Home and away

November 4, 2019

More than a third of New Zealanders think the Prime Minister is too focused on overseas.

The latest Newshub-Reid Research Poll asked New Zealanders: “Is the Prime Minister too focused overseas?”

    • Most said no: 55.3 percent
    • But more than a third think Ardern is too overseas-focused: 35.9 percent
    • Even some Labour voters agree: 14.3 percent. . .

One of a PM’s roles is international relationships and overseas travel is part of that.

My criticism isn’t the time she spends away and her international focus per se, it’s that there are too many problems at home on which she doesn’t appear to be focused and which she either isn’t addressing or is addressing poorly.

Here’s just one example:

All her year of delivery is delivering is disappointment.


Red tape rules

October 18, 2019

Louis Houlbrooke tweets:

 

Anyone seeking causes for New Zealand’s poor productivity, housing shortage and high cost of building should start here.


Making more houses more expensive

October 16, 2019

Retirement Commissioner Peter Cordtz is suggesting people could be allowed to withdraw KiwiSaver funds to buy investment properties:

Home ownership has been declining for the past 30 years, from a high of about 78% in the 1980s, to about 55% today.

Māori and Pasifika have fared the worst – today only 35% of Māori and 20% of Pasifika own their own homes.

About 12% of New Zealanders aged 65-plus are renting, making them eligible to apply for the Accommodation Supplement if they are struggling. The cost to taxpayers of the accommodation supplement paid to people 65+ has already increased 92% in the past six years, from $88 million in 2013 to $170 million in the year ended March 2019.

This is on top of the cost of NZ Super, currently $39 million a day and forecast to rise to $120 million a day in 20 years due to the ageing population.

“Super wasn’t designed to cover rent – it currently pays $411 for a single person; $632 for a couple. At that rate, it assumes you have housing sorted,” says Cordtz.

“The cost of declining home ownership is a problem that affects all of us, and we need a circuit breaker,” says Cordtz. “If we can get more people on the property ladder earlier, there may be less liability to taxpayers later.”

One idea open to public submissions is to loosen the KiwiSaver rules related to withdrawing savings for a deposit on a first home. Currently, the KiwiSaver member has to live in that property, but high house prices in cities like Auckland, Wellington and Tauranga mean it is difficult for members who work in those cities to purchase a home there to live in.

“If they could buy a property in a more affordable part of the country, they could use it as an investment to progress on the property ladder or simply to retire to one day,” says Cordtz.

He says the idea originally came from a Māori mortgage broker who was trying to help clients buy property near whānau in areas other than where they worked.

“We see this as an idea that could help a lot of New Zealanders get on the property ladder and create a long-term investment to aid retirement,” says Cordtz. . . 

I see this as an idea that could make it harder for a lot of other New Zealanders get on the property ladder.

High prices in several places is a problem for people wanting to buy their first home or upgrade an existing one, and not just the cities mentioned. Wanaka and Queenstown are at least as expensive.

The root cause is one of supply and demand.

Allowing people to use KiwSaver funds to buy investment properties will give people a bit more to spend but do nothing to increase the number of properties available.

Won’t that spread the problem of rising prices fueled by demand outpacing supply to other places, many of which have lower wages than in the places where people are already struggling to buy a first home?

The last thing would-be home owners in smaller towns and less densely populated cities need is buyers from other places competing with them and spreading the problem of property inflation wider.


Property rights matter to all

September 24, 2019

Who’s standing up for property rights?

The Government’s handling of Ihumātao has shown it has no respect for property rights, Leader of the Opposition Simon Bridges says. 

“It’s been eight weeks since the Prime Minister told Fletcher Buildings it had to stop developing much needed houses on land that it owns. Since then, Fletchers has not been invited to be part of negotiations. It’s had to sit on the side-line as others have tried to take away its rights.

“It has set an appalling precedent for a Prime Minister to insert herself into the business of a private company and prevent it from building 480 much needed houses.

Does the Prime Minister even have the right to tell a company it can’t go about its lawful business on its own land?

“No wonder business confidence has plummeted when the Prime Minister shows such blatant disregard for businesses and property rights.

“It doesn’t matter where in the world the Prime Minister is, it’s time for her to set the record straight. She needs to tell the protestors to go home, make it clear that the Government won’t be spending taxpayers’ dollars on buying the land and rule out any sort of deal.

“This matter doesn’t concern her. It’s time to butt out and give Fletchers back the land they legally own.”

Jacinda Ardern’s interference has done nothing to solve the problem. It’s made it worse.

If the government gives, or loans, the Iwi anything at all towards purchasing the land, it will open up the opportunity for every other iwi to renegotiate what were supposed to be full and final Treaty settlements.

Worse than that, it has sent a very clear message it doesn’t respect property rights which are a fundamental building block of democracy.

Private property was exempt from treaty settlements for a very good reason. The wrongs treaty settlements were to compensate for were started when Maori property rights were ignored in the past and could not be righted by infringing other people’s, including those of Maori, in the present and future.

Property rights matter for everyone and it is well past the time when the Prime Minister’s interference in Fletchers’ right to exercise theirs must stop.


Water woes not just rural

September 19, 2019

It’s not just farmers who are facing huge costs from the government’s proposed freshwater strategy.

. . .Rural residents are showing up in their hundreds to public meetings about the scheme, despite it being the busiest time of year for them. But on the whole townies don’t seem to be so aware of the proposals, Federated Farmers environment spokesperson Chris Allen said.

“This package affects urban – our city cousins, as much as it does farmers. This is going to be huge, this is not just a farming package.

“The fact that it affects councils [means] everyone needs to understand that it’s a big undertaking and it’s going to cost a lot of money, so expect rates to go up.”

The package announced on 5 September includes plans to improve the health of waterways, such as national standards for managing stormwater and wastewater, and tighter controls on urban development. . . 

What will this do to the government’s purported aim of solving the housing shortage? Tighter controls on urban development will add costs to building and reduce the supply of new houses.

Engineer and clean water advocate Greg Carlyon has previously told RNZ the changes were likely to cost “many many billions”.

These costs include those from what has to be done to meet new standards and loss of production; the army of advisors who will be needed as well as more compliance officers and council staff.

Anti-farming activists have highlighted the impact animals and chemicals can have on rural waterways. There’s been very little attention paid to urban run-off . The more concrete and tar seal, the more people and pets, and the more vehicles there are, the more run-off there will be and the more detrimental the impact on water quality.

A lot of towns and cities also have inferior sewer and stormwater systems the upgrading of which to meet the proposed standards will be very, very expensive.

We all want clean water but the answers to the questions of how clean and at what cost won’t just impact farmers. They will add constraints and costs to urban activities and increase council rates for us all.

If any candidates for council elections are promising no rates increases, ask them have they taken into account the cost of meeting the requirements of the freshwater policy and if so what services will they be cutting to ensure rates don’t rise.


Counting down

June 30, 2019

David Farrar has been doing a regular count-down on what’s required for the government to keep its KiwiBuild promise:

I don’t usually gamble, but am confident to wager they’re not going to make it, even with all the new ministers.


Labour pains National delivers

January 31, 2019

The National Party will put an end to tax bracket creep:

A National Government would link income tax brackets to inflation, ensuring income taxes are adjusted every three years in line with the cost of living and allowing New Zealanders to keep more of what they earn, National Leader Simon Bridges says.

“New Zealanders’ incomes are struggling to keep up with the rising cost of living because this Government is imposing more red tape and taxes,” Mr Bridges said in his State of the Nation speech in Christchurch today.

“Over the next four years, New Zealanders will be paying almost $10,000 more per household in tax than they would have been under National. The Government is taking more than it needs, only to waste billions on bad spending.

“On top of that, by 2022 New Zealanders on the average wage will move into the top tax bracket. That’s not right or fair. So in our first term National will fix that by indexing tax thresholds to inflation.

“We will amend the Income Tax Act so tax thresholds are adjusted every three years in line with the cost of living. That will mean that within a year after every election, Treasury will advise the Government on how much the thresholds should be adjusted for inflation.

“This would prevent New Zealanders from moving into higher tax brackets even when their income isn’t keeping up with the rising cost of living. It would ensure New Zealanders keep more of what they earn to stay on top of rising costs of living such as higher prices for necessities like petrol, rent and electricity.

“We will include a veto clause so the Government of the day can withhold the changes in the rare circumstances there is good reason to. But it will have to explain that decision to New Zealanders.

It would take a very serious change in economic health, or a very stupid government, to do that.

“The changes would make a real difference. Assuming inflation of 2 per cent, someone on the average wage would be $430 a year better off after the first adjustment, $900 after the second and $1,400 after the third.

“A family with two earners – for example, one earning $80,000 and the other $40,000 – would be $600 better off a year after the first adjustment, about $1,300 after the second and $1,900 by the third.

“That’s more of their own money in their own bank accounts.

“The first adjustment would prevent Kiwis from paying an extra $650 million a year in tax based on today’s estimates. We can afford that by managing the books prudently and spending wisely.

“We will also do more on tax – but add no new taxes – and I’ll continue talking about our plans between now and next year’s election.

“National is committed to helping New Zealanders get ahead. This step means that as well as cancelling new taxes this Government has piled on, we won’t allow future governments to use inflation as an annual tax increase by stealth.” 

This is a very positive start to the political year from National and a stark contrast to Labour’s which featured what amounts to an admission of failure on their flagship policy:

KiwiBuild’s “interim” targets for this electoral term have been scrapped as the Government recalibrates the programme.

Prime Minister Jacinda Ardern and Housing Minister Phil Twyford told media from their caucus retreat on Wednesday that their commitment to building 100,000 affordable homes over the next decade remains intact, but the interim targets for this term did not.

The Government has been dealing with the fallout from an admission by Twyford that the Government would not be able build 1000 of the homes by July 1, its first interim target. Instead it expects to build just 300.

The KiwiBuild policy aims to build 100,000 affordable homes for first-home buyers over 10 years, half of them in Auckland. . . 

They expect us to believe they can build 100,000 affordable homes in a decade when they can’t build 300 in the first year?

Labour is planning to waste money on houses for a relatively few people earning well above the average income. National has committed to letting people keep a bit more of their own money.

It gives voters a very clear choice – Labour pains over housing or National delivering clear policy to end bracket creep.

 

 


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