Australia’s Morrison echoes RBA Steven’s caution about foreign buyers

Speaking in Melbourne earlier on the day, the Australian Treasurer Scott Morrison seconded RBA Governor Glenn Steven’s caution around allowing foreign buyers to purchase “passive” assets.

In an exclusive interview with The Australian and The Wall Street Journal on Tuesday, the RBA’s Stevens, who steps down next month, noted that the tide of foreign investment was pushing up the value of the Australian dollar and countering the impact of Reserve Bank rate cuts, while adding that Australia needed to consider the kind of foreign investment it was attracting.

Key Quotes:

“When you embark on a process which may change the nature of ownership of what you could describe as a passive asset, if that is freeing up capital for the NSW government to invest in productive infrastructure, then I think they meet the governor’s test and more to that end”

 “The governor has said on many occasions it is better to be borrowing to build productive infrastructure than borrowing to pay for payments. He is absolutely right about that and that is why the job of fiscal repair is so important”