Former Reserve Bank of Australia governor Ian Macfarlane says house prices must fall to help solve growing wealth inequality for younger Australians, amid warnings that Labor’s home equity scheme could drive up prices.
Former Reserve Bank of Australia governor Ian Macfarlane says house prices must fall to help solve growing wealth inequality for younger Australians, amid warnings thatMr Macfarlane, appointed deputy governor of the RBA by the Keating government in 1992 and governor by the Howard government in 1996, refused to comment directly on Tuesday’s interest rate decision but has previously warned that cutting rates to near zeroIan Macfarlane said a fall in house prices would not be very popular, “but...
“We’re seeing more schemes such as the one announced [by Labor] yesterday, which help first home buyers in but, ultimately, you have to do all those things to have a chance of shifting the dial.”Eamon Gallagher “If most of the increases in national income fall into the hands of the already rich, which is indeed what has happened, it is easy to see why it won’t lead to strong growth in consumption.” Australia’s reliance on income tax was making wealth inequality worse, he said.pay more personal income tax as a share of government revenue than any other advanced economy
Ian Macfarlane, left, with John Howard, Josh Frydenberg, David Morgan and former ACCC chairman Graeme Samuel at the Financial Review 70th Platinum dinner in Sydney in March.“The people who hold all the wealth are the older people – we don’t really tax wealth. The people who depend on income are the young people who have no wealth and our tax system relies very largely on taxing income, so we have a problem going forward.
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