Greens want to rob Peter to pay Paul


Year after year remits at National Party conferences sought to ensure fuel taxes and road user charges went in to roaring roading and not the consolidated fund.

The AA and other organisations with an interest in transport lobbied in support of that too.

Eventually they succeeded.

Fuel taxes and road user charges have been directed at roads and not treated as a general tax since 2008.

Now the Green Party wants to go back to the bad old days:

Transport Minister Gerry Brownlee says Green Party Finance Spokesman Russel Norman’s plan to raid the National Land Transport Fund to pay for his “Rent to Buy Housing Scheme”, shows a complete lack of knowledge of public finance in New Zealand.

“Mr Norman seems unaware that roading funding is collected from road users through fuel taxes, user charges and fees. That money is then dedicated to the National Land Transport Fund, to pay for road policing, public transport and road maintenance.

“This dedicated funding or ‘full hypothecation’ was introduced in 2008.

“The Greens can’t have it both ways – paying for houses from road taxes would cause serious problems for the funding of core transport services such as public transport.

“The lack of investment in new roading projects would create long term bottlenecks in our transport system and create congestion, leading to greater fossil fuel use.

“”First it was crank up the photocopiers to print money, now its let’s rob Peter to pay Paul.” said Mr Brownlee.

Cactus Kate found the Green Party housing policy is aimed at people suffering from entitilitis:

Sharissa Naidoo, 25, and her partner have been renting together for four years and say they are desperate to buy their first home.

“The concern is if we’re wanting to start a family and move into a house that’s more than one bedroom, we can’t afford that,” Naidoo said.

Naidoo recently graduated with a Masters Degree in Sociology.

She is now sick of renting and expects the net taxpayer (you) to underwrite a home for her to live in with her “partner” (hate that word) of four years.

All of this, not even one year after her graduation ceremony in May 2012. . .

Taxpayers shouldn’t be funding people’s wants and taxes collected from road users should stay in the transport fund.

$550,000 and rising


Last year Labour promised to build 100,000  new houses for $300,000.

This year the price has gone up:

Labour leader David Shearer has conceded his party’s affordable housing policy will only be able to deliver small apartments or terraced housing in Auckland for the $300,000 price tag – while standalone family homes are more likely to cost up to $550,000.

He can’t blame that on inflation, it’s his party’s own fudged figures.

We built a three-bedroom, one bathroom house with a lean-to car port for dairy staff for $180,000 last year and a three bedroom, two bathroom manager’s house with a double garage for $280,000.

That leaves $120,000 for a section for the smaller house which wouldn’t be difficult in small towns but wouldn’t buy much in Auckland.

You’d be in the likes of Ohai before you’d find a $20,000 section for the bigger house.

After his speech yesterday Mr Shearer said the $300,000 figure Labour had quoted was the average price of KiwiBuild homes nationwide rather than applying to every house under the scheme. “In some places it will be more.”

But the housing affordability isn’t a nationwide problem it’s mostly an Auckland one.

Labour’s plan does nothing to address the cause of that which is the availability, and therefore price, of land.

That is why National’s policy addresses the high cost and lengthy time some councils take to process consents for new developments.

“They are apartments, they are terraced houses. For a three- or four-bedroom standalone house it will be more.”

He said three- and four-bedroom standalone homes were “of a different ilk” and a lot of the homes built in Auckland would be two-bedroom apartments or terraced housing.

Isn’t Labour also concerned about overcrowding? How many families do they expect to fit on two-bedroom apartments?

This is typical of Labour to promise much, spending our money, to benefit a lucky few, neither helping those most in need nor addressing the cause of the problem.

What do these people know about real estate?


The Labour Party’s housing plan for first home buyers has a little more than 70% support in a Herald-Digipoll survey of 500 people.

What do these people know about real estate?

The policy is to provide houses for $300,000 and you could build a house for that.

We built a manager’s house last year for $280,000.

It’s got three bedrooms, two bathrooms, an office, a double garage and is clad in Oamaru stone.

But we already owned the land. There aren’t many places in the country where you could buy a section for $20,000.

You could build a more modest house. We built a house for dairy staff last year too. It cost $180,000 for three bedrooms, one bathroom with a lean two single car garage.

That would leave $120,000 for a section and you could probably buy a reasonable one in small towns for that but it wouldn’t get you much in a city, especially Auckland where the biggest mismatch between supply and demand is driving up property prices.

If the media was doing its job as the fourth estate properly it would be analysing the policy.

While doing so journalists might ask where the workers who will build the extra 100,000 houses a year are going to come from when there’s already a serious shortage of labour for the rebuild of Christchurch.

They might also ask whether it’s the taxpayers’ role to get people onto the housing ladder – especially those on middle and upper incomes because there’s no mention of income or asset testing the people who would benefit from Labour’s largesse.



He’s dreaming


It is possible to build houses for well under $300,000 as Labour proposes to do.

We’ve just built a three bedroom one for staff for $185,000.

But we already owned the land.

It would have cost more than twice as much if we’d been building it in Auckland and had to buy the section before we started.

The average section price in Auckland is actually $300,000.

Prime Minister John Key says Labour’s plan is unworkable.

“I think they’re in fantasy land,” he says.

But not so, says Mr Shearer, who today showed off two Auckland subdivisions – built by a charity – containing $300,000 homes. Labour says the sections cost about $50,000.

But property developer Olly Newland sees it differently.

“It’s a nice idea, but they’re dreaming,” he says.

He says it simply isn’t possible to bulk buy cheap land in Auckland.

“I don’t know where you can get land for $50,000 – possibly in Mosgiel out of Dunedin.

“I think it will cost five times as much, it would be cheaper to buy 100,000 caravans.”

Mr Shearer set out to prove today that his housing policy could work, but one important aspect was absent from today’s tour – those $50,000-$80,000 sections needed to make Labour’s sums add up.

And the Government says that’s simply because hardly any of them exist.

If  a government wanted to build 100,000 houses a year at an average cost of $300,000, it might be possible to do it in this part of the world – providing they could get the skilled workers and materials to do it and that would be a very big ask.
But if Shearer thinks it’s possible to do it in Auckland where the average section is $300,000 he really is dreaming.




Spot the contradiction


Labour says it wants to make housing more affordable.

It’s even prepared to put public money into building basic houses for first home buyers.

* KiwiBuild: a 10 year programme to build 100,000 basic homes for first home buyers (less than $300,000). In partnership with the private sector and community housing groups.

* Two thirds of the homes built in the first 5 years will be in Auckland. Others will be in other ‘unaffordable’ centres such as Christchurch, Tauranga, Nelson, Wellington and Queenstown.

* Cost: a one-off $1.5 billion initial investment, to be recouped as homes are sold. Will also sell ‘housing affordability bonds.’

Though as Kiwiblog points out that $1.5 billion doesn’t take in into account the cost of interest.

Cactus Kate points out it doesn’t appear to be means tested.

That would, like several of the bribes from the last Labour government, mean help for those who don’t necessarily need it.

Another flaw in this policy is the contradiction between this attempt to make housing more affordable and the commitment to a capital gains tax which would make property more expensive.

It’s not the only contradiction from Labour’s weekend conference. The party also voted to reduce the voting age to 18 16 although it wanted to increase the purchase age for alcohol to 20.

More tax to encourage more?


Trans Tasman makes a pertinent observation:

OK, so the Govt wants us to smoke more, which is why it has hiked the tax on tobacco, right? And the whole Kyoto, putting a price on emissions thing: it’s to encourage people to put out more greenhouse gases, isn’t it?


Well consider the position of Labour and the Greens and – as of this week – whoever writes NZ Herald editorials. Apparently, according to this logic, the way to get more houses is to tax them more. Confused? They are. . .

. . .You don’t – unless your grasp of economic incentives is really skew-whiff – increase the tax on something you want more of.

There might be valid reasons for a capital gains tax – though I’m not convinced the negatives outweigh the positives.

But whoever thinks it will increase the supply of houses needs to think again. It won’t.

Is affordable or wantable the problem?


When I first left flatting there wasn’t a great deal of difference between the house I lived in and my parents’ home.

The flat wasn’t as well built and the home was a bit bigger but it was just an ordinary three bedroom, one bathroom houses with few bells and whistles, as most houses were back then.

I was only renting but had I been looking at buying that’s the sort of house I’d have been looking at too.

Now the difference between what many young people are used to in their parents’ houses and what they can afford to buy as a first home is much greater.

Their parents probably started in modest houses, and only after saving a good proportion of the price for a deposit. Then by dint of hard work and saving upgraded to something  bigger and better.

It’s so much easier to go up than down and it’s understandable that people accustomed to designer kitchens, multiple bathrooms and other domestic comforts don’t want to do without them.

But it’s unrealistic for most young people to expect to start out where their parents finished.

Cactus Kate points out:

Until my generation (X) and younger realise that they cannot afford to live in the sort of homes in their 20’s and 30’s as their parents do in their 50’s and 60’s then housing affordability will always ultimately cause disappointment because somewhere and somehow we all want to own or rent a bigger home in a nicer area that we are stretched to afford.

Don Brash has a point about the supply of land on which to build impacting on prices .

Some towns and cities do have a land supply problem which pushes up the price.

But buyer expectations are also part of the problem.

If would-be home owners lowered their sights a bit and a little less demanding in defining what’s a wantable house they might find it’s a more affordable one.

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