Rate decisions rankle

Mortgage-free RBA bosses “out of touch”

MORTGAGE-FREE millionaire Reserve Bank bosses have been accused of being out of touch as families struggling to pay off their soaring home loans face the spectre of an eighth rate rise in as many months.

RBA governor Philip Lowe and his deputy Michele Bullock both own their homes mortgage free while Ms Bullock’s personal declaration of personal interests shows she owns two investment properties with her husband.

Amid calls for rate decisions to be taken out of the hands of the RBA and handed to the treasury, homeowner Jacky He, whose monthly mortgage payments on his Hurstville home have soared by $500, said it wasn’t fair.

“I don’t begrudge them not having a mortgage, I just wish I didn’t have one either,” Mr He, 24, said. “If they don’t have mortgages they are not on a budget where they have to pay big liabilities like a mortgage and they probably can’t understand how an average household with a mortgage is having problems coping.”

Mr Lowe (pictured) lives in Randwick in a house he and his wife paid $1,075,00 for in April 1997, property records show.

Ms Bullock lives at Five Dock in a house she and her husband paid $285,000 for in April 1991. The couple also has investment properties in Five Dock and Drummoyne but it is not known if they still have mortgages over them.

The bank board has its monthly meeting on Tuesday when it is tipped to hike rates again.

Mr Lowe apologised to the most recent meeting of the federal economics legislation committee for declaring the cash rate was “very likely” to remain at 0.1 per cent until 2024 and then hiking it seven times.

Nationals senator Matt Canavan and Greens senator Nick McKim, members of the committee, have both called for fresh leadership at the head of the RBA.

Queensland LNP senator Gerard Rennick yesterday said one problem was that most of the RBA governors spent their careers at the bank and lived in a bubble.

“So they have very little real life experience,” Mr Rennick said.

A former Westpac and Queensland treasury accountant, Mr Renwick said what they lacked as well as a mortgage was accountability and interest rates should instead by set by the Federal Treasury.

He said first the RBA set rates far too low at 0.1 per cent and then had to raise them too fast.

“They created a housing bubble,” he said.

“The best advice I would give anyone is to own their own home, pay off their mortgage as fast as they can.

“It doesn’t really matter if the (RBA governors) have a mortgage but they are paid well to do their jobs and they are certainly not doing that.”

Both Mr Lowe and Ms Bullock have had long careers at the RBA.

Mr Lowe was last year paid $1,037,000.

Ms Bullock was appointed to her current position in April this year and has been paid $205,369 for her three months’ work. Her annual salary is expected to be around $580,000.

Mr He said he chose a variable interest rate because he believed the RBA when it said rates were not going to be hiked until 2024.

“I’m now paying about $500 dollars more every month,” he said.