ANZ slams ring fencing proposal

They believe such ancillary policy instruments “would deliver additional distortions”.

Moreover, they say ring-fencing losses arising from property investment looks “dubious…It would undermine the principal of tax neutrality, in that all investment is taxed equally”.

“Rents would likely increase sharply, placing more upward pressure on inflation. In any case, ring fencing of property losses would be too late for this current housing cycle.”

The ring fencing of losses, previously flagged by the Reserve Bank, and raised by the Minister of Finance at a Finance and Expenditure Committee meeting last month, has been touted as a solution to help stem rampant housing market growth and give the Reserve Bank more leeway to ease monetary policy.