By Alex Tarrant
Grant Robertson wants to be the next Finance Minister. And it’s looking like he’ll be a busy one if Labour gets elected.
Changes to monetary policy, spending billions more on health & education while finding savings in the corrections, defence and social investment budgets, and trying to find the trick to unlock those elusive export growth and productivity targets. All at the same time as renegotiating the TPP.
How will he go about it? Will he spook the financial markets with Reserve Bank Act reform coupled with a promise to get unemployment to 4%? Will he commit to the OECD’s agenda for improving productivity? Will his Tax Working Group look at corporate and savings tax setting? Alex Tarrant sat down with him to find out.
Monetary policy
This is an interest.co.nz interview so there’s no excuse in not beginning with Monetary Policy. Labour is is proposing two key changes to New Zealand’s settings. The first is shifting from the Reserve Bank Governor’s sole charge over the final decision setting the Official Cash Rate and moving to a rate-setting board. Labour wants people from outside the Bank to sit on this board alongside the Bank's governors. One concern is whether we’d have the depth of talent of candidates for such an outfit not connected to the large banks or businesses.
Robertson reckons we do. “We’ll be looking towards people with monetary policy expertise, in academia. We know that there are people who have served boards before, who have a strength and a knowledge and an understanding of monetary policy,” he says.
“The two ideas we’ve got [for Monetary Policy] are linked, in the sense that we do want to broaden the objectives of the Bank, and so therefore we’ll be looking for people who can bring some knowledge and expertise in the wider macro economy – the way in which employment is going.
“So, I think within that scope, we do have a pool of people. It’s a little bit like the argument when New Zealand moved to create the Supreme Court; there was this, ‘oh my gosh we don’t have people who can do this’. Of course, we do, we need to build their expertise up, but we’re very confident that the people are out there.”
One of the planned appointees under Labour’s plan is a Treasury representative providing a liaison between the Bank and Treasury at rate setting meetings. While not a voting member of the board, I ask Robertson whether he’s confident there won’t be a perception that the Minister of Finance will effectively have some sort of input into monetary policy decisions.
This person would be expected to provide a clear understanding of the broad government fiscal objectives and Treasury’s economic perspective, he says. They’ll be “there to provide information and be a conduit, but they’re not part of the decision-making apparatus.”
“The [OCR] decision is still being made by the Bank and the external people that we’re bringing in. We want the maximum amount of information to be available to those who are making this decision. And we want to make sure that the flow of information is good,” he says.
“We’ve worked hard here to keep the independence of the Bank. We’ve got the balance of people, so that the Bank is still able to do its job, but we’re bringing the outside perspective in.”
Employment target
Now to the main change Labour is looking at – adding full employment alongside inflation targeting as central mandates. Robertson has said neither is going to be more important than the other, which I want to ask him about. Meanwhile, we’ve already got a way to determine whether the Bank has met its inflation target (the target band).
Has he had any more thought on whether to add something similar for the employment mandate? After all, Robertson said in his conference speech earlier this year that Labour would work towards getting the unemployment rate to 4% within its first term.
“The most important thing for me is, ensuring that the Bank is having active consideration of the impact of monetary policy on employment. Now, we’ve got a clear goal to see unemployment reduced down to 4% within our first term,” he says.
I jump in: Is that not a goal now? If we don’t get there, then has the Reserve Bank failed its mandate?
“No. And I’ve been very clear, the Reserve Bank is not tied to that specific percentage,” Robertson replies. “We all will have failed…that will be a collective failure – not that it’s going to be a failure, it’s actually going to happen. But we’re not saying the Bank is solely responsible. It’s about making sure that when the Bank is making its decisions, it’s looking at the health of the wider economy.”
The exact wording of the legislation change, and subsequent Policy Targets Agreement is still up for discussion - Labour doesn’t want to be unrealistic with its goal. “But I think everyone’s pretty clear that, inflation control remains absolutely essential for the Bank, but it is capable of walking and chewing gum at the same time.”
To me, that sounds like inflation targeting will therefore be held above employment in terms of this ‘battle of equals’.
“I think that’s maybe because that’s what we have now,” Robertson says. “And so therefore people are coming from that as the basis. But, if you look to the US, they make the decision…weighing up those two elements. If you look to Australia, they make the decision weighing up a range of criteria. So, it is possible, it’s done elsewhere. It can be done here.”
The next Governor
We move on to choosing the next Governor. This is something Steven Joyce is staying out of until after the election (if he gets back in). Robertson has attracted a few recent headlines saying he wants a say on who the new governor is. So, is he happy with the current set-up where the Finance Minister can veto a board recommendation, but has no other power over the process?
“I’m not proposing any change to that,” he says. “I respect the independence, it’s a very important relationship.” One reason he has been talking about Labour’s designs is to give a heads up to anyone that applies for the job about where he’s coming from.
Robertson was concerned that he wasn’t consulted when Steven Joyce signed the Policy Targets Agreement with interim governor Grant Spencer for the six-month period following the election. As it happens, he agrees with six months of the status quo. But, “when you’re in that period, immediately before the election, I do believe that it would have been better to have had some input from the Opposition in that.”
Grant Spencer’s 1-3% target with a 2% mid-point will remain in place over the six months post-election. “We’ve got to take some time to get ourselves in and then have the discussions we want.”
How about the job description for the next Governor – is he OK with that? “Yes, but, as I say, the reason we gave the speech was to make sure that people were aware that, should we be elected, this is the direction we’re going in. The job description is what it is, as it stands today.”
And, finally on this, he’s happy that financial traders will understand Labour’s position on this dual mandate? They won’t get confused by a 4% unemployment rate target a Labour government has, even if the Bank’s out there saying the non-accelerating inflation rate of unemployment (NAIRU) is 4.5%?
“We’ll discuss this in good faith with the Bank,” he says. “The exact wording I’m happy to make sure that we sit down and make it workable. One of the reasons we did this was…to help with market certainty. We certainly know from overseas, some of the other things we’ve talked about, like publishing the minutes of the meeting is actually really welcomed by market analysts because they have a lot more information. So, I am confident. And in the end, it will come down to what we can negotiate and put into the PTA.”
Export growth
Onto the broader economy. I’d asked Joyce about that goal to grow exports from 30% of GDP to 40% by 2025. It’s not looking like happening. Does Labour share the same ambition, and if so, how would they do things differently?
“We want to see exports lift. The value of exports at the moment hasn’t even got back to where it was in 2014, so we’ve got issues in terms of lifting that value,” he says. The issue goes hand in hand with productivity.
“What we’ve got to do is, what’s bogged New Zealand down for a long time, [which] is, ‘how do we drive the diversification of our economy?’ Which goes alongside, ‘how do we add value to the economy?’ For me, the starting point there, is around research & development and innovation,” Robertson says.
“We’re still well below the OECD average – private sector R&D’s about a third of the OECD average. Clearly, we’ve said R&D tax credits, we want to make sure that actually there’s some certainty of investment. For large businesses, they’ve been telling us that is something that they want. It will then enable them to start pushing themselves up the value chain.”
Free trade & TPP
How about free-trade within the export story? Labour wants to renegotiate the TPP 11. If they don’t get what they’re after, will they walk away? Or is there room for compromise?
“What we want is to be able to have something that everybody else who’s asked for it, in that agreement, has,” Robertson says. “Which is the ability to be able to protect the sale of residential properties…”
“That’s the one that I’m focussed on. I know that there were some concerns around intellectual property issues as well, and biologics. We would have to take some briefings about that. But that’s the one that has been the major sticking point for us.”
Could there be room for negotiation? “For me, that is still a bottom line,” Robertson says. Labour would still need a briefing from MFAT on the issue. But, “I’ve experienced long enough, being around trade negotiators, and around this particular negotiation to have witnessed many false dawns, and so I think we can take the time to look again at what is possible for us. I’m not going to make a statement today about…it is this, or it isn’t that. Our position has been clear – we can’t accept the TPPA, as it stood, without the ability to have that [residential property] clause.”
He wants to add another point on trade as well: “We are committed as a party to quality trade agreements for New Zealand. We showed that the last time we were in government. So that remains. And there is huge opportunity out there in the EU, and other parts of Asia, that we can start to build that up. While the TPP and the situation there is what it is, there is an enthusiasm in the Labour Party to continue to negotiate important agreements for our exporters.”
Productivity
Productivity. It’s one of Labour’s big criticisms of the National-led government – quite rightly too when you look at the stats. What would Labour do differently, then? The OECD when in town a few months ago provided us with five suggestions they reckon could get things going again. I put them to Robertson.
Number one is narrowing screening of foreign investment and reducing compliance costs – ie boosting predictability for foreign investment – what are his thoughts on that?
“We need foreign investment in New Zealand – there’s absolutely no doubt about it. We know the pool of capital that we have in New Zealand isn’t strong enough to sustain the things that we want to do,” Robertson replies. “We’ve been very clear about the areas that we’re not comfortable with, which is particularly around land and iconic land.”
“If there’s a way of streamlining the kind of investment that we want, I would most definitely be open to that,” he says. “But we’ve got those rules and we want the Overseas Investment Office to implement those rules as they should be.”
The second suggestion is enhancing local government incentives to accommodate growth – sharing the tax base linked to local economic activity. Previous leader Andrew Little was a fan of the ‘GST for the regions’ policy – is that still in the works?
“It’s certainly not our policy,” Robertson says. “What we have been doing is talking to Local Government New Zealand about whether there are some possibilities for revenue sharing, particularly where there’s value uplift in those regions from economic activity. We haven’t settled on a policy in that area, and so while we’re certainly open to the discussion, it isn’t our policy at the election.”
I add that this suggestion also includes user-charging for infrastructure and congestion charging. Phil Twyford’s quite keen on the first, I know, and the second also sounds familiar…
“Exactly, and we’ve been very clear that is one of the tools that should be in the box, along with the infrastructure bonds that we’ve also talked about,” Robertson says.
Number three is increased fiscal support for business R&D. We know Labour is in favour of tax credits. Does that mean National’s R&D grants will be gone? “No…there’ll be a mixture of them. We still think there’s a place for the grant-based system. But...for us, if you have a tax credit you’re clearly not going to be spending as much on grants. But there is still a place for grant-based funding.”
Universities & research institutes
Robertson says he’s big on the relationships between Crown Research Institutes, universities and the private sector. It’s an area of work he was in at Otago University before becoming a politician. “And I still see a lot of opportunity in there. It’s not necessarily about funding…it’s actually just about the mandates of those bodies and how they work together.”
New Zealand in general doesn’t think enough about the connections in our tertiary and research sectors. “We’re not that huge.” Robertson references presentations by the likes of Shaun Hendy on how countries of a similar size to New Zealand build much better and stronger connections between the different research institutions.
“In part, that’s because of the model we’ve got. We’ve got this overly competitive model in our tertiary sector. One of the first lines of our tertiary education policy is about building a more collaborative sector – the research and innovation side of that is really important.”
Number four on the OECD list is reviewing competition law to allow the Commerce Commission the ability to conduct market studies – something he’s open to looking at.
Corporate tax
And number five is what I’ve been wanting to get to, really. The OECD tells us that our high corporate tax rate reduces capital investment – they want government to review corporate and personal income tax rates and look for potential new tax bases. Now, Jacinda Ardern has ruled out raising the corporate tax rate. Would Labour consider cutting it?
“It’s not in our plans,” Robertson says.
What if a hypothetical tax working group were to recommend it?
“The job we’re asking of the Tax Working Group is about the balance in the tax system, particularly in how we get the balance right between speculation in housing, in the way in which we look at assets versus the way in which we look at income. We don’t have any plans at this point around corporate tax.”
Tax Working Group
We had to touch on tax – I ask Robertson whether Labour will stop ruling things out when it comes to parameters for this Group. So far, we’ve had the family home ruled out from a Capital Gains Tax, the land beneath it ruled out from a Land Tax, and we’ve just had his comments on corporate tax.
“This is the thing,” he starts. “The questions get asked. Jacinda has been very clear from the beginning that the family home and all things associated with the family home are not part of what we’re asking the working group to look at.”
“I understand for people it’s a bit difficult, because what we’re trying to say is, here’s a direction of travel that we’re going in, and we want therefore the expert working group to come back to us and say, are we going far enough? Is a bright line test of five years far enough in this area?”
I ask about excluding the family home. Labour talks about fairness across the tax system regarding income, assets and wealth. Owner-occupied housing is the single biggest asset held by New Zealanders which isn’t attracting tax. How can you leave it out?
“Yeah, but the point is, that we’re making a decision that says that your home is yours, it’s an important part for people of the security of their lives to know that it’s theirs, that that’s how we build strong communities,” he says.
“You look around the world. Let’s be honest. Most countries that apply capital gains tax do exclude the family home.”
I put to him this still leaves open the incentive for people to keep upgrading the family home in the hope of a large gain when they sell it, rather than putting capital elsewhere. “That’s cracking a different nut, though,” he says. “What we’re talking about is property speculation, not about what people do in terms of owning their own home.”
Savings tax and KiwiSaver
I put to him the idea that instead of talking about CGT, or charging imputed rents, we deal with levelling things up by reducing the tax burden on savings – something I also put to Joyce. Can he see a shift to a time when, if I put money from my wage into KiwiSaver, I won’t attract income tax on that portion of my wage, and only on either when it earns a return within KiwiSaver or when I withdraw it all? (Or just once during the process, rather than the status quo of twice.)
“Again, that’s not in our plans, and it’s not a policy that we’ve discussed in depth,” Robertson says. “We do want to encourage savings, and one of the things that I want to look at when we get in to government is, how do we reach the group of people who haven’t joined KiwiSaver?”
“Now, they do tend to be low-income New Zealanders, and therefore we’re going to have to think very long and hard about what it is that will help them in. Clearly, lifting their wages will help them come into the scheme, but no, at the moment we’re not looking at the tax regime on savings.”
Would the working group be looking at it, perhaps? “It isn’t something we’ve thought about at this stage.”
Just back to KiwiSaver, what are his thoughts on compulsion? “I still believe in everyone being in KiwiSaver – universal scheme,” he says. But he’s holding off from compulsion.
“We’ve now reached a point where those that aren’t in the scheme are largely made up of the lowest income New Zealanders. What we’ve said is, we now want to take a look at what is the best way to bring them in? I don’t want to click my fingers and say that it’s compulsory to a group of people who are looking at us saying, ‘I’m just making my way at the moment, I’m just meeting my bills’.
“So, we will look at that when we’re in government, and find a way. But the commitment to every working New Zealander being in KiwiSaver is something that we still hold.”
Fiscal plan, spending priorities
Labour’s fiscal plan has been in the news recently, with Robertson batting back erroneous suggestions from Steven Joyce that there’s a hole in it. The conversation has moved on to what room Labour might have for spending above and beyond what they’ve already promised to the government’s current track. He’s talked about efficiencies and reprioritising spending from some areas to others. Any updates on that?
“I think what every government does when it comes in, is it takes a long hard look at what the previous government’s been doing. And there is invariably going to be things that we won’t carry on with – that’s the nature of every government coming in.”
Such as?
“An example could be, the Social Investment Agency that the government set up. We don’t believe that the way they’re implementing that policy is sensible. I would have to be convinced that a stand-alone agency was the best way to do this.”
I put to him that he’s mentioned prisons before.
“We’ve also looked at both the corrections budget and the defence budget. They’re mainly large-scale capital items that we’re talking about there. But, certainly, our goal would not be to be having to build more prisons at all. And clearly the defence budget, while we’ve got to make sure we maintain our defence force, I’d want to have a very long look at the $20 billion plan.”
Do we need to move on from this recession affair with looking into every potential million dollars of an opposition party’s policy platform?
“I think voters have a right to know what our priorities are,” Robertson says. “And that’s exactly why we put the fiscal plan out in July – I might add – and then updated it after Prefu. Because, we wanted people to know what our priorities were and what our commitments were. We’ve put that out, it’s fully costed, it adds up. People will then make their judgements.”
Why change?
I finish by putting a few numbers to Robertson from the Reserve Bank’s latest projections in its August Monetary Policy Statement. GDP growth forecast over the next three years at 3.1%, 3.6% and 2.9%, annually; the trade-weighted exchange rate dropping from 77.5 to 76; the unemployment rate constant at 4.5%; and a household savings rate as a percentage of disposable income going from negative 1.6% to negative 0.7% - getting better, at least. Why change?
“There are some good, solid indicators in there,” Robertson says. “But then there are other ones, like GDP per capita, which is not so good. We’ve still got far too many long-term unemployed, we’ve still got 100,000 underemployed people. We can be better than we are.
“The argument has never been that those high-level indicators aren’t good. The argument is, are people getting a fair share in prosperity? Are we actually making sure that we’ve got a long-term plan for sustainable prosperity? And we all know that the other numbers there that aren’t so good are productivity numbers, export growth…those are the numbers which will be most important in driving improved living standards for New Zealand.”
“The question for me is, what’s next for New Zealand? And what’s next for New Zealand needs to be, lifting the value of what we do, improving our productivity, lifting our skills, making sure that we’re generating high-paying jobs. Those numbers don’t deliver that to me.”
158 Comments
Small town - you do appreciate that he was faced with a once in a lifetime GFC and still managed to keep Govt debt to a levels amongst the lowest in the OECD, and is now producing surpluses and starting to reduce it - you do realise that Labour managed to run surpluses during a global boom period from 2002- 2006 and then set up a massive future contingent liability in its final term with the likes of interest free student loans etc as it tried to cling to power in its final year.
Understand Rick, NZ isn't an island, its trades with the rest of the world and was badly hit along with everyone else in terms of commodity prices, bank funding costs (there was a frightening period where they could not access funds from anywhere - understand the connetations of that) - Yes its banks were more prudent and we didn't have the same exact issues particularly in housing, indeed that's what's causing the housing problem now, too low interest rates trying to bail out others, pushing asset prices through the roof.
It was a massive crisis very well managed.
the reason was the Australian government using their balance sheet to make sure there big four banks could carry on
The role of the wholesale lending guarantee
The Labor government passed its so-called ‘wholesale lending guarantee’ into law in November 2008, assisted by an apparent pact of silence on the part of the finance sector and the media. The lack of reporting belied the enormity of what was happening. For a small fee, government would now guarantee all of the banks’ overseas borrowings, including the rollover of hundreds of billions in existing debt. This was not just a case of government lending the banks a helping hand in hard times. Rather, Australia’s four big domestic banks had told the government in October, as the world went into financial meltdown, that without its backing, they would collapse
It's the Tweety Pie syndrome
Tweety Pie is alive and well. Tweety Pie's entire world begins and ends with her birdcage. Sylvester is a cat that exists to amuse her. Grandma, her owner, exists to feed her.
So here's the thing , I am hardly neurotic, I just look at things from a realistic and pragmatic viewpoint.
I personally have nothing to lose from a Labour Government.
I have only one home in a trust , our investment assets are held for the long run , and so there is no personal issue with CGT because I will never have to pay it , because I will only sell off my assets as and when and if I need the money over the next 20 years .
There is no donations tax , so we will donate the stuff to my kids before I die if we dont need it
I dont own any farms (my family does ) and my practice can be sold off piecemeal over 5 years after I turn 65
CGT affects the next generation who will really struggle to build assets and personal wealth to give them a comortable existence
Like you, I also dont want Auckland properties to go up, it just means more rates to pay but I have much more to gain from a National because at least they are not hell bent on taxing everything in sight without giving a hint as to how much they will take.
The problem is that what Labour is proposing WILL NOT bring property or house prices down , a new tax or additional tax on Land simply makes land more expensive .
And if you drive investors out of the housing market who on earth will provide rental stock ?
Housing New Zealand ?
Forget it , even Helen Clark was not able to achieve that , and so she made it easy for the private sector to supply rental stock when she realized her Government was unable to do so .
Thank God I am an EX-banker , all that PC nonsense , minding your P's and Q's , your colleagues arse creeping the pompous bosses in London and corporate backstabbing is not fun at all .
The only thing good about it was the pay , the bonuses and the share options , other than that its a crock of you-know-what .
After a few years at Standard Chartered , I had had enough
As with most parties a few good ideas and some I think aren't the best. A board to determine interest rates has some merit and should be pursued. But some transparency would also be good. However, targeting employment doesn't seem like any point - merely a "feel-good" policy. Let's also remember that unemployment is now at 4.8% so getting to 4% is hardly impressive.
But tax is the big issue. As Winston Peters suspects, and I think he is right, they know what they want from the tax working group - the things they have ruled out means there is only a few things left. On corporate tax a really bold move would be to move to zero. I won't hold my breath for that one.
National = There's a housing affordability issue, get us into goverment and we'll fix it = We're in government, oh you like expensive houses, what housing crisis?
By your definition, National are liars as well, or do they just have multiple personality disorder? In which case you could say we've had a bunch of psycho's running the country for the last 9 years..
@independent ..... here's food for thought , Sydney and Vancouver house prices ( for example) have done the same as Auckland, in fact Vancouver is worse .
Labour are wanting us to believe they can sort it with a simple click............. they cant .
We have low costs of borrowing , massive immigration , a Labour -leaning run city which until recently restricted development and had no plan .
Its going to take a generation to sort out .
Labour are making promises they cant honour.
Interestingly, Vancouver is now taking some novel approaches to address speculative demand:
http://vancouver.ca/home-property-development/empty-homes-tax.aspx
"Net revenues from the Empty Homes Tax will be reinvested into affordable housing initiatives."
This follows upon their tax on foreign buyers.
So yeah, multiple places have faced this same issue, and it will certainly take time to address. Best get started then, eh? No use postponing action for another three terms.
@Independent .....no need to get personal , sarcastic of facetious ......... I dont think I have ever said that National is honest .
If you look at my comments in the past, going back years , I have always said that National were not honest with us about immigration .
I have always said that I dont trust Winston Peters.
Now we have Jacinda lying through her teeth , or not coming clean
Voting in this election is Hobsons choice we will just have to accept the horse we get allocated by a naive and gullible electorate
FYI, I'm not sure what in particular you are claiming Jacinda is lying about...? But she's noted today that inheritance tax is not one they'd consider implementing were the working group to recommend it. It was another spectre that Stephen and Bill had started shaking at the electorate and shrieking about.
They've said, what, removing negative gearing, extend bright line. And see what recommendations a working group makes, in conjunction with consulting with the NZ public. They've explicitly excluded the family house and land from any CGT, were such a tax recommended.
So what plans do people want disclosed?
Sounds more like some are parroting talking points. Primarily property investors trying to scaremonger up support from those who would not be affected by Labour's stated tax changes or a possible CGT.
I cannot imagine any reasonable Kiwi who does not have investment properties would get their knickers in a similar twist. And why would the want to, when National has demonstrated zero interest and less than zero progress in affordable housing - something their children and grandchildren need.
"consulting with the NZ public." - the only meaningful and proper way to do that is called "general election" and they are refusing to put their tax changes as part of the election manifesto ( for this election or the next ).
"Sounds more like some are parroting talking points. " - which is exactly what you are charged with on behalf of Labor.
"consulting with the NZ public." - the only meaningful and proper way to do that is called "general election" and they are refusing to put their tax changes as part of the election manifesto ( for this election or the next ).
That's fair - so I guess the public will decide if they're okay with the idea of bright line to 5 years, negative gearing being removed, possible water tax, and possible introduction down the track of a CGT that would exclude the family home and land.
I suspect many will be.
As for me, I try to bring some sane analysis to some of these discussions. Rather than "LABOUR IS LYING!!!!" or "a thinly veiled plot institute tax, tax and more tax". I always welcome logical counterpoint and analysis.
In fairness to your point - I do end up having to do a fair bit of rebuttal on this site to straw men and misrepresentation of what many on the Left are saying and doing. Ironic.
yep, more astroturfing from the usual suspects. Labour's furtiveness on their tax policy, and being asked to just trust them to work out what is best and even details on their announced policies after the election (after sitting in opposition for 9 years) is simply appalling.
Whereas the public voting for National to fix the housing crisis in 2008 because they said they would, but then they didn't -in fact they spent 9 years in power denying a housing crisis exists is not appalling? same argument could be used for youth suicide, the declining state of our waterways etc.
Do you really think Foyle that it is okay to constantly scrutinise the main opposition party to the nth degree while giving the party in government a free pass to be useless is ok?
If you do -well vote on tax -for me I am relaxed about it. I don't see tax as the priority. I am much more concerned about housing, mental health, education and being able to enjoy the country's waterways like my parents, grandparents and great grandparents did.
watch marae form last week, they asked all eight if it was a housing crisis, everyone says yes even act and the maori party(government partners) and the poor national MP on the end says its not, its a challenge.
to me sums them up can not even admitt a problem that needs fixing when it is slapping them in the face
https://www.tvnz.co.nz/shows/marae/episodes/s2017-e28
The interesting aspect, is for the majority of New Zealand there is no housing crisis. The housing issues are primarily in Auckland. Most of the rest of the country has not had much issues in regards to housing stock. When Canterbury got a supply shock from a few earthquakes, their council went on a building spree, opening up land for quick development. At present, there is a surplus in supply in Canterbury. Why is it that the Auckland council quashed development for a decade when it was clear that there was an imbalance in supply vs demand? The primary driver of this demand appears to be specuvestors instead of organic demand. The blame lies primarily with the council. Some councils responded well (CHC), some extremely poorly (AKL),
National have failed in a lot of things. But have done a decent job of managing the economy, bringing us back to surplus from a very deep hole we were in when they came to power, and are very much a known quantity with clear policy going forward. They are also finally starting to put some money into sorely needed national infrastructure projects.
Labour are asking us to trust them even though they have basically no one with any commercial or ministerial experience, have strong tax-and-spend preferences and are being at-best furtive and coy about their true tax policies - we are expected to take it on faith that they will turn out OK even though they have already indicated that they are going to hammer various mostly non-labour voting groups and target productive industries to fund their lolly scramble (ie the bogeyman of Clientalism). And additionally have a back-to-the-1970's industrial relations policy penned by the council of trade unions as their payoff for all the money that unions funnel into their coffers.
Add to that acid mix we will have the hard-left greens in their coalition to really wind the sphincter factor up to 10.
Does none of that scare you?
I'm not a fan of National either, they have fiddled while Rome has burned, though I think they deliberately went the high-immigration route because it was an easy way to pump foreign money into the economy and retain the treasury benches without borrowing, their big failure being in not pushing the necessary Auckland infrastructure development needed to support the increased population - but then 2 labour mayors in succession haven't helped with that either.
Given a bad choice between asleep-at-the-wheel National and a much worse tax-and-spend Labour who don't appear to have been awake during economics or history at university I am certainly going to side with the more fiscally responsible mob - even if I won't vote for National themselves.
Least bad option seems to be Act to me, on principle that they might at least pull left-tending National slightly to right, and have broadly Liberal principles with rationality and pragmatism on other emotive issues like euthanasia. I don't like their support of exceedingly expensive refugee immigration - so much cheaper and helpful to more people to address those problems by spending same money at the source rather than taking on uneducated and frequently non-integrating refugees that will cost up to a million-per-head over their lives. But I can see why they need to do it given Epsom is 30% Asian.
Winston is a lazy and entitled Muldoon-like populist decades past his use-by date and surviving only as a cats-paw for the media. He frequently appears to be slurring and confused during question time in the house and by all accounts was rather lazy when he was in govt. Should never be allowed near treasury benches again.
Greens are unevolved communists - using green veneer to gain power (like ex Australian democratic socialist (marxist) party leader Russell Norman). They've ejected the more thoughtful and ethical environmentalist MPs from their party in the wake of the MeTu scandal, and like Trotsky/Lenin seem mostly about using environment as a cover for their social agenda. I would happily see them vanish from parliament as like Alliance before them they are well past their use-by-date.
I do respect a few Labour MP's (D.Clark among others) but their subservience to destructive Council of Trade Unions money, agenda and control (Unpopular-in-caucus union man Little still at #3 on list! and was only replaced during brief pre-election window where caucus can outvote union) and general antipathy towards farming and productive industries + belief in tax and spend in face of all evidence of its perils is a frightening package. I do favour their land tax idea, so long as balanced by income+business tax reductions, and don't dislike CGT barring proposed exemptions but would need to see more detail on how it was to be enacted before I would vote for a party proposing it.
This lot are dangerous to all proponents of the benefits of a system where you work hard and reap the benefits of your (own) efforts. All of what Robertson is saying is a thinly veiled plot institute tax, tax and more tax.
As Winston Churchill once said "We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle".
Read more at: https://www.brainyquote.com/quotes/quotes/w/winstonchu700209.html
Isn't there an elephant in the room with these video comparisons of Robertson versus Joyce (yesterday's video).
Joyce in his video played the role of being the serious and considered Finance Minister of NZ -having a serious discussion about NZ's economy. I expect Joyce's expectation was this performance would give him the respect of his countrymen. But this performance come days after a bald-face manipulative lie or $11bn act of mathematical incompetence from Joyce, which no financial expert in the country agreed with.
Given Joyce's act of manipulative lying or gross incompetence why should New Zealand voters take him seriously? How can we trust any of his numbers? Why does Joyce think he can be a lying shock-jock or bumbling incompetent one day and the next day the public accepts him as a trustworthy and competent Finance minister?
Robertson in this interview didn't set the world on fire with excitement. But that doesn't matter because as long as he is competent and trustworthy, which he was, he is leaps and bounds better than Joyce.
Joyce called out on his persistence with "fake news" at the Mood of the Boardroom Herald debate;
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…
Shayne Currie, the moderator said Joyce's claim was "straight out of a Trump playbook".
So Kate, as the local Labour rep can you tell us exactly how Labour will cover the massive hole in their fiscal plan with near nothing budgeted for operating allowance?:
In 2011 National allocated money to health/education and then had $900m operating allowance. For one year, that year. That was in the depths of the pit of global financial crisis. They faced an $18bn deficit most of which was a carry over of Labour’s 54% spending increase and $7b operating allowance increase in 2008, and they faced permanent, ever increasing deficits – forecasts of debt to GDP of 70% (vs 25% now) by early 2020’s and $14b per year interest payments.
Ardern and Labour called it the ‘zero hope’, ‘zero future’ budget and said it would kill government services dead and lead to the death of poor people in New Zealand.
Well (deceitful? lazy? or just plain incompetent?) Grant Robinson has just presented a fiscal plan where they have allocated money to health and education, and then left $900m operating balance for *3 years*.
So in order for Labour’s numbers to work they have to run the most ruthless austerity this country has seen in decades. Much more severe then National in 2011 which they said was causing deaths. It’s three times worse – as Hamish Rutherford pointed out.
And yet compliant media economists have got up and said ‘there is no hole’.
Except Labour have to run budgets in 18/19 and 19/20 that belong to the ACT party. Actual massive cuts in government spending in real terms, for everything not health and education. Do any of these media economists actually believe that will happen?
Could anyone with any sort of brain believe that Grant ‘spend it now’ Robertson is going to inflict massive austerity on his pet public service in 18/19, 19/20?
The mendacity from media and their pet economists on this issue is unbelievable.
It’s not just that there is an $11billion hole. Labour cannot keep key promises, like: fully erasing the median gender earnings gap (lifetime), introducing living wage in the public service, and putting together huge pay deals for Nurses and ECE.
I think Kate is leaning towards New Zealand First.
Labour's fiscal plan is audited and based on the same assumptions as the government's (Prefu) -so any supposed tightness applies as much to National as it does to Labour.
And Foyle if you are getting your figures from Joyce -well better be careful -not one expert in the country believes him. As a Finance Minister he has committed harikari.....
It’s not just that there is an $11billion hole.
No, there is not an $11billion hole.
Do I think in those tight years that you mention that Labour will "inflict massive austerity" - no.
The overall tax take as put forward in PREFU was conservative - i.e., predicted to be tracking lower than present due to NZSF and the banks having contributed what they referred to as "one-off" tax receipts. Hence, no budget forecast can be cast in stone. Those fiscal years you mention might be tight, they might not be tight. It's all prediction.
The argument here is whether or not there is an $11billion hole in the fiscal plan and there isn't - irrespective of the various side issues that Steven Joyce is now trying to run as a sort of 'back track' on his earlier mistaken calculations.
yes it has, though actually it was over the first 5 of those years in the wake of the huge structural deficit left by the outgoing Clark govt, the GFC, and a little contribution from the Chch earthquakes. During that period NZ actually did better than vast majority of OECD in limiting the build up of debt.
With the decent growth that NZ has had over recent years the debt to GDP ratio has actually been falling since 2012:
http://www.oecd-ilibrary.org/economics/government-debt_gov-debt-table-en
Describe this "huge structural deficit" in more detail? Do you have some detail?
I was one who ascribed to this belief in the past, but I've not actually seen the facts of it presented anywhere. I know National blamed it on Working for Families and Kiwisaver, describing the first as "communism by stealth", but they've not done anything to reduce that and are now in fact looking to increase it. National did of course increase taxes by removing the tax exemption on the employer contribution to our Kiwisaver - hitting the average taxpayer again and increasing tax takes there. It also looks like they reduced spending by cracking down on beneficiaries [Source], something that's certainly supported by anecdotes about it being much harder to get social support now.
Are you talking economic cycles? When the GFC hit, John Key was claiming there could be a decade of deficits to come. As it happened, apart from some slowing of the economy, NZ was not hit hard in large part because our banks were not extended into silly areas the way those of the USA and other places were.
National certainly did the reasonable thing - spending to stimulate the slowing economy rather than the traditional right-leaning "austerity" approach. Arguably their $1.6 billion bailout of South Canterbury Finance was socialism at its finest...but they were always going to go socialist rather than capitalist and lose votes over that one.
On the other hand, borrowing money to fund tax cuts just as a global recession hits seems odd...not necessarily fiscally prudent, though you could argue it's part of a stimulus approach.
John Key didn't seem to think Labour did a bad job of fiscal management overall, saying:
Firstly let me start by saying that New Zealand does not face the balance sheet crisis of 1984, or even of the early 1990s. Far from having dangerously high debt levels, gross debt to GDP is around a modest 25 percent and net debt may well be zero by 2008.
In other words, there is no longer any balance sheet reason to justify an aggressive privatisation programme of the kind associated with the 1980s Labour Government.
He did end up selling off government assets after saying that, but ah well...the above statement was made before he gained power.
a few seconds on google... http://www.stuff.co.nz/business/opinion-analysis/9840884/New-Zealands-d…
"In the year ended June 2004, core Crown operating spending was about $35,800 per household in fiscal year 2013 dollars, yet the government still had a fiscal surplus of 3.8 per cent of GDP.
By the year ended June 2009, the government had lifted spending per household by 21 per cent to $43,400, in the same dollars, and there was a fiscal deficit of 2.1 per cent of GDP.
Electioneering spending enticements, such as interest-free student loans, Kiwisaver subsidies and working for families, were part of this spending transformation.
Despite recession and tax cuts, core Crown tax revenue in the year ended June 2009 was almost exactly the same, at $37,100 in fiscal year 2013 dollars, as in the year ended June 2004.
On these statistics, the switch from fiscal surplus to deficit between 2004 and 2009 was caused by an unsustainable spending splurge."
Thanks for the source. National seems to have gotten it down to $41,700, although has maintained most of the things Labour did.
I haven't checked the numbers but I'd imagine a part of that Labour spending was also on the Cullen Fund - which arguably is a good idea, investing in pre-funding the Pension for a known demographic timebomb that will hit in the future.
I think the problem some have too is they perceive too much of this reduction in spending has been via kicking people off the benefit (see the welfare mix change: http://www.stuff.co.nz/business/industries/92951932/budget-2017-nine-ye…), and - more affecting of the everyday Kiwi - continuing issues in healthcare. Healthcare is a really tough nut to crack, in fairness.
In fairness too, different sources cast different lights - NZ Initiative are certainly never going to cast Labour in a positive light. However, the spending figures are objective and thus fair.
To be clear I am not a fan of a lot of National's choices over last 9 years. Taxing everyone and then giving it back via WFF is bad example of politicians overtaxing and then handing out lollies to raise their profile (tax credits would be better). But politics is the art-of-the-possible, and you don't get to do much if any good in opposition. Overall National has undoubtedly been a much better steward of the economy than Labour had been (given their proliferate spending and creation of large structural deficit) or would have been had they continued, so they get a better-than-passing mark from me.
Agree - I'd rather we got rid of WFF altogether along with the Accommodation Supplement, both effectively little more than subsidies ultimately for businesses and property investors, and both only required because we've really mismanaged the housing situation in New Zealand over the last 20-30 years. (Note, I include the previous Labour government - whom I voted against - in that.)
Probably like yourself, I'm a more traditional National voter who simply hasn't been happy with a number of their choices over the last nine years. And while I can understand them abandoning their principles re WFF and Interest Free Loans (they want to hold power, not get voted out), I can't give them a pass mark on housing.
And that's the biggest issue many New Zealanders face today...And National have shot themselves in the foot by calling is "a good problem to have", at times saying it's good that prices are going up, and refusing after campaigning on the housing crisis to even admit it exists. Seems to me a massive misstep in a country where even many of the Haves are starting to worry about their kids and grandkids having the same opportunities to own a home.
Regarding tax credits would be better:
WFF is a tax credit;
http://www.ird.govt.nz/wff-tax-credits/understanding/all-about/all-abou…
And given their proliferate spending, I think you mean profligate spending. Proliferate is what rabbits do really well, and is a verb, whereas you needed an adjective in that sentence.
Nice to know that National got a better-then-passing mark from you.
Welcome. I actually enjoy our discussions. I am - in contrast to what some here assume, and probably quite like yourself - traditionally a National voter.
I think what's put me off in recent times have been ethical issues (Judith Collins, English & Todd Barclay, Key and Slater), and the failures vis-a-vis the housing crisis as well as what I've come to feel is an overly punitive approach to those in genuine need of welfare support - lumping them all in with "bludgers" who abuse the system. Those and a few other bits and bobs.
No, here's Jacinda on it;
"Inheritance tax is not what we're trying to do here. That's not what we're looking at - that's off."
http://www.newshub.co.nz/home/election/2017/09/bill-english-scaremonger…
I suspect it's actually easier to talk about what is on the table - and that is an extension of the bright line test for all non-owner occupier real estate and/or a full fledged capital gains tax for all non-owner occupier real estate and/or a land tax for all non-owner occupier real estate.
At least that's about all I can think of that's left!
She's the Flim Flam Lady check out what she says around 10.51 on this - she isn't discounting it. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11920548
Colin James who has been a political commentator for longer than I can remember says National is in damage control and need a deeper rethink. https://www.odt.co.nz/opinion/damage-control-and-deeper-rethink-needed.
What Joyce and English are doing is not working -they will be replaced....
"Campaign chair Joyce damaged not Labour but himself. He presented as a Minister of Finance who couldn't read a simple numbers table. He also damaged his party. We can be as near certain as anything ever is in politics that Joyce will not manage National's next election campaign.
More puzzling was that English, who used to be good at reading tables, jumped in Joyce's hole then stayed there through the week.
Is Mr Reliable now Mr Rattled?"
Bill English also started digging himself into Paula Bennet's hole, before realising the mistake. Proclaiming that it is good we don't have a written constitution so we can change what Human Rights we give certain people. Then the next day after being condemned by Human Rights lawyers everywhere, suggested that Paula Bennet was wrong to suggest his government would take away peoples Human Rights.
It's worth highlighting that they are currently battling the NZ courts to allow them to deny prisoners the right to vote, something that the courts have found to be inconsistent with the Bill of Rights and international courts have found to be contrary to human rights.
National are taking it to the supreme court: https://www.newsroom.co.nz/2017/09/10/46928/people-in-prisons-are-peopl…
Key point - there's a consistent value in there.
In jest.
It will be a fascinating election as it does seem to be boiling down to a referendum between property speculation is okay versus property speculation is not okay.
Even those surveyed in the Herald's Mood of the Boardroom saw it that way - unaffordable housing and homelessness being among their key concerns. Makes sense as their workers have to live somewhere.
If housing is the issue that decides the election then the good news from Shamubeel Eaqub is voters have positive choices ranging from Labour, Greens, Maori Party and New Zealand First.
https://www.stuff.co.nz/business/opinion-analysis/96654690/shamubeel-ea…
Shamubeel also calls out politicians for being negative and National's negative campaign style. Look at the kind of negative messaging National has given us;
week 1: "jacinda will tax your home"
week 2: "where's the $11b jacinda?"
week 3: "jacinda says kill yourself"
I think this negative campaign style is more a reflection of the National party as a whole rather than its leader Bill English -who I think is doing his best and has upped his game. I think Bill has recognised that leading the nasty party against Jacinda's nice party is not going to work.
But for Bill it is too little too late, especially on housing and what they recently announced is economically ignorant. It is a band-aid which is grossly inappropriate to the size of the problem, as Phil Twyford -Labour's housing spokesperson explains, http://www.labour.org.nz/national_s_housing_band_aid
NB; An Australian economist also describes National's latest housing policy as failing Econ 101 and has endorsed Labour's housing package as the more effective option.
https://www.macrobusiness.com.au/2017/09/nz-pm-spins-housing-failure-pr…
You got it Kate..and throw in the environment too. The all out media war on Jacinda has begun, Winston looks more and more like national everyday.
In spite of the efforts of MSM and the wondrous opinions they are wheeling out in support of the rockstar, we have a brexit/trump brew well and truly on the boil.
On election night the young, happy, healthy, multicultural blue spandex outfitted young Nat runners will be lying face down in the mud, completely overrun by those who have seen through the charade. .
Some interesting quotes from Mood of the Boardroom:
Tourism Boss:
"I think the National Government has been a very credible and stable manager that deserves respect for its approach in managing the country," said a tourism boss. "However, it is arguable that they have come late to issues such as water management, local infrastructure and transport investment with a piecemeal, below par approach."
Don Brash, former National Party leader:
ICBC chairman and former Reserve Bank Governor Don Brash said the Government has failed to adopt policies designed to increase per capita growth, and many of the other problems (increasing wealth inequality, poverty and homelessness) are a direct result of the Government's failure to deal with the unaffordability of housing.
Energy sector boss:
"The Key Government was negligent with the house price outcomes which is a very difficult, inter-generational issue now to resolve," said an energy sector boss. "English was Deputy Prime Minister and Minister of Finance during that time so has to shoulder some of that blame, and therefore putting the party's interest ahead of New Zealand."
The last seems to have become the stumbling block, especially after the campaign promises on it 9 years ago. Even in the business community.
The biggest local concerns from Mood of the Boardroom (rated out of 10):
1. Congestion in Auckland: 7.40
2. Adequacy of transport infrastructure: 7.36
3. Growth pressures in Auckland: 7.13
4. Housing unaffordability: 7.09
An interesting quote from a Westlake Boys High School teacher: "idiots with rich parents"
Teacher reprimanded over calling Chinese students 'idiots'
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11921377
Yikes, not good. You would have to wonder whether the teacher is one of the many in AKL who have been locked out of home ownership.
As I said earlier, it seems to me to be the defining issue of this election campaign: Labour voters in the "speculation is not okay" camp - National voters is the "speculation is okay" camp.
And then this gets reported in the Herald;
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11919332
Which only serves to feed impressions that many of those of Chinese ethnicity are firmly in the speculators camp.
I never picked this NZ election to be quite so polarising. We had of course seen this elsewhere in the world but I just didn't pick it coming here. Until Jacinda started to get the cut through on Labour policy that she is, I just don't think many were aware of their crackdown on speculators stance. Once that was made clear - we saw the rise and rise in the polls.
I've said this before but my Boomer parents-in-law bought a 4 bed, 2 bath + swimming pool in Auckland on ONE teacher salary. They currently rent it out to TWO TEACHER COUPLES!!! That's right it takes 4 teachers to afford the rent (they can't afford to buy) on the same house that once took one teacher salary to buy. And who paid off that mortgage by his 40s.
Yet, it you believed the rhetoric of many of the "I GOT MINE" Boomer, you would think that somehow teachers then worked harder than teachers now and that the inequality currently crippling the lives of those under 40 was brought about by lack of hard work.
Sky high interest rates held house prices down and inflated away mortgages in a few short years (with corresponding salary rises) during the 70's and early 80's. Net effect was a massive transfer of wealth from elderly property owners to younger boomers. Reverse of what has happened with low interest rates of last decade. Boomers won when young and won again when old.
Oooh look it's the NZ will turn into Zimbabwe trope repackaged.
No doubt we'll be Venezuela, USSR and Cuba before too long - it's the only possible end result of not voting for National, run for your lives, we're going to be taxed a bit more, the world is going to end!
When you've personally managed the aftermath of bombings, coups and riots you tend to have a circumspect view of the world and what human nature is capable of. Scoff if you like, but I no longer question why a friend in the Regions has a steel reinforced door to his bedroom.
On a serious note I couldn't do that, so hats off to you.
However, there is a huge gulf between 3rd world countries and western civilization, Kiwis much like the Brits would maybe take to the streets at a push, waving a placard saying "Down with this kind of thing", but for the most part would grin and bear it, potentially pausing to tut mildly into their flat whites.
If NZ had been colonized by the more Latin Europeans then maybe you might have a point, the Spanish and French love a good riot, but there's a fair bit of British stoicism evident over here.
Voting for labour is like buying something online from China with your credit card , all we have is a pretty picture, a fancy advert , some vague details and little idea as to the quality or even whether they will deliver .......... you just have to trust them .
Thing is ........... can we ?
Voting for National is like selling your assets to China so you can temporarily spend more on your credit card. All we have had is a smiley leader (Key), fancy adverts (rowing as an 'everyman' sport?!), some vague details and little idea as to what they've delivered (nothing of substance)........ You can't trust them.
Thing is ....... why should we?
But really we have been also been rather cunning in selling houses to a whole lot of Chinese nationals to bring a lot of that money spent in China back to NZ plus increase our tax-base with a population of hard working Chiwis.
NZ is hard pressed to support itself of tradeable agricultural products and tourism alone, but we are too small to create large internal markets and too far away to be competitive in other global industries. Immigration has been a short term fix for that balance of trade issue, but won't work forever. Is there anything we can we do to fix that?
Again you show your mind blowing ignorance and comparing Aliexpress to Labour really just bites you.
So, yes. My experience as a heavy aliexpress buyer is,
a) I can save a huge amount of money if I buy with care. Example I buy SS bolts and screws at <1/2 the trade price I pay in NZ. and that is the Trade price I get in NZ trade shops and not Bunnings retail prices.
b) With over 450 buys I have only a handful of failed trades 75%+ of which I got refunds on. So yes sure I've lost a few dollars but frankly you get the same failure with NZ stores, in fact even worse IMHO.
c) Like voting you dont look at the fancy advert you look at the feedback, ie do your research. Now the thing is the feedback is critical to the web stores survival and prosperity. They only want 5 stars or they go out of business really fast so they are usually keen to give good service.
Did I mention the huge savings? and then there is the huge choice?
and I mean huge unlike NZ where you have to pay a premium for the few colours and sizes they choose to sell V picking your choices from a mind blowing sized shop.
So if you are comparing aliexpress to Labour, well Labour gets my vote.
if you tax the family home or the one property you own and live in you will need to maintain a set of books for the house. The house becomes an investment or a business and then you have the nightmare of running a set of tax accounts for your home. That is the ultimate model in Doctor Morgan dream and what most journalists dont realise is that once you apply a tax to something it becomes the preserve of the IRD and that means a set of tax accounts. Is the set of accounts going to have a standard applied and will it be single entry or double entry......It will of course be single dimensional or multi..?.
Depends on the complexity of the tax system. That is the issue with TOP's plan, it's too complex.
Assume that all income is taxed as per the INCOME TAX system. We all know that capital gains on property rarely come from any personal effort by the owner. The only records one needs is the purchase price and the selling price. Pretty simple really.
If thats all and no inflation adjustment... no that leave it open to complete ridicule from tax specialists.. you really need to understand that once you tax a house you are taxing a very complex model... firstly you need to adjust for inflation... read the problems with the CGT in australia... its a long read...
What about exceptions (e.g. for family home and how this is defined), capital improvement expenditure, no loss/no gain transfer rules, personal limits, carried forward losses, entrepreneur relief, rollover relief, tapering adjustments. All these form part of the capital gains codes elsewhere.
A yearly assumed rate tax on capital does away with all of these and is MUCH harder to avoid. It works well for FIF shares.
more taxes just as china starts to slow down.. debt at 255% of GDP and china now looking at a floating exchange rate... china purchasing power dropping...fixed interest yield curve starting to tell the story now...and aussi employment out thursday... if its more lower wage jobs and consumer confidence continues to weaken in aus then growth could remain slow for the next N years... forcing more pressure on treasury to raise funds for governments ... NZ interest on bonds to increase? forcing pressure on NZ government debt ?
I did the I -side-with.com quiz and I have just been and voted early ................ for Winston Peters .
It was a strategic decision .
Now I just hope Winston either sides with National and cuts immigration or goes with Labour curbs Labours reckless enthusiasm for and unrelenting raft of new taxes in a coalition
I am after-all a greying Baby Boomer , so Winnie will take care of our interests .......... I hope.
My best earning years were taxed at 39% by Helen Clark and Michael Cullen , and I dont want this to happen again
Reckon Bill's right. Going to be a drag race to the finish.
Will depend on young Kiwis appreciating they might have to wave goodbye to the idea of home ownership if Nats get back in...
Wonder how much of this is a consequence of Joyce's greasy propaganda re the pretend $11 billion hole.
@Rick Strauss. "Will depend on young Kiwis appreciating they might have to wave goodbye to the idea of home ownership if Nats get back in..."
Even National wins the election, Bill will learn the lesson from Jacinda effect this time, and a strong opposition party will push National do something to help young kiwis owning their home.
The employment mandate is the reason northern hemisphere central banks have kept interest rates down for nearly 10 years after the GFC. These low rates have sparked a property boom as in Auckland which we hear about every day in the media with the side effects of unaffordable housing, high rentals and increase in inequality etc. Adding a employment mandate to the criteria that the Reserve Bank must consider when setting interest rates will only make housing even more unaffordable as interest rates will be kept lower for longer increasing the disadvantage of those seeking to own or rent. At the same time a Labour government will make taking on more staff more difficult for existing or new employers by increasing the minimum wage, extra compliance costs, and forced industry agreements, so interest rates will never be low enough to reach employment targets. An employment mandate is a bad idea as those it is supposed to benefit are actually more disadvantaged as it is likely to further increase their housing costs.
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