By Alex Tarrant
The new Labour-led Cabinet is today (Tuesday) set to discuss a series of proposals to ban non-resident foreign house buyers. But questions continue to swirl around the government’s ability to impose any policy prescription in line with New Zealand’s free trade agreements (FTAs).
New Trade Minister David Parker shut up shop on Tuesday morning when asked about renegotiation of New Zealand’s FTA with South Korea. And on the Trans Pacific Partnership (TPP) he acknowledged that, because negotiations were at such a late stage, government “won’t be able to change everything that we want to change.”
Parker and Prime Minister Jacinda Ardern both hit out Tuesday morning against the previous administration for “incorrect” statements about the government’s ability to impose a stamp duty on foreign house buyers under the Korean FTA. (Labour already knew they couldn't do so under TPP.)
Regardless, a stamp duty was unlikely to be considered, with Ardern saying it would not tackle the the issue – ie completely blocking out the ability of non-resident foreigners to purchase existing New Zealand housing stock.
“Stamp duty doesn’t actually get to the nub of the issue. It uses a different tool to achieve what we’re trying to achieve, which can be done much more simply if you use the right mechanism,” Ardern said on her way into Labour’s caucus meeting Tuesday morning.
Ardern said Cabinet later today will discuss which mechanisms could be used. She said she would talk about that later today if in a position to do so. Asked whether options had been presented by Treasury, she said: “I’ll be sharing the outcome after we’ve had a conversation at Cabinet.”
Treasury Secretary Gabs Makhlouf was seen in the Parliamentary precinct Tuesday morning – although it is not known for what purpose. Makhlouf has been known to commission Treasury working papers on key Opposition policies in the past.
‘Misled on Korean FTA’
Meanwhile, Parker wasn’t talking much on his way into caucus Tuesday morning. Asked by media to elaborate on earlier comments on Radio NZ, he argued the previous National government had mislead Labour on the issue of stamp duty. He walked off when I tried to ask further on stamp duty and other mechanisms to block foreign buyers.
On RNZ Tuesday morning, Parker was asked specifically if he thought he’d be able to renegotiate New Zealand’s FTA with South Korea. He replied: “We are dealing with the advice that we have received from officials since we took over, which is inconsistent with some of the statements that we had previously relied upon by National Ministers before they left office.”
Parker said some of these statements had been made in Parliament’s House of Representatives along the lines that the government could not ban land sales to non-resident South Koreans, but could introduce a stamp duty on them. The statements had turned out to be wrong, he claimed.
Asked whether that meant the agreement would not need to be renegotiated, Parker shut up shop: “I’m not making that call today.”
On TPP, Parker said the previous government had tackled two of the four concerns Labour held – around honouring Treaty of Waitangi obligations and Pharmac’s operating model. Labour also wanted extra movement however on foreign land and property sales, and on Investor-State Dispute Settlement (ISDS) clauses.
“We’ve got to fix land. We think it’s absolutely abhorrent that New Zealand government would lose the right to control who buys homes in New Zealand from overseas. And we’re working up on mechanisms on that,” he said.
Asked whether Labour wasn’t going to sign TPP unless it got movement on both foreign buyers and ISDS, Parker said he wasn’t going to comment on that in the media. “But we’ve been pretty clear that we’ve got to make some significant progress around these matters in order to be comfortable signing the agreement.”
He acknowledged there were trade benefits from the deal – not as big as if the US were still in it – but still some benefits, particularly from access into Japanese markets.
Asked whether the changes could be made before TPP ratification, Parker said Labour was “pretty good at trade agreements” having landed the China FTA, and with previous Labour Prime Minister Mike Moore heading the World Trade Organisation.
Morning Report host Guyon Espiner put to Parker a Japanese article quoting an official there saying that if exceptions were made for New Zealand alone, then TPP would fall apart. Parker said he hadn’t seen the article, but, “I am told by officials that it is late in the negotiation and we won’t be able to change everything that we want to change.”
That wasn’t to say that mechanisms could be used outside the TPP couldn’t be used “to fix other things,” he said.
43 Comments
What going on?
Don't recall Bill English and Stephen Joyce ever getting a going over on housing like Ardern is receiving. English and Joyce always shut the conversation down saying "there is no crisis" and the waiting gossip-columnists went silent. While Nick Smith waved his magic wand at all the SHA's that haven't yet produced one single house and developers are handing their fast-tracked privileges back in. Again the hacks went silent.
Never forget - there was no crisis
Just making sure my thinking is right here. Am I correct that foreign buyers will still be able to invest in new property projects?
The logical conclusion is that with the new property rules to be put in place will be to make the housing shortage even worse than it already is as it means that the offshore buyers are not going to commit more capital to NZ property for 6 or 12 months until the situation becomes clearer.
That means less building, more homelessness and higher rents in near term.
Every action has a reaction and it could be that foreign money says the little Islands at the bottom of the Pacific are too complicated and move on elsewhere for deployment of their capital.
Interesting times!
To be fair, it is this coalition who have gone on and on about shutting down overseas buyers, when the reality is that they have no idea how it is going to work, just like all the other promises!
Button down the hatches we are in for a very rocky ride over the term of this coalition.
It is the blind trying to lead the blind.
All talk and no action plan!
Looks like they did: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=118…
Question seems to be, was National up front on everything?
National does not believe we should ban foreign buyers, and negotiated different terms in the South Korean FTA and the TPP. These purport to stop a future New Zealand Government banning the sale of our homes to buyers from South Korea. The South Korean provision flows to China under the most-favoured-nation clause in the New Zealand-China FTA.
South Korea in its FTA with Australia a year earlier allowed Australia to ban the sale of their homes to Koreans.
Even more absurd is the fact that South Korea can ban house sales to New Zealanders, though New Zealand can't do the reverse.
WTF has National done to New Zealand???
Q. Is that what the source says?
A. No. That's not what the source says.
...
Clause 3 of article 139 means earlier agreements with Australia and Pacific Islands are not affected, and do not flow into the New Zealand-China FTA.
...
The update of the FTA should make it clear a future New Zealand Government can ban the sale of New Zealand homes, notwithstanding article 139 of the New Zealand-China and South Korean FTAs.
Ms Ardern earlier said she was confident the flow-on effect on the China FTA would also be resolved by altering the Korean deal.
She said she believed a renegotiation with South Korea would not be a major issue.
"I don't believe it would put that deal at risk. Korea already has that provision for themselves. I'm sure they would be very understanding of the rationale of why we would want the same," she told reporters in Auckland.
"Australia signed a deal with that carve-out, Korea signed a deal with that carve-out, New Zealand should have asked for that carve-out. The government didn't, we will."
So I wonder what National may have tried to do to prevent any of this, essentially betraying young Kiwis for their short-term thinking.
Time to drop out of the FTA with South Korea if they dont want to respect that the shelter of our population should be owned by our population.
It makes me sick that they wanted that in the FTA to start with
There are plenty of other phones and cars other than Samsung & Hyundai, I personally am going to avoid buying South Korean products.
What I don't understand is why National thought it was a good idea to try to be world's most available village bicycle? Seriously...they let South Korea exclude Kiwis from owning property, but wanted to lift NZ's skirt as high as they could in return?
What the heck were they thinking? Just their own personal portfolios, or what?
Being able to buy property's in each other's country has absolutely nothing to do with free trade and if this is a significant concern of any trading partner, you have to seriously question what their true objectives are. This stance suggests that their true objective is colonisation of New Zealand. Faced with anything like this sort of vulnerability we would be better to walk away from any deal that hinges on this.
You’re wasting your time RickS , the ones that you see crying about the ban so much are trying to find every little twist of lies to moan about labour are the same ones that need and want house prices up for there own little world and stuff the other 90% of the country, Hoskings etc and we know the ones on here. They stand out like dogs balls. And some haven’t any, Greed is a powerful thing and they’re very worried
The free trade agreements were treason!
The lack of information as to how much land and housing was being sold to foreign interests was complicit to the FTA treason.
Labour building 100,000 houses over the next 10 years is 10,000 houses a year. 40,000 immigrants a year means 4 people to each house.
Thats us the tax payer paying for these houses.
It seems like we are still giving away our sovereignty and paying for the privilege.
Our infrastructure is worth trillions and we continue to give it away.
Hmmm, welcome to the real world, Talk time is over ... now its time to Walk the talk
David Parker blaming National and claiming being mislead is only proof of how ill planned and illiterate this lot was while snoring on the opposition benches for so long instead of keeping up with the job ... and now claiming ignorance & flogging blame !!
Poor Phil Twyford too is in an unenviable position, his first days in the new office seem to be shocking, he keeps throwing around his same generic election slogans, maybe he is not used to be a minister yet or learned how to talk like one .... Not yet used to take Action rather than Hopes and Moans ... he should shut up too until he gets on top of his late and undone homework !! and come up with the goods he promised.
I fear that we will see more of this as we go ... as they all discover that life in Office is not the same as ranting and moaning in the streets !!
And you see no irony in the fact your flavour of politicians were blaming their predecessors 9 years in to the job?
National lost as they have no friends, no-one wanted to play with them, they sucked the right vote dry and left a dry husk of an Act party clinging on like the familiars that they are. Time for you to use your housing skills, build a little bridge and get over it.
The simplest solution is to only allow buyers who do not hold "Permanent Residency" or "NZ Citizenship" to build new - let them go through the tortured disciplines of buying bare land, employing local architects to design their new build, pay application fees to local councils, employ local legal-peoples to apply for specialist resource consents and employ local builders only, and help pay for new infrastructure
Hold those rules in place until all the infrastructure has caught up and all local rough-sleepers and homeless are catered for
Complicated rules with obscure exemptions will be exploited and got around and will fail
Ahh, the Eighth Task of Asterix, as our consenting process is wont to be.
Genius Rick. The perfect strategy to use against overseas buyers. We do not need to ban them just totally frustrate them. Furthermore they will have to pay lots for all the essential things that we must investigate prior to releasing property such as extensive background checks or whatever WE deem is essential.
To be fair the thinking voter, voted for National!
The country had done very well under National and to replace them with a coalition of inexperienced dreamers with no track record is a disaster waiting to happen!
Yes I know housing was important to many of you but the reality is that the promises from Labour will never eventuate and the country will be poorer for this experiment!
"Yes I know housing was important to many of you" ...cough cough..yes a roof over ones head at night is quite desirable MAN. But do please keep bleating on about NATIONAL., dreamers they certainly were not.
"The world needs dreamers and the world needs doers. But above all, the world needs dreamers who do." - Sarah Ban Breathnach
And your ramblings on here are the sign of a thinking voter? It's extremely unhelpful to assume that people with different opinions to you are stupid, and I believe this is one of the problems with the world today. Have you considered that others might have different situations and priorities to you, and therefore form different opinions? Personally, I voted green because the environment is in a much worse state than the economy, and much more difficult to fix once it's buggered. That does not mean I am not 'thinking'.
As many have found when doing business in China having trade agreements does not ensure fair play. Surely we can assure that only new builds get timely consents or whatever else is needed by overseas buyers. I doubt if our free trade agreements stop us from introducing extremely protracted procedures or other barriers to stop what we do not want. There are many ways to skin a cat.
BIG Test for Labour. Can they ban the foreign / non resident buyer as promised or will they come with excuse as people voted them for what they promised (As everyone knew that National is out to sell NZ) and not for excuses.
Will they last 10 Days. Big test for them as the only way they will be able to come out clean is by banning the the foreign / Non resident buyer as promised (No Excuses and No dilution) as anything less will be not accepted by the people who voted them and also Mr Winston Peter.
How they do is upto them as they promised and not national (If they do not - It will be a Big win for national)
You see as far as your participation allows you. Watch parliament sessions, and you already see leagues further than basic media, follow releases and again leagues ahead. Even some basic web following and most media is well behind. Heck you can even go to the meetings, committees, trawl through the reports or even speak to MPs and departments. Even if you want a question answered it is possible through the OIA within reason. Why stay back in the lazy prol media lane that just posts simpleton clickbait. Might as well be honest and just say it is cost too much time and you were not that dedicated to really do the research. That is completely ok. Most people need downtime with their day job. It is why there is a also spike in participation and input once the age bracket is in retirement. That and it is way too depressing to watch this country be managed poorly into the dirt without even the relief of Douglas Adams. Even the cricket was better with him.
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