Advice to Malcolm Turnbull on the housing market

In yesterday’s blog, I wrote about the role of expert advice in the formulation of public policy:  Company tax cuts: whose opinion matters?

RBA Governor Dr Philip Lowe is one such expert, having completed a doctorate at the Massachusetts Institute of Technology (MIT) with Nobel Laureate Paul Krugman as his adviser.

Paul Krugman

Today’s leader in The Age writes: “Central bankers are among the most authoritative, cautious and discreet people in the realm of public policy. Because their words carry such weight – they can, for example, instantly move financial markets – they make few public utterances and rarely intervene in sensitive political issues.

This week RBA chief Philip Lowe partially attributed booming housing prices to ‘‘the taxation arrangements that apply to investment in residential property in Australia’’.

RBA chief Philip Lowe

The combined cost to the budget of this transfer of wealth from average taxpayers to property speculators is estimated by the Treasury and independent researchers at close to $12 billion a year.”

This is serious advice from a man who knows what he’s talking about.

Will Malcolm and ScoMo heed it?

Probably not.

 

 

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