MacRae studied at the New South Wales Conservatorium of Music and then worked in Australia in the 1960s as an arranger for Festival Records.
He moved to the United States in 1969, playing with experimental groups in Los Angeles before joining Buddy Rich's ensemble in 1970.
He relocated to London in 1971, working that year with jazz musicians Clark Terry, Chet Baker, Jon Hendricks and Gil Evans.
He worked closely with Bill Oddie on the music and together they wrote their most successful song, "The Funky Gibbon", which peaked at number 4 on the UK Singles Chart in 1975.
He played in WMWM and Giles Farnaby's Dream Band in 1973 and did session work for Back Door in 1974, but left Nucleus around this time to concentrate on his own project called Pacific Eardrum, which he led with his wife Joy Yates until 1979.