, a fundamental need of humanity. I mean, you need to eat, you need to drink, and you need to have a roof over your head and a bed to sleep in. And so, it's basic.