The Reserve Bank has done what it can, now it is the Government's move.

Outdated inflation targets have pushed the Reserve Bank to the limits of its power to fight the housing crisis and the onus is squarely on the Government to do more, says Salt Funds Management director Matthew Goodson.

Talking after the Reserve Bank said further rates cuts were likely despite the risk of fuelling the housing bubble, Goodson said he thought it was time for the Government to look at tax based solutions to the problem.

"There is a clear distortion in the New Zealand system where you can earn tax free capital gains with very cheap leverage so money always flocks to where there is no tax," Goodson says.

The Reserve Bank was now in a very difficult position being forced to chase a two per cent inflation target.

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"In such a low inflation environment it would be very difficult to put up rates," she said.

All the world's central banks were running extremely loose monetary policy, she said.

Goodson agreed questioning the validity of the inflation target in the current environment.

"We're still fighting the last war," he said.

The Reserve Bank and Government had been "at logger-heads" for over a year on this issue, he said.

The solution would require " a cohesive effort from the Reserve Bank, central government and local government," Leung said.

When you had people as experienced as ANZ chief executive David Hisco calling for more action it really told a story, Goodson said.