While we liked Reserve Bank Governor Ian Macfarlane’s comments
to the House of Representatives Economic Committee on Friday that
Sydney property is too expensive and young home buyers would be better
served by going somewhere more affordable, his remarks on Telstra
really caught our attention.

Handing back the proceeds from the full sale of Telstra to taxpayers would be an entirely wrong thing to do, Macfarlane said.
He warned that if the $30 billion thought to be raised by the sale of
the government’s remaining majority share in the telco was ploughed
back into the general economy it would have huge ramifications.

“If
that was immediately spent or handed back that would be the biggest
fiscal expansion we’ve ever had, and entirely the wrong time to have
one,” he said. “It would potentially have a very big impact, but if
it’s going to – as I believe it’s meant to – go into the Future Fund,
then there won’t be any particular monetary impact in that.”

No-one
has suggested in any forum that the whole of the proceeds of the sale
of Telstra would be immediately pumped back into the economy. Yet a
certain Treasurer has proffered a warning very similar to Macfarlane’s.

The
whole thing smells like a set-up to whack Barnaby Joyce and the Nats
and to give a free plug to the Future Fund – or would if we didn’t have
Reserve Bank independence.