The minutes were released hours after the International Monetary Fund condemned US President Donald Trump's trade policy in Washington and advised governments to bulk up their savings to guard against an economic downturn. The board voiced concerns that household debt could be a barrier to recovery if economic conditions deteriorate and that cutting interest rates from their record low of 1.5 per cent would have less of an effect on stimulating spending for highly-indebted households. The RBA said the next move "in the cash rate would more likely be an increase than a decrease” but that “there was no strong case for a near-term adjustment," after the cash rate was left unchanged for the 21st consecutive meeting in July. It found household debt has increased by more than household income over the preceding three decades in many countries, but particularly so in Australia.

"Households with high debt levels are more vulnerable to economic shocks and therefore more likely to reduce consumption in the face of uncertainty about their future income," the minutes stated. "Changes in interest rates have a larger effect on disposable income for households with high debt levels, but these households may be less inclined to borrow more at times when interest rates fall." Australia's relatively high ownership of large detached houses in urban centres has driven the rise in debt levels to record highs, but the two major markets of Sydney and Melbourne have seen prices cool over the past year, particularly among premium properties. "Housing prices had fallen by almost 5 per cent in Sydney over the preceding year," the minutes said. Stubbornly low wage growth has not helped those with high mortgages. Recent household incomes have started showing some signs of life but they "remained subdued" compared to the previous two decades.

"Nevertheless, growth in labour income had increased to its highest rate since 2012, in line with solid growth in employment," the RBA found. Treasurer Scott Morrison echoed the RBA's sentiments on Tuesday, reassuring voters wages would gradually pick up. "We have hit a trough when it comes to wage growth," he said. "It's not growing at a rapid rate, but it is certainly improving." He said he could understand why workers struggling with wage growth would scratch their heads at the pay-packets of Australia's highest paid chief executives. Treasurer Scott Morrison. Credit:Alex Ellinghausen.

An Australian Council of Superannuation Investors report released on Tuesday revealed Domino's Pizza boss Don Meij earned the most of any Australian CEO, taking home $36.8 million after shares were taken into account. "At the end of the day these companies have boards who decide these salaries and they have to be accountable for them," Mr Morrison said. Mr Morrison - who is about to depart for a G20 Finance Ministers meeting in Buenos Aires - warned customers could pay the price for the US-China trade conflict, after the US announced an extra $US200 billion worth of Chinese products that it plans to place tariffs on by September. "Countries can get caught in the crossfire, we need some cool heads and we need to keep focused on what the real outcome is here," he told radio station 6PR in Perth. "When you introduce all this cost on tariffs and trade protectionism, that just pushes up the prices for everybody, it costs jobs and it costs customers more at the till."