Prime Minister-elect Chris Hipkins has pledged at his first full press conference since the Labour Caucus confirmed he was their sole choice to be Prime Minister to ‘rein in programmes and projects that aren’t essential right now’, appearing to a suggest a tightening of fiscal policy.
He also said the Government’s sole focus was on the economy and dealing with cost of living and inflation issues that had developed globally and here since Covid. He signalled his new cabinet, which he would announce next week, would tighten spending on some projects.
He also indicated he would stop using ‘co-governance’, which he said had become a catchphrase that was misunderstood. He was critical of the use of the phrases ‘transformational,’ which was also a ‘catchphrase’ that had become mis-understood.
He said he wanted his Government to focus on the ‘bread and butter’ issues and said he did not want to do anything to further lower house prices. He named Carmel Sepuloni as his Deputy PM, the first Pacifica Deputy PM, and said Kelvin Davis would contine to be Labour’s Deputy Leader.
“For New Zealanders, covid and the global pandemic created a health crisis, and now it's created an economic one. And that's where my government's focus will be," Hipkins said.
“I know that people are worried about paying the grocery bills and paying their mortgages. The globe is now facing a new challenge, a pandemic of inflation. New Zealand's rate of inflation remains below the OECD average, but high global inflation is biting into Kiwi household budgets. And families are feeling that pinch. My government will bring a strong clarity, sense of purpose and priority to helping New Zealanders through these tough economic times," he said.
Hipkins referred to a 'bread and butter' approach several times.
“Our focus will be on the right now, on the bread and butter issues that people care about. Some people, many people are hurting at the moment and I want them to know that we are on their side," Hipkins said.
"I know that some New Zealanders feel that we aren't doing too much, too fast and I've heard that message. Over the coming week, Cabinet will be making decisions on reining in some programs and projects that aren't essential right now," he said.
“We will be focused on middle and low income New Zealanders and the small businesses that are doing it tough to get by. We'll be making decisions on refocusing on some of the most pressing priorities. Then also getting some new work underway on policies that will make a real difference to Kiwis over the longer term. New Zealanders understand we cannot do everything and we certainly can't do everything all at once.”
He was also asked if he wanted house prices to fall.
“We're working our way through increasing housing supply, and making sure that New Zealanders have an opportunity to get on the housing ladder. Our focus has been on first time buyers, and it will continue to be on first time buyers," he said.
“We've already seen a shift in house prices from the peaks that we were seeing. I guess to reframe your question, we're certainly not going to be doing things that aim to bring house prices down.”
He was also asked if he wanted to be transformational.
“I'm not really interested in those kinds of catchphrases. Basically, we will deliver a very solid government that that is focused on the bread and butter issues that I see that matter to New Zealanders and that are relevant to the times that we're in now. 2017 was five and a half years ago, and quite a lot has happened since then."
Asked if he would drop co-governance, he said: “One of the challenges around co-governance is no one understands what that means because we're talking about quite often quite different things. So if I look at some of the Treaty settlements that have been reached over the last 20 years, they often have co-governance arrangements and and previous governments including the National government.
“The national government probably signed up to more co-governance arrangements through the Treaty settlement process than any other government. But it means a different thing in a different context. So I don't want to get hung up on on what has become a catchphrase. I think there is a an uncertainty in New Zealanders around what we mean when we're talking about drug governance. So I want to make sure that at each context, we're very clear about what we mean. And I acknowledged that that hasn't always been clear.”
Hipkins declined to rule in or out any policies such as Three Waters or a Capital Gains Tax or a fiscal policy tightening. He also would not specify likely cabinet members, except to say that Jan Tinetti would take his Education portfolio and Stuart Nash would take his Police portfolio. However, he did say that Grant Robertson would become Leader of the House and take Hipkins’ Public Service portfolio.
120 Comments
Note, he is dropping the catchphrase word 'co-governance, for a new one, 'bread and butter issues,' quickly to be followed leading up to the election with a whole new catchphrase, bread and circus' policies.
But at the end of it this, the bread will be stale, to give a whole new meaning to pale(and Ginger), stale(bread) and male.
Oh, I'm such a Misandramist.
I thought Chris Hipkins put in a solid performance for his first press conference as PM. It was a bit rich from Luxon to say it was just more of the same, a few days after promoting Judith Collins and Todd Muller. If any party looks to be stuck in a rut, it is National.
She was, as she said herself, an unexpected prime minister. She gave birth in office to international acclamation and led New Zealand outstandingly well through the terrorist disaster in Christchurch. At that point she became one of New Zealand’s greatest celebrities. Good and as well deserved as that may be, there is more substance, than the opportunity of those moments, required for prime ministership.,Labour has survived in government, more or less as a one trick pony based on her, for want of a better description, fame and star dust. In the end, as the storm gathers, it has amounted to little more than flim flam.
... zigzactly ! ... if a rabid life long Labour supporter like Chris Trotter can turn his back on them , and claim that they've lost the soul of the traditional Labour Party movement , then it's good enough for the rest of us to agree , and to boot them out on October 14 ...
It could well end up National been more of the same, and Labour offering the bigger changes. Certainly for lower and middle income earners.
I hope both parties offer real choice, and don't just fight over the "middle" voters. Then again, I find the term rather condescending, as though middle all think the same, and the only fight is over who can offer them 20 to 40 bucks a week tax cut.
.. in point of fact , we don't require " transformation " in our day-to-day lives : we need a government who helps , who makes it easier for farmers , for business , for innovation ...
Labour has spent 5 & a quarter years doing the opposite ... making productive people & firms seriously pissed off ... I doubt that Hipkins can undo the damage they've done in the next 9 months ...
He might even double down on it.
Fun Fact - this is his favourite song. https://www.youtube.com/watch?v=sJJjSh7jBSQ
Labour's problem is that don't think what they are doing is wrong, they just think that are not doing it fast enough, or enough of it.
National has always been more of the same, that is their whole bit.
Look at the early 1980s - Muldoon just kept doubling down until he was forced out of office, Labour was a revolution by comparison and on the right.
Look at the 1990s National government - National just kept on doing what labour was doing in the 1980s.
Look at the Key government - Key saw what Helen did and squatted in the middle. He made zero policy changes, his big deals were asset sales and the flag referendum - both incredibly minor policies.
If you are looking for the party who will entrench the status quo then National is the party for you. Luxon isn’t even pretending to have an agenda except let us have a turn.
The people who drove changes had a broader world view than Chippie has got as a bogan from Upper Hutt whose work experience has really only been labour politics
National will have ACT as a major part of Govt. and David will not accept the status quo so expect real change come October
I think you are right. Remove int duduction rules, re-orient 3 waters, drop tvnz merger, resolving cogovernance terminology and issues will be the hardest job as he needs to bring those MPs with him.
If he can do that and inflation drops away a bit the he can simply paint 7HouseLuxon and national as thr party of the wealthy. And he ìs in business.
As a Labour voting landlord, I can promise you the interest deductibility change doesn't just affect the landlord. Landlords that have been able to offer their good tenants below market rent until now are suddenly in such a dire tax situation that wasn't in their financial planning that they're having to adjust rents to make ends meet, which often leads to the good old tenants having to leave and be replaced with less good but higher paying new ones. This of course fuels CPI inflation too, because rents are in that basket.
Don't necessarily cry for the poor landlords, but certainly even a Labour supporter should understand that increasing taxes never makes the product cheaper...
From what I can tell it's working. It's pushing some investors to sell (because they can't squeeze their tenants further), prices are coming down, and first home buyers are increasing their share of purchases. Once prices are even lower (hopefully) there will be even more FHB and no need for these people to rent anymore. It's a great policy that it working exactly as intended.
That's the theory, but actually the number of FHBs that are buy ready (deposit, bank of mum and dad) but didn't dive into the FOMO last year can't be huge. Chances are in a year or two if prices keep dropping and those FHB can build up more deposit then yes, this will pan out with maybe 5-10% of renters getting out of the trap.
What I'm saying though is the 90% of renters who aren't even close to being FHB get stung with unintentional consequences of landlords needing to balance their books.
The interest deductibility limitation rule was an emergency measure to try to slow ridiculously out of control price growth, and a fair option in my mind if you needed a big gun that would get investors out of the market fast. I'd argue that now that the market is in freefall and interest rates are rather higher that the emergency brake could perhaps come off to help fight inflation. If I were labour I'd be offering a hold on deductibility at 75% as a wait and see. Wouldn't unduly remove the benefit of new builds, but also would help keep rents from getting worse next financial year and gobbling any wage increases. Less rent + more wages means better conditions for FHB to save a deposit, if you'd rather think of it that way.
I'd be happy to see my tenants buying their own place. I've only had one lot of tenants manage it in the 5 years I've been in the game though.
Agree with all of that. We do need to get back to a view that the provision of a good number of properties for rent in our society is a good thing - it gives people choice and flexibility. But it (the provision of rental housing) became more of a cottage industry - an every man and his dog aspiration. We talk about FOMO in terms of FHBs, but FOMO also took off in terms of keeping up with the Jones' investment portfolio-wise.
Few folks bought a rental with the view of improving the asset so that it could command a higher price in the rental accommodation market. There was an attitude that tenants should just be thankful to have a roof over their head and all 1, 2 or 3 beds were created equal.
This rot in our society's attitude toward shelter started with the National government's wholesale sell-off of state housing in the 1990s;
https://nzhistory.govt.nz/culture/we-call-it-home/the-state-steps-in-and-out
Looking at you Ruth and Jim.
Even the last 7 years. People go on about homelessness under Labour. 10,000 people living in motels/emergency accommodation.
That wouldn't have something to do with Housing New Zealand (KO)'s managed stock dropping by 4000 houses between 2015 and 2017?
https://kaingaora.govt.nz/assets/Publications/Archive-Managed-and-Vacan…
https://kaingaora.govt.nz/assets/Publications/Archive-Managed-and-Vacan…
So which way did rents go when interest rates were cut to almost zero? You think landlords would willingly drop rents if say rental income tax was dropped? The exclusion of new builds from the policy is the carrot of landlords want to continue to reap that benefit.
A LOT of owners never bothered to out their rents up while all costs were covered. I work in RE and see it all the time. However when they sell the new owner does put them up, or the existing owner finds they are losing money and does the same.
I've talked to a lot of owners who either put their rents up after the tax changes or handed the keys to a social housing provider and evicted their tenants.
I agree the interest deductibility change is working to bring prices down.
There may be some landlords that need to increase prices because they weren’t previously charging as much as they could, but I think they are in the minority.
Renters may be temporarily slightly worse off because of these rent increases but that’s a short term problem, a knee jerk reaction. Long term I expect house prices to return to their “true” value of 3 to 5 times the average which is what it needs to be to be sustainable, most renters and first home buyers will be better off long term.
Problem is most political parties in NZ have no vision, they only think short term and what they need to do to keep in power, to save their own jobs. This is made worse by our election cycles of 3 years which is way too short, meaning that all our political parties are constantly in campaign mode.
Oh its all fun and games until crashing house prices bring down the entire financial system, and everyone loses their bank savings. Like, did no-one pay attention to what happened overseas in the GFC? Banks sitting on thousands of empty, foreclosed homes, people living in tent cities or their cars, elderly left destitute after their life savings got seized by bank creditors, ordinary people sent bankrupt after selling their home for less than what it was mortgaged for, trades made unemployed as construction stopped. You know what didn't happen? All of America going "oh cool, now the poor can buy houses" - turns out you can't buy houses when you have lost your deposit money and no longer have a job.
Everyone knows by now that any benefit that any incentive like a homestart grant gives is, within one build cycle, captured by the most restrictive other parts of the system. Ie cost of land, consenting availability of finance, and now building supplies, if it increases demand relative to supply.
End result is that the total cost goes up and housing gets dearer, not cheaper. The only perceived way to make housing cheaper is to get more people into smaller houses. IE more apartment living which is naturally dearer on a $m2 basis anyway, and is not the type of housing most people want.
They need to start with the availability and cost of land, which is the first principle of housing, and work their way back up the chain from there.
"“We're working our way through increasing housing supply, and making sure that New Zealanders have an opportunity to get on the housing ladder. Our focus has been on first time buyers, and it will continue to be on first time buyers," he said."
Oh great, he doesn't get it. More interventions in the market instead of abolishing Monetary Policy. My expectations have been met already.
They understand the situation better than National. The removal interest deductibility for existing housing stock but allowing it for new builds absolutely indicates that they “get it” I believe Michael Cullen would have had a great influence on this policy, who most certainly understood the situation. At least they are trying to redirect investors away from over powering first home buyers and in doing so directing banks to lend more productivity and less inflationary.
I agree regarding National; Labour seem to have some commitment to the affordability goal - they are trying and having some impact.
The bit they don't get is the most important, fundamental problem - by manipulating the price of money, the price of everything gets manipulated. In practice that means money generally becomes cheaper, so those who can get their hands on it (tipped towards the winners that banks want to lend to) go on a buying spree. Until they stop monetary policy, endlessly fiddling with LVRs, DTIs, subsidies and tax rules (e.g. interest deductibility) becomes necessary as a workaround, and no government could get it right.
That's true. The whole system is crazy. Monetary policy dictates a lot what we experience and negative outcomes often get blamed on governments, but we don't get to vote on the actions of central bankers, we listen to a party like National preaching fiscal responsibility yet we let unelected retal bankers lend currency into existence and not one people questions the social outcomes of their lending decisions that shape and mould our society. And to add to that our reserve bank needs to emulate the bad decisions made of the Federal reserve in the US as they influence the global reserve currency that all other currencies are really measured by. You have to ask when we vote, what do we actually influence?
Yes, so we are left with a tiny country with a govt that doesn't matter much compared to it's tiny central bank that, in turn, closely follows the Fed. We've borrowed as much as we can and piled it into bidding up land prices. And now with that constraint in place our fate will be determined largely by overseas developments. I don't follow much NZ news.
Labour and Hipkins have played their hand perfectly, considering the speed at which this situation has unfolded.
No protracted leadership battle, landing a balanced leadership team which on the surface covers many electorates (Pasifika deputy PM (CS), Maori deputy leader (KD) and continuity on the Finance front (GR). I'd say they are being advised well.
I liken it to the cricket saying "playing with a straight bat"
Furthermore, signaling that there are things / policies that will change under his leadership is a clever play, and indicates the public feedback (and comments on Interest.co.nz?) is being listened to.
How he changes tack, and whether he gets full support from his caucus, will be the defining period before the election - introducing things that Jacinda couldn't politically achieve (CGT etc.) will demonstrate a willingness to be fiscally responsible for the majority and may indeed get something delivered that is "transformational" as much as he's walking back from that word.
My vote is still very much undecided, I'll be looking for solid policy that positively impacts the majority of the population, and looking for people (in any party) that can speak authoritatively on their portfolio with healthy doses of common sense...
There's not a lot of constructive public feedback though, even on interest.co.nz. The public feedback usually consists of people seeking out the negative in each scenario and having a moan about it. e.g.
Chris Hipkins hints at "reining in" spending on non-essential projects.
That's great news. Except people all over social media are still miserable, claiming it's vote buying etc. Maybe listening to public feedback is why nothing ever gets done, because no matter what is proposed, people are unhappy.
Think of it in this way…a group of thugs continually harass, bully and steal you lunch money everyday at primary school…finally the one and only school teacher decides to intervene and stop the bullies on threat of board intervention….do you think the teacher has your best interests at heart…do you think the bullies have changed their ways…only a fool would trust this lot again!
If they want a fighting chance they've got to come up with something positive and quick. To me that would be forcing the introduction more competition in both supermarkets and building supplies; they could go far beyond Comcom's feeble recommendation and in the case of building materials, bring our building systems inline with say the US so we can import materials for far cheaper.
It depends how they rate their chances, no party wants to leave something that will benefit the incoming government.
Clearly the party name is wrong , they're totally incapable of doing any labour , of getting anything done ... it breaches the advertising standards act to call themselves " Labour " ...
... I'd rename them the " Gunna Do Party " ... and they'd promise all the stuff they'd gunna do in the next 3 years ... but never actually do any of it ...
You're right. I saw the part of the interview that BH asked that question. CH thought about it for a bit, before saying what he said. If had said anything else BHs headline would be CH wants house prices to collapse. CH knows house prices are going down, so does BH. It was a loaded question.
I understand that Chippie has been anointed "Mr Fix It", particularly by the media (who will be particularly enthused about his 'chill vibes', affable personality, as articles about how much fun he'd be to have a beer with will do far better at driving clicks and ad revenue than any meaningful discussion on policy of national consequence... and with my tinfoil hat firmly affixed there are, of course, 55 million other reasons for the media to give him an easy time)
Barring economic calamity or an internal party meltdown, he's clearly going to win the election for Labour, because:
a) he isn't Ardern, who had become as polarising as my pair of Ray Bans;
b) he's got the "likeable, relatable guy" schtick down pat, and;
c) he's clearly got a mean streak when he needs it (e.g. calling random women prostitutes to cover his officials' asses) and can debate and present well, unlike Luxon who is as dangerous as a boxer who refuses to throw a punch, and is about as good as an old, punch-drunk pugilist at debating.
What I'd like to understand, however, is how our PM for at least the next ~4 years has earned his reputation as a political Bob The Builder (can he fix it? According to the media, yes he can).
- Education seems to be in the toilet, and flushing further down the bowl. No teacher I know has anything good to say about him, and educational achievements and standards do seem to be worsening.
- Crime is the only growth industry left in NZ - outside of the Wellington civil service, which will no doubt do well on his watch. A patched Mongrel Mob member would have been an improvement on Poto Williams with respect to policing, of course, but what good has he done here?
- I guess he did some good work re: Covid, but ultimately presided over depriving Kiwis of their right to return home (and families of their right to be together) well past the expiry date.
How has he got the reputation for getting s**t done. And is the s**t he's done actually good, or does it stink?
And to anyone who's about to reply claiming I'm just salty that Labour have pulled a political masterstroke and turned the election upside down, you'd be wrong. I'm not a National fan, and I see nothing in their camp that will get me inside the tent.
However, I am salty that once again - driven primarily by the media, but ultimately the voting public are to blame - we are staring down the barrel of an election that will be probably be decided not on any meaningful policy but simply who you'd rather sink some piss with on a Friday night.
That really is a serious pickle. How could it come to the point that New Zealanders will go to the polls largely to vote for what they perceive as the least negative or damaging, to them at least, option. Ages ago Robert Muldoon uttered the most extraordinary comment that he thought it was a prime minister’s role not to leave the country in a worse position than when he (or she) took over. Sadly, ironically that strange ambition, now seems to resonate.
... an older fellow called up NewStalk ZB the other day , perplexed he was , that we're not all in raptures with Ardern & the wonderful stuff she's done for us : then he rattled off a very long list of gifts , supplements , cost of living payments , winter energy payments , increases to WFF , you name it , any " packages " & welfare increases that Robbo splashed out in the past 5 years ... all gifts , all free money ...
For an older guy , you'd think he'd realise that governments dont make , they take ... and that someone has to pay for all this largesse ...
Ironically Labour have done more to strip income from disabled people who make up the most of under 65 beneficiaries... also they in very real terms cut the pay of the nursing support families with disabled people have. The only ones benefiting from Labours benefit changes are retirees and those with the most number of kids in the middle to low income brackets and that is saying something. The worker insurance only benefits those in the highest income brackets the most and completely denies basic income support to anyone of low incomes to no incomes now made chronically ill (rapidly increasing with covid normally around 10% of cases worldwide and likely more than 10% here considering higher rates of medical complications in NZ).
There is no love of Labour amongst those who need social programs the most but there is also real fear of anyone else as well. Sort of the devil you know kinda argument in voting then.
I take my statement back. He is not going to do any reform or make this a better country.
He will probably keep the status quo, get through his time as a PM and enjoy his post PM plush jobs as a board member or a diplomatic chair.
So disappointing that we have no brave politicians left in the country who can take us forward.
Feel like crying for 3 hours just like that guy who won 23 million. We as a country lost another opportunity to do something good but i guess the property nexus is just too powerful in the country.
I did, as I'll suggest most of us did.
He mentioned something about "not wanting people to have to be on a 6-figure income to be able to buy a home" and in that statement there might be hope.
Let's be honest. In Chris Hipkins there is hope where there was none. Key - who I voted for - had it beaten out of him, and so did Ardern - who I also voted for. Both of them starting with the best of intentions. We are about to see if Hipkins is made of the stern stuff he tells us he is. Hope!
Me too!
whether it’s Party Red or Party Blue, it’s variations on the same tired theme, one that is well past its used by date.
Time for me to tune out in terms of what Party Red or Party Blue have to rant on about, and simply vote TOP.
possibly a futile vote, but at least a principled one…
Re house prices. Rising interest rates have greatly magnified the impact of Labour’s interest deductibility policy. National will rightly remove that, so we'll probably end up with a violent swing down in house prices followed by an equally violent move up in prices at some point in the future. Not sure how healthy that is for the economy?
The interest rate hasn't magnified the impact, actually the inverse since 50 or 75% of 6% is a hell of a bigger deduction than 100% deduction of 2.2% ever was.
The books still ache though, but interest deductibility ironically wouldn't help a huge amount right now.
Good point, but cold comfort for the folks who're "doing it tough" right now and have seen their mortgage expenses go from say 20K to 54K pa. Same principal with cigarette smokers. They’re predominantly Maori, pacific islanders, of from lower socioeconomic backgrounds, and the government’s raking in 2 billion per year from them. Much damage is being done by that tax also.
That's total BS. - they pay in vastly more that they cost the state, and they die earlier therefore they take less superannuation. Cost of cigarettes is 1/10 in Germany and I don’t see the desperate grinding poverty over here than i do in say Papatoetoe Auckland. IN Auckland I see homeless people crawling on their knees in the gutter looking for cigarette buts. I see ram raids every other day where the desperate people are looking for tobacco. I think it’s likely that a large portion of families receiving significant help from the state and or food bank packages are either smokers of have a smoker in the family draining their financial resources. Cigarette tax is highly regressive. It's essentially a poor tax.
Ironically Labour have done more to strip income from disabled people who make up the most of under 65 beneficiaries... also they in very real terms cut the pay of the nursing support families with disabled people have. The only ones benefiting from Labours benefit changes are retirees and those with the most number of kids in the middle to low income brackets and that is saying something. The worker insurance only benefits those in the highest income brackets the most and completely denies basic income support to anyone of low incomes to no incomes now made chronically ill (rapidly increasing with covid normally around 10% of cases worldwide and likely more than 10% here considering higher rates of medical complications in NZ).
There is no love of Labour amongst those who need social programs the most but there is also real fear of anyone else as well. Sort of the devil you know kinda argument in voting then. For many disabled people who are so ill they are unable to work they have no income support so in the past years have been forced into more and more social ills and abusive relationships due to cost of living. Labour CH is just a sign of tightening the screws and hammering down the nails in the coffin.
You want a worker insurance scheme that provides income support to people who don't have incomes from work? Who pays for it?
Agree though that the approach to sickness benefits need an overhaul. Funding approval for medicine takes years, during which people lose the ability to function as normal contributing members of society. By the time they get it, it's too late. There's not going to be any dropping out of the workforce if you contract otherwise treatable and curable cancer if you have a massive mortgage looming over you and literally cannot afford to drop back from full-time work without being financially ruined. There is a huge, huge quality of life shitstorm coming in this country over the next 30 years and we need to plan for it now.
Live poor, or die knowing your family are financially secure? Welcome to NZ 2035.
I have to disappoint you, Luxon the great great CEO with "real" experience was in fact merely the boss of NZ largest beneficiary and he spent taxpayers money left right and centre.
Real world business experience is extremely lacking in any of the political parties as real business people are usually not interested in grandstanding and talking themselves up.
Many businesses leaders are also not too interested in shared decision making, which is a key feature of a democracy.
Also the economic realities of govt books are entirely different from those of a private business, with the former being able to print money or raise/lower taxes at will.
There we have it repeated by Hipkins. They have no intentions of lowering house prices. With both national and labor having the same open immigration, population/house price ponzie economy, decent housing ownership will never be affordable for a large proportion of our young population. Their only hope therefore remains to leave New Zealand. Don't waste your life getting bitter and twisted thinking that it will ever get better here.
The mention of capital gains tax gave me shivers, Cindy ruled it out while she was PM, now she's gone it might be on the table again.
While a good portion of people don't have enough it might be a good time to push it through by blaming "rich people" for all the problems.
I am on the fence re capital gains tax. The devil will be in the detail. Will it apply to your primary residence? Shares and businesses (why not)? Losses ringfenced? etc etc.
The IRD can already tax capital gains if it was part of your intentions in the investment decision. As an example anyone who buys a rental that makes a loss must have been in it for the eventual capital gains. So apply the law and tax them.
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