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Key wants to turn New Zealand into a haven for the 1%

Written By: - Date published: 7:30 am, March 29th, 2016 - 91 comments
Categories: climate change, Environment, Globalisation, im/migration, International, john key, national, overseas investment, same old national - Tags:

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There was an interesting article by Fran O’Sullivan in last weekend’s Herald about John Key’s ambitions for New Zealand.  O’Sullivan may not be liked by some lefties but she writes perceptively and provides insight into National Party thinking that no other journalist does.

The headline suggests that Key wants to make New Zealand the Switzerland of the South but a closer reading shows that he does not want to make it a place where everyone is prosperous, educated and healthy.  Rather he wants to make New Zealand a bolt hole for the overseas rich.

From the article:

John Key is positioning New Zealand as an Asia-Pacific “Switzerland” – a beautiful and wealthy bolthole for high net-worthers seeking to escape from an unstable world.

Key believes that free-flowing terrorism is here to stay. To the Prime Minister, this simply makes New Zealand more attractive and will result in more high net-worth consumers wanting to come here – a theme he is developing in business briefings.

There is another strand to this developing Key mantra.

He is frankly unapologetic about the massive increase in Auckland residential property values, which has resulted in many established Aucklanders becoming relatively rich, but younger people being locked out of the market. It is a trend which is not going to stop anytime soon, given the immigration figures.

So Key wants to attract more wealthy people to New Zealand as the rest of the world implodes.  This explains his utter indifference to climate change and why he wants everyone to get some guts and make the Middle East even more unstable.  They present business opportunities, not threats.  As the centre of the world cooks and the north implodes from the pressure of millions seeking a new home, rich people flooding south to New Zealand’s green and pleasant land will make us richer, or at least those of us who already own land.  As for the rest clearly they are poor and undeserving.  Tough luck if you are young or working class or both.

O’Sullivan also discusses Key’s reticence to make overseas multinational corporations pay their fair share of tax and thinks that this is intentional.

One of Switzerland’s attractions is its taxation environment and its strict secrecy laws, which until recently have enabled rich people’s investments to be squirrelled away in its banks, safe from the reprisals of revenue officials.

New Zealand does not compete on that score. But it is notable that one of the reasons why New Zealand has yet to follow Australia and bring in rigorous laws to clamp down on multinationals which are not paying significant tax here is because this country is competing for investment.

The Key Government is proceeding at a very slow pace indeed, which is rattling New Zealand businessmen like Spark CEO Simon Moutter, who is adamant that it is unfair to local companies that they have to compete against offshore players who have a tax advantage.

This is undoubtedly a pressure point. There is a growing perception that New Zealand domiciled companies are getting an unfair shake while international investors are offered incentives or have the rules cut in their favour to invest here.

Obviously we need the money from those overseas corporations and not requiring them to pay tax is a small price to pay, at least as far as Key is concerned.  He wants to attract this sort of investment, not scare it away.  Forgoing $500 million a year is clearly a small price to pay.

More than any other article this one explains what John Key wants to achieve in politics.  He is a bit of a laugh, he is fine about socially liberal things as long as they do not go too far, he is a monarchist but will propose a flag change to show that he is relaxed about the constitution.  He is fun to have a beer with, he will welcome selfies with drag queens and support the occasional greenwash policy to make sure that his environmental credentials are not too badly tarnished.

But his role in politics is to look after the 1%.

91 comments on “Key wants to turn New Zealand into a haven for the 1%”

  1. Paul 1

    Where your boss will be come the revolution: ‘Boltholes with airstrips’ in New Zealand that are being bought by world’s super-rich who want a hideout in case of ‘civil uprising’

    The super-rich snapping up luxurious properties in New Zealand – but many don’t plan to move there anytime soon
    Instead, they are holding onto the homes as possible ‘boltholes’, should the west go into meltdown in the future
    Global leaders at Davos hinted they would want an escape route if the poor rose up against the growing super-rich

    Financial experts attending the recent World Economic Forum in Davos this month revealed many wealthy hedge fund managers have already started planning escapes for themselves and their clients should life in the northern hemisphere descend into chaos.
    Robert Johnson, president of the Institute of New Economic Thinking, said: ‘I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway.’

    Mr Johnson was backed up by Stewart Wallis, executive director of the New Economic Foundation.
    Mr Wallis told CNBC Africa at the Davos gathering that a New Zealand bolthole was ‘a way to get off’, adding: ‘if they (the wealthy) can get off onto another planet, some of them would. I think the rich are worried and they should be worried.’
    He pointed out that the 80 richest people in the world had more wealth than the bottom three-point-five billion: ‘Very soon we’ll get a situation where that one per cent, one percent of the richest people, have more wealth than everybody else (combined), the 99 per cent,’ he said.
    Suggesting that there was a risk the poor would rise up against the rich, he said: ‘What’s happened now mean we are going to see all sorts of social problems. It is a breeding ground – not just for terrorism.’

    http://www.dailymail.co.uk/news/article-2931325/Super-rich-buying-property-New-Zealand-bolthole-case-west-goes-meltdown.html#ixzz44E91LasH

    • D'Esterre 1.1

      “Suggesting that there was a risk the poor would rise up against the rich, he said: ‘What’s happened now mean we are going to see all sorts of social problems. It is a breeding ground – not just for terrorism.’”

      In virtue of what would the rich think that the poor in NZ wouldn’t rise up against them? In truth, there are no safe havens: we’re all in the same leaky lifeboat.

    • Toby 1.2

      The thing about this is that in a way, it is already happening gradually. He (not sure who it is that sorts the immigration policies) lets in more and more foreigners into our country every year. I am not meaning to be near sighted or racist in any way at all, i know there are more people that feel this way about it.
      We used to be a small, family orientated country filled with hard working ladies and blokes that were able to live in peace in OUR own way. And MAKE IT OUR OWN.
      Now, John Key in his Infamous wisdom thinks that not only opening this very small country up to the TPPA and exposing what we have to the rest of, what is essentially the world. Now he thinks its a good idea to let any body in that has “DEEP POCKETS”, and all for the money. Good on ya mate, way to ruin us even more.
      You place enough rich people into a Island country as small as ours then the Terrorism will come here (eventually). Does not matter if it happens in our life time or later, later becomes our children and so on. All the decisions that are made by you people effect more than you would like to actually think about. Or maybe you do think about it, you just don’t care about us, you care about your own pocket.

  2. maui 2

    Excellent piece, that should be “bolthole” in the second para though.

    Looks like NZ is lined up for increased overseas investment. Oh joy. At least the public sentiment is against that, hopefully the public might stand up for themselves sometime.

    [Thanks now fixed. The trouble with typing on an iPad … MS]

  3. dv 3

    Might fit nicely with a capital tax for overseas property owners to support the UBI

    • saveNZ 3.1

      DV – a capital gains tax would work if the super rich are planning to sell, but it appears they are just planning to buy up NZ.

      • dv 3.1.1

        No i meant a tax on purchase of say 20% –
        Maybe we could also tax them on the capital growth each year too for non residents.

        • Lara 3.1.1.1

          How about we just cease all sales of land to non residents and non citizens?

          If you don’t live here then you have no need to buy land here. And if you for some reason need access to land here and you don’t live here, then you can lease it from a NZer.

          • Mike S 3.1.1.1.1

            +1 Lara

            Residential houses should be for New Zealanders to live in, not for foreigners to make money from. All foreign ownership of residential property should be illegal. If you want to buy residential property here that’s fine, but only if you live here and become a permanent resident and/or a NZ citizen. When hard working Kiwi’s will never be able to afford a house of their own, it’s disgusting that people living overseas can buy houses here and make money off those hard working Kiwis.

            That’s not foreign investment, it’s rent seeking behavior.

            While we’re at it, we should make it illegal for a company or corporation to own residential property as well. That might help curb all of the tax dodges that happen in the property money go round. Again, houses should be for Kiwis to live in, not for people (disguised as companies) to make money from.

  4. Jenny Kirk 4

    You can see this happening already in the Far North – large farms with gated communities off them, leading down to beautiful estuaries and beaches – all privately owned by wealthy overseas people – if you drive into remote areas. And its happening on some of the off-shore islands as well.

    But its not really increased investment for NZ – other than the wages paid to the servant caretakers of these properties, or the building costs of the luxury pads.

    MickySavage is right – these boltholes will be ShonKey’s legacy – looking after the 1%.

  5. Rae 5

    Odd that she should suggest Key wants us to be like Switzerland. As a foreigner there, I suggest she go try set herself up with a portfolio of rentals – not going to happen, Switzerland has very strict rules governing foreign ownership of land. Silly Key went and signed our right to take direction action on that.
    I hope he is still around when civil unrest starts taking hold here, so he can take his share of the blame for it.

    • Brendon Harre -Left wing Liberal 5.1

      Also Swiss tenants have much more security of tenure, stability of rental prices and general rental rights which allows them to treat their residences like homes. Whereas in NZ all the rights go to the landlord and renting in NZ is another factor of instability which makes up the Precariat class.

      • Graeme 5.1.1

        +1 there.

        I did a double take at the intention of making NZ like Switzerland. The balances and restrictions that the Swiss have to keep everything together would make the average nactoid hiss and spit a little. And they think our RMA restricts things…

  6. Lanthanide 6

    As the centre of the world cooks and the north implodes from the pressure of millions seeking a new home, rich people flooding south to New Zealand’s green and pleasant land will make us richer, or at least those of us who already own land. As for the rest clearly they are poor and undeserving. Tough luck if you are young or working class or both.

    Would you rather be young/working class/both in New Zealand, or young/working class/both in one of those imploding northen / hot central countries?

    Sure, it stinks that Key is prioritising rich foreigners over locals, but things could be worse for the locals.

    I suspect that in this coming century, New Zealand is going to take the mantra “the lucky country” away from Australia.

    • Draco T Bastard 6.1

      Sure, it stinks that Key is prioritising rich foreigners over locals, but things could be worse for the locals.

      And John Key and National are making sure that it will be – much worse.

    • Nick 6.2

      Even if what you say were true, Lanthanide, and that is by no means settled, don’t you feel ashamed to present it as a positive? Is the I’m-all-right-Jack virus, which informs John Key’s popularity, so easily caught?

    • Mike S 6.3

      Nobody should settle for the old ‘lesser of the two evils’ argument. If you have two options that are both bad, then force change rather than settle for the ‘least bad’

  7. BM 7

    Wealthy people bring money, wealthy people spend money.
    Money spent means jobs for Kiwis .

    BTW NZ has always been considered a bolt hole if everything turns to custard, why do you think the Mormons built their end times Church/bomb shelter out in Temple View.

    • gsays 7.1

      Hi bm,
      all together now, ” trickle down, trickle down”

      really mate, you need a new tune.

    • TopHat 7.2

      Wealthy people don’t spend money!

    • gsays 7.3

      If you are keen to get another aspect on this I heartily recommend a ted talk by nick hanaeur. The pitchforks are coming.

    • DH 7.4

      “Wealthy people bring money, wealthy people spend money.”

      Don’t think too deeply do you BM.

      NZ has its own sovereign currency so foreigners don’t bring money. How can they, their money isn’t legal tender here. What they do is buy $NZD which would (eventually) end up back in the country to be spent anyway.

      The money that foreigners spend here will ultimately be spent whether it’s foreigners or citizens spending it. The big question is which type of spending is of more value to the economy and the nation.

      Another question is whether the call for foreign investment is really about trying to promote economic growth or instead a need to keep plugging the hole in the current account. Those are different objectives and each has a very different impact on our economy.

    • Draco T Bastard 7.5

      Wealthy people bring money, wealthy people spend money.

      1. Not really – they keep their money safe in banks
      2. We don’t need their money

    • Anno1701 7.6

      Rich people don’t ACTUALLY create jobs im afraid …..

    • Stuart Munro 7.7

      It’s never worked BM – that’s why we’re calling bullshit on it.

      Competent governments make sure that foreign investment is only allowed if it produces jobs and local wealth – Key is more like Marcos – a corrupt guy who owes a lot of favours to wealthy patrons and ruins his country for them. Quisling was an outstanding citizen compared to Key.

    • Wealthy people don’t spend anywhere near as much of their income as a percentage as do poor people or middle-class people. Sure, if every person in the country were magically rich, we’d have more spending total and more economic activity.

      That said, if we tailor policy to be unfair to ordinary people to cater to the rich, we don’t attract enough people who are rich in order to make up for the effect it has on ordinary kiwis whose spare income creates most of the demand, which initiates the economic feedback loop that creates jobs. (Because lets be honest, rich capitalists only hire as many people as they absolutely have to in order to fill demand- so jobs are only created when the economy grows enough that they NEED more staff. This isn’t something they do, it’s something that their customers do)

      • Mike S 7.8.1

        And the very wealthy these days are often in the financial markets racket where they simply make money from money and there is certainly no job creation involved. Instead they create job losses by sucking money out of the real economy of goods and services, to which it never returns.

    • Quinnjin 7.10

      BM do your initials stand for Blatant Muppetry?

      Absolute bollocks.

      You obviously have absolutely no interest in real world data, or reality for that matter.
      The data is in, the results are know the result of this debate is une fait accompli …

      The trickle down effect does not exist. You lose. Now shut up.

  8. Incognito 8

    If Key wants to follow Switzerland’s example he could start by accepting more refugees.

  9. AmaKiwi 9

    Comparing NZ to Switzerland is like night and day and the Nats have made our nights darker.

    Unlike our commodity/tourism economy, Switzerland’s wealth is derived from being a world leading high tech manufacturing economy. It is a world leader in engineering, electrical, metallurgy, and pharmaceuticals (Novartis and Roche). Agriculture is only 1.3% of their economy. What has Key done for our manufacturing?

    Unlike our elected dictatorship, Switzerland is democracy. They have 10 to 20 binding citizen initiated referendums every year. Our governments don’t even apologize for ignoring the results of our citizen initiated referendums.

    Unlike our elected dictatorship, the Swiss federal cabinet includes all five major political parties and requires unanimous decisions. This creates middle of the road government decisions instead of our wasteful swings from left to right and back again.

    Unlike our increasing loss of local government, Switzerland has strong regional and local autonomy. Regional governments are able to encourage and protect local industries.

    It is virtually impossible for foreigners to buy real estate in Switzerland.

    Key embraces superficial similarities while undermining essentials of why Switzerland is successful and we are floundering. Lipstick on a pig.

    • Draco T Bastard 9.1

      +1

      • saveNZ 9.1.1

        +2 AmaKiwi

        • Graeme 9.1.1.1

          I can’t believe he actually said he wants to make New Zealand like Switzerland. Did he understand what he’s said?

          We should be agreeing with him and pointing out how and why the Swiss system works. His ashpuranshunal politics would unravel pretty quickly.

          • Don't worry. Be happy 9.1.1.1.1

            Used to be that the big pillock wanted NZ to be the new Ireland. Then Ireland went tits up. So now it’s Switzerland…..

          • Draco T Bastard 9.1.1.1.2

            Did he understand what he’s said?

            He probably does. He’s hoping that no one else does.

            It also seems to National playing to the cultural cringe that we have. It;s along the lines of See, they’re better than us and so we should be like them. But they only ever seem to reference the movie depiction.

            Hmmm, maybe that’s it – National and National supporters get all their info about the world from watching Hollywood blockbusters. Would explain why they’re so disconnected from reality.

    • Chooky 9.2

      +100

    • D'Esterre 9.3

      AmaKiwi: “Comparing NZ to Switzerland is like night and day and the Nats have made our nights darker.”

      In Europe, NZ is widely referred to as the Switzerland of the Pacific. And it isn’t a compliment: it’s an allusion to the fact that absolutely everything is so bloody expensive here. But, sadly, there our similarity to Switzerland ends.

      • AmaKiwi 9.3.1

        Tax Haven NZ?

        Maybe they call us the Switzerland of the Pacific because in 2009 Key made us one of the best places on earth to hide billions of dollars of dirty money. Few of us locals know about it because it’s only available to NZ non-residents.

        Want to know how it works? Google search “NZ tax haven”

  10. Colonial Viper 10

    Very interesting isn’t it.

    John Key reveals that the 1% have of late, become very afraid of the world that they themselves have created.

    But appear to have painfully little understanding of their leading role in the world’s current mess.

    Being a reader of Zero Hedge, all of this has been crystal clear for a long time.

    • Anno1701 10.1

      Zero Hedge eh …

      They’ve been in cukoo land for quite some time now. They are libertarian, Paulite, conspiracy theory driven nutjobs.

      they don’t even call THEMSELVES economists.

      although they do occasionally link to angry-bear who are actual economists

      Time for them to own up that they are nothing more than a bunch of short-seller concern trolls……

      • Lanthanide 10.1.1

        Yeah, there’s only so many times you can listen to someone cry wolf and that the whole system is going to meltdown (especially in October!) until you realise what they truly are.

    • Chooky 10.2

      +100 CV

  11. Draco T Bastard 11

    So Key wants to attract more wealthy people to New Zealand as the rest of the world implodes. This explains his utter indifference to climate change and why he wants everyone to get some guts and make the Middle East even more unstable.

    Yeah, the stupid bloody rich pricks have tried that shit before. Didn’t work then either.

    But it is notable that one of the reasons why New Zealand has yet to follow Australia and bring in rigorous laws to clamp down on multinationals which are not paying significant tax here is because this country is competing for investment.

    Of course, we don’t actually need offshore ‘investment’ as we’re a sovereign country and can easily use our resources however we choose. Just need the monetary system to support it.

    Forgoing $500 million a year is clearly a small price to pay.

    And just how much ‘investment’ that creates wealth do we get? Last time I looked it was mostly the offshore rich buying established and successful companies here.

    And, of course, it’s not an ongoing income stream as it would be if it was still in NZ hands as the taxes are no longer paid.

    But his role in politics is to look after the 1%.

    QFT

    We need to get rid of the rich. It is that simple – we really can’t afford them.

  12. DH 12

    ropata made a post yesterday which is worth reiterating….

    “The next Canada? Rich mainland Chinese push New Zealand migration to 11-year high”

    http://www.scmp.com/news/china/article/1495757/next-canada-rich-mainland-chinese-push-new-zealand-migration-11-year-high

    So approx 3100 of the 6200 Chinese immigrants came in on the investor scheme which requires them to invest at least $1.5 million over 4 yrs. That’s over $4.65 billion worth of investment just from one year’s immigration from China alone.

    If we were to add all the other countries and factor in those ‘investor plus’ immigrants who invest $10 million plus I’d think we’re looking at over well over $50 billion of immigrant ‘investment’ since the Nats came to power. And what’s that done for us, they still can’t even make the books balance.

    • saveNZ 12.1

      @DH

      “If we were to add all the other countries and factor in those ‘investor plus’ immigrants who invest $10 million plus I’d think we’re looking at over well over $50 billion of immigrant ‘investment’ since the Nats came to power. And what’s that done for us, they still can’t even make the books balance.”

      That is because the ‘investor plus’ are allowed to invest in property and land rather than being asked to invest in production and creating real jobs. By allowing cheap migrant workers to work in NZ, they are also reducing the amount of jobs for locals. Lose lose for NZ.

      Another rout, local councils are selling land off community land cheap and it is being converted by foreign investment into retirement homes. Retirement homes are one of the biggest rip offs for the elderly. Production nope. In some cases the land was being used by a community group and helping local industry but now privatised for private retirement homes with the councillors signing it off, getting rich off it.

      • Craig H 12.1.1

        The Investor categories can only invest in new developments, not currently existing stock.

        • saveNZ 12.1.1.1

          Retirement home conversions from community land, fall under new development.

        • ropata 12.1.1.2

          So massive amounts of land banking is OK as long as there is a vague plan to develop it one day

          • Craig H 12.1.1.2.1

            No, the investment has to be in an actual development that happens.

            That said, the investors can also invest in unit funds and shares, so could theoretically buy shares in a listed company that does that (not that I’m aware of any companies or funds that do that as their core business).

    • Anno1701 12.2

      “well over $50 billion of immigrant ‘investment’ since the Nats came to power.”

      how many pizza hut/Dominoes franchises do we really need in Auckland !

  13. shorts 13

    from ill mooted financial hub to fuck it they’re already here bolt hole for the rich… a brighter future

  14. Olwyn 14

    If you put this post together with Anthony’s “A Quick Question (again)” post, the picture that forms is of a re-colonisation plan. After all, last century’s colonisation brought in wealth too, but the original inhabitants not only saw little of it, they lost most of the wealth they had to the colonisers. Many current property owners may well think that they will be part of this 1% Utopia, but they should not be so sure: it is not hard to rate or regulate all but the richest out of a place, once you have gained the necessary leverage. And the big underlying question is, are such plans really within the purview of the PM of a democracy? Replacing the daggy old existing population with a shiny new rich one is far from being a democratic way of going about things.

  15. Nick 15

    ‘Wealthy people bring money, wealthy people spend money’

    …. except if you are shonKey and then you try and spend taxpayer money to bail you out of court costs and ‘small’ legal settlements….and when you get caught, you pretend surprise and the ‘I didnt realise that was the rule’…..continually more lies.

  16. shorts 16

    I guess one small upside is the worlds super rich who do come here will be better for the environment than cows

    • Nick 16.1

      Same amount of bullshit

    • NZJester 16.2

      I don’t think so. Their toys like cars and planes and helicopters tend to eat through the fuel and spit out pollutants at an extremely high rate. They also tend to have a much higher power demand than the average person for houses. The amount of rubbish they put out also tends to be more than double the average rubbish output per person.

  17. greywarshark 17

    On the other hand we are being asked by the wealthy overseas to send more troops to the Middle East to civilise and train the natives. Colonialism again, pacify and subvert, stuff up their own culture that they had managed to fashion. Replace it with a foreign one that has other pitfalls. Now the wealthy don’t like the results, they want to run away to a place they haven’t managed to spoil yet.

    Send them to Mars along with their spurious money that can buy them anything as long as they can keep puffing out the green smoke that confuses the watchers as to the shonky nature of the financial system a la Wizard of Oz. He reckoned he was a very good man but a very bad wizard. Perhaps we would be kind to these wealthy charlatans if they agreed to honestly confess their sins and be re-educated.
    (https://www.youtube.com/watch?v=NZR64EF3OpA

    Funny, I just read Olwyns comment above and she mentions colonisation too. Only she is talking about NZ undergoing a second one. But the same subversion of the natives, all of us, applies here as well as in the Middle East and anywhere really.

  18. mpledger 18

    Although I don’t want Trump to be the American president, imagine the people fleeing to NZ if Hillary wins.

    • Liberal Realist 18.1

      If HRC wins the nomination then POTUS watch for (vastly more) mass migration into Europe from the middle east.

      I honestly believe that Trump would be less dangerous that Clinton. John Pilger is of a similar view;

      “Donald Trump is a symptom of this, but he is also a maverick. He says the invasion of Iraq was a crime; he doesn’t want to go to war with Russia and China. The danger to the rest of us is not Trump, but Hillary Clinton. She is no maverick. She embodies the resilience and violence of a system whose vaunted “exceptionalism” is totalitarian with an occasional liberal face. ”

      From here:
      http://johnpilger.com/articles/a-world-war-has-begun-break-the-silence-

      • Colonial Viper 18.1.1

        Precisely.

        Clinton’s international outlook is that of the Empire of Chaos. Destabilise and destroy entire countries and peoples so that they cannot provide any material or ideological resistance to your geopolitical goals.

        • saveNZ 18.1.1.1

          +1 – I fear Hillary as she will bring more of the same problems. We need a change of world direction.

      • Draco T Bastard 18.1.2

        Yep. It’s the status quo that we need to change and Clinton is the smiling face of the status quo.

  19. Liberal Realist 19

    He is frankly unapologetic about the massive increase in Auckland residential property values, which has resulted in many established Aucklanders becoming relatively rich, but younger people being locked out of the market. It is a trend which is not going to stop anytime soon, given the immigration figures.

    O’Sullivan’s analysis of Key’s mantra is shallow at best.

    Firstly, Key is unapologetic about anything and everything. He doesn’t give a shit and he doesn’t apologise for anything if he can get away with it. As far as Auckland house prices go, they’re a great distraction and vote generator for National. This is why they’ve done nothing about it (immigration) and won’t do anything about it any time soon.

    Established Aucklanders (who own a home) are not really becoming rich at all. Unless said homeowner sells out of the market (Auckland) and buys into another (Cheaper) market then they stand to make no real net gain. Said homeowners are at risk of negative equity and/or (if mortgage free) a significant loss on the paper value of their property in the next GFC/Credit Crunch. Those who have taken on massive mortgages to buy into Auckland’s market in recent years risk losing everything, especially those that are leveraged to the hilt. Many could find themselves without a home but still carrying a mortgage of 200+k.

    Yes, young people are being locked out of the market but so are many many people in the 35 – 50 bracket. People in general are being locked out of home ownership and the security it affords. It’s obscene and it’s John Key and Nationals fault.

    • greywarshark 19.1

      @Liberal Realist
      Established Aucklanders (who own a home) are not really becoming rich at all. Unless said homeowner sells out of the market (Auckland) and buys into another (Cheaper) market then they stand to make no real net gain

      Though that has always been the case during the long discussions on the housing bubble, the point above that you made, has usually been tacit, not spelled out clearly.

      The lack of understanding of the degradation of our economy, from this shonky financial sleight-of-hand is an example of our foolishness and seeking of short-term advantage. On the other hand it seems to be a Virus that other countries have also, so we are in the pool with the other swimmers, globally dogpaddling to stay afloat.

      • Liberal Realist 19.1.1

        @greywarshark

        Fair comment and yes, paper gains in overheated markets are never clearly spelled out by the media.

        What I don’t understand is how the public (in general) have been duped so easily with the promise of paper gains they can’t spend (without further borrowing) yet don’t seem to have much, if any, understanding of the risks of rapid asset inflation carries?

        The Virus as you call it is called ‘credit expansion’ which stems directly from private bank credit creation. All this debt created money is completely decoupled from the real economy. To make matters worse, this credit is being used for purchase of assets that produce nothing, expanding the asset bubble further.

        With regard to staying afloat, I think we’re now under water only able to come up for a gasp of air occasionally – see recent press release from Labour:

        http://www.scoop.co.nz/stories/PA1603/S00449/badge-of-shame-nz-house-prices-the-worst.htm

  20. Tautuhi 20

    Key is certainly trying to plant the Corporate USA Footprint here in NZ.

    Getting all his little buddies from Wall St down here to play golf etc etc

  21. Steve 21

    Fran’s online article was updated late Saturday night (although there is no mention of it being updated). The original article: ” It is probably not appreciated by many New Zealanders, but New Zealand is now second to Switzerland when it comes to local wealth.
    This was underlined by Credit Suisse’s Global Wealth Report late last year, which showed New Zealanders’ net wealth had risen from US$100,000 apiece in 2000 to nudge US$400,000 – the strong run in property prices being a determining factor.”
    The updated article has removed the Credit Suisse’s paragraph.

    After reading Fran’s article on Sat evening i sent in a comment, it was not published but the article was updated. My comment was “Credit Suisse’s had used the wrong figures. The report’s authors have said that the correct figures show the average New Zealander with wealth of around US$252,000, as opposed to the US$401,000 originally quoted. That puts us roughly in the middle of the pack with other Western countries, as one would expect. (And the point remains that those figures are still inflated by our massively over-valued housing market.) http://www.inequality.org.nz/new-zealand-worlds…/

    • Pedant 21.1

      Yes Steve well done I saw your comment and the rather atrocious inaccuracy as well.

      The second time in almost as many weeks she’s been completely off course, some would say off-Key.

      http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11608077

      “An earlier version of this column incorrectly said Gary Romano circulated the press release via LinkenIn.. That is not the case. Fran O’Sullivan retracts the comments and apologises to Mr Romano for unfavourable inferences”.

      Ouch that would have hurt.

  22. Paul 22

    Would you trust a man who does this?

  23. whateva next? 23

    If only people would look at someone’s full CV before choosing a leader to govern the country, why would being a successful money trader qualify him to care about any but the 1%?
    Look at any Labour MP’s back story, and it’s brimming with worthy causes, and signs that they care about the whole of society, so much so I have trouble choosing one to lead each time we are called to do so!

  24. Ad 24

    Economic growth for all is hard.

    I recall going up in a lift with the Head of Treasury after a hard meeting and he said “anyone who says they have a really simple solution to a major policy problem is always wrong”.

    Undirected, policy-absent invitations to large capital is no substitute for the actual hard work of growing good jobs here.

    Compared to Labour’s ten big ideas, at least Labour looked like they could actually make policy. Key’s cheap crisis-mongering doesn’t deserve the name ‘policy’. Key cheapens the name Prime Minister with such thoughtless outbursts.

  25. Brendon Harre 25

    John Key also ridiculed by the dry right wing economists for his latest legacy idea.

    Check out Michael Reddell article, “Switzerland of the South Pacific Cargo Cult thinking”

    Especially his critique of John Key’s attitude towards unaffordable housing -“it is surely a disgraceful indictment of a failed government. The sheer indifference to the plight of ordinary New Zealanders is breathtaking.”

    http://croakingcassandra.com/2016/03/29/switzerland-of-the-south-pacific-cargo-cult-thinking/

    • ropata 25.1

      +1 Great link, utterly shredded poor old Fran O’s attempted rationalisations of FJK’s mad scramble for foreign “investors” (aka our new landlords)

  26. Smilin 26

    I’m certainly not going to get educated and intellectual about this Sellout shyte Key.

  27. pat 27

    The only surprising thing about this “revelation” is that the Herald published it.

  28. Tautuhi 28

    John Key has clearly abandoned his State Housing Roots and is now batting for the other side living in his gated house in Parnell Auckland.

    He is a rags to riches Fairy Tale Story.

    • tc 28.1

      Fairy tales tend to have happy endings, shonkys cabinet dealing room have dealt out such an ending for the wealthy elite only. Misery and inequity for the rest.

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