Interest rates: Reserve feels the blowtorch: "The Federal Government has stepped up pressure on the Reserve Bank not to increase interest rates to stifle the housing boom, triggering accusations that it is damaging the central bank's independence."

"Senator Minchin said the bank's role was to control inflation and not deal with growth in house prices. "The suggestion that they should . . . use interest rate policy simply to deal with the growth in the price of housing is not sensible and not one I'm sure they would contemplate."

This statement is against all conventional wisdom, but the Senator has a point if he realised that as the 'boom' is in land values, a more specific and appropriate remedy would be higher rates of land value taxation. Of course no such concept will pass the lips of any politician or commentator in spite of the obvious need:

"Last week, the Treasury Secretary, Ken Henry, said the economy was being haunted by a housing bubble and the International Monetary Fund warned that Australia risked a housing bust because of surging home prices and rising household debt. The Reserve has also issued repeated warnings, especially to highly geared residential investors, that home borrowing had reached unsustainable levels and threatened the economy."

Interest rates: Reserve feels the blowtorch: "The Federal Government has stepped up pressure on the Reserve Bank not to increase interest rates to stifle the housing boom, triggering accusations that it is damaging the central bank's independence."

"Senator Minchin said the bank's role was to control inflation and not deal with growth in house prices. "The suggestion that they should . . . use interest rate policy simply to deal with the growth in the price of housing is not sensible and not one I'm sure they would contemplate."

This statement is against all conventional wisdom, but the Senator has a point if he realised that as the 'boom' is in land values, a more specific and appropriate remedy would be higher rates of land value taxation. Of course no such concept will pass the lips of any politician or commentator in spite of the obvious need:

"Last week, the Treasury Secretary, Ken Henry, said the economy was being haunted by a housing bubble and the International Monetary Fund warned that Australia risked a housing bust because of surging home prices and rising household debt. The Reserve has also issued repeated warnings, especially to highly geared residential investors, that home borrowing had reached unsustainable levels and threatened the economy."