rba governor calls for crackdown on investment sem

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    By Krista Hughes, Economics Correspondent
    CANBERRA, June 6 AAP - Reserve Bank of Australia governor Ian
    Macfarlane today called for a crackdown on get-rich-quick seminars
    run by real estate agents.
    In his twice-yearly evidence to the parliamentary economics
    committee, Mr Macfarlane blamed property speculation for rising
    household debt and said credit was a major concern for the central
    He singled out real estate investment seminars for particular
    criticism, and said they should be policed by corporate watchdog
    the Australian Securities and Investment Commission (ASIC).
    Mr Macfarlane said there was a regulatory gap in that financial
    planners were regulated, but real estate agents providing a similar
    service were not.
    "(There is) widespread growth of these investment seminars where
    people come along and get told how to get rich quickly by using the
    equity in their existing home to gear up and buy a couple more
    apartments," Mr Macfarlane said.
    "ASIC would love to stop that, the problem is, they cannot
    demonstrate that these people are in fact financial advisers.
    "If they were, they would have control over them.
    "But the people who run these investment seminars say `no we're
    not, we are humble real estate agents and we are not subject to
    your laws, we're subject to state laws'."
    Mr Macfarlane said the tax regime was also favourable to
    property speculation, and public sentiment could turn against
    allowing tax deductions on investment property if there was a
    He said margin lending to buy shares was not as risky as using
    home equity to invest in property because it was easier to keep
    track of share price fluctuations.
    "When you buy shares, you know the price of it every day," Mr
    Macfarlane said.
    "If your gearing goes up because the value of your equity is
    declining, your bank phones you and makes you put in some more
    "The problem with negative gearing a property is that you don't
    know what the thing's worth and maybe you are going to get a rude
    shock in two years time, but you won't know it until two years
    "If it were a margin loan on share you will be reminded of it
    every day, and you could cut your position whenever you wanted to."
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