Former Reserve Bank (RBA) governor Philip Lowe has placed responsibility for the housing
crisis at the feet of politicians.
In his final speech, Lowe admits he had to make unpopular decisions and says politicians
cannot escape some responsibility for the current state of affairs.
“Raising interest rates and tightening policy can make you very unpopular, as I know all too
well,” Lowe says.
“Monetary policy is a powerful instrument, but it has its limitations and its effects are felt
unevenly across the community. In principle, fiscal policy could provide a stronger helping
hand.”
He says interest rates influenced housing prices, but that is not why Australia has some of
the highest house prices in the world.
“It is the outcome of the choices we have made as a society: choices about where we live,
how we design our cities, and zone and regulate urban land, how we invest in and design transport systems, and how we tax land and housing investment.”