By Alex Tarrant
A National lurch across the centre line on housing, Winston Peters takes aim squarely at Labour, and John Key finally appears on the campaign trail (via video link, at least).
That’s exactly what we were expecting. As polling opens Monday, we’re seeing the main parties jostle for position, relevance and the votes of those still undecided on which way they’ll turn as 7pm on September 23 approaches.
Labour has had all the momentum of late, with the recent 1 News Colmar Brunton poll showing it now has a choice of potential coalitions: with the Greens and Maori Party, or with New Zealand First.
While it looks like National will now have to rely on NZ First, and only NZ First, for any chance of forming a government, Labour’s new ‘position of choice’ means Peters needs to target Ardern with the hope of winning back that Kingmaker slot he’s been coveting most of the year.
It didn’t take him long. On Monday morning Peters launched a broadside against Ardern, saying he would ensure Labour sets out an exact tax policy before NZ First would consider entering a coalition with them.
Shrugging off the notion of sending everything to a Tax Working Group, Peters told the Herald he believed Labour already had an idea of what they wanted the Group to recommend. “You can't possibly mean to go into an election saying, 'My tax policy will be decided by a committee, and I am very sincere about that'. One needs to know what we are talking about ... that should be fatal to a party's chances. And we need to know,” he said.
We now wait to see whether the move will take votes off Labour for New Zealand First. If it only serves to take votes off National, leaving Labour in a position to form government with the Greens and Maori Party, then Peters could well and truly find himself out in the cold again.
Is there a faction of Labour-leaning voters who are worried enough about the party’s tax stance that they will turn to Peters to ‘keep Ardern and Robertson in line’ over the issue?
National aims for first home buyers
Meanwhile, Peters will also be hoping that National’s housing announcement on Sunday will serve to hurt Labour’s momentum. Amy Adams and Nick Smith were wheeled out to announce a boost to the government’s HomeStart deposit subsidy. Also announced is that banks will be allowed to approve 10% government guaranteed Welcome Home Loans on the spot to first home buyers on low incomes, without having to jump through the current checks and balances.
Bill English on Monday morning defended the need to boost the subsidy, and also explained why National wouldn’t lift the HomeStart house price caps, which in Auckland is $600,000 for an existing home, and $650,000 for a new-build.
National did look at raising the cap but decided against it as house prices were plateauing in Auckland now, he told Radio NZ. “And the drive in Auckland, as in the rest of the country, is getting more houses on the ground, faster.” This was well under way, English said.
“Prices are flat-to-falling, so that indicates there’s progress. But we do need four or five years of the kind of building boom we have now, where across the country there’s around about 30,000 houses a year going to be built.”
Asked whether that meant there weren’t enough houses to meet current demand, English replied: “Well, there’s people who want to get into houses at the moment who can’t get in. As of today, a number of the first home buyers will be pricking up their ears, because there’s now – we reckon about 80,000 more will be able to get into the market, where in the last two-or-three years 30,000 have already used the HomeStart scheme.
“It’s also going to be clearer to them what they can get. Because the Welcome Home Loan, which is a guarantee for those who have a 10% deposit instead of a 20% deposit – government backed guarantee – they have to go through a separate process with [Housing NZ], and we want to bundle that together so when they go to the bank, they can see that they can get the HomeStart grant - $20-30,000 if they’re a couple; $10-15,000 if they’re on their own – and get the Welcome Home Loan if it’s a 10% deposit,” he said.
English argued there were a “significant number” of houses priced below $600,000 that were sold in any given year. A significant proportion of houses being built at Hobsonville, for example, were under the cap, he said.
Asked whether those houses were large enough for families – rather than studios and one-bed apartments – English acknowledged people would want properties that suited their needs. “The houses are getting built…you’ve just got to drive around Auckland and see the massive development.” Across the rest of the country prices were lower than in Auckland, he said.
“There is strong demand. This is a feature of an economy, where New Zealanders want to stay home, where we’re attracting people from overseas, there’s no doubt about that, to do the jobs that need to be done here. This is all headed in the right direction. The houses are getting built, the infrastructure systems are much better than they used to be, and that is why, for first home buyers, we reckon 80,000 of them will be able to use the scheme to get in.”
National had kicked HomeStart off 2-3 years ago, had bypassed planning systems, written a new Auckland Unitary Plan on the back of a new Council, rebuilt 30,000 houses in Christchurch. “So yeah, there’s been a very high level of activity,” he argued.
“We can now sustain that through the next three-to-five years, get the 200,000 houses built, get the people into them. That’s where the housing market is going. What will create uncertainty is all this discussion about capital gains tax, land tax, inheritance tax that Labour is floating, just at the time when we need real confidence and investment in the housing market.”
National had always been looking at enhancing housing support, English said in response to a question of whether the announcement was made because National was falling behind in the polls. “Prices are flat-to-falling. We want to get more first home buyers into the market. And now people know our plan. It’s pretty clear.”
He disagreed that the move would fuel house price rises, saying government would ensure this didn’t happen “by continuing to pursue all the projects with Councils that are getting more houses built faster.”
Greens take aim at Peters
A response to Peters's attack on Labour was expected. Perhaps not from the Greens, though. Leader James Shaw put out this statement mid-Monday morning:
Winston Peters needs to show us how he plans to pay for his $10 billion of recent election promises before he attacks Labour on their fully-costed plan, the Green Party said today.
Winston Peters set out another new condition of going into government with Labour this morning, saying that Labour must tell him what its tax plans are.
“Winston Peters needs to explain what new taxes he plans to raise to pay for his $10 billion of election promises before he can attack Labour’s fully costed fiscal plan,” said Green Party Co-leader James Shaw.
“It’s the pot calling the kettle black.
“Peters needs to be held to the same high standard Labour and the Greens have submitted themselves to by having his election priorities fully costed and independently scrutinised.
“The Green Party will release its independently analysed fiscal plan before the election.
“Peters has promised at least $10 billion of new spending this election, yet is still to reveal what new taxes he plans to raise or what public services he will cut.
“Until he’s transparent with his own plans, he has no right to attack Labour for theirs.
“Once again, we see Winston Peters holding a potential new Labour Government to ransom. If voters are seeking a change in Government this election, which Winston Peters has not committed to, then the Greens can give that assurance,” said Mr Shaw.
National campaign manager Steven Joyce used the opportunity to update his party's fiscals:
The National Party has today released an updated summary of its 2017 election campaign announcements and their impact on future budgeted expenditure.
"The policy announcements we have made since 12 August up until yesterday have a total effect on the Government’s operating budget of $424 million in the 2018/19 year against a budget operating allowance of $1.7 billion," National Party Finance spokesperson Steven Joyce says.
"Across the four year period, the amount allocated through our policy announcements equates to 11 per cent ($1.98 billion) of the $17.34 billion reserved in the Pre-election Fiscal Update for new spending.
"We are therefore on track to stay well within the parameters of the pre-election update and reduce the government's nett debt to $56 billion by 2022.
"This is in marked contrast to the Labour Party who by their own admission would have debt $11.4 billion higher at $68 billion by 2022.
"And that's before you consider how unrealistic they are being about their revised fiscal plan and its projected zero budgets outside of education and health.
"Or the negative effects their policies would have on economic growth and tax revenues which would increase debt further.
"Only the National Party has a fully costed sustainable fiscal plan that will keep New Zealand growing strongly and keep debt and interest rates under control," Mr Joyce says.
“We will continue to update this policy summary through the remainder of the election campaign.”
181 Comments
Because I identify with their values on self reliance and social justice. Nothing I've read from the Left on these threads has given me any reason to question that there is a better balance for me out there. Yours and many others views will no doubt vary. That is your choice. If you/they were intended to actually sway views then you all might want a lesson or two in EQ. I come here to have a laugh, bait a few zealots and that's it. I suspect others are doing the same.
Here's Reddell's opinion on National's policy:
"Yesterday morning, National announced that, if re-elected, it would increase the subsidies offered to first-home buyers. First-home buyer grants, in a supply-constrained market, are a policy so daft that I’m not aware of any serious analyst, from any side of the political/economic debate, who thinks they are a good idea (and Treasury and the Reserve Bank have opposed them)."
Because I identify with their values on self reliance and social justice.
In fairness, Ex Expat...would not Act be a better match for you?
National called Working for Families "communism by stealth" but have only increased it, along with the Accommodation Supplement. Now they're talking increasing the First Home Buyers grant. They're also significantly subsidising the farming sector.
Nothing wrong at all with your values - I just question whether National actually aligns with those values, beyond their window dressing.
On NZ First tax plans - there is the intent to return the GST receipts derived from tourists back to the regions in which the spend was made, as well as returning royalties/tax paid on water back to the regions from which the water was extracted. And then there is the tax policy to remove GST altogether from healthy/fresh food stuffs and to remove the GST from rates.
So, under NZ First, there would be a lot less GST for central government and I haven't seen anything announced to replace that loss of funding with tax from some other source.
As far as I can tell, NZ First's counter to these cumulative GST losses to central government is to raise productivity and to raise company tax receipts (given with a lift in productivity, it is assumed that profitability will be up). And also, their proposal to lift the minimum wage substantially might also bring in more income tax and/or reduce the tax transfers now being met by central government.
Yes, run deficits, perhaps - something neither National or Labour are promoting presently.
Although I haven't heard them say it, I'm also guessing NZ First would be opposed to National's income tax bracket movement/tax cuts? Don't know... perhaps someone else has heard them speak on that one.
Surely Kate, they are all going to have to run deficits for some time to cover the lolly scramble. Winston Peters has all his policies on the NZ First website and while National (not a voter) used the wrong definitions for the "Hole", it concerns me that the actual outcome is no further money for the next 2 -3 years. Is that not deeply concerning? Both National and Labour have agreed we have a strong economy - we haven't by any means - and that makes it even more worrying that both are perpetuating this myth...and doing budgets/lolly scramble based on this? I look forward to the Kingmaker as referred to being there to balance either Party as they have both grabbed his well published in advance policies. Just need common sense to get them right.
I'd have thought that in attacking Labour, WP is trying to swing National/conservative voters over to him.
Point being to National supporters that their party is on a downwards trajectory, so why waste a vote with them? National voters would be better to vote to put NZ First firmly in the kingmaker position (which means bigger than the Greens in number) - otherwise, they might have a Labour/Green coalition.
One of the bigger issues being dealt with in this election campaign is ownership of freshwater.
Both Labour and NZ First have policies to put charges on water - and they see the resource as no different to gold, coal and other mineral resources.
On the other hand, National is silent on the issue and has no policies to charge for water (although I believe it has said something about looking into the issue of water bottlers) because it doesn't want to have to address the ownership issue.
ACT, the Maori party and the Greens all argue that allocation/charging needs to be brought in and that Maori has an ownership interest and therefore should be compensated in a manner like the fisheries settlement before any charging regime is brought in.
Only NZ First and Labour are on the 'no one owns the water' page.
https://www.tvnz.co.nz/one-news/new-zealand/water-not-race-based-matter…
Is anyone proposing a tax on water you collect from your roof? I don't know, haven't checked that. Honest question.
If water is infinite, how is it possible for aquifers to be drained? If it is possible for aquifers and natural springs to be damaged or drained by taking too much, should we consider measures to discourage this?
I know Judith Collins seemed to be claiming that all water resources are infinite, but she was also claiming that Labour was going to result in $18 bottles of water, and that she just stopped for a quick wee cup of tea on the way to the airport.
Also...isn't oil also given to us by God, Allah, Cluthlu or whomever it is you choose to prostrate yourself in front of?
To your first question, no.
There are major problems with groundwater/aquifer depletion the world over;
https://www.bing.com/images/search?q=Groundwater+Depletion+Map&FORM=IDM…
Groundwater is not so much a problem here as much of our irrigation is via run-of-river and/or water collection via dams - although there is concern regarding groundwater in the Canterbury region;
https://preview.ecan.govt.nz/get-involved/news-and-events/zone-news/wai…
http://files.ecan.govt.nz/public/cw-ashburton-brief/14%20Ashburton%20GW…
Yeah, I've come across that issue in Canterbury. Was down there a while back and the folks in the horticulture industry were complaining about the effect of dairy on the aquifers used for both horticulture and local town supply. Aquifers at 45m down that were previously usually at 15m down, as I understand it (and could be wrong) because dairy requires significantly more than hort.
Cheers for posting. I would recommend the documentary History of Water/A journey in the history of water, (Nordic World production), for an entertaining summary of development of water management across climates, (even including ground level changes from aquifer depletion messing up architecture). It is a succinct summary of what can and has gone wrong with overuse that children can grasp. It is always good to start from there as many think water is magical, and infinite in purity and availability for use. Few understand what the effects of aquifer depletion are. However at least we have far better more recent examples of water pollution worldwide damaging the resource availability.
I personally think Kate is one of the few people on her that manages to actually add an intellectual /logical perspective into the threads she comments on.
On many occasions if it wasn't for her, you lot would be reduced to the level of debating the merits of BE's next tie choice.
Oh please !!! ...Give us a break ... I have nothing against Kate , but she sounds very very logical by calling for a 50% fall in Auckland house prices, among many other similar intellectual propositions !! ....
you guys have nothing better to do than buttering each other ?? lol
So articulating Nonsense , even when incorrect, is very important for some of you because it sounds logical ... tell us something we don't already know ! .. but as they say, misery likes company ...
And Yes, it is foreign to me personally as I do not suffer fools, or BS thrown around to mislead people, easily ...
similar intellectual propositions
This sort of stuff is weird, and we've been seeing a bit of it. The argument seems to go:
1. My anecdotal experience from the school of life is relevant, thus my perspective is relevant
2. The experience of these other people is relevant, thus we have "common sense"
3. Your reviewing the experience of thousands of people today and in the past is "intellectual" and has no basis in reality
What makes the experience of thousands of people irrelevant when compared to your own personal experience and that of your mates?
LOL. I didn't "call" for a 50% drop in AKL house prices. My point was that it could well happen given those prices are so wildly out of whack with household incomes. The Labour proposed ban on non-resident foreign purchasers, combined with any slowing of immigration will most certainly result in significant price drops.
That's not me "calling" for a fall - that's simply the way supply and demand in any asset market works.
Light shock hyperbole in hope of it coming to fruition or deliberate to call for more counter argument? Supply and demand is always too simple to represent an accurate model of reality which has far too many variables to be completely predictable, (human psychology, global markets, cultural changes, resource movements, product development, company relationships, profits etc). You can even take companies in NZ as a quick example of factors which can influence it, (perhaps even whiskey for a nicer asset market :) ). The likelihood of something like a 50% drop will take a lot more than new foreign buyers, (not those residents already with property), being restricted to new builds and a little bit market slow down on immigration to something more manageable. Mortgagee sales on those who extended too far without equity and defaulted, market reductions and growth rates slowing have always been a risk to take with the purchase of property. But definitely not as bad as an earthquake or leaky building crisis. It is what the banks do which will be interesting. Regardless those in it for the long term investments should not be worried. The main parties are still more centrist in approach and it is not the politicians but those they hire to do the work behind the scenes who have the bigger task on ensuring no large drops occur (and NZ pays exceptionally well for those roles & legal so we are not talking unskilled ignorant people).
They will, but that's politics. Why on earth would believe any party on the future without concrete answers and policies? Actually no politician/political party can be trusted on what they say to the media.... The political game changes like the wind! A positive attitude and a smile is certainly not enough substance to go on to run a country. Concrete policies please!
God not this again... You know Labour might bring in some kind of tax to drop house prices, but it wont be on the family home. So unless you are a property investor its unlikely to affect you. If you are a property investor, you are probably better off not to vote for Labour. Pretty simple isn't it?
The anti National surge looks like it will carry the day. National have only themselves to blame, too complacent, too uncaring. Therefore, given the writing is on the wall, probably, then for traditional National voters like myself it makes perfect sense to vote tactically for NZF as having them in coalition with Labour will be the best safety brake around. WP senses that too, and these hard questions over the clandestine tax scheming by Labour are the very ones anybody with half a brain should be asking, especially many quarters of the media.
I agree. National have shot themselves in the foot. Winnie will now collect more of the previously blue 50+ Boomer voters who are aware of National's poor decisions and government. Funnily enough, a NZF/National coalition with Winnie firmly pulling the immigration strings would probably be the best outcome of this election.
I think you're right, but I doubt National will get enough for Winne to seriously consider it. He'll be poaching the ex-Nat/conservative votes from Bill to bolster his influence, so a NZF/Labour coalition will probably be more likely to occur.
This is the first time I've agreed with you on something! :)
I somehow agree ... and maybe National is losing support ( if every party was perfect , we wouldnt have seen a change in government at all) ... However, the risk in that remains in WP failing to gather more seats than the combined Green and Maori parties would - which will make him a second choice ( which he hates!) ... in which case it would be a lost vote ! .... WP is wise but remains unpredictable before any election but I doubt very much that he would go blindfolded into a coalition which will hurt most of his grey power base ....that would be political suicide for NZF.
I doubt very much that he would go blindfolded into a coalition which will hurt most of his grey power base ....that would be political suicide for NZF.
Which Labour policies do you think would hurt most of the Grey Power base? See the second media release down;
https://greypower.co.nz/grey-power-media-releases/
The chances of avoiding a head on clash between Grey Power and the Government over raising the age of national superannuation are fading as the organisation’s 65000 members prepare for political war.
Grey Power are very much in the no changes to super age of eligibility camp - Labour and NZ First policy.
Dear Labour Party spin doctor,
who cares if it was 65 or 67 when you are over 50 or 60 today ?? .... chances are that you will not even be around in 20 years !! and even if you are it wont make any difference to them ...!!!
The boomers are remotely concerned about retirement age as most are either over it or very close to it ...so no immediate Gov change will affect that !
Grey power will be concerned about TAXing their wealth that was collected over long years of hard work, which they were going to pass on to their younger generations. They would be worried about the overall effect of uncertainty and market stability threatening their businesses, share holdings, investments, and savings ... their Vision for the future is a bit different of what you would imagine ! --
They do not want to pay extra taxes and then beg the Gov for an exemption ( they are sick of that) .... !! and do not like any favours other than left alone to enjoy their grey years instead of provoking and dragging young ones into intergenerational debate based on jealousy and inequality !!!
So, you're saying that they are lying in their media release?
“We inherited that scheme from the generation before us and we intend to ensure it is still there for those who follow us into retirement. This battle will not be for us but for those who have yet to retire.” he said.
I think you need to stop basing all your opinions on your own anecdotal evidence.
now! now!, Good spin doctors don't use such strong and harsh words like " Lying" .. that is immature and contradicts lesson 1 in the spin handbook.
Lesson 2 Labour spin Handbook , always personalise the discussion when everything else fails.
Own anecdotal evidence huh? ... I base my opinion on what I believe based on interacting with real people and discussing real issues everyday - not some faceless ghosts behind faceless sites ... they are not my own anecdotal evidence - they are a slice of different views you might not like because it does not suit the current narrative you and others are trying to make us all believe that it is the only show in town!! ... there are still people around with brains and logic you know!!
Heh...I haven't heard Grey Power described as "faceless ghosts behind faceless sites"...that's hilarious. Go Eco Bird!
I mean, they're grey, sure, and their skin can be a little loose and translucent at times...but I think "faceless ghosts" is a bit harsh a description.
You guys need to lay off the ad hominem a bit. Folk who hold opposing positions to you aren't automatically employees of the nefarious commies, nor do they have tails and horns and pitchforks.
That said,
1. If property prices go down an inheritance is reduced, sure. But so is the need for inheritance, as property is more accessible to the young based on their earnings. It also helps those who don't have enough property to leave to their children and grandchildren, or simply have too many grandchildren for their wealth to help into property.
(Affordable homes also foster a reasonable birthrate, as their less incentive to reduce the number of children you have in order to be able to help them into the property market. There are multiple reasons why previous NZ governments across the 20th century worked to foster housing affordability.)
2. Stability of reelecting National is illusory. The piper will have to be paid for this blowing up of asset bubbles and economic over-reliance on immigration while leading us into a productivity recession.
3. Intergenerational war...certainly hasn't been helped by the prevalence of Smashed Avocado Warriors forgetting the benefits they received from society and lambasting the young as lazy spendthrifts (despite the fact they're saving at a higher rate) and entitled for wanting a return of some of those affordable housing policies, while all the while expecting the young to hand over money to fund their pension.
As one of those grey old farts I want to know if I am going to pay Capitol gains tax on my second property when I sell it and if my kids have to give 33% of my wealth in inheritance tax when I'm sent upstairs. I want to know that information before the election not when Labour patsies follow what the jealous party tells them what to say in a years time.
I came into the world in a extremely poor family due to my father having TB. I have worked my balls off to get to where I am and I don't want some young prick telling me that we had it easy.
Out of interest, what year did you first buy in NZ?
If houses are made more affordable you'll be able to spend more of your wealth to enjoy your retirement, because your children's incomes will go further when it comes to housing. They won't be so dependent on you. And the children of others who lack such wealth to leave...should they fall by the way? Do we no longer think of them in NZ?
Who's raised inheritance tax? Only National, as far as I can see. Further scaremongering, I presume.
Very well put mate - right to the point... Don't we all want this Labour party scrum to tell us the truth and intentions?? the fact that they are dodging it for so long and after so many questions looks more than suspicious to me ...so they are not getting my Vote ...
With all due respect, my family also suffered through the TB crisis and we all worked hard and all own houses. I'm a Gen X but my older siblings are all Baby Boomers born to parents who were children during the war days and they are known as the "Silent Generation". So we have all done well, had opportunities to boot and government money pumped into the social equation to ensure we wouldn't be a burden on future society. But my children are up to their eyeballs in student debt and paying astronomical rents in Auckland and are now competing with other immigrants for the same slice of pie in the low wage economy without a promise of jobs in their own country. You can bet your last super funded dollar that I am about to vote for a change!
I remember when I first started working at NZ Steel about 30 years ago. I was on about $30,000. House prices were about $100Kish in some areas.
Now average house prices are about 1 million in Auckland and average wage is about 70K. Hmm not sure if things are equal. Oh yeah swapacrates were $15 and now $34, which sounds about right, maybe property should be indexed around crates of beer.
If Bill English and his cronies are so smart then why have they implemented a policy in the FHG that has been proven to create the opposite result to what apparently is the desired affect?
Here in Australia the FHG came in and the price of the houses went up by that amount overnight. It's obvious why.
The money goes from the the government, to the seller and the banks and gives no extra buying power to the first home buyer.
Cynical at best, at worst who knows.
I suspect it is more a policy to try and 'hold' prices at their already inflated level - as opposed to push prices up. The example was given about how it would now be easier for a FHB to buy a $600,000 first home. Clearly, this $600,000 first home is not an "affordable home" no matter what both Labour and National keep trying to push.
National are trying to stem the flow of FHBs out of Auckland with taxpayer subsidies. It's ludicrous.
Bernard Hickey from Newsroom reports these housing demand subsidy schemes are a proven failure. This is another sign of desperation coming from National/English.
"The scheme has already been used by 31,000 people since the subsidy was doubled to $10,000 shortly after the 2014 election. That doubling was announced a month before the 2014 election.
That announcement followed a 36 percent rise in Auckland's median house price over the previous three years and after the Reserve Bank restricted lending with loan to value ratios of over 80 percent.
However, the move was one of the factors that pushed up house prices far faster than the rise in the first home buyers' grant. Auckland's median house price rose 39 percent or $253,000 to $905,000 between September 2014 and March this year.
That demand-push effect is one of the problems with these grants, along with the fact most of the benefits go to the wealthier couples able to afford to save the deposit and then service a big mortgage, particularly in Auckland.
The Government knows about the demand-push and regressive nature of these grants.
Treasury warned the Government in 2013 that increasing first home buyer subsidies would undermine the Reserve Bank's efforts to slow down the housing market, force an early Official Cash Rate hike and push up house prices.
Treasury said in cabinet papers the expansion of the Welcome Home Loan and KiwiSaver withdrawal schemes "may undermine the power and credibility of the Reserve Bank's proposed use of restrictions on high Loan to Value Ratio mortgages, depending on up-take."
"Experience with homeowner grants in Australia suggests that such programmes tend to push prices up in a supply constrained environment by supporting greater demand, rather than improving affordability," Treasury said.
"The Kiwi Saver Home Deposit Scheme increases the cash available to homebuyers for deposits. Increasing eligibility may encourage buyers to take on more debt/seek more expensive houses. This could exacerbate house price pressures," it wrote in July 2014."
I agree Brendon, these subsidies make no sense at all - the TSY position is completely correct.
But aren't prices falling faster in AKL than any other local market? That suggests to me that FHBs and other NZ resident, owner-occupiers are moving out of AKL to more realistically priced markets.
That largely leaves only foreign buyers and non-owner-occupiers in the AKL market.
Not only is the Reserve Bank out to quell the non-owner occupier demand, but the trading banks themselves are looking across an individual investors portfolio and applying requirements for higher equity over the whole of their asset portfolio. Hence, I think credit tightening is going to take the non-owner-occupier demand down.
That leaves foreign buyers, but China has applied a brake there.
Whereas before the FHB was all but locked out (and National didn't seem to care), now they are needed to keep the market functional.
Kate the evidence is that reduced investor activity is the largest factor causing a stall in Auckland's housing market. We know that investors are borrowing only half of what they did before Wheeler raised the deposit requirement for investors to 40%. Then there is uncertainty from this election -where housing is one of the main battlegrounds. Mortgage rates also went up a while back and the banks have been more risk averse.
These factors are countering the pent up demand coming from population growth being greater than Auckland's house building rate.
The government's subsidies so that FHB's can borrow more is directly counter to what the Reserve Bank was trying to achieve by cooling the market by increasing deposit requirements i.e. rationing credit. So in a way the NZ housing market is a bit like Muldoonism -a chaos of conflicting subsidies, rationing..... it is a nonsense really.
Time for a change....
Imagine if we limited investor activity to this extent in the Auckland market 5 years ago.....how much better things would be for everyone....less debt...less strain on FHB's....less risk to the economy in terms of a market crash..more money available for productive spending....
lol .... this is really funny guys ..TWO Labour party spin doctors are now exchanging promo type conversation in the form of a discussion explaining things to each other, haha .. very amusing and original way to promote nonsense ... but Hey, carry on , dont let me interrupt your good work !! .. I am sure the Unions / Party are happy with your efforts Brendon !! you might be promoted to Hospital Manager or DHB CEO ...never know!!
Evidence like in data , NO ...there is NON !! but there is logic to follow ...
There are thousands of available houses around NZ under 400k now ,,, a lot of these should become affordable to a certain portion of FHB .... Auckland has 1526 houses under 500K listed as we speak on trademe ..... where are the buyers for these affordable homes? .... will there be some if subsidies are increased? Of course ....
Will selling (consuming) these 1526 houses in Auckland create a shortage to affect market prices ?? Absolutely NOT , that is a drop in the bucket .... will selling few 600k homes affect the housing inventory ? Not at All ... will that push the $1M+ house prices up ?... lol .. that would be a laughable question ...
There is your evidence, ask anyone who is involved in real estate and you will get the same answer ...!!
It is too little too late from National ...but it will help few FHB to get into houses sooner ...No big deal !!
Here you go EB - more logic for you;
https://www.macrobusiness.com.au/2017/06/surprise-nsw-first-home-buyer-…
Kate, AUS is not NZ ... there is no point in bringing in evidence from other countries where we need to do Extensive research to compare apples with apples ....
I also read this this morning , despite the slight correlation with us but still we are not AUS: .... http://tradingdiary.incrediblecharts.com/
the gap in our market between affordable and expensive , which we know, is quite significant - hence my actual example above ....
there are another 1000 homes under 400k in the Waikato and more and more cheaper houses around the regions ....why are they not sold yet? and will selling them bust the whole market again - I dont think so ...especially both parties will be building 100,000s new houses in the next 5-10 years and reduce immigration etc ....
So rather than shutting off a reasonable policy ... it pays to think about it logically and practically ...I hope you agree at least on that methodology ...
Eco Bird, do you have any examples of experts who agree with you that adding subsidies to buyers in a supply-constrained market will not increase prices? I have seen zero support anywhere for such a claim, either in track records where it's been tried or in those who have analysed the performance of subsidies.
(As an aside, it's a pipe dream that National will build 100,000 new houses in the next 5-10 years and reduce immigration. National has not said they'll do that.)
Here's a summary of broad consensus:
Yesterday morning, National announced that, if re-elected, it would increase the subsidies offered to first-home buyers. First-home buyer grants, in a supply-constrained market, are a policy so daft that I’m not aware of any serious analyst, from any side of the political/economic debate, who thinks they are a good idea (and Treasury and the Reserve Bank have opposed them).
https://croakingcassandra.com/2017/09/11/housing-failure-set-to-continu…
how many times have we offered subsidies like these to FHB or anyone in NZ?
and if so what were the results? do you have any experts which agree with your view point in NZ that that inflates the market ??
BTW, neither National nor Labour will be able to build 100,000 homes in 10 years...!! we all know that ..lol
I just linked you to an expert source.
You can also find many on Google (and Google Scholar if you'd like studies).
E.g.
On plausible (unitary elasticity) demand and supply assumptions, the homeowner subsidy increases all housing prices by about 2% and total housing consumption by about 2%, with the rise in consumption by home owners more than offsetting the fall in consumption by renters.
Are you arguing that unlike anywhere else they've been tried, NZ will be magically different? As per your note, given National isn't going to meaningfully increase supply, the only thing that'll result is that people competing for affordable houses will be able to pay a bit more, thus prices increase. You NEED supply to increase, otherwise it's just a subsidy that benefits sellers.
Also, New Zealand's own Treasury:
Treasury warned the Government in 2013 that increasing first home buyer subsidies would undermine the Reserve Bank's efforts to slow down the housing market, force an early Official Cash Rate hike and push up house prices.
"Experience with homeowner grants in Australia suggests that such programmes tend to push prices up in a supply constrained environment by supporting greater demand, rather than improving affordability," Treasury said.
Source: https://www.newsroom.co.nz/2017/09/10/47097/election2017live-15days
Our very own Tony "Meth House" Alexander in The Listener on September 2nd; "A special message for first-home-buyers."
The market is moving in your favour. A lot of investors have over-extended themselves in the past three years and their hopes of new investors taking property off their hands at a tidy profit have been dashed. The next layer of the investor pyramid has been stripped away by the need to raise a 40% deposit and by banks steadily tightening debt-servicing criteria. In fact, when an existing investor with a few properties goes to their bank these days seeking finance for a new purchase, even if they have a 40% deposit, banks are saying they need 40% coverage also for their existing portfolio. In many cases, that means either the planned purchase by the established investor does not happen or they achieve it by selling some of their existing stock.
He goes on to say:
The time is ripe for you, first-home buyer, to start taking advantage of property investors’ pain.
It's not the economic model, it's the short-termism created by 3-year democratic election cycles. Politicians only care about stuff that makes them look good at the next election. So we very little local or central government investment in transport infrastructure - choking city transport up and driving house prices sky-high. And we get no long-term focus on fostering industries and social policy that will create economic prosperity in NZ.
Politician salaries should be reduced and pensions increased and linked to a basket of indicators like GDP and life-expectancy growth so that Politicians are motivated to focus more on long term improvement of NZ.
first, economics. I Dont agree, our economic model /financial system is geared to make short term profits only in order to boost the share price so a) ceo's make $s b) investors make $d, c) wall street makes $s off the frequent trading. Rinse and repeat in other sectors. ie no one wants to really work just concentrate on buy and sell ponzi scheme economics.
Second, we also are on a exponential economic growth model on a finite planet, doesnt work forever, even simple Math should tell you this.
Finally, Politicians give us what we think we want. So if we actually start to ask for indicators we will get them.
Huge number of small privately held manufacturing/technology development businesses in the world (particularly in spectacularly successful German Mittelstand, Japan, China...) that care very deeply about long term development due to long term interests of their private owners. Listed multinationals are in fact slowly being out-competed and losing out to longer term focus, understanding and superior strategic choices of privately held companies (Economist article covering this about a year back). Though this is bad in that it doesn't allow everyone to participate in their growing success, their rise will also lead to reduced wealth extraction by finance industry - they will have to reduce their cut (which has grown over last few decades to take nearly all surplus generated in west) to compete.
There is no reason to believe that our overall economic growth model will end anytime in next few centuries given pace of tech advancement, (particularly AI) and ultimately size of solar system. The pie continues to grow inexorably, and it is not all about bulky 'things', in fact quite the opposite, information and small smart devices and intelligence added to everyday things represent much of ongoing advancement.
Fat chance of ever getting more than a few percent of electorate to educate themselves sufficiently to vote rationally based on considered long term economic good of the country rather than just voting for short term benefit to their wallets and superficial identity politics.
Centuries? LOL no you dont even understand simple Math.
Math. Lets also look at the exponential function, just say China. They want a 7%+ annual growth rate. this means every 10 years their economy will double in size. So lets say today they sell into the 1.5bliion in the developed world and we are crippled with debt so, no more growth from us. In 10 years time they have to be selling to 3billion people, Ok lets say themselves. In 20 years time 6billion ppl, Ok maybe (not but there you are) in 30 years time 12billion ppl. NB There won be 12billion on the planet in 30 years time. In 40 years that is 24billion ppl they want to be selling to. Then we can look at the supply side of trying to get the raw materials for these numbers.
So no it isnt centuries, its today.
I can give you one solid reason economic growth will stop, Peak oil. Indeed why it has stopped is we are at, Peak oil.
I totally agree with your last para however, TOP is proving that in spades, 2% if they/we are lucky.
So you're a Club-of-Rome Malthusian doomster like the perennially wrong Paul Ehrlich? Getting stuck on silly extrapolations while ignoring changing behaviours, technology and economics that continually produce cheaper alternatives?
For a start educated-world population is on the decline. Basically only places that have >replacement birthrate are 3rd world misogynistic shitholes, and increasing wealth is slowly fixing them. They are culturally incapable of taking over the world - they rely on developed nations to provide all their tech and are getting close to collapse in many cases. Developed world is nearing a peak in population and will start declining in a few decades. Global population won't increase much more.
Peak oil?? Global reserves have continued to rise every time the oil price goes up for any length of time, they are greater now than 30 years ago. But oil is just a convenient dense energy carrier until we develop better alternatives and we're slowly replacing it. Eventually we will synthesise it using energy produced by fission or fusion heat sources for not much above current oil cost (we have enough fissiles in accessible earths crust to power human civilisation until literal end of the earth, deuterium=many times as much).
In transport oil is already in the slow process of being replaced by PV-battery for reasons of fashion, not scarcity.
Economic growth does not hinge on population growth, not does it hinge on increased consumption of materials - the economy of the west has continued growing even as energy and raw materials consumption has reduced over recent decades. The majority of human effort no longer goes into growing food or building things, but rather into services and informational activities (~60-70% of OECD total). This will continue to fall with increased automation of agriculture and industry.
And the only mineral that has ultimately limited availability on earth is helium, everything else is here in abundance - beyond any foreseeable demand we may ever have for it. It is just a matter of how much it costs to extract and concentrate. But then the price of energy continues to drop steadily decade upon decade while our technology for efficient extraction continues to improve making ever more sources economic. Even fresh water is cheap enough to make that we could afford to run all agriculture on desalinated water if needed.
So stop worrying about silly limits to growth stuff and concern yourself with real threats like the next global pandemic and the eventual creation of artificial general intelligence (which could end civilisation or humanity respectively in 30-100 years time)
And then there is antibiotic/antimicrobial resistance;
http://www.radionz.co.nz/news/national/329639/antibiotic-resistant-supe…'
Apparently National don't, either...
Note that pretty graph.
http://ellisp.github.io/elections/changelog.html
And....
https://www.predictit.org/Market/2634/Which-party-will-win-the-next-New…
I agree with Winston, Labour needs to be HONEST on their tax policy. It will be too late to stop them taxing everything that moves as they have done before after they are elected. WP sounds sane in this current circus group.
Build up the regions, make it attractive to employers and employees to work and live there. Currently it is a one trick pony, Auckland.
People who use water should pay a tax. Thats fair all of us do so why should corporates not pay?.
Farmers need to be held responsible to clean up rivers as dairy and agriculture are the largest pollutors.
Everyone should be treated equally, no special privilages based on race. Consulting certain groups on water, land etc starts a new gravy train for making claims which tax payers will continue to be saddled with for many years to come.
Reduce immigration and train our unemployed youth and get them into jobs.
Build infrastructure to cope with 5million tourist coming into NZ. Give the regions a % of gst earned so they can work on projects that are important instead of waiting for hand outs from central governments.
He may be a maverick but currently he is making more sense compared to the other clowns. I think NZ First needs to get in strongly to keep the 2 major parties honest otherwise we will see same old same old from National and the Labour-Greens-Maori group will take NZ back to nanny state where all of us will be told to shut off our brains and put it on a shelf while the government tells us how to live. For me that is the worst outcome NZ can have so WP gets my vote this time.
That is garbage. Cities are the biggest polluters, their streams are middens, their rivers and seas awash in effluent and garbage, they import their food, water, power and young workforce from the provinces and export their waste back to them, all while they foist their rules, taxes and financial demands on those rural areas and push their narrow little one-dimensional city-bound disneyfied vision of how the world should look on the rural proles whose land they drive through a few times a year - like aristocrats of old. Killing off industries and communities on a whim (eg west coast has lost forestry, mining and greenstone to the new urban aristocrats, who are now coming for the farmers too).
Fashionable assertions by urban ignoratti/greens who have an unthinkingly negative attitude towards rural folk/farmers and productive industries (those hated grubby little peasants who work outdoors with their hands to put all the necessities of life on our tables) have almost no reference to actual data. Eg Canterbury uses 2/3rds of all irrigation water, and will be paying 2/3rds of the water tax but have universally clean/swimmable rivers, except within Christchurch. Those dirty farmers should shut up about this lest David Parker double it (As he threatened when challenged by farmers armed with facts).
Water taxing has nothing to do with fixing water quality and everything to do with insular urban socialists disconnected from productive industries targeting the kulaks who don't vote for them to pay for their lattes (Gulags being no longer in vogue). It is an example of that most evil of democratic illnesses - Clientalism.
Our rates are already spent on efforts to try to combat water pollution in our urban centres. They've been doing this for decades and it is a never ending battle as the cities continue to grow. I worked in this area a few decades ago. So nasty urban socialists are already paying tax to try to clean up their excrement and prevent it flowing into waterways, stormwater, and the sea.
This needs to be recognised in any discussion considering people suggesting polluters in the countryside also contribute to paying to clean up the pollution they create.
Also, your last paragraph sounds like you're declaring it to be so, but without evidence.
BTW, the aristocrats of old - as is increasingly becoming the case today - were the landowners.
Countrysiders are spending money on efforts to try to improve water pollution too Rick. Some of them $100s of thousands of dollars of their own money. But the public doesn't see it as it is happening on private land.
Some years ago govt had a fund that Councils could apply to for funding to fix infrastructure - due to lack of demand they ended up closing it. The councils didn't see the problem in cross connections, sewage/heavy metal/landfill leachates etc contamination.
Not everyone is paying enough urban rates Rick and not enough effort to find and require landowners to fix cross connections in some areas.
2014 - "..That QLDC did not have a trade waste by-law, but was looking to develop one'
Item 3: http://www.orc.govt.nz/PageFiles/1404/January%202014/Confirmed%20minute…
2017: https://www.odt.co.nz/regions/queenstown/spill-lands-council-court
2017: https://www.stuff.co.nz/environment/96195636/whats-in-lake-wanakas-wate…
15years ago we had younger friends visiting us, they were disgusted at the stormwater/sewage pipes emptying on to some beaches at low tide when they visited....Those pipes are still there spewing their loads on to those beaches today.
Green Party policy is to fund Landcare Trust so that it can appoint Catchment co-ordinators across the country. Excluding National, it appears to be the only party who recognises that real progress will be made via catchment groups, not taxes.
Thanks for the info, CO. I actually worked with a council addressing issues around cross connections, sewage contamination etc. There was certainly plenty going on at that council and others we worked with.
I'd certainly agree we could stand to contribute more in rates to address this issue, though. It seems like it's worth doing.
Absolutely right, blame all the evils on a compartmentalised group, makes you feel less guilty as you build railways to airports so you can furn fossil fuels faster at 6 miles high while sipping Chardonnay business class on your way to a climate change conference with 10.000 other kale munchers converging.
Tax the suckers, and the money will go to pay rises for councillors; when the goals are not attained blame them.
Talking of pots and kettles , lets not forget that Labour has not got someone credible to assess their spending plans .
Firstly Ganesh Nana would say anything for a fee , and secondly we dont know what proviso's or qualifications he attached to his report saying it was Kosher and good to go .
The Green Party has no idea what a Billion of anything is , and they want to plant a billion trees ?
Do they have the faintest idea how to do this , how many people it would take , how long it will take , and even where they would plant these 1 Billion trees ?
I dunno, Boatie, looks like you're engaging in a bit of propaganda there. National have not found a single expert to back up their wild and ill-conceived spreadsheet misreads:
http://www.newshub.co.nz/home/election/2017/09/economist-consensus-ther…
It's a difficult issue. I've had to argue from the position of personal finance in a number of political arguments. It's the only thing many political zealots can relate to. In fact it seems to be why National has been incredibly focused on having a balance budget, it makes sense to their supporters. They seem oblivious to the public debt.
There is a separate issue of responsible Government spending. Selling assets or borrowing money just to pay the bills instead of add something useful doesn't make much sense to me.
Yes, but on the other side of that thought, you can't print your way to prosperity and even if you denominate debt in your own currency (not always an option if you are not the USA) it doesn't just magically disappear.
If you choose to print the value of your own-currency debt away as a method of not paying the piper there are consequences to your wider economy.
There are many principles of personal finance that do apply to national accounts, even when sometimes the details are more complicated.
Purely out of curiosity I did some quick back of the envelope stuff....
A billion trees would take about half a million hectares (2,000 trees per hectare) which Wikipedia tells me is about 5% of our (2007) total farmland. So there's space, at least.
There are about 30,000 farms across the country so on average call it 30,000 trees per farm.
10 minutes per tree per person (bore hole, chuck in sapling), assume two people per farm, comes to about 300 working days (each). There are 130,000 unemployed people in NZ, so maybe some of them would be up for tree planting.
(I'm not entirely serious, but cost of the trees aside it's also not entirely that impractical a suggestion if you spread it out over a reasonable time period).
Depends where the trees are been planted , and for what purpose, but for erosion control , it is around 4000 per ha. Your not going to plant trees on prime farmland , it would be on marginal or steep land with very low production. The farmer or other land owner is likely to benefit more than the lost production.
There is abit more too it than just putting the tree in a hole, alot of weed control to do on most of the land the trees would be planted on.
Pure Advantage, a consortium of NZ business interests, suggests we need to plant 1.3 million hectares in new forests;
http://pureadvantage.org/news/2016/04/22/our-forest-future/
Accordingly, this report calls for a national forest strategy. It calls for the creation of long-term plans to establish future forests that cover 1.3 million hectares of New Zealand, to offset our agricultural emissions and to position New Zealand on a feasible course for a net-zero greenhouse gas emissions future.
Their plan is for a combination of harvest crops (on erosion-prone land), urban forest expansion and margins of waterways.
http://pureadvantage.org/news/2016/04/22/our-forest-future/
Most certainly a possibility as it's been scoped extensively by these folks.
Good link Kate; I am a bit against largely commercial tree planting vs natives, as whenever the Pinus Radiata is harvested there seems to be a lot of erosion, machinery,logging trucks and nasty visual effects.Radiata is probably more of a fire hazard which will get worse with global warming.
The natives are much more friendly to endemic fauna too.And much prettier!
Longer term thinking needed.
Unlike Labour who has a panel of experts to decide tax policy. You can review them here on this site ......... oh, sorry, silly me, I forgot their names are a secret.
But we are assured nothing has been pre-decided, the party is open minded. Well, ahem , actually, senior officials already know some of what this open minded undecided panel will at a future time come out with. Such as confiscating part of the family home when the olds go into a rest home and die. When we say undecided, that's more a sort of truthiness concept than , you know, actual truth.
And no, we will not say which other assets will have CGT applied to them. We also won't say whether NZ super will be means tested. Odds won't be published but still put money on us.
Labour are only claiming 15 new taxes back in 2014.
http://www.labour.org.nz/at_least_15_new_taxes_under_national
Can't you make the same argument for National's GST increase to 15%? The Minister claimed that everyone would be better off even the most vulnerable.
http://www.treasury.govt.nz/budget/2010/execsumm/10.htm
It is a clandestine opener ended prospect, undoubtedly. Do believe that one Cullen is the likely front runner for the convenor. Of course now that Mr is now Sir, there may be a different outlook, just like pigs fly. You can bet your boots, last dollar, back teeth, that the recommendations that are to come forth, will have been written well before the agenda & terms of reference have been set. Doesn't really matter as Labour will do as they like anyway, just like every other government, more or less since Holyoake. A manifesto, what is that?
No. But the comparison argument is pointless. Ardern is now signalling a significant structural change in to the way tax is levied. It will likely have profound effects on many people. It is cynical to insist the policy is not known when clearly some aspects already are and then demand voters to simply 'trust us'.
According to TOP, Winston has a $55 billion hole in his budget http://www.top.org.nz/enough_is_enough_winston
Was at a candidates meeting where one of TOPs candidates was on the panel. Meeting was in an urban area and the poor sod decided to comment on Fonterra. It became very clear that he didn't have a clue what he was talking about - just parroting what he must have heard but no understanding of what he was talking about. Unfortunately for him there were a few farmers in the audience who knew fact from fiction....After a while he had learnt his lesson and when asked a question that he didn't know something about in detail replied 'I'm agnostic on that as I don't have the information with me'....Who the heck says 'I'm agnostic' rather than 'I can't comment as I don't know enough to comment'....
So, Labour would have us believe that after 9yrs they don't have any tax policies ready and they'll decide after the "working group" comes back to them after the election. Really? Any halfwit will realise that this is a smokescreen and they already know what they plan to do, but don't believe that the electorate is smart enough to decide for themselves...i.e., they have utter contempt for real democracy. Add to that the fact that a lot of middle class voters naively believe that they will be spared from the coming taxfest, erroneously of course, and you have a perfect recipe for a shambolic election.
"you have a perfect recipe for a shambolic election."
I will take a shambolic election over willful destruction of NZ with homelessness at all time highs, homes unaffordable for the average person, immigration the can fill CHCH in 5 years, infrastructure issues where a journey was 50 mins now takes 1hr 30. Ques in hospital where sick people are pushed on the streets, and house prices at levels that are 10 times income plus.
Its taken 9 years for National to create generational issues, but the Im alright jack pack are happy to let the rest of NZ eat cake. The poor guys may even have to pay tax on their investment profits. Oh no they may have to down grade from 2 Mercs, a House and a batch to 1 Merc and a BMW. Or there savings may not top 10 mill for an extra couple more years. You just dont realise how hard life will be having under 10 mill in savings.
pines and eucalyptus, can be at high risk of fire damage because their leaf oils and resins are flammable to the point of a tree being explosive under some conditions, especially if they are in drought conditions.Especially in Australia. Fire breaks can mitigate.
The dead prunings can increase risk
Seems to me that nobody regards nikau, karaka, griselinia, wharangi xc as good firewood
So, Winston will take away the votes of National Supporters, but after the election, he will support National to form the government ?
If Labour gets in with Green support (or not), his game is up....
I think this election is the Mother of Toss Ups. Interesting, to say the least.
"REDS UNDER THE BED! REDS UNDER THE BED!"
Haha. The thing with Western socialists is that they've generally read the likes of Orwell, Václav Havel, Solzhenitsyn and the like. They are fully aware Communism is a utopia (i.e. it cannot and will not actually exist on a national scale).
Like Christopher Hitchens - whose parents were Tory voters ultimately burned and undermined by the party they voted for - they're ultimately social democrats of the garden variety found in many social democracies such as our own and those in Europe.
I don't often agree with Winston but back him totally calling Labour to state exactly what their tax polices are and most importantly what % they are. I don't particularly trust any politician but find Labour more untrustworthy around this, if they clarified this they probably would get my vote !
This has happened under Nationals watch, while people moan about tax on their batches, and their investment property NZ is facing a crisis. But I hear if you put barb wire around your mansion it will keep out the poor.
"Yesterday, Waikato Hospital said it had hit capacity with non-emergency elective surgeries cancelled and patients sleeping in corridors on Monday night."
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