Property Couch host Ben Kingsley and economist Evan Lucas used their live May RBA broadcast to turn fire on a Canberra rumour that the federal government is planning to hand every working Australian a $200 to $300 'income offset', arguing the timing - hours after the RBA lifted the cash rate to 4.35% - lays bare a fundamental fiscal-monetary disconnect.
The leaked plan, which Kingsley and Lucas stressed remains unconfirmed, would not be means tested. 'If you're a retiree or you are on some form of pension, you're not working, you won't qualify for it,' Kingsley said. 'If you have a pay-as-you-go tax file, you're going to qualify.' He labelled it 'an absolute disgraceful cash' splash dressed up under a softer name.
Lucas saw the proposal as fundamentally inconsistent with the government's parallel push to lift capital gains tax and reform negative gearing. 'It would have made sense if they turned around and said, we're doing reform with the CGT and negative gearing and NDIS and trust... and the reform on the other side is that we're going to actually reduce or scrap, take your pick, on the personal income side,' he said. 'That would have been reform. Instead, at least it's a stimulatory measure, but it makes more sense because all we're doing right now is we're raising taxes.'
Kingsley's economic objection cut to the heart of the inflation-targeting problem the RBA had just escalated by hiking. 'For a lot of households that $300 will be spent instantly,' he said. 'For 60% of households, they'll just spend it... that just goes straight into business coffers and it doesn't give the household the discipline in terms of reducing their spending which then brings pressure down on inflation.'
He argued the move would force the RBA to do more, not less, work. The bank's mandate is to throttle demand to bring trim mean inflation back inside the 2-3% band; a fiscal handout running counter to that is the kind of move governors privately push back against. 'How is that going to go for you, Michelle?' Kingsley asked rhetorically of RBA governor Michele Bullock. 'They lose their economic credibility... if they do something like this, they've got no credibility.'
Lucas warned the inflation psychology numbers are already running hot. ANZ-Roy Morgan weekly consumer inflation expectations have lifted from a March base toward the upper end of the chart, and any cash injection lands directly into a basket already showing a 37% jump in petrol, near-70% jump in diesel and a 6.5% housing inflation read.
On the parallel CGT and negative gearing reforms, Lucas was more sympathetic - though still wary of execution. He welcomed a possible return to the pre-1999 capital gains discount regime, framing it as a brake on speculation: 'we're going to reduce speculation in the market and I think that's a good thing.' He also flagged that any negative gearing rule that grandfathers existing investors but excludes new ones risks creating a two-tier rental market with explosion in fringe rents and undersupply in middle-ring suburbs.
Both hosts repeatedly returned to the GST as the elephant in the room. 'The monkey in the room is the GST,' Kingsley said. 'We've got to do something about that. Consumption taxes are good taxes because the more you spend, the more tax you pay.' Lucas added that superannuation tax concessions are now 'so generous they're attracting assets in for good reason' and need to be inside any genuine tax-mix reform package.
The pair noted federal interest payments, NDIS and welfare combined now consume 37% of the budget, with debt heading toward $1 trillion and interest the single largest line item. 'One job: run the economy. Run it strong,' Kingsley said.