The only way the Auckland Council's target of halving the median house price to median household income multiple to five by 2030 will be achieved is if the price of new houses falls, says University of Auckland senior lecturer in economics Ryan Greenaway-McGrevy.
Greenaway-McGrevy, who has argued our politicians must declare a war on house prices in Auckland and do what it takes to make Auckland housing affordable here and here, said this in a Double Shot interview.
In 2015 the Auckland Council said it wanted to roughly halve the Auckland median house price to median household income multiple to 5.0 by 2030.
"The only way it's feasible is if you bring down the price of dwellings. So a lot of supply has to come on line, or worse you have a massive crash as a result of something else going on with the economy," Greenaway-McGrevy said.
"There's no way that incomes can double in that amount of time, not with our lacklustre productivity growth in New Zealand. We're simply not that lucky. So a statement like that is basically saying 'we have to reduce the price of dwellings coming onto the market'."
Greenaway-McGrevy argues greater housing density is one way of improving housing affordability in Auckland.
"When you allow for greater density that inflates the value of land. But when that piece of land is developed to house, say three or four dwellings when it used to house only one, that's additional supply coming onto the market. That's restoring affordability," said Greenaway-McGrevy.
"So one reason I am a fan of density is it means we can bring down the price of dwellings while maintaining the price of land, and therefore a lot of the property values around Auckland, avoiding a crash."
"We're in this situation in which the number of escape routes are rather limited. If house prices fell by 50% tomorrow, that would be a massive shock for the economy, put us into a big recession. But at the same time if we continue down this path where housing is unaffordable, that's slowly going to strangle Auckland. It's going to strangle the New Zealand economy. So we have to get out of this situation. Allowing for greater density is one way to do it."
Greater density doesn't necessary mean Auckland needs large high rise towers at this stage, Greenaway-McGrevy said.
"If you look at cities like London, cities outside of Manhattan in New York, cities like Washington DC, there's a lot of row housing, what we call terraced housing. We don't have a lot of that in Auckland yet but we could," he said.
"If we want Auckland to continue to grow it's critical that we bring house prices down. Why should we want Auckland to grow? Essentially because cities are incredibly productive places. If we want to allow our own domestic industries working in say STEM [science, technology, engineering and mathematics] or IT [information technology], these are going to be located in cities. So if we want to encourage these firms in Auckland, we have to do something about the cost of living here to allow the city to continue to grow and to build these sectors."
"If you look at Auckland we're not really blessed when it comes to space. We've got two harbours. We're not like Atlanta where you can just grow out in every direction. It's clear that if Auckland's going to grow in terms of population, in terms of employment, in terms of its economy, we're going to have to fit more people into a smaller amount of space," said Greenaway-McGrevy.
113 Comments
there are three main costs to building - land , product and labour - with a shortage of both Land and Labour, neither is likely to fall in the short term, but the price of materials definitely should - if we broke the duopoly in building. we could easily lower build and so house prices by 20%.
Also - there is no reason we cannot take some of the high end productive work to other cities and regions in New Zealand - not just Auckland - research and the STEM work could be done anywhere - and to be honest the quality of life in the likes of Napier,Nelson, Tauranga, Taupo would all be much better and affordable - there is no need to build high rise high density housing that clearly people dont want to tackle the problem in a country with so much unused land
Yes,where is the investigation into this,the building game is owned by a few of nationals mates like Fletchers who clip the ticket at every level,they own the subdivisions,the builders, the material suppliers,instead of savings by economy of scale,they rip the country off.
Agree - high rise is not the most attractive option for Auckland (or other sizeable NZ cities). I can live with it in the CBD but as it spreads to the outskirts (Ponsonby, Parnell etc) it becomes a curse.
But with Auckland's population growing by around 45,000 people per year (900 per week) I'll be my bottom dollar we will see a further expansion in high rise over the coming decades. Unfortunate that will be.
My advice would be to encourage regional development and make it more attractive for people to live in the provinces. There are lots of attractive provincial cities/towns the length and breadth of NZ - but we need to make sure they have good employment opportunities.........
A worthy challenge for the next government, I reckon.
yes- the government could easily move some of its core business activities - agencies like IRD / NZTA / larger parts of MSD to a regional location - Hamilton with lots of flat land and ability to grow and airport - Taupo also has an existing infrastructure and of course should have free power! there is space in Dunedin, Invercargil -- Blenheim - New plymouth plenty of opportunities to grow our regions and at the same time take the pressure of Auckland, Wellington and christchurch - loosing 20 000 governmetn jobs from Auckland would have little to no impact on Auckland as many staff would move, they will be replaced by the new arrivals and of course there are lots of current vacancies Instead of talkign about supporting the regions whoever gets in should actually put some of their existing jobs into the regions -
Looks like somebody can see the writing on the wall...
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…
Encouraging house price inflation and chinese buyers certainly resulted in a tidy payday.
A certain word starting with C springs to mind doesn't it...
Might be time to call the peak.
This must have leaked from Labour or he realised his BS was coming to an end.
" Labour to ban foreign purchase..... by Christmas"
Bring it on - its less than 3% so shouldn't matter to farmer.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…
Comments like this makes me realise why we have such low productivity. I didn’t realise many NZers were socialists but looking at the comments in stuff,nzherald et al and looking at the recent poll numbers it’s looking like I was wrong wrong. Are we seriously wanting a career politician who has not worked a day in her life in the private sector and who has no experience running a business, balancing the books to make decisions that may have major life-changing effects on you, me, the typical NZers? Labour had 9 years to come up with sound tax policies but right now they have nothing but fluff. What were the Labour back-benchers doing all these years if they can’t even reveal their tax policies? To me a vote Labour isn’t a vote on the policies as there are huge uncertainties on what’s to come. Also Ardern passing the buck around to tax working group, or whatever other “working group” means their policies can be swayed by outside parties/interests that may not benefit the whole NZers. It’s the same Labour team behind Ardern that came up with a housing report with “chinese-sounding names”.
An excellent politician who owned six odd houses and left the country with a $6 Billion deficit to clean up. " "National had barely got its feet under the Cabinet table before the Treasury further revised its forecasts and projected deficits of $6 billion-plus.
So much for “careful management”. Labour is relying on short memories to rewrite history, however. It won’t fool everybody. But in the heat of an election campaign, it is easy to spout fiction and difficult to establish fact."
http://m.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=1076…
http://www.treasury.govt.nz/budget/forecasts/eff2008/eff08.pdf
https://tradingeconomics.com/new-zealand/government-budget
That might be a good starting point to sense check your assertion.
Yes. It all went into paying down debt and the pension fund.
Weren't you arguing on the fact that paying down debt is good?
Also, don't forget that National stopped contributions to the Cullen Fund.
"we would still have deficits today"
Great that you are now arguing in the hypothetical. Especially pertinent when, up until last year, we were running deficits under National.
You guys just drink so much koolaide it's poisoned your minds into a bible belt american psychology that the world will literally end if the left was ever to win an election.
Perhaps you could check you assertions - though I doubt you'll bother to take off your blinkers and do some fact checking. When the baton was handed from Labour to Labour budget deficits were forecast beyond 2023 without any earthquakes. National got in there and had us back in the black by 2015 - something Cullen and Clark were never forecast to achieve. Assertion checked.
"…and debt is projected to rise substantially…
The need to fund continued deficits contributes to gross debt being projected
to rise substantially, with GSID (excluding Settlement Cash) increasing to an
estimated 57% of GDP in 2023."
http://www.treasury.govt.nz/budget/forecasts/eff2008/eff08.pdf
I'll spell it out for you, The projected debt at the time, under Labour policy settings, from the Treasury report was not expected to decline. "…with both gross and net debt not projected to diminish at any stage
Figure 19 shows that the pattern of continued increases in gross debt is
also seen with net core Crown debt.Under these assumptions net debt
reaches 47% by 2023."
And what happened - with an earthquake or two thrown in? "New Zealand recorded a government debt equivalent to 24.60 percent of the country's Gross Domestic Product in 2016."
https://tradingeconomics.com/new-zealand/government-debt-to-gdp
http://www.treasury.govt.nz/budget/forecasts/eff2008/eff08.pdf
Seriously, you cannot understand this report?
It is a report stating the projected debt on the basis of the new forecasts arising due to the GFC.
It does not say at all that the debt was a function of budgets deficit, and even your link shows the systematic paydown of government debt during the Labour governments of the era.
The reason the debt burden was going to be increased was due to increases in government costs and decreases in production possibility.
It was not the fault of the previous government, nor was it any fault of National. It was bad timing.
Seriously, just read the executive summary on page 18 if the graphs confuse you.
They even bold the important bits.
I guess you are just in the Armstrong "fooled" category. "National had barely got its feet under the Cabinet table before the Treasury further revised its forecasts and projected deficits of $6 billion-plus.
So much for “careful management”. Labour is relying on short memories to rewrite history, however. It won’t fool everybody. But in the heat of an election campaign, it is easy to spout fiction and difficult to establish fact."
http://m.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=1076…
Yes , He is ...but I am sure he is now on a better quality of weed ...
He keep contradicting himself ... wants 50% downgrade and crash the economy, which he thinks that is a bad thing, then it is ok because we cannot continue this way ??!! wants to preserve land value while introducing a land Tax to lower it ....a lost soul , I say!
Dropping house prices by 50% what a brilliant idea from a " University of Auckland senior lecturer in economics " no wonder I dislike academics its a reply that a 5 year old could give if asked the question. I don't have the answers other than open up the building supplies industry to greater competition and remove the city limits zoning. But REALLY does anyone including this Dickhead understand what would happen to NZ if that happened ?? I'm no Uni lecturer by can tell you NZ would suffer a long and protracted Depression of perhaps a decade, unemployment could look like Greece and NO one would be happy in fact people would dream of the good old days when people wanted to own houses even as expensive as they were.
Overall house prices don't need to drop by 50%. What needs to drop is the price of homes for the first home buyer, to say 400-500K.
This is a point Jacinda has argued consistently in the election debates.
Kiwibuild will provide that, without adversely affecting in any material way the values of existing homes.
Agree that there needs to be cheaper alternatives. But seriously, how will Aucklanders feel about a newer version of Coronation Street-style rowhouses in the likes of Pukekohe, Pokeno and Wellsford? Because that's about the only way I can see housing in Auckland dropping to 400K - 500K.
The government has some very large land holdings across Auckland that they can build on. And it doesn't need to be just rowhouses, it can also be duplexes etc.
400-500K can be achieved by providing leasehold titles and building en masse with prefabricated materials.
New Zealand IS one of those few countries!
From what I gather about Auckland's CBD apartment dwellers, many are either overseas-born (and hail from countries where apartment living is common) or are students for whom the proximity of said apartments to university is worth it. I absolutely agree with you that some people need to adjust their expectations and be realistic about what they will get in Auckland for the previously mooted 400K - 500K.
What greed dreamland? ... is that the best that you and your likes can come up with ??
appealing to the vulnerable, playing on their sentiment and growing hatred for anyone who is a bit better off .... you were in that category before you sold out your RENTALS !! Go on donate some of the juicy tax free capital gains you made to the poor FHBs if you are that keen and if you dare !! or is it just BS and hot air ??!!
Go back to your stupid research on London and Vancouver properties and keep following some Canadian kids writings the same BS on that pathetic dwelling website which only reflects your likes ... you are nothing but an opportunistic trader who is crying wolf to recover his losses ...and cheering up to get back into some more properties ...lol.
You are fooling no one but yourself CJ099
If Auckland continues on its current trajectory and then, according to this professor, slowly starts to strangle itself, wont that naturally suppress house price inflation?
If Auckland is short of workers accommodation why can't we build accommodation just for that purpose? Much like students and nurses accommodation. These places could be used for people to get established in the city. A place where they could save more money and have time to look around for better accommodation. Maybe they could stay in Auckland for the week and return to their homes outside of Auckland in the weekend.
Since it is such a wise proposition and a good idea , why was it overlooked and rejected by governments in the last 20 or so years? I hear that two previous tax work groups had that as a firm recommendation ... so it must be a very wild idea in a weird brainstorming session then ....!! ..
Labour is in desperate need of cash to fulfil its social agenda - that's It, no spins necessary !!
You can put as much lipstick on a pig as you want ...it wont change the fact ... right?
For 50 years Auckland flirted with proposals for a rapid rail public transport system - the elites and aristrocrats and the vested interests shouted it down - they got their way and persevered with the road-motorway motorcar philosophy
Well guess what
The fullness of time has proven them wrong - they were wrong - they made a huge mistake - but they have gone now and don't have to suffer the ridicule that is their due
Anyone got any suggestions that will solve that without costing $200 billion and climbing for every year of further delay
Autonomous electric powered quadcopters.
I think it was the right decision not to build railways. Seems so Victorian. We benefited greatly from the cheap Japanese import and have enjoyed a fabulous car culture, something we should enjoy while we still can until we get our quadcopters.
The point is that it is well established among the labour economics literature that introducing negative shocks to a system typically result in long run (or even permanent) detrimental effects to the area.
So, strangling Auckland now means that we are pissing away long run efficiency.
"So, strangling Auckland now means that we are pissing away long run efficiency." And that is why we are seeing changes in attitudes from those behind the scenes. I suspect there will be shocks to some of our communities that will not originate from either Labour or National.
Like the old slums of Victorian working class Britain you mean? Stack the workers on top of each other in hovels so the rich can still have minions to make sure life runs smoothly for them? They certainly ended up being very well established. Why not go one step further and just have servant accomodation at regular intervals all over DGZ, obviously design them to be as inconspicuous as possible?
Some how I don't think we'll b e see a rise in Auckland's property market any time soon!
Better Dwelling article: Mainland Chinese Real Estate Buyers Continue To Dry Up
https://betterdwelling.com/mainland-chinese-real-estate-buyers-continue…
Chinese Buyers Are Disappearing Globally
Mainland Chinese buyers are exiting global real estate markets, as quickly as they became the largest buyers. Australia, one of the largest markets for Chinese overseas buyers is seeing them not just disappear, but these buyers are now failing to find financing to complete purchases. This has led to a number attempting to sell pre-construction before the properties register.
New Zealand, another hotspot for Mainland Chinese buyers, is now blaming China’s capital controls for a big decline in foreign buying. Toronto and Vancouver have had noticeable declines too.
Let's sum up. The Chinese uncontrolled have brought the nicer housing stock starting a massive boom. These people who sold moved out of Auckland and or brought cheaper houses for investor property's in massive amounts. With higher rents and house prices some get kicked to the gutter because at the same time we sell the country's state houses. And because of all this we become one of the most unaffordable city's (and Tauranga now) in the world. NOW the Chinese get stopped. Most of the country are so pissed at national they in mass turn to a government that will end this even at the cost of there house . With all this the brain child of it all key bails the party and new his property and who knows what in his trust. Just remember the house prices of around 2010 worked. Supply and demand was ok. Immigration was high too . People weren't on the streets. There's plenty of land and houses for everyone. THE ONLY PROBLEM IS HIGH HOUSING PRICES. Labour has the right ideas. Bring immigration back. Do a DTI restriction. Not for now so this doesn't happen again. As for getting or letting house prices to come down. There no way of stopping that. No way in hell. With the Chinese money gone and the country's dept so high and prices a mile from affordability there's no way of stopping the downturn. No demand. We can't even hardly lower interest rates to ether help a drop or encourage a lift. We've even killed savers in the country at a time they're needed. What a total stuff up by national. Do they even understand a economy
Dont let the facts get in the way of a good rant I see :-)
Chinese buying is a small component of the overall house price expansion, to claim otherwise requires evidence beyond anecdotes of 'chinese sounding names'.
Supply and demand were not okay in 2010:
http://www.interest.co.nz/sites/default/files/embedded_images/image/gil…
Affordability is a complex metric and as youl see its not as stretched as you probably think:
https://www.macrobusiness.com.au/2017/03/nzs-housing-affordability-trou…
DTI restrictions wont work when prices are already very expanded on that multiple, they would simply crater the market.
The OCR is 1.75%, if that was cut to zero then the 1 year rates would get down to around 2.7%, that would make housing very affordable,
So to summarize:
Scant evidence Chinese are the major factor
Supply and demand was not okay in 2010
DTI unworkable in this environment
Affordability not as stretched as you claim
Interest rates cuts would have a dramatic effect on affordability
"When you allow for greater density that inflates the value of land. But when that piece of land is developed to house, say three or four dwellings when it used to house only one, that's additional supply coming onto the market. That's restoring affordability," said Greenaway-McGrevy.
Greenaway-McGrevy is very naive! The apartments cost about the same as the originally zoned house and land. No benefit in terms of affordability at all!
Yes very naive.
In most parts of Auckland, converting a one house property (worth say 900K) into 3 dwellings will result in the new dwellings (assuming at least 3 bedrooms) selling for at least as much as the original house, given construction and other costs, council charges, GSt and the need for a healthy profit margin.
The wider supply benefits will only happen if that conversion is occurring on a large scale. That is very unlikely given the constraints.
The conversion of one house into multiple dwellings would only help affordability if it was one house converting into 6 x 2 bedroom flats - what I'm thinking here is a better designed version of the old 'sausage flats'. Unfortunately the Unitary Plan effectively prohibits that with some of its rules.
You are still thinking like minnows. Try to imagine what would happen if for example many six pack apartments replaced single older buildings on quarter acre sections especially within walking distance of shopping malls or other preferred sites such as railway stations. Rules will be changed if those with the real power in society wish it.
Also insightful. The more emotional and incoherent the comments, the more you get a sense of the fears of middle NZ. It also gives you an idea how people respond to structured ideas based on empirical research. The more incoherent and squawkish the responses, the greater you understand how people are incapable of dealing with ideas that they feel are somehow threatening to their sense of self worth.
You should watch the interview. It was very good. Gareth Vaughan is a good interviewer and the interviewee was enlightening and expressed his ideas clearly with a focus on outcomes.
Ryan's comments are spot on. But his view, the way it's portrayed here, is incomplete. Yes, lowering the price of dwellings without crashing the land prices is key. Densification has to happen, and uban planning is about 5 decades behind Europe. But there are more structural points, one of which is the (other) elephant in the room: demand.
1) Halving house prices by 2030 will have negative macroeconomic consequences due to de-leveraging and negative wealth effects. It's more likely and more preferable that prices grow slower, possibly not at all, until the ratios with fundamentals are more in line. Ryan acknowledges that a disorderly disruption will trigger a recession. But this isn't enough. Think about Japan's lost decade, and its correlation with the Tokyo land bubble (the land of the Imperial Palace had a nominal value of all land in California at some point, I hear).
2) Demand. This is a big one and seems to be missing in the complete supply-side approach discussed here. As several people in the comments pointed out, Auckland is a) desirable, b) not as expensive as other desirable locations like Vancouver, Melbourne, etc. In addition, our management of demand is basically ZERO. We have an open capital account, no restrictions on foreign buyers unlike those two cities mentioned above, no stamp duties or technical restrictions, and there's a massive tax wedge on the treatment of houses in NZ. If China again relaxes its capital restrictions, it's hard to imagine that Auckland house prices won't continue to rise. Why? There's just way too many millionaires in the world that would like a "plan B" option of owning a property in an open-minded peaceful remote country with kind educated and a multicultural modern city.
I'm essentially arguing that the demand elasticity of foreign buyers is very low and that the demand will grow unless NZ policy frameworks tighten towards foreign buyers. The domestic demand has already moved away from Auckland towards regions to the extent that people are looking for a place to retire.
Taxing non-resident buyers seems like a no-brainer in a city plagued by infrastructure problems: it's efficient, IMHO.
Ryan's point about the flow-on effects of people being unable to live in Auckland on Auckland's productivity and growth is crucial. The council (and the government) need to make a stand here. The current policy stance seems driven by a desire not to antagonize the already wealthy land-owners.
The overarching question that policymakers aren't asking (except Morgan who's not really interested in being in the parliament) is: in which state of the world is it efficient to tie an ever-increasing share of country's resources in a basically fixed stock of housing rather than some productive investment to develop businesses, infrastructure, etc. [hint: it's hard to find one]? The ramifications of the current laisses-faire policy stance are a) lost productivity, b) diversion of talent (with luck only to other NZ cities - but that's unlikely because of the draw all of them have as places to live and because of urban and network economics: bascially, it's hard to uproot the Silicon Valley to some other Valley), both of which result in poor GDP/capita performance. And obviously c) misallocation of capital, which is a huge problem in a country with some of the lowest capital-to-labour ratios in the developed world.
Is this Dr Martin Berka ?
Honorary Research Associate Professor Massey
Martin Berka, University of Auckland, Department of Economics
Victoria University Wellington
https://www.youtube.com/watch?v=7Mnf9lUTLfY
Another new arrival into New Zealand in 2011
Forget the macro stuff, give us the micro stuff - we have been microed out
Must have been a golden decade for macro economists with Phd's to seek refuge and succour in NZ
Dr Marc Oliver Hartwich - NZ Initiative
Dr Eric Crampton - NZ Initiative
Dr Martin Berka
Dear Mr Berka, forget the macro stuff, forget telling us what we are doing wrong, forget telling us how we are doing it wrong, forget telling us how we can do the wrong things better
Give us some of the Micro stuff
Start by telling us WHAT we can do, the more productive industries and activities that we can invest in
Do that and I will gladly sit at your knee and listen
If you watched the #leadersdebates - you would have noticed that both English and Ardern refused to answer the very question of crushing prices and yet the moderator Gower allowed them both to slide and quickly moved on to the next topic
Both parties are terrified of the prospect of being the instrument of doom that sends people who are leveraged up to their eyeballs in debt into negative equity and get bankrupted - the optics are worse than a CGT - imagine being accused of being the party of bankrupters - and possibly an upsurge in suicides
A outfit with some smarts would never have let this happen in the first place
Oh well - People voted for it in 2008, and again in 2011 and again in 2014
Nail on head Gareth
Both parties are terrified of the prospect of being the instrument of doom that sends people who are leveraged up to their eyeballs in debt into negative equity and get bankrupted - the optics are worse than a CGT - imagine being accused of being the party of bankrupters - and possibly an upsurge in suicides
I think you're partially correct. You're only thinking of the 1st-order consequences of the bursting of a bubble. They should be (and likely to be) more terrified of the unknown consequences. These consequences are much broader and relate to the impacts that the bubble has on consumer spending, which is the key driver of the economy.
And yet for all those who are currently locked out of the market, they will be heros! And what about the youth suicides at present under the current conditions of growing up in NZ? We're obviously not doing something right....so are we going to keep doing more of the same thing? (would be madness right?)
You might be right - or would he be just too old school to cooperate effectively with the progressive ideas coming from Labour and mean nothing beneficial comes from the alliance?
Teetering on the edge of ideas is a very scary place indeed...imagine if they were good ideas and were beneficial to the country...
Everybody including politicians want houses to be more affordable for NZers, well most people.
However, no politician wants house prices to decrease. Is this cognitive dissonance? Or political pragmatism?
Or is this the real desire of all our politicians- to sustain and increase house prices?
https://www.stuff.co.nz/business/money/96556989/arden-v-english-house-p…
And where is the harm in that? Could it not also highlight the deficiencies in our existing monetary, banking, economic growth model? Could it not encourage us to think/create outside the box rather than continue with existing policies that got us into this situation in the first place?
National throw more bags of sweets - doubling the homestart allowance - http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…
Supply demand doesnt make unaffordable... yes low supply does increase the price, but only to a level where the product sale/ profit margins slow up... usually indicated by a levelling off of sales. Just part of the market correction cycle.
Reduce disposable income of the sector that , (low middle income) and yo remove a huge number of buyers.. Reduce those buyers and sales slump.
On one hand we have a situation that has been brewing for many decades, where less of our economic times is not filtering down to mid and low income earners, and far to much going to the top 10% earners.
Then on the on the other hand we have so called 'unaffordablity.'
Not because of the cost of the product but because of distribution of incomes across the board.
We have subsidies on low income because rents are unafordable, and in low income families.. WHY?
Because their income is not a living wage you think?
Pollies talk tax cuts to increase disposable income...tax income earners then redistribute... Why?
Take tax from everyone, including mid income earners and employers and those on subsidies, and redistribute to low income in a 'living wage subside ?
What is the logic to that.. other than employ more people to do it, admin it, study it?
Why not simply remove the subsidies.. which also removes the tax on everyone(including employers) that supports it, the bureaucracy that administers it, and increase the real wage?
We then have low income rents actually move to real market levels...housing the same.
Our housing market.. new and established, is NOT UNAFFORDABLE.. it is the buyers wishing to enter that market dont have the disposable income that's the problem.
I dont have access or the skills to crunch the numbers to see just what the effect would be, or how far it would go.. maybe we need to look more at the multinationals that are currently avoiding paying their fair share of tax ..
Multi nationals who are a significant proportion of mid and low income employers, including fast food/ retail/ hospitality would then be forced to leave greater part of profits in this country...And keep in mind.. their products/ services are not subsidised , there fore price increase would only be to a limited level... a level that remains affordable...or face product obsolescence... also a natural market force.
You guys are discussing theoretical land taxes, not a reality. But nah - your land value would decline over time to factor in the land tax. So ultimately under a land tax the land would lower in value (as in NZ's past), more land would be made available from land bankers (you could buy more land!) and mortgages would get smaller.
stop the population growth!
It hasn't increased export earnings.
We have more people to share the cake with.
Immigrants get off the plane and take immediate benefit of NZ's infrastructure that has taken generations to build and countless billions to pay for.
Growth is not sustainable and is costing NZ'ers their lifestyle.
Set a 10,000 quality immigrant per year limit.
A productive economy creates wealth. Selling our low population demographic has created poverty.
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