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Renters will pay for Nats’ tax cuts for the rich

Written By: - Date published: 11:11 pm, May 16th, 2010 - 70 comments
Categories: class war, housing, tax - Tags:

The tax changes that are about to be announced are characterised even by the Government as a ‘tax swap’. They are fiscally neutral. The tax burden will not fall. All that will change is who it will fall on.

So, it’s pretty disappointing to see the media running silly pieces titled ‘Tax cuts: What’ll you get’ and the like with no corresponding look at who will pay more.

Into the breach once more.

As I’ve shown before, there’s actually no tax cut for the 1.1 million taxpayers with incomes under $14,000. The cut in the bottom rate is eaten by the higher GST bill. The first 50% of taxpayers get an average of $1.25 a week between them. Net tax goes down by the princely sum of $8 a week for someone on $65,000. Of course, it’s after $70,000 that the big money starts flowing. A person on John Key’s $350,000 salary gets $12,000 a year. Paul Reynolds, Telecom’s $7 million man, gets $290,000.

But that’s only part of the story – the country’s total net tax cut is zero. The money for those tax cuts for the rich comes from increasing tax on housing investment. Until now, I haven’t tried to work out who bears the cost of that.

A tax isn’t necessarily borne by the person who pays it to the government. If they can, they will pass it on to someone else. Although there appears to by no(!) official work done on who will bear the cost of higher tax on housing investment, the landlord’s lobby group has been clear that the costs will be largely passed on to renters. And that seems to make a lot of sense, most landlords are operating on on thin margins at present, so they can’t afford to take the cost themselves. Renters are quite a captive market while home ownership remains so expensive so landlords are free to pass the cost on to them.

Who are the renters? The census tells us:

  • 29% of households pay rent.
  • They are mostly low income – 50% of renting households have incomes of under $50,000 a year. The median household income is $68,000.
  • We’re not talking just students or young people. 260,000 of the 400,000 renting households are families.
  • Renting households tend to be larger, so a lot more people rent than the % of houses that are rented would suggest. 1.4 million of 3 million adults do not have tenure over their residence.
  • 60% of non-Pakeha don’t own the house they live in.
  • One million of the people who don’t own their residence have incomes below $35,000.
  • Approximately 100,000 households spend more than a third of their incomes one rent.

These are the people who will be paying for the tax cuts for the rich. They are poor, they are non-Pakeha, they are already paying large portions of their income on rent.

Being low income working families they are most likely to have lost jobs during the recession and to have got no pay rise. They may get small income tax cuts, but they will already be eaten up by the higher GST bill. On top of that, they will be picking up the tab for tax cuts to people like Key, Reynolds, and other wealthy members of the capitalist class.

Remember, if you get a net tax cut in this Budget, that money isn’t manna from heaven. It has come out of someone else’s pocket. Most likely, it has come from a low or middle income working family that rents. Do you need it more than them?

One last point. I actually don’t object to better taxation of housing investment or to higher GST. Discouraging over-investment in housing, letting the price of houses fall, is good. Taxing consumption is good. What matters though is what is done with the revenue raised. It should be distributed fairly – a zero-tax bracket from $0-$8000 would be my preference. Seeing as the National Government isn’t doing that and only sees tax reform as an opportunity to make the poor pay more taxes and the rich less, I can’t support it.

70 comments on “Renters will pay for Nats’ tax cuts for the rich”

  1. RedLogix 1

    And that seems to make a lot of sense, renters are quite a captive market while home ownership remains so expensive so landlords are free to pass the cost on to them.

    Just to be clear here, with the median house price in the order of $370k, and the median rent at $15k; is a very marginal return of about 4%. This means the cash flow of many landlords is right on the knife-edge. Of course we will attempt to recover any increased costs in this budget.

    I’ve done my numbers. The median rent I’m charging at present is $300pw. If they go for killing depreciation AND ring-fencing other losses like mortgage interest, then I’ll be putting rents up about $80pw.

    Discouraging over-investment in housing, letting the price of houses fall, is good.

    I take it you do not already own a home, nor have a mortgage Marty. The way table mortgages are structured at any given moment in time about 20% of households own homes with less than 20% equity; while in any given year only about 2% of the market transitions from renting to owning (ie new home buyers).

    If landlords who currently own 29% of all homes in the market are all simultaneously hit with increased costs then either they will attempt to recover them with increased rents or massively dump thousands of properties onto an already fragile market. This would crash prices at least 20-40%. Let pretend our median house price drops from $350k to $250k .This will mean several things:

    1. Those 2% of new home buyers will be hurt because the banks will demand lower LVR’s, ie higher deposits because they are nervous about the value of their security in a falling market. For instance, an 85% LVR on a $350k property is a $52.5k deposit. A 75% LVR on the same property that has fallen to $250k is $62.5k…the price may have dropped, but the barrier to entry is higher! So they stay renting.

    2. Those 20% of folk who purchased their $350k home in the last five years or so, will have their equity wiped out. They are ‘underwater’. The bank will tolerate this for a while, especially if they keep servicing the mortgage. But sooner or later some event like loss of job, or relationship breakup forces their hand. Then these people are forced into a mortgagee sale and lose everything.. Worse still due to the punitive nature of commercial law in this country, they are likely to have a debt to the bank that will remain. These unfortunate folk have no choice but to rent as well…plus pay back their debt. Their chances of buying again are slim.

    3. The big winners will be cashed up overseas buyers (Chinese most likely) who’ll happily snap up the bargins financed by cheap money local New Zealanders cannot access.

    Still seem like such a good idea Marty?

    • Anita 1.1

      RedLogix,

      I suspect that the distribution of rental property values is not the same as the distribution of all property values, and I suspect that difference is significant. If you want to make the point in your first para you might want to dig up some better differentiated statistics.

      • RedLogix 1.1.1

        Anita,

        That’s a very good question and one that I gave some thought to before writing. It’s certainly true that at one time the huge bulk of rentals were older houses in the last 30% of their lifecycle…that nobody really wanted as their own home anymore. But my observation, and a quick look at the Trademe ads confirms this, is that this is no longer true, there are rentals in virtually all classes of property nowadays….except perhaps at the very top end.

        Besides I was using median values…and I think that answers your objection. And many landlords are telling us that their position is rather marginal; it’s the banks who corner the vast majority of cashflow from the rental business.

        Rents are only as low as they are because for the last few decades the State has been subsidising them. The removal of this subsidy is what this Budget is all about. In this sense I totally agree with Marty, it’s the hidden ‘new tax’ that English is going to hit the poorest and least privileged in society with…in order to give those who already have the most, some more.

        • Anita 1.1.1.1

          Yeah, I can’t work out a simple way of checking the assumptions either. The disagreggated CPI data would help perhaps but I’m not sure how much. This was interesting but no damned use :)

          Anyhow, if we were talking about the rental of privately owned properties to people who might otherwise own I think your logic would be safer. My hunch is, tho, that state and council rental properties, and high volumes of student rentals probably distort the rental market too far from the distribution of all housing.

          I utterly agree that property rental must be marginal, or worse, in many cases. I bought the house I rented, so I am keenly aware of how much higher my mortgage payments are than the rental value of the property.

          Incidentally, doesn’t the accommodation supplement available through WINZ potentially act as a further subsidy at the bottom end of the non-student market?

    • Add to that the stigma attached to renting and you’re creating a poor subclass who will never be able to cross the divide.

      Captcha: falling

      • RedLogix 1.2.1

        True enough …yet it mirrors the other stigma attached to being a landlord, which makes it all too easy for the govt to deflect tenant’s anger at rent rises onto the landlord…the person at the door anxiously informing them of the inevitable result of the govt’s change of policy.

        Yet the truth is that the majority of landlords are fairly ordinary middle and working class people in their 50′s and 60′s who put a lot of cash and work into their business.

        • uke 1.2.1.1

          Ahhh… reminds me of that wonderful song: “Oh pity the downtrodden landlord”:

          Please open your hearts and your purses
          To a man who is misunderstood
          He gets all the kicks and the curses
          Though He wishes you nothing but good
          He wistfully begs you to show him
          You think he’s a friend, not a louse;
          So remember the debt that you owe him
          The landlord who lends you his house

          Chorus: So pity the downtrodden landlord
          And his back that is burdened and bent
          Respect his gray hairs, don’t ask for repairs
          And don’t be behind with the rent.

          You are able to work for a living
          And rejoice in your strength and your skill;
          So try to be kind and forgiving
          To a man who a day’s work would kill.
          You are able to talk with your neighbor
          You can look the whole world in its face,
          But a landlord hat ventured to labor
          Would never survive the disgrace.

          When a landlord resorts to eviction
          Don’t think that he does it for spite;
          He’s acting from deepest conviction,
          And what’s right, after all, is what’s right.
          But I see that your hearts are all hardened
          And I fear I’m appealing in vain;
          Yet I hope my last plea will be pardoned
          If I beg on my knees once again:

        • Lew 1.2.1.2

          RL, isn’t “owning more than one house” a definitive marker of the (upper?) middle, rather than the working class — cloth-cap pretensions and upbringing notwithstanding? To my mind it’s a clear indicator of mobility.

          L

        • pollywog 1.2.1.3

          Is there an ethnic breakdown of stats on landlords ?…if 60 percent of non pakeha dont own homes just wondering how many pakeha own more than one ?

          and why is that ?

      • RedLogix 1.2.2

        My repsonse to uke’s charming wee ditty, and Marty’s equally Victorian pic that he headlined this post with… is simple.

        About 12 years ago I had nothing except a job, a company car and so few possesions I could fit them all into the back of it. Otherwise zip. (Plus of course all that white privilege baggage, but I couldn’t find a Maori at the time who’d take it.:-).

        My partner and I have worked very hard to get to our current position, which is still not that flash. We are what you call asset rich and very cash poor. Most of our tenants have nicer furniture and cars than we have.

        The average landlord in this country is someone in their middle age who owns 1.5 units. The vast majority of us are ordinary people who’ve used the equity they built up in their own home in a long-term retirement investment. Typically they start in their 40′s or 50′s and for the first 10-15yrs the cash flow is very marginal, of they are putting money INTO the business. In this respect the rental is just like many other SME’s…without depreciation and the ability to deduct expenses from income the business would never get off the ground.

        It’s only after the mortgage is paid down after 15-20 odd years that it becomes profitable and begins to pay tax in the normal way. The vast majority of us are doing this business because the govt has told us not to rely on National Super …and from bitter experience we do not trust and of the alternative investments on offer in this country.

        And pollywog, for Christ sakes not everything is a race issue. There really is no law stopping non-Europeans getting into the business. Indeed many do.

        • Lew 1.2.2.1

          RL, is that intended as an answer to mine as well? It’s an honest question, not a wind-up.

          L

        • uke 1.2.2.2

          “My partner and I have worked very hard to get to our current position.”

          Just because it’s a bunch of “ordinary” Kiwis involved, doesn’t make it “right”.

          As you pretty much admit, you were only thinking of yourselves. Not about the effect that the massive middle-class shift to property investment was going to have on the market. Making what was once affordable to all social classes now unaffordable to those on the bottom. (I wonder what their retirement plan will be?)

          One could argue that the shift to rental investment among those on the middle-class Left in the last 20 years showed an implicit loss of faith in the Kiwi social contract. It was a bit of an insurance policy to ensure their own status at the expense of those “below”.

          As you’ve stated, you’ll be only too ready to “pass on” the cost again.

          • RedLogix 1.2.2.2.1

            Not about the effect that the massive middle-class shift to property investment was going to have on the market.

            The reality is that there is always a portion of people who will never own their own home regardless of how cheap they are. They are either too young, too old, too transient, not interested, have a criminal record, or are simply paid so badly that no bank will ever lend to them. We used to have a decent State Housing system for them…and part of me wishes it were still so, but the days of massive state institutions being so deeply entrenched in our lives is over. We simply are not ever going to go back to the days when the left could dream of the State providing 30% of the total housing needs in this country.

            Instead over recent decades we have transitioned to what is essentially a State-subsidised, privately managed housing system. It’s not perfect, but it is what we have. And we fiddle with it at our peril.

            I wonder what their retirement plan will be?

            Kiwisaver. If rents are kept low they should be able to afford it. It’s more than I can.

            • Pascal's bookie 1.2.2.2.1.1

              I’m a bit confused about how much and which parts of your position is rhetoric.

              You seem to be saying that ‘rents are low’ based on historic ratios to property prices. But to me that’s crazy given what you also state about banks lending policies driving a property price bubble.

              Seems to me that if you want to find out if rents are ‘low’ or not, then the thing to compare them with is household income. The ratio to property price only tells you if there is a bubble in the property market.

              If there is such a bubble, and everyone seems to agree there is, then renters, I would think, should be last on the list of who should be getting a haircut, after the banks etc.

            • uke 1.2.2.2.1.2

              “Kiwisaver. If rents are kept low they should be able to afford it. It’s more than I can.”

              That’s a big “if” at this stage of the game.

              And why should the low income-earner trust in Kiwisaver any more than you didn’t trust National Super? (Already the Nacts have fiddled with it). The brutal facts are they don’t really have any choice: unlike the middle-class.

              So it really all comes down to brutal facts, survival of the fittest, the richest, and all that, eh?

        • Bored 1.2.2.3

          Interesting Red, theres a subtle message here that stands out: people doing what you have done are by and large not avaricious rentiers, they are more concerned that their retirements might not be funded by the state in the future.

          Is the other subtle message is that these people have no faith in collective solutions to this and have taken responsibility for their own outcomes? Has our commitment to public solutions to large issues reached such a low point where we see no alternative to landlordism to secure our own individual wellbeing?

          • RedLogix 1.2.2.3.1

            Bored.

            Got it in one.

            • Bored 1.2.2.3.1.1

              Hope so Red, I suppose my real question is should we be debating the validity of this or alternatives? Or do we just accept it?

        • pollywog 1.2.2.4

          For probably not the last time, though i wish it were RL, let me reiterate, I don’t do race issues… I do culture issues !

          But anyway, for some reason i’m reminded of motivational speakers telling how you too can realise your dreams, but if everyone were a motivational speaker there’d be no one to motivate…same with landlording ? If everyone owned 1.5 units there’d be no one to rent to and they’d be worth sweet FA.

          So in whose best interest is it to keep house prices high, wages low and ensure a surplus of renters who dont have any choice but to wear any and all price hikes…if you cant beat em join em eh ?

          yeah nah, good on ya mate :thumbup:

    • Samuel 1.3

      Redlogix- your comments about the cashed up Chinese buyers underscore why we urgently need a law change that reserves housing for New Zealand buyers only. Otherwise I disagree that rent increases will be a long term problem . People can only pay what they can- once rents are too high people will find other alternatives and demand for rental accommodation will fall. House prices need to fall enough so that landlords can buy a house and make a return that covers costs.

      And a note to Labour- don’t even think about raising the accommodation subsidy to bail out landlords. Hitting PAYE earners to pay for the excesses of landlords who gambled on capital gains and lost is not on.

      • uke 1.3.1

        “…we urgently need a law change that reserves housing for New Zealand buyers only”

        In combination with a rent freeze too? Otherwise, until everything stabilises, you’re going to see many more families opting for the “trailer park lifestyle”.

        The underlying problem is that land, by nature, is not a commodity – any more than money is – and should not be traded on that basis. Land is not something you can manufacture more of.

        Freezing rents would be one way of bringing house prices down and de-incentivizing its use for investment purposes.

    • Jenny 1.4

      Nasty little racist stab at Chinese people there at the end, Rightlogix.

      Like many apologists of the capitalist economic model, when the figures don’t stack up you look around for scapegoats to blame.

      A tactic most infamously used by Hitler to explain the Great Depression and the banking collapse of the 1930s.

      Have you ever considered that investors in rental property like yourself are one of the causes of the housing bubble that has put home ownership out of the reach of normal working people.

      You took the risk, Boo hoo if your equity is wiped out. But no, you want your tenants to bail you out.

      Maybe you would like to explain how you are any different to the Wall Street banksters who were able to raid the public account when their speculation in housing collapsed.

      The advertised purpose for this tax was to “cool the housing market” ie. to stop housing investors like yourself inflating house prices.

      Personally I think the government would be fully justified in bringing in rent controls along with this tax, to stop people like you passing it on to your tenants.

      Rightlogix you justify your behaviour by saying you are a hard worker. Well who isn’t?

      Are your tenants not hard workers?

      Do they really deserved to be squeezed by you to protect your lifestyle?

  2. interesting points Red. You’ve certainly confirmed that most of the cost will be passed through to renters.

    • A good analysis by Redlogic and a good case to do nothing.

      The problem is that if we do nothing then things will continue to spiral. Kiwis will keep borrowing more and more money from Australian Banks to buy the same houses of each other for higher and higher prices.

      Investment in industries that are capable of the techonological breakthroughs that we need will instead be put into land. And taxpayers who should be paying considerable tax will be paying less.

      At some stage the economy has to be corrected.

      • Lew 2.1.1

        So it seems a gradual correction is required — a managed step-down, rather than one which will cause a stampede. Is such a thing even possible? Property investors are even more like reef-fish than the stockmarkets.

        L

      • RedLogix 2.1.2

        and a good case to do nothing.

        A good case not to fiddle with the symptoms rather than addressing the root cause…which is excessive credit creation by banks.

        The long-term ratio of property values to imputed rental value is about 15:1. In other words if the current median rent is $15k, then the median property value should be $225k.

        The only reason why the median property price is so much higher than this is because banks have pumped so much credit into the asset market. They did this in order to make money. Be very clear what the root cause is here.

        The optimum LVR ratio is about 80%. In order to establish equilibrium in the whole market (remember rentals are only 30% of it) the banks must be regulated by the Reserve Bank to limit credit creation. At present the value to rental ratio is about 25:1. A bank should not lend more than 80% of this, therefore they should be limited to lending no more than 20 times the imputed rental value of the property. (The imputed rental value is fairly easy to establish.)

        Here’s the neat part. In order to prevent crashing the market you need to reduce this ratio gradually over a period of about 5-10 years. So each year the RB reduces the ratio by 1 point, so next year the limit is 19 times the imputed rental value. After about 7-8 years the ratio is down to 12 times which is 80% of its historic mean value. Job done.

        It’s a simple technical move that is well within the powers of the RB, and addresses the very real problem of asset price inflation at it’s root …benefitting all New Zealanders in the long run.

        • mickysavage 2.1.2.1

          The only reason why the median property price is so much higher than this is because banks have pumped so much credit into the asset market

          That and landlords seeking a tax free capital gain.

          In response to Lew’s point I am not sure if it can be graduated. in any event the Government is relying on the extra income to give significant tax cuts to the uber wealthy who do actually pay tax.

          It is an interesting conundrum for the Government. I have no sympathy for the predicament they are in. They will on Thursday annoy a significant portion of their supporter base.

          If it could be graduated then I would suggest that before a tax deduction can be allowed there should be evidence of actual reduction in the value of the rental unit. The deductions are allowed on the false premise that the rental unit has devalued, whereas often it has not.

          But we would need to beef up IRD’s resources considerably.

          • RedLogix 2.1.2.1.1

            That and landlords seeking a tax free capital gain.

            Those folk are called property speculators. The IRD already has plenty of tools to deal with them. The big scandal was the fact that the 90′s National govt more or less directed IRD to so completely turn a blind eye to the rules that most people forgot that if you are buying and selling for a business that tax was owed.

            Landlords by contrast intend to keep their properties long-term…so capital gain is largely irrelevant.

            The deductions are allowed on the false premise that the rental unit has devalued, whereas often it has not.

            It’s the land value that increases the most…. and that is not depreciable. The building and chattels increase pretty much at replacement value. And they do wear out as do all business assets do and need replacing… at replacement value.

            The rort that some speculators get into is when they do sell they illegitimately manipulate the ratio of imputed land and chattel values to their maximum benefit…but again IRD is pretty much onto that these days. It’s a mug valuer who connives with them in that game.

            • mickysavage 2.1.2.1.1.1

              If you give a landlord a big enough capital gain they tend to become speculators …

              I accept the land/improvements distinction exists but I am not sure why. We are giving a tax break and allowing a tax free capital gain at the same time for the same object.

              IRD did improve during the past decade. They were given the necessary resources and there was the necessary political will to do something.

              With the cutting of the public service this sort of work will become of lesser priority.

              I recall reading an analysis that suggests that for every $1 spent on more IRD staff there would be a return of $60.

  3. Herodotus 3

    “…higher tax on housing investment, the landlord’s lobby group has been clear that the costs will be largely passed on to renters…”
    For me those who continual this statement (incl Lab MP’s) are just doing the work and re inforcing the justification for a rent rise, just keep on saying this and it WIL happen becasue we have accepted it. Who are they and the left really working for?
    So Lab has been happy for me and all the other PAYE workers to subsidies the rich with our taxes. The logic for allowing depreciation on an asset that appreciates is nonsense. So with this logic Lab and “the left” will DO NOTHING regarding the property con with favourable tax and ability to claim poverty and claim social welfare in allowing to increase their asset base.
    No wonder people are confused Nat is more left than lab in looking after the welfare of the poor, and Lab is safe guarding the filthy rich !!!

    • Marty G 3.1

      That’s a bit rich. Does continually stating that rising GST will rise prices make it happen? Does stating that summer will bring longer days make it happen? No. These are just observations about the consequences of events.

      Labour has supported closing down tax advantages for housing investment. It looked at doing so in 2006 and was shouted down by the media.

      What Labour has opposed is more tax on housing being used to give big arse tax cuts to the rich – ie it is against National forcing “workers to subsidies the rich with our taxes”.

      • prism 3.1.1

        “Labour has supported closing down tax advantages for housing investment. It looked at doing so in 2006 and was shouted down by the media”

        That is why Labour got voted out. They didn’t have enough political will to push forward the policies that their voters would have expected. In the end they were more concerned about skimming along so they could get another term. It would have been hard for them either way, but they chose not to stand up and explain what they were doing and why, and how it would benefit the country and then go forward. At the end of the day their fall was inevitable.

    • Samuel 3.2

      Herodotus- “No wonder people are confused Nat is more left than lab in looking after the welfare of the poor, and Lab is safe guarding the filthy rich !!!”

      Yeah- my thoughts too. The best thing you can do for low income people is make a home of their own affordable. If this means letting house prices fall to a natural level than so be it. Labour seems to be looking after the interests of the landed classes rather than the people they say they represent.

      .

      • Bright Red 3.2.1

        samuel. Labour. Doesn’t. Oppose. Tax. On. Property. Investment.

        what it does oppose is that moeny, which comes from higher rents, being used to pay off the rich when it should go to working New Zealanders.

  4. Herodotus 4

    Marty when did this subsidy really hit in?
    Abourt 2004 when housing went thru the roof, and there was no action by the govt to abate this growing bubble.
    I also do not remember any electon comment as voting for me and we will keep rents down by giving a backhanded subsidy to landlords.
    There are also rules as to how often and by what % increases of rent can occur, perhaps “The Left” should be placing greater effort on informing tennants that they have rights and where to turn if they feel hard done by.
    Perhaps landlords are struggling because they made marginal decisions on what the property as a commercial enterprise was worth. So the banks made bad decisions we bailed them out, now landlords. I hope that the govt would bail me out if I made a bad decission at a casino and bailed me out !!! I only Hope :)
    “…was shouted down by the media.” So Labs policies were based on WHAT the media think, no wonder we have had crap government they do as the media says NOT what is best. I think that Helen was a bit stronger than to change direction on this rather poor group within the media Has not this site commented on the bias of the media, yet Lab was listening to them?

    • Marty G 4.1

      “” was shouted down by the media.’ So Labs policies were based on WHAT the media think, no wonder we have had crap government they do as the media says NOT what is best. ”

      stop yelling.

      You know full well that there are limits to what a government can do. National thinks it is best to mine schedule 4 land but the political environment means it can’t. When Labour proposed changes to housing tax the headlines made it clear this would be branded as another tax grab by overtaxing Labour.

      No-one’s talking about ‘bailing out’ landlords. Get a grip.

      • Samuel 4.1.1

        Marty G- Phil Goff came out against changes to property taxes only last week. The climate has changed greatly in the past few years and many influential people in the media are calling for drastic chnages to the rules around property. I can’t see any excuses for Labours current position on housing and I think they are letting down the people they say they represent.

        • mickysavage 4.1.1.1

          Phil Goff came out against changes to property taxes only last week

          Are you sure? Source and quote please.

        • Bright Red 4.1.1.2

          Samuel. Where’s the quote on that?

          Labour has said they support tax on housing investment but it has to be redistributed fairly.

      • Herodotus 4.1.2

        “No-one’s talking about ‘bailing out’ landlords. Get a grip.”
        Marty this comment was based on the premise that the landlord paid too much for their property and as they are having a gross return of about 4%, are now having the ability to deduct depreciation on the house thus have part of the negative equity bank rolled by the state, and then in most cases take the capital gain and run. When under close scrunity that is all the exercise was based on Capital Gain, with the state funding the “time” element along with the tennant.
        I am still taken back by some who continue to protect the landlord.
        The lack of building for me will not be sorted out until someone losses a packet of money. To build costs $1700/m2 fora single level and over $2000/m2 for double story. Land takes 9 years + to get zoned, the purchase price of the land is minor when compared to holding costs and prep work for plan changes and hearings. The days of Ferarris being driven by Land Developers has gone. The one saving grace is that earth works and civil work contracts are fort for with historicall low prices. But this can hold out so long before contractors go under.

  5. big bruv 5

    Ah…the return of market rents, the good old days are back again.

    Now all we need is for renters to start paying for the local body services they currently receive for free, it is time for a council tax based on use not property ownership.

    • lprent 5.1

      They don’t receive them for free. As a landlord, I certainly account for them in my pricing for rents, along with body corporate fees etc.

      Most of the more expensive elements like roads, accessible public transport, etc are factors that make people prefer my offering over another. In fact they are why I brought in a particular area. It made it more attractive to me when I lived there, and more attractive to my tenants now.

      I think that you’re just being your usual unthinking self again. The majority of the services paid for by rates probably benefit the owner more than the renter.

  6. Bored 6

    Very interesting debate from Marty and Red about the effect this could have on house prices…..it sort of reflects that great NZ middle class concern about what they percieve to be a safe investment. A collapse in housing prices might just be the “disaster” that sinks the Nacts. And that says something about us as a nation: it may reflect our unhealthy obsession with making others pay for what we want to own, either through rent, or through tax based upward distribution.

    capcha enginering

    • Zaphod Beeblebrox 6.1

      Shouldn’t we be more concerned on a left blog with the looming housing shortage which the government is doing nothing about? Thats what is going to pressure rental costs.
      The cost of construction will keep prices going up. You’d be lucky to build anything in Auckland for under $250K construction cost, thats not even counting land. When employment stabilises I can’t see prices falling (have a look at Melb and Sydney prices) Don’t know about the rest of the country but in Auck, Well and ChCh any rent increase due to the depreciation changes (and GST increases- remember rates are also going up 2.5%) are going to be dwarfed by the rent increases caused by the housing shortage and interest rate increases that are coming..

      • Bored 6.1.1

        Z, you are at the hub of the issue, supply and demand. As you point out there is more than just people and house numbers, theres land, finance, labour etc etc. As a ‘left wing” blog I am surprised by how quickly we descend to the mechanics of and the realities of todays issue and the current paradigm.

        This indicates a tacit acceptance of the current status quo as opposed to valid social questions about ownership, housing standards and availability, and most importantly who benefits and in what proportion?

        • uke 6.1.1.1

          How about a rent-control calculation made by the government – related to household income and market value – so that a fair rent could be set for the tenant and the landlord wouldn’t get unduly squeezed?

          Rather than this fluid market-based financescape of shifting property values, incomes, and taxes that seems to please nobody.

          • RedLogix 6.1.1.1.1

            Well my other really radical suggestion…which few people seem to get is this:

            Socialise all urban land.

            In other words convert all urban freehold title into leasehold, in the name of the local TLA. Instead of charging rates, they charge rent.

            Before anyone gets all upset over this, think… there is already plenty of leasehold urban land in NZ, plenty of people live perfectly happily in such properties all their lives. What they are renting is the right to occupy the land…they have no actual need to OWN it.

            The big impact this would have is to remove the land value from the asset that the bank has a mortgage over. It eliminates the main cause of price speculations and bubbles in property …because the land can no longer be bought and sold privately.

            Just in case anyone thinks I’m all rhetoric and no solutions.

            • Lew 6.1.1.1.1.1

              Ok. Supposing this could work, where would the local authorities get the cash to pry the existing parcels of freehold land from the fingers of its current owners? Or would this land-grab not be subject to compensation? And what would happen to land on the urban fringe — presently outside the boundaries, but prone to become a part of it as the cities expand?

              L

              • RedLogix

                Agreed Lew, I can’t see a simple path through, certainly not one that is politically achievable. As I said it’s a radical suggestion, more helpful to frame the discussion by defining what the core issue really is …than anything we are likely to see implemented anytime soon.

                Although on second thoughts, there is no need to implement it all at once. It could be achieved over time if TLA’s were allowed back into the urban development business.

                What if we did a 12% compulsory super system like Australia, and invested that into nationalising the $190b of private debt we owe to overseas banks?

              • Lew

                Right, so the councils purchase property as it becomes available on the open market, and use the revenue from building sales and land rental to fund further purchases.

                I’m not a fan of using super funds as debt-absorbers. Either the fund is there to maximise returns for provision of future services or whatever, or it’s earmarked for some other purpose. Trying to do both tends to result in doing neither very well. This means that any such additional levy would need to be in addition to those presently invested in Kiwisaver etc. This would be a hard sell to folks who already own property in the equity safe zone.

                Also, just wondering why you’ve not responded to my prior questions, RL? Beneath debate?

                L

              • Bored

                Really please to see some thinking and debate around some more far sighted approaches, rather than picking away at the details of the current issue. Well done gents, my day is getting happier. I like the socilaise urban land idea, the subsequent redevelopment of older housing stock might be quite an economic stimulant and opportunity to build better environments and communities.

                Moving on to rural land…..rent based upon soil conservation levels…hmmmmmm.

            • uke 6.1.1.1.1.2

              Agree with you on this Red, though I can see the implementation problems, as with Lew. But why not all land, while we’re at it?

              As I stated above, a basic problem is treating land as a commodity, when in fact, it is not a true commodity (being “unproduceable”). It is no coincidence that the birth of British market capitalism is strongly linked to the enclosure of common land by the genrty.

              *Sorry, Red, if I came over a bit irreverant and pointed before: these issues wind me up*

            • Zaphod Beeblebrox 6.1.1.1.1.3

              Councils don’t need to do it all. They have plenty of control over the development market already so why not let them do what they (and HNZ) did in Hobsonville- provide the land, the development plan and the infrastructure- then private developers build what they believe the market wants. That way developers can have certainty and policy objectives can be met (proximity to jobs appropriate social housing etc). Just takes a bit imagination- something this current government seems a little light on at the moment.

              • Anita

                How does that provide homes for the hard-to-house?

                Private developers/landlords are not particularly willing to rent to people dealing with alcohol or substance abuse, people who are transitioning from residential mental health care, recent refugees, and the long-term homeless (to name just a few groups).

  7. Fisiani 7

    Supply and demand economics 101.
    After the budget it will be less profitable to be a heavily geared landlord. This will cause many houses to come on the open market and thus drop prices. Houses will then be purchased by other cashed up landlords and rented out with LOWER rents. First time buyers can get houses cheaper.

    • Bright Red 7.1

      yes and it’s not the tax on housing investment that people have a problem with, it’s what happens to the money raised.

      You really have trouble with the reading comprehension, huh?

    • RedLogix 7.2

      Fisani

      Read the thread above… your argument is superficial and has been unpicked.

      The property market is not pure supply and demand 101 in the normal way most people think of it. It’s not like when the price of cornflakes go up and people switch to weetbix because they are cheaper.

      If you want to buy a house there is no alternative…but a house. When prices are rising, paradoxically demand increases because people want to lock in their purchase price now and avoid a higher price later. Conversely when prices are falling, demand drops because everyone thinks they might be able to buy cheaper if they wait.

      And so does the bank. The last thing the bank wants is to lend into a falling market. Look at the rural farm market, the banks are so bearish about it at the moment, some of them have limited LVR ratios to 50%! Moreover all those people who already have mortgages lose their hard-earned equity selling into a falling market…if they sell they don’t have enough for a deposit on their next home no matter how low prices go.

      The failure to understand supply and demand in the property market, and the failure to take into account the non price-neutral behaviour of mortgage debt are the two main mistakes most people make when thinking about the property market.

  8. aj 8

    I agree with mick and lew @ around 11am
    One only has to look at historical trends {and the current US situation} to see a correction is most likely to happen. There will be tears, as with all bubbles. The Blue Chips and finance companies bubbles popped brutally and quickly – housing will be a slow death for those in marginal situations with static, reducing, or zero wages.

  9. Pat 9

    There is a bunch of options for first home buyers to get into the market. The truth is, most don’t know what is available and how to get it. Higher income earners can still borrow 95% through some Banks, and most other first home buyers are in reach of Welcome Home Loans, and/or KiwiSaver with the First Home Buyers subsidy.

    Govt has provided the options, but govt is piss poor at delivering the advice and planning needed by first home buyers. No-one from WINZ is going to go around to your house at 8pm at night and show you how to buy your first home, or set up KiwiSaver to save for your deposit. (Maybe Whanau Ora will be better at filling this gap).

    Simple solution: Pay mortgage brokers commission on Welcome Home Loans.

    • Pascal's bookie 9.1

      “Pay mortgage brokers commission on Welcome Home Loans.”

      then bundle up the mortgages into a big shitpile, split the pile into tranches, rate the tranches using magic beans, sell them to kiwisaver managers, and around we go, gabba gabba hey. :)

  10. Pat 10

    “What if we did a 12% compulsory super system like Australia, and invested that into nationalising the $190b of private debt we owe to overseas banks?”

    All complusory super needs is a start-line. For example, you could start now with all 18 year olds and over starting their first job once they finish school and/or tertiary eductaion. Compulsory 10% deductions into KiwiSaver until they are 65, plus minimum 2% plus employer, and no National Super. Only withdrawal available is for first home deposit. That gives them 40 plus years of savings at the desired level to meet retirement needs, and unburden the future taxpayer.

  11. icehawk 11

    Piffle!

    “the landlord’s lobby group has been clear that the costs will be largely passed on to renters. And that seems to make a lot of sense, most landlords are operating on on thin margins at present, so they can’t afford to take the cost themselves. Renters are quite a captive market while home ownership remains so expensive so landlords are free to pass the cost on to them.”

    Of course the LANDLORDS lobby group says this!

    But rentals are not set by landlords saying:

    “Gosh Humphrey, I think I deserve an extra $500 a year”

    “Why yes Reginald, that’s only fair. I deserve to make an extra $1000 a year in rent, so I’ve raised the rent on my peons too!”.

    No. Rentals are not set landlords making up what they want. They are set by supply of rental property vs demand for rental property. Charge too much and you find your property empty – and for landlords with a mortgage that’s very, very expensive. Supply and demand of rental property will be pretty much the same next month as they are now, no matter what happens in the budget. Renters are not a “captive market’” in the sense Marty suggests- if landlords could get twice as much rent as they do now they would.

    The landlords lobby warns that landlords will “get out of the market”. What, take their rental houses and put them under their bed?

    Long term (very long term) tax on property will lower property prices, which will reduce building of new property, and the interaction of those two might raise or lower rents as they will each push in opposite directions. But it’s very hard to tell.

    Short term, the landlords lobby is talking self-serving nonsense. Much like Red Logix.

    • RedLogix 11.1

      Renters are not a “captive market” in the sense Marty suggests- if landlords could get twice as much rent as they do now they would.

      But no-one can or will supply anything at less than cost. A significant portion of landlords are close to that point. They will have to raise rents or go out of business. Some landlords will not have to do this, but their fortunate tenants will likely stay put rather than face the chance of higher rents elsewhere. Any one unit can be only rented once, until the tenant moves it is effectively off the market. Again, it’s not like we are selling cornflakes here.

      The current price in the rental market is set by a range of exogenous factors that at any one point in time are more or less in equilibrium. Change one of those factors and the price will change.

      Put this another way. If tenants were free to pay whatever they like why don’t they pay half what they do now?

      Supply and demand of rental property will be pretty much the same next month as they are now, no matter what happens in the budget.

      Well as I described above at 7.2 ‘supply and demand’ in the property market is nothing like the simplistic Econ101 model you have in mind.

      Another factor that many people are unaware of is that a surprisingly large number of new houses are built by landlords each year. I don’t have the exact percentage, but I’m guessing its in the order of 5-15%. Personally I’ve built six, fully hands-on with three of them. Of course if we stop doing that (and I’m sitting on land, a consent and funding for an unbuilt home that currently I’m unlikely to proceed with) then that will take a decent chunk out of the supply side of the equation.

      You might also like to read this.

      What, take their rental houses and put them under their bed?

      As explained at 1.0 you really don’t want us dumping thousands of them on the market either…not if you already own a home, and especially not if you have a mortgage.

  12. icehawk 12

    Red,

    You misunderstand Econ 101.

    Renters are not a “captive market”. If you raise the rent they can easily move to the vacant flat down the road. Even if every landlord in town wants to raise rent, landlords are competing with each other for tenants. So rents are set not by what landlords want to charge to recoup their costs, but by how much supply and demand there is for rental properties.

    That is why when mortgage rates dropped hugely in the last two years, thus hugely dropping your costs, you did not halve the rent you charge your tenants.

    “Put this another way. If tenants were free to pay whatever they like why don’t they pay half what they do now?”

    Red, you’re not that thick. So stop pretending. I was arguing that prices were set by supply and demand, not at whatever level the landlords want and not at whatever level the tenants want.

    Supply of rental properties is inelastic in the short term. Pixies don’t suddenly create houses overnight if rents are high. Nor do they steal them away when rents are low. Landlords quitting being landlords don’t take their units out the market. Demand is more elastic because household sizes change – if rental prices are too high people can stay home with mum and dad for another year or squeeze a flatmate into the lounge. If prices are low then a couple may rent a larger place to give themselves more space.
    (BTW, this is the big point the link you suggest is missing – the important effects of changes of household size on property prices and vice versa, since in most Western countries social pressure towards smaller households is as big a driver in the property market as increase in population is)

    We’re not going to have a property crash, despite your bizarre claims. We may have a noticeable dip in property prices in some rental markets. Basically you’re saying that we should retain tax loopholes because otherwise highly-geared capitalists will lose money. I lack sympathy.

    I’m disappointed that people are trying to pretend that their desire to keep tax loopholes for highly-geared capitalists is somehow about protecting those poor renters. This is self-serving nonsense. Stop it.

    • Herodotus 12.1

      Icwehawk I think that it is because the enemy has done something that Lab should have done, but “we” cannot give them credit for this, so how can we help Lab to save face?
      By putting forward hallow arguements why protecting landlords is a good idea and how society benefits from this protection. Why cannot those say Nats have started this giving some begrudging support, then how can we the left/Lab continue this process to where “the left” believes property should be contributing to the taxes paid, also I did not know that the Property Council whas giving advice to Labs campaign strategy.
      It is the same with the token Fruit & Veges GST exemption suggestion. We the voting public deserve better.

    • RedLogix 12.2

      Demand is more elastic because household sizes change if rental prices are too high people can stay home with mum and dad for another year or squeeze a flatmate into the lounge.

      Yes this is true. So can I take it you are happy with overcrowding as a solution to an undersupply of rental accomodation?

      I was arguing that prices were set by supply and demand, not at whatever level the landlords want and not at whatever level the tenants want.

      I was waiting for you to fall into that common trap.

      What you are doing is confusing and conflating the supply and demand for homes, with the supply and demand for rentals. They are not the same thing. While on the supply side there is a total number of dwellings that can be considered more or less equivalent in the market, on the demand side people who rent and people who own are not equivalent to each other.

      A person renting does not easily nor quickly transition to someone who owns, nor do people who own normally choose to go renting just because it might be cheaper to do so.

      We may have a noticeable dip in property prices in some rental markets.

      When a landlord puts a unit on the market, it competes with ALL other properties on the market. There is no such thing as an isolated ‘rental market’. If these tax changes cannot be recovered in increased rents as you claim, then something in the order of 30% of landlords would have to sell at least some properties. Given that this would massively increase the supply of properties on the market, how on earth could ‘mr supply and demand’ argue that this would not drop prices for ALL properties.

      In fact what I’ve argued above is that the dynamics of the property market are a lot more subtle than that. When prices are falling, paradoxically demand also tends to fall. The effect is that the volume of sales plummets.

      All these reasons mean that your simplistic ‘supply and demand’ mechanism doesn’t work the way you think it will.

      capchta = resident. Lyn….this thing IS sentient.

    • Bright Red 12.3

      ‘If you raise the rent they can easily move to the vacant flat down the road.”

      Kind of assumes there are lots of empty flats sitting around.

  13. Mark 13

    @ icehawk: You keep on saying rents are not set by “by how much supply and demand there is for rental properties” – and that is undoubtedly true. But then you proceed to contradict that – by arguing that it’s only the demand side of this equation (i.e. the tenants) that matters, and the supply side doesn’t.

    The landlords want the highest rents they can get, and the tenants want the lowest rents they can get. What determines the ‘equilibirum’ price then is a range of factors, *including* the landlord’s costs. If you increase landlords costs across the board, surely you can see this must least to higher rents?

    Reginald and Humphrey can’t raise their rents in your little example because there are other suppliers in the market, that will happily supply their property at cheaper prices. But if every supplier is hit with new costs (taxes), they won’t be able to, and rents must and will rise!

    How will suppliers take their properites off the market? By selling them. Most rental properties do not achieve a good return, and it often doesn’t even cover the interest component of their loan. The only thing that keeps it viable are the tax benefits. Take that away, and something’s got to give – either sell your property, or raise the rent.

    Another thing I’d be curious to know is whether you think the same “supply and demand” principles apply to the labour market and wages?

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    Via the Dom-Post: Prime Minister John Key says there is nothing unethical or inappropriate about charging guests at a Maori Party dinner $5000 a head to sit with him for part of the evening It has been reported that 15...
    DimPost | 14-04
  • I went to the Northern Club once. Really classy toilets.
    Via the Dom-Post: Prime Minister John Key says there is nothing unethical or inappropriate about charging guests at a Maori Party dinner $5000 a head to sit with him for part of the evening It has been reported that 15...
    DimPost | 14-04
  • Trading through a more complex global economy
    Australia signed a trade deal with Japan last week. Does that help or hinder New Zealand’s trade ambitions and prospects? There are four parts to New Zealand’s trade strategy, broadly followed since Trade Minister Tim Groser enunciated them when an...
    Colin James | 14-04
  • In search of found time
    Originally published at Overland Three different projects dealing with presence, absence and the passage of time. The first one is straight photography: no tricks. Irina Werning’s Back to the Future features adults posing as their childhood selves in replicas of...
    Bat bean beam | 14-04
  • 2014 – Ongoing jobless talley
    . . Continued from: 2013 – Ongoing jobless talley So by the numbers, for this year, January OceanaGold/Macraes Mine: 146 redundancies Fitzroy Yachts: 100 redundancies OceanaGold: 76 redundancies Tenix: 15 redundancies February Goodman Fielder: 125 redundancies Pacific Steel Group: 70-90 redundancies...
    Frankly Speaking | 14-04
  • 2014 – Ongoing jobless talley
    . . Continued from: 2013 – Ongoing jobless talley So by the numbers, for this year, January OceanaGold/Macraes Mine: 146 redundancies Fitzroy Yachts: 100 redundancies OceanaGold: 76 redundancies Tenix: 15 redundancies February Goodman Fielder: 125 redundancies Pacific Steel Group: 70-90 redundancies...
    Frankly Speaking | 14-04
  • Proceedings of the Third Annual Meeting of the Committee for Perpetuating t...
    What happened when a group of scientists dedicated to perpetuating the climate change hoax met recently?...
    Imperator Fish | 14-04
  • Genesis: The biggest fire sale of them all
    National has finished its asset sales with a massive bonfire of a fire sale, showing once and for all how much of a disaster this programme was, says Labour’s SOEs spokesperson Clayton Cosgrove. “Just 68,000 Kiwis bought shares in Genesis,...
    Labour | 16-04
  • Interest rates rise but only smokes increasing
    Mortgage rate rises are making life harder for homeowners, and many of them will be surprised the latest CPI figures show inflation would be zero were it not for tobacco tax hikes, says Labour’s Finance spokesperson David Parker. “New Zealanders...
    Labour | 16-04
  • Term One Report Card for Hekia Parata
    Assignment Teacher’s Comments Grade      ...
    Labour | 16-04
  • Hekia Parata kept exam book errors from schools
    Schools will be appalled to learn Education Minister Hekia Parata knew since January that hundreds of exam booklets had been returned to the wrong students but said nothing about it, Labour’s Education Spokesperson Chris Hipkins says. “Exams are stressful enough...
    Labour | 15-04
  • What has ACC Minister been doing?
    The ACC Minister needs to front up and explain what, if any, changes she has made to the broken culture of ACC rather than denying that she has any part to play in the dysfunction of her Ministry, the Green...
    Greens | 15-04
  • Promise of jam tomorrow takes the cake
    A claim by Minister of Finance Bill English that average wages will climb by $7,500 over the next four years is a cynical promise of jam tomorrow by a government whose record on wage growth is atrocious, Labour spokesperson on...
    Labour | 15-04
  • Judith Collins has to fess up on ACC blunder
    ACC Minster Judith Collins must front up and tell New Zealand how many people who refused to hand over their private details to ACC have been denied cover, says Labour’s ACC Spokesperson Iain Lees-Galloway. “The legality of ACC’s privacy waver,...
    Labour | 15-04
  • Board of Inquiry conditions will save rivers in New Zealand
    The Ruataniwha dam decision released today has protected the Tukituki River and dashed the Government’s hope of the “one nutrient model” (TRIM) being adopted nationwide, says Labour’s Conservation spokesperson Ruth Dyson. “It is a massive victory for those in the...
    Labour | 15-04
  • Labour turns wheels for cycling safety
    With more than a million New Zealanders now using cycling as an attractive alternative means of transport it is past time their safety was taken seriously, Labour’s Transport spokesperson Darien Fenton says. Due to speak to a cycling rally at...
    Labour | 15-04
  • SPEECH: Institute of Directors
    LEADING AND MANAGING OUR ECONOMIC FUTURE David Cunliffe MP, Labour Leader Speech to the Institute of Directors 15 April 2014, Auckland It's a privilege to be speaking here. The Institute of Directors has a proud history of developing New Zealand's...
    Labour | 15-04
  • More Oravida endorsements from John Key
    The use of a picture of John Key in an advertisement for Oravida’s scampi products in a Chinese airline magazine is further evidence of an unhealthily cosy relationship between the National Party and this company, Labour Leader David Cunliffe says....
    Labour | 15-04
  • Workers at Canterbury Yarns need redundancy support
    Workers faced with redundancy at Canterbury Yarns need a redundancy support co-ordinator, Green Party industrial relations spokesperson Denise Roche said today.Last week, Canterbury Yarns was placed in receivership. Canterbury Yarns joins a long list of New Zealand manufacturers who have...
    Greens | 14-04
  • Making the holidays easier for Kiwi drivers
    The next Labour Government will make the holidays easier and journeys quicker for Kiwi families driving on the roads, says Labour Leader David Cunliffe. “There’s nothing Kiwis like more than getting on the road and going on holiday. But on...
    Labour | 14-04
  • Ae Marika! 15 April 2014
    Our MANA AGM down in Rotorua on the weekend was a sold-out affair – even the media were struggling to get in! Political conferences can be very dull, but not this one. We had a great line-up of speakers including...
    Mana | 14-04
  • Green light from Labour for cancer screening programme
    Labour Leader David Cunliffe has today committed to a national bowel screening programme, starting with extending the current service to the Southern and Waikato districts. “Around 3000 New Zealanders develop bowel cancer each year and about 1200, or 100 a month,...
    Labour | 14-04
  • Adequate resourcing needed for victims’ advocate
    The establishment of a victims’ commissioner role will only be meaningful if it is properly resourced to do the job of advocating for victims’ interests, Labour Justice spokesperson Andrew Little says. Justice Minister Judith Collins has just recently indicated her...
    Labour | 13-04
  • IPCC report shows Government ignoring climate experts
    The Intergovernmental Panel on Climate Change's (IPCC) report into climate mitigation, just released in Berlin, shows the National Government is ignoring the pleas of the world's best climate scientists.The report says deep and fast emission cuts are vital from all...
    Greens | 13-04
  • Japan’s quick turnaround on whaling disappointing
    News that Japan plans to recommence some form of “scientific” whaling programme so quickly after the International Court of Justice’s ruling against it is very disappointing, says David Shearer, Labour’s Foreign Affairs spokesperson. “New Zealanders expected the ICJ ruling -...
    Labour | 13-04
  • Reviewable tenancies will increase risks for vulnerable children
    Instead of kicking families out of their homes if they can pay their rent, parents with young children should have the opportunity to purchase equity in a state-built home over time, the Green Party said todayFrom July, Housing New Zealand...
    Greens | 13-04
  • 48,000 New Zealanders drinking faecally contaminated water
    Some 48,000 people were provided with water that had issues with faecal contamination, 18,000 of whom were from Canterbury, the Green Party said today. The Ministry of Health's Annual Report on Drinking-Water in New Zealand for 2012/13 shows that 48,000...
    Greens | 12-04
  • Labour will move to save the Kauri
    Labour will spend $20 million over the next 10 years to stop the spread of Kauri dieback disease, says Labour Leader David Cunliffe. “We are facing an ecological disaster with over 11 per cent of the Kauri trees in the...
    Labour | 12-04
  • SPEECH: Saving our Kauri
    Seech notes Good morning. Thank you for joining us here today. As a West Auckland MP I am very aware the kauri is an important part of this place. The Waitakere Ranges with their thousands of kauri, are a taonga....
    Labour | 12-04
  • MANA to continue negotiations with the Internet Party
    The MANA AGM has decided unanimously tonight to continue negotiaitions with the Internet Party. Within a month further negotiations, further consultation with MANA branches and a final decision on whether to proceed with a relationship is expected....
    Mana | 12-04
  • National’s tax dodge
      National’s insistence that it is cracking down on tax dodgers is little more than a bit of election year chest beating, Labour Leader David Cunliffe says. “Revenue Minister Todd McClay surely doesn’t believe collecting $100 million of an estimated...
    Labour | 12-04
  • Housing prices go up – Gens X & Y give up
    Today’s REINZ report shows house prices continue skyward while first home buyers are dropping out of the market, says Labour’s housing spokesperson Phil Twyford. “According to the Real Estate Institute of New Zealand the national median house price has risen...
    Labour | 11-04
  • Do Key and Adams support Chorus appeal?
    John Key and Amy Adams must tell New Zealanders whether they support Chorus’ appeal of the High Court’s ruling in favour of the Commerce Commission, says Labour Leader David Cunliffe. “Chorus’ appeal is a waste of time. The company is...
    Labour | 11-04
  • Is Judith Collins unapologising
    Judith Collins appears to have retracted her apology for failing to disclose her meeting with her husband’s fellow company directors and a senior Chinese border control official just weeks after being ticked off by John Key for not doing so, Labour...
    Labour | 11-04
  • Media Advisory
    There have been a few minor changes to the MANA AGM agenda. Moana Jackson is unable to attend due to family commitments. Speaking in his place on Saturday morning MANA is pleased to welcome Georgina Beyer and Willie Jackson. MANA...
    Mana | 10-04
  • Green Party requests inquiry into Peter Dunne and Trust
    Green Party MP Denise Roche today wrote to the Parliamentary Registrar of Pecuniary Interests requesting an inquiry into whether Peter Dunne should have included his involvement as chair of the Northern Wellington Festival Trust on the Register of Pecuniary Interests...
    Greens | 10-04
  • Veterans short-changed
    The Veterans’ Support Bill reported back to Parliament today rejects a key recommendation of the Law Commission Review on which it is based and ignores the submissions of veterans and the RNZRSA, says Labour’s Veterans’ Affairs Spokesperson, Phil Goff. “A...
    Labour | 10-04
  • Tribute for Maungaharuru- Tangitu settlement
    Labour Member of Parliament for Ikaroa-Rāwhiti, Meka Whaitiri paid tribute to Maungaharuru-Tangitu today as their Treaty of Waitangi settlement became law. “The Bill acknowledges Treaty breaches that left Maungaharuru-Tangitu virtually landless. Today we were reminded of the history, mamae, loss...
    Labour | 10-04
  • Neglected rural and regional roads will cost more lives
    The government must take urgent action to prevent more accidents to truck drivers and other road users of increased logging trucks on neglected roads, says Darien Fenton, Labour’s Transport spokesperson. “The dangers to drivers and other road users in the...
    Labour | 10-04
  • Judith Collins’ refusal to answer a disgrace
    If John Key is holding his Ministers to any standards at all, he must make Judith Collins answer questions about the senior Chinese official she met during her taxpayer-funded visit to China last October, Labour MP Grant Robertson says. “Judith...
    Labour | 10-04
  • Ryall needs to heed hospital workforce issues
    The public health workforce, the same one Tony Ryall argues is making a lot of progress is facing increased pressure and staff burnout through his continued shuffling of the deckchairs, Labour’s Health spokesperson Annette King says. “Mr Ryall uses all...
    Labour | 10-04
  • Key ducks but can’t avoid High Court slap
    The High Court’s slap in the face to John Key and his Government over Chorus has left it with no option but to accept the Commerce Commission’s lawful process in deciding the price of copper, says Labour’s associate ICT spokesperson...
    Labour | 09-04
  • First home buyers shut out as LVRs bite
    The bad news continues for young Kiwis as the latest Core Logic report shows the proportion of first home buyers has declined since LVR lending restrictions came into force, says Labour’s Housing spokesperson Phil Twyford. Twenty two centres across the...
    Labour | 09-04
  • MANA – and, or, or not – DOTCOM
    Both MANA and the Internet Party share goals in common with other parties, like getting rid of National and reining in the GCSB. There are also differences, as there are with other parties as well. MANA accepted a request to...
    Mana | 09-04
  • Wise heads want wise response
    Labour accepts the challenge laid down by the Wise Response group to protect and future-proof New Zealand’s environment and economy. A petition calling for urgent action was presented to Labour’s Environment and Climate Change spokesperson Moana Mackey at Parliament this...
    Labour | 09-04
  • Greens support high profile Kiwis’ call for climate action
    The Green Party fully supports a group of high profile Kiwi business people, lawyers, academics and commentators delivering a petition to parliament today calling for the Government to take the threat of climate change more seriously.Wiseresponse, a group of over...
    Greens | 09-04
  • Mayor’s jobs initiative shows up inactive Govt
    Auckland Mayor Len Brown and the Auckland Council are to be congratulated for providing opportunities for young people to get into work, but it stands in stark contrast to the National Government overseeing spiralling youth unemployment, Labour’s Employment, Skills and...
    Labour | 08-04
  • National discovers public servants needed after all
    New figures released today show National has done an embarrassing U-turn after discovering it actually does need the public service, Labour’s State Services spokesperson Maryan Street says. “Wellington now has the most public servants it has had since 2000. Figures...
    Labour | 08-04
  • School closures about saving Hekia, not kids
    The National Government's decision to merge Phillipstown and Woolston schools is another disaster for Christchurch and proves this Government is more interested in saving face than in what is best for children, the Green Party said today."Hekia Parata's stubborn refusal...
    Greens | 08-04
  • Cosgrove writes to invite Countdown to Committee
    Labour’s Commerce spokesperson Clayton Cosgrove has today written to the Chief Executive of Progressive Enterprises Dave Chambers, asking him if he would accept an invitation to appear before the Commerce Select Committee. “Yesterday National MPs blocked my motion to invite...
    Labour | 08-04
  • Phillipstown will get reprieve under Labour
    A Labour government will allow Phillipstown School to stay open, with a review after two years, Labour’s Associate Education spokesperson Megan Woods says. “Hekia Parata has failed the Phillipstown community with today’s decision to close the school. “It is disgraceful...
    Labour | 08-04
  • State Housing waiting lists go through the roof
    The waiting list for State Houses has risen by over a thousand in the past three months, says Labour’s Housing spokesperson Phil Twyford. “Low income people are feeling the sharp end of National’s housing crisis. A shortage of affordable houses...
    Labour | 08-04
  • Hekia Parata fails to answer basic questions
    Education Minister Hekia Parata’s inability to answer even the most basic questions about her proposed new Executive Principal roles will have alarm bells ringing in school communities all around the country, Labour’s Education spokesperson Chris Hipkins says. “Schools are already concerned...
    Labour | 08-04
  • Guy gets it wrong by any measure
    The Ministry for Primary Industries being forced to reprint rulers designed to help recreational fishers measure their snapper catch is right up there on the incompetence scale, Labour’s Fisheries spokesperson Damien O’Connor says. “MPI is having to spend another $8000...
    Labour | 08-04
  • Books almost $1b worse than expected
    Yet again the Government’s financial statements are worse than expected, raising serious questions about National’s management of the economy and its books, says Labour’s Finance spokesperson David Parker. “In November, December, January and now February National’s books were worse than...
    Labour | 08-04
  • Support for Key Government hangs in the dock
    The latest documents released in the John Banks case raise serious questions about the credibility of John Key’s Government that continues to be propped up by the discredited ACT MP, Labour MP Grant Robertson says. “We now know why John...
    Labour | 08-04
  • Give up Chorus – leave it to ComCom
    Three cheers for our court system in confirming the law which gave Chorus three years to prepare for a changed  copper price, says Associate ICT spokesperson Clare Curran. “The Government is now in the embarrassing position of having the High...
    Labour | 08-04
  • Want to get rid of synthetic cannabis? Legalize real cannabis
    Have we managed to appreciate the madness that synthetic cannabis is legal yet more harmful than organic cannabis which is illegal? I find the current moral panic over synthetic cannabis difficult to become concerned with when alcohol is FAR more...
    The Daily Blog | 16-04
  • Save our homes – stop the evictions!
    “We will keep on fighting because it frightens me to think my grandchildren could become homeless,” Tere Campbell told me. Tere is a member of Tamaki Housing Group. In September 2011, tenants in 156 state homes in Glen Innes received...
    The Daily Blog | 15-04
  • The daily humiliation of women and the constant policing and shaming of our...
    The last few months have been particularly bad for the shaming and policing of women’s bodies in the media, both in New Zealand and globally. First we had NZ Newstalk ZB presenter Rachel Smalley referring to women weighing over 70kgs...
    The Daily Blog | 15-04
  • A case study of racism by Police at Auckland Airport
    A couple of days ago I returned from Samoa after attending a family matter and some contract work. Spending a few days in the warmth of our homeland was welcome relief from the cold weather starting to make its presence...
    The Daily Blog | 15-04
  • An acute shortage of emergency youth housing
    The housing crisis is effecting everyone in Christchurch but some are more vulnerable than others. Recently I attended a workshop on emergency youth housing hosted by the 298 Youth Health Centre, who I worked for from 2001-2003. Over fifty people...
    The Daily Blog | 15-04
  • The Oceans Issue
    The ‘Earth’ is 71% water but our oceans are the last frontier. The oceans are huge, relatively unexplored, full of weird and wonderful diversity. In New Zealand we’re never far from the sea, and our identity, our landscapes, our communities,...
    The Daily Blog | 15-04
  • Fear of South Auckland
    Fear of South Auckland...
    The Daily Blog | 15-04
  • TV News Geography
    TV News Geography...
    The Daily Blog | 15-04
  • The best bit about gay sex
    The best bit about gay sex...
    The Daily Blog | 15-04
  • On not voting 1
    On not voting 1...
    The Daily Blog | 15-04
  • On not voting 2
    On not voting 2...
    The Daily Blog | 15-04
  • Labour on trucks
    Labour on trucks...
    The Daily Blog | 15-04
  • Claire Trevett shows how biased msm works
    Read this nonsense by Claire Trevett… David Cunliffe denies claims he is ‘running scared’ Labour leader David Cunliffe has dismissed claims he is running scared from Prime Minister John Key and playing hard to get over a