The curious convergence of Labour and National towards major housing market intervention is quite something as a principle.
The National government has proposed installing Commissioners to replace Auckland Council if they don’t see sufficient growth capacity in Auckland’s draft unitary Plan. They have also specially designated areas for developers with low regulatory oversight.
Labour is proposing even greater intervention – I don’t need to outline their policies when you can read them here.
As are the Greens’ policies here.
It’s good to see both sides of the house preparing to limit, regulate and funnel housing capital. Few except landlord interests dispute the risks housing represent to the whole of New Zealand.
But there are two more massively distended risks to market failure ripe for government intervention, because their collective risks are almost as great to us as housing.
The first is the vulnerability of the rural economy to dairy commodity prices. A future Labour-Greens government risks few votes in revisiting Fonterra’s governing legislation. Simply mitigating the risks of Fonterra’s market power hasn’t been enough to benefit the whole of New Zealand’s rural society in any sustainable fashion.
It could have been. From the purpose:
to promote the efficient operation of dairy markets in New Zealand by regulating the activities of new co-op to ensure New Zealand markets for dairy goods and services are contestable …”.
That purpose now looks weak.
Fonterra’s approach to commodification has rendered our export economy and rural communities far too vulnerable. It hasn’t responded to our country’s needs. Its core aim should be to gain the highest export dollar for the least environmental impact. It’s also by far our largest company and highest R&D investor. Fonterra is a creature of statute and it needs a sharp reminder of that fact from Parliament.
It’s time to intervene in the dairy market as boldly as in the housing market.
The second is the growing vulnerability of the urban and rural economy to cars. Politicians from both sides of the house like to think about transport through mode-shift and ribbon-cutting. That will always have a place. But our car fleet is old and getting older, hence dirtier and more unsafe.
A market intervention to upgrade whole generations of cars with massive subsidies for pre-2000 cars towards electric, hybrid and non-petrol options would be an efficient use of public capital. It would have a far faster rate of return on safety, pollution and efficiency grounds than any 100 metres of motorway or rail you could name. And it is a sure-fire vote winner with big and tangible redistributive effects. It’s good politics.
A winning 2017 government would see the sustained low oil price as a window in which to act with least societal impact and greatest short and long term benefit. Only housing ranks higher in terms of our desire for ownership and autonomy – and with that desire goes political desire.
As parties on both sides start writing bold policy bids towards next years’ general election, Labour, the Greens and National have signalled it’s time to revive the moribund muscles of the state towards our common wealth. 1987 is dead. The main players agree that 2017 demands a high benchmark of intervention and redistribution.
Housing has set that new modern benchmark. It’s time for more.