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National playing catch-up on affordable housing

Written By: - Date published: 8:06 am, October 4th, 2013 - 58 comments
Categories: housing - Tags:

Earlier this year, National attacked the Greens’ Progressive Ownership housing policy, a ‘rent-to-own’ scheme that effectively gives first homebuyers access to the Crown’s low cost of capital (like State Advances used to do). Nat fanboi John Armstrong said “It is a dog of a policy. It should be put out of its misery”. Now, National’s nicked it. The problem is, they’re just doing it on a token scale.

The Weymouth project announced yesterday will see 282 houses built, with 113 for sale at affordable (by Auckland standards, at least) prices. And buyers will be able to pay a basic rent to cover the cost of capital on the houses, the purchase equity over time as they can afford it. That’s the Greens’ policy, with the only difference being it’s community groups providing the rent to own scheme (which means it’s more expensive because of their high cost of borrowing compared to the Crown’s).

The problem with Weymouth is it’s tiny. 113 houses to be completed and sold over four years. We need at least a hundred times that amount. Labour plans nearly four hundred times as many over four years. And that can only happen if the Crown leads. At Weymouth, the Crown is putting up less than a third of the build cost. We need more than that.

Remember, these projects are cost-neutral to the builder – the people living in the houses cover the cost of capital through rents and buy the equity over time. And the net debt effect is neutral because while money needs to be borrowed to fund the builds that’s offset by the creation of a financial asset – ie the rent-to-own agreements.

There’s no excuse for the Government to not do more. Unfortunately, it looks like National’s objective is just to be seen to be ‘doing something’ on affordable housing because the issue is hurting them politically; they’re not interested in doing enough to fix the problem.

58 comments on “National playing catch-up on affordable housing ”

  1. Jane 1

    Typo? 282 built but 113,000 for sale? 🙂

    • Lightly 1.1

      yeah, should be 113 from the media reports.

      It’s really ‘think small’ from this government, eh?

      And all they’re doing is building a Labour Party project using Green Party funding ideas.

  2. karol 2

    Oh, look, it was all Helen Clark and Len Brown’s idea back in 2008, when Clark was still PM.

    Two weeks ago Prime Minister Helen Clark told Parliament the country needs large-scale urban housing projects that incorporate realistic numbers of affordable homes.

    She announced several initiatives, including a new type of agency based on overseas models to oversee future large projects.

    Partnerships between central, regional and local government as well as the private sector are envisaged.

    Starting in Auckland, public land holdings will be reviewed to see which areas can contribute to new projects.

    Media reports have suggested the Weymouth site and land owned by the Counties Manukau District Health Board near the Manukau SuperClinic as possibilities.

    The Weymouth land was reportedly bought from Child, Youth and Family in 2006 for $5.7 million.

    Housing New Zealand south Auckland regional manager Madhavan Raman says the project is still at the concept stage but once that is completed there will be full public consultation.

    “That process is expected to start mid-2008,” he says.

    What took the Nats so long?

    And why is CYF’s land being used for PPP housing and not state housing or council housing?

    • ghostwhowalksnz 2.1

      Obviously a project that was cancelled by the Key government when they won the election.

      Lucky for them it was all scoped out and ready to be ‘reannounced’ when they needed some good news for housing.

      Whats the bet it will wither away again ?

    • bad12 2.2

      Yes this latest ‘stealing’ of the Labour housing policy by Nick Smith and National follows on from another ‘announcement’ in the glare of television lights by Smith where the Government will tinker with the HousingNZ stock, selling off some as ‘unwanted’ and adding an extra bedroom to others to cater for bigger families,

      It’s all Labour policy well into the planning stage in 2008 when the Government changed, what such ‘tinkering’ by both Labour and National does not do is add NUMBERS to the HousingNZ stock,

      Such ‘policy theft’ by National may be one reason why Labour appears to have taken the vows of silence over the fate of future State House builds and HousingNZ itself which has been largely neutered by this National Government,

      At the least, 10,000 new build State houses are needed in both Auckland and Christchurch and the ‘tinkering’ with the number of State Houses, their location, and their number of bedrooms should be halted until such time as a comprehensive number of houses are built,

      Smith’s latest ‘publicity stunt’, the selling off of ‘unwanted’ HousingNZ stock should be halted, HousingNZ sends out a quarterly news-letter to all it’s tenants and such ‘unwanted’ tenancies should be offered to exiting tenants in the cities with long waiting lists who are unlikely to ever work again thus freeing up city tenancies for low income working families,

      As a HousingNZ tenant i am fucking insulted by Smith’s claim that these houses are ‘unwanted’, i would happily move out of the city to a provincial town if i thought my present HousingNZ rental would house a low income working family…

      • Dumrse 2.2.1

        ” Stealing policy…” FFS, the Liebor pie in the sky policy is…Labour plans nearly four hundred times as many over four years. I don’t see where it said National would build that many. Policy theft my arse.

        • Hanswurst 2.2.1.1

          I *would* say that you didn’t actually read the comment you were purportedly responding to, but you have a handle that suggests that you probably did but were too thick to get it. It’s not referring to current Labour policy, but Labour policy developed prior to being voted out in 2008.

    • xtasy 2.3

      AMAZING!!!

      John Key and his National gang steal ideas from Helen Clark’s days, wrap it all up in blue coloured National Party gift wrapping, and now sell this to the public AND DUMB media, as THEIR policies! I am disgusted, and this is what the damned, so often so useless MSM better pick up and report on!

  3. Alanz 3

    “they’re just doing it on a token scale”

    Yah, it Nats – the government of token gestures!

    • BrucetheMoose 3.1

      It’s what you expect from a token PM. Key is there just to have something else to highlight in his CV. Oh, and a bit of line his and his pals’ pockets.

  4. Puckish Rogue 4

    Well if Metiria Turei gets in and lowers house prices (as she said she’d like to see happen) then everyone will be happy won’t they

    • Paul 4.1

      Another valuable contribution from you, then….
      Obviously not everyone will be happy, but most people will be.
      Just because it does not suit you and your friends in the 1% does not make it bad policy.

      • Tom 4.1.1

        Most people will be happy? I imagine pretty much every home-owner will be unhappy, and moreover the poor sod who has spend years chipping away at the mortgage on a low wage and is finally getting some headway – suddenly they are back at square one and risking being overcapitalised. Way to look after the little guys.

        • bad12 4.1.1.1

          Bullshit…

          • infused 4.1.1.1.1

            How is that bullshit? It’s exactly what would happen.

            • bad12 4.1.1.1.1.1

              Read my comment at 4.3 infused, how can housing such as the Green Party propose effect the market except to slightly slow it…

        • Naturesong 4.1.1.2

          As a home owner I’m looking forward to a Labour / Green government taking the heat out of the housing market (lowering house prices compared to inflation)

          – Capital Gains Tax; hopefully an even broader look at how all income from investments are taxed.
          – Restricting ownership of housing stock to NZ citizens and residents; hopefully a broader look at overseas investment in NZ, particularly core infrastructure and food production (and protecting water from being privatised by any future National / Act government).
          – policies from Labour, Kiwi build, and the Greens, Home for life, being forged into robust legislation.

          It’s a good start, and there is enough talent in the Labour and Green parties to ensure the legislation is enacted to prevent a massive correction in the housing market. The longer we wait though, the greater the risk.
          I’d like to see the capital currently sitting in the ground being invested in New Zealand businesses.

          Did I hear the other day the RB talking about 8% mortgages?
          That would set it off a market correction for sure. Economic vandalism.

        • Draco T Bastard 4.1.1.3

          They’d have the same mortgage so why would they suddenly be back at square 1?

          • QoT 4.1.1.3.1

            Because we’re all fixated on attaining immaterial “wealth” and growing an invisible “net worth” and it’s unfair that other people’s imaginary value might catch up to ours because then we’ll be less special.

    • Colonial Viper 4.2

      House prices will return to the historical mean. Whether you want it to happen gradually starting from now, or in a sudden uncontrolled market correction a couple of years from now, is a choice we have to make.

      What would you prefer?

    • bad12 4.3

      And if National ‘stays in’ and interest rates hit 8% like what the Reserve Bank Governor says they will everyone will be delirious with happiness right,

      Being blindsided by the Jonolists on TV3 didn’t help Met’s or the Green Party, HOWEVER, an examination of the Green’s ‘rent to buy’ housing policy would tell everyone but the biggest of idiots, like yourself, that such a policy will NOT lower the prices of existing houses in places like Auckland,

      What the Green Party is proposing is the building of smaller houses (100-120m), than are currently being built in Auckland,(200-220m) thus making such housing ‘affordable’,

      The sale of such housing will not be via the ‘market’ but instead will be based upon family needs and via application,

      The purchaser of such housing will enter into a ‘rent to buy’ agreement with the Government which also includes a ‘BUY BACK OPTION’ for the Government,

      So pray tell me how does housing stock half the size of what is currently being built sold solely via application and not able to actually enter ‘the market’ because of the proposed buy back clause lower the price of any existing property in Auckland,

      Only a fucking fool would conclude that it could, that obviously means i believe you to be one…

      • bad12 4.3.1

        Lolz, the above comment is directed solely at ‘puckish rogue’,(befor i start an unintended scrap)…

        • Alanz 4.3.1.1

          “And if National ‘stays in’ and interest rates hit 8% like what the Reserve Bank Governor says they will”

          – more than meets the eye, or ears, with that latest statement from Wheeler

          – my City of London of contacts said just yesterday that the situation is currently not that clear and it could be any kind of a call either way with interest rates, particularly NZ’s, so far out.

          • bad12 4.3.1.1.1

            Can you get any stupider, seriously, what the hell has your supposed ‘City of London contacts’ got to do with the Governor of the Reserve Bank wanting to put out the fire of Auckland house price over-inflation by raising interest rates got to do with the city of London…

            • Alanz 4.3.1.1.1.1

              Not stupid. Hold your fire. It’s about the call as to which way and how far interest rates go internationally and for NZ.

              • bad12

                So, you are now saying that the Governor of the Reserve Bank is lying when He indicates that house price over-inflation in Auckland is reducing His ability to perform His duty of keeping inflation within the set target band and He will have to raise rates to quash this over-inflation…

                • Alanz

                  Veracity of statement is not really the issue but the basis of forecasting and effect of shaping expectations should be of greater interest.

                  You are a smart person and can search for info and think for yourself as evident from your comments. Open to interpretation and discussion. Have fun.

                  • bad12

                    That sounds like a long winded admission from you which in simple English says,”Alanz has been talking shit without having a shred of evidence to back up such shit-talking”…

            • bad12 4.3.1.1.1.2

              Incidently, rather than punish the economy and the people of the rest of New Zealand because of the over-inflation of house prices in our bigger cities there is another tool which could be used other than interest rates hikes that would stop such house price over-inflation from effecting the Governor of the Reserve Bank from keeping inflation within the set target bands,

              Using one’s brains is always efficacious in the ‘economy of the chimps’,

              The ‘rate of inflation’ is judged by gauging prices of various goods and services which have been added to a ‘basket’ of such goods and services,

              Remove housing from the basket and we have a true picture of ‘inflation’ unmodified by housing cost over-inflation in our 2 biggest cities,

              Seriously, why should a person paying off their home in Levin be made responsible for the actions of the middle class who created the price over-inflation in Auckland…

              • bad12

                ‘Using your brains part 2’, as such house price over-inflation is mostly confined to the cities of Auckland and Christchurch, and considering we do live in a ‘modern world’ it doess not then take a fucking huge leap of imagination to see that in cities,(they are clearly defined as to their boundaries), where price over-inflation is rampant interest rates solely directed at those housing markets can be set,

                The Governor of the Reserve Bank saying that this is too complicated is simply mouthing bullshit,

                Again the question must be asked, why are Jobs being put at risk by the ‘economics of the chimps’ and why should the homeowners paying off their homes in towns and cities that have not over-inflated their house prices pay for the over-inflation in Auckland…

            • Draco T Bastard 4.3.1.1.1.3

              Heard of the LIBOR?

              • bad12

                Who me, yep, heard of commenting in such a fashion so as to make a lucid debatable point…

                • Colonial Viper

                  Interest rates are a stupidly blunt tool with which to try and tackle the Auckland property asset bubble.

                • Draco T Bastard

                  Inter-bank rates = interest rates in London will affect interest rates here.

                  • Colonial Viper

                    The Reserve Bank still sets overnight rates in NZ.

                    • bad12

                      What i actually took the Reserve Bank Governors words to mean was the implicit threat that should a Labour/Green Government be elected in 2014, by mid 2016 interest rates would be 8%,

                      To me this simply adds impetus to the view that it is the Minister of Finance who should ‘set interest interest rates’,

                      Having an unelected official set those rates is simply more of the Neo-liberal escaping of responsibility of the past 30 years,

                      The Reserve Bank and the Treasury should be constrained by law to give the Government of the day advice on the best means of achieving it’s stated Legislative aims and social goals, not threatening dire social outcomes when those social goals are put befor the electorate…

                    • Draco T Bastard

                      To me this simply adds impetus to the view that it is the Minister of Finance who should ‘set interest interest rates’,

                      Actually, the supply of reserve money from the RBNZ should be at zero% and only available to the government which then spends the money into the economy. The spending could be direct (hiring of public servants, R&D, mining etc) or indirect (advancing mortgages and business loans at 0%).

                      How much interest people charge privately is of no concern to the government – probably because there won’t be any.

                      Yep, it’s really quite simple to get rid of the usury of interest.

                      The Reserve Bank and the Treasury should be constrained by law to give the Government of the day advice on the best means of achieving it’s stated Legislative aims and social goals,

                      Both are constrained by their failed ideology and thus can’t actually give that type of advice.

                    • bad12

                      DTB, your extolling the economics of your personal nirvana here, such has nothing to do with what is or ever is likely,(except in the instance of a total collapse of the worldwide banking system), to occur,

                      Extolling nirvana is all well and good, but i prefer to debate the possible not the improbable,

                      At the point where the Banks and the Global financial markets have all imploded upon their own bullshit, Governments will have little choice but to produce their own monies…

                    • srylands

                      “The Reserve Bank and the Treasury should be constrained by law to give the Government of the day advice on the best means of achieving it’s stated Legislative aims and social goals, not threatening dire social outcomes when those social goals are put befor the electorate…”

                      Only problem is that all the professional staff in those organisations would leave. You could get a job as a Treasury analyst. Congratulations.

                      More seriously, The role of public servants (especially the Treasury) is to give frank advice about the impacts of government policy. There is no obligation on the government to accept any advice. And the Treasury IS bound to implement the policies of the Government, regardless of its views. Kind of “If you are going to do this stupid destructive thing, let us tell you the best way to do it.” e.g Treasury was in charge of buying back Kiwirail. I am guessing they said “This is stupid” and when the Government said “Thanks for your advice go do it” they did so.

                      If public servants cannot serve the Government of the day they should resign. A number I know personally did so in 1999 because they could not serve the Labour Government. How many resign next time will depend on the degree of recklessness and stupidity of the policies. e.g Raising marginal tax rates significantly, expanding welfare, Kiwi Power, removing the independence of the Reserve Bank, would all result in some public servants leaving. How many time will tell.

                      But back to the main point – Treasury (and all public servants) are already required by law to implement government policies.

                    • Colonial Viper

                      Treasury should be the next department downsized.

                      Only problem is that all the professional staff in those organisations would leave. You could get a job as a Treasury analyst. Congratulations.

                      Anybody who still utilises stochastic equilibrium models in their work is free to go. Anyone who advocates for borrowing and taxes as the only way to obtain government funds is free to go. Anybody who thinks that monetary policy is the ideal way to deal with an economic slow down is also free to go.

                      The country would better off for it.

                    • McFlock

                      The country seems to do better without the advice of your friends.
                      I hope it happens again next year.

                      More specifically to the discussion, however, Treasury seems to be great at giving advice to help corporates, but I thinnk B12’s point was that it would be great if they could advise on how to give everybody a living wage, an affordable home, eliminate child poverty, make primary healthcare and prescriptions affordable for all, and reduce unemployment to <3% (allowing for some people being voluntarily between jobs at any point of time).

                    • KJT

                      Treasury could be replaced by a recording of Don Brash, saying, “cut taxes, cut Government services, sell assets, cut welfare, cut wages, and de-regulate everything!”.

                      No one would notice the difference as treasuries advice, to do just that, has proved consistently wrong. Their predictions have been as accurate as using chicken entrials, for as long as I can remember.

                      Srylands, as usual, is divorced from the reality, that every country which hasn’t followed the above advice to the extreme extent we have, is doing better than us.

                      Havn’t you noticed, Srylands, that the best performing economies have a high level of State “interference” and spending.

                    • Draco T Bastard

                      Only problem is that all the professional staff in those organisations would leave.

                      We could only hope. People too stupid to realise that the “theory” that they follow is bunk don’t give the best advice.

    • The Al1en 4.4

      “if Metiria Turei gets in and lowers house prices (as she said she’d like to see happen) then everyone will be happy won’t they”

      It’s not her fault NZ pays well over the odds to live in over valued property or that government presently protects it’s price inflating investor and speculator bubble makers.

      Chris Tremain: 17 properties, 4 lots of land, no taxes to be paid on his investments.

      Sort out scum bag profiteers like him and it’ll be a start.

    • Naturesong 4.5

      A financial bubble occurs when prices for assets, such as stocks, rise far above their actual value. Such an economic cycle is usually characterized by rapid expansion followed by a contraction, or sharp decline in prices.

      Whether or not the what is happening in Auckland is an asset bubble is still being debated, I believe that it is.

      Assuming that I am right, housing prices in Auckland will fall. It’s just a matter of when, how far, how fast and how much damage is done when it happens.

      For the middle class investors, look to the parties whose policies will cause housing prices to correct in a way that causes the least financial destruction.

      One of the negative effects of an asset bubble in property is that it is pricing out of the market a significant chunk of the electorate. Basically anyone who lives in Auckland and earns less than me, which is most of Auckland.

      For those earning less than 80k or 90k per year, look to the parties whose policies will help alleviate the shortage of affordable housing, and quality rentals (I’m not talking about a pool here, insulation and not being damp or leaking would be a big step up for many, rentals).

      Are there any parties that have policies that currently address the housing issues faced by people on lower incomes right through to upper middle class?

      There are three; The Green Party, Labour and Mana.

      It is likely to end the party for those who are speculating on the property market, though even these people will end up being saved from bankruptcy which is the likely outcome of a sudden market correction.

      • bad12 4.5.1

        Agree with you, the party is hardly going to end with a big bang tho given the mix of housing proposed by Labour, the Green and Mana Party’s,

        All of those Party’s are proposing solutions that only effect either first home buyer or renters, given that there will still be a huge demographic in Auckland of home owners who are wishing to be upwardly mobile,

        My opinion is that the proposals from Labour/Green/Mana will simply bring the price over-inflation to a halt, property might take months to sell instead of days and weeks, and any speculator having bought solely on the basis of making a hundred grand simply by holding the property for 3 to 6 months is likely to be outta luck…

  5. Sable 5

    Pre election DIY time…..

  6. xtasy 6

    The National led government is very much “the drunken builder”, who ran down his business by spending cash on bailing out mates and relatives, but forgot his priorities.

    Now the new Minister for Housing (or for the “House of Cards Shambles”) is going “nuts” and desperately pulls out another trick out of the hat at every new media-effective opportunity.

    Already the budget announced this bizarre plan to add extra bedrooms to existing Housing NZ homes, which will mean subdividing existing rooms, or perhaps adding smallish extra rooms from the exterior. All this is meant to provide “more housing”.

    Of course the “housing accord” idea was discussed and so far agreed on between Auckland Council and central government, but the 39,000 houses to be built over the coming few years are well behind schedule.

    Consultations happened with the Reserve Bank, and while government cannot influence the banks’ decisions, the loan to value ratio regime was brought in from 01 October. This was to contain the demand for housing and the price growth primarily in Auckland. House prices keep climbing in much of Auckland and Christchurch, and so Nick Smith(erines Brain) pulled out the idea of selling old, so far unsellable, unattractive and wrongly located Housing NZ homes in some provinces to prospective first home buyers with a government hand-out.

    Campbell Live showed the other night, what that is all about, and that this is nothing but another trick to get rid of old stock that Housing NZ Corporation sits with, which earns them neither rents or anything else.

    Next trick out of the hat is this housing project in Weymouth, to the south of Auckland, where NGOs are now going to be involved to build 282 houses over four years, as I understand it. They are in this case, at least in part, trying an altered version of what the Greens proposed as their housing policy earlier on.

    “Keep the pressure off us”, the drunken builder says, “can you not see, we are busy getting the job done?” Yes, you had 5 years now, to do something about affordable housing for New Zealanders, which will primarily be those in Auckland and in large part the to be rebuilt Christchurch. Social housing has not even seriously been on their agenda, so “window dressing” is being applied, to make Housing New Zealand look good and effective. A few nice, new homes were shown on television the other week, to “impress” the public, and to pretend the government cares and does something for those in need.

    On the front page of this Wednesday’s Central Leader here in Auckland, Nick the Smith(erines Brain) is also shown on a large photo in an article, about a home being “improved” in Mt Roskill.

    Would our dear mainstream media out there perhaps have a closer look at the true figures, and would they perhaps bother talking to the many kicked off Housing NZ’s waiting lists (since mid 2011), would they perhaps bother to talk to Housing NZ renters, would they perhaps go and gather some stories from homeless, poorly housed, from sick and disabled, from the ones really affected, also by exorbitant rents in much of Auckland, please!?

    I hear, read and see little if anything of this, only short stories on all the good things the “drunken builder” presents them, trying to hide his daily hangover, and other shambles, by pointing to endless window-dressing.

    Expose the “drunken builder”, Nick Smith, and his team, and sack the lot, a.s.a.p.!

  7. Draco T Bastard 7

    And the net debt effect is neutral because while money needs to be borrowed to fund the builds that’s offset by the creation of a financial asset – ie the rent-to-own agreements.

    The government never needs to borrow. The fact that everyone believes that they do is because of a lie that the private banks have perpetuated so that they get to produce the countries money at interest.

  8. Tracey 8

    insulation and now this, both stolen from the Greens following public ridiculing of them. Cynical, very cynical national. Playing the electorate for mugs again. Puckish Rogue at the head of the queue nodding vigorously for his latest rogering.

  9. Ad 9

    DTB can you expand on that Reserve Bank idea of supplying money only to the government. I don’t understand the implications but its intriguing.

    • Draco T Bastard 9.1

      At the moment the private banks create money whenever they make a loan but they’re (supposedly) restricted by the Capital Reserve Ratio. When they can’t find funds to balance that capital reserve ratio requirement they then borrow reserve funds from the central bank (in the RBNZ) at the overnight rate (the OCR). The upshot of this is that the private banks aren’t actually restricted in the creation of money despite the Capital Reserve Ratio. In fact, due to the fact that they charge interest rates above the OCR, they’re actually incentivised to create ever more money which is what they do and this is why we see massive asset price bubbles.

      By making it so that only the government, in the first instance, has access to the money created by the central bank has several implications:
      1.) Money creation would be severely restricted reducing inflation (especially house price inflation)
      2.) As the money would be supplied at 0% interest the government would save several billion dollars per year in interest payments (and people would no longer have a government guaranteed income from that interest)
      3.) The government would be able to make 0% interest loans available for housing and business massively reducing the cost of living (Estimates are that the interest that the banks charge on the money they create makes up around 50% of the price of everything)
      4.) Due to the fact that interest rates would disappear the chances are that our dollar would decrease in value as no one would be holding it for the high interest rates. The only reason that people would buy our currency would be to purchase products from NZ

      A few people will come back with the BS that if people don’t get any interest then they won’t invest but that’s really not all that important. If the last 30 years has proven anything it’s that people don’t invest anyway and the government will be able to invest in long run innovation as it always has done.

      The problem of share buybacks is not isolated but rampant: in the last decade, S& P 500 companies have spent $ 3 trillion on share buybacks (Lazonick 2012). The largest repurchasers (especially in oil and pharmaceuticals) claim that this is due to the lack of new opportunities. In fact in many cases the most expensive (e.g. capital-intensive) investments in new opportunities such as medicine and renewable energy (investments with high market and technological risk) are being made by the public sector (GWEC 2012). This raises the question of whether the ‘open innovation’ model is becoming a dysfunctional model. As large companies are increasingly relying on alliances with small companies and the public sector, the indication is that large players invest more in short-run profit gains (through market gimmicks) than long-run investments.

      Mazzucato, Mariana (2013-05-15). The Entrepreneurial State: Debunking Public vs. Private Myths in Risk and Innovation (Kindle Locations 904-909). Anthem Press. Kindle Edition.

      • McFlock 9.1.1

        Still mulling it over, but the investment thing is interesting – direct investment in govt bonds might be out (unless that’s how the government wishes to redistribute the cash to banks and thereby increase the amounts available for bank lending), but by and large that just means that the banks would go back to lending based on the deposits they get from savers. Old school.

        Whereas it gives the government to inject cash via direct spending or cheap loans into different sectors that are short of capital (geographic sector or industry sector or startups/desired R&D areas).

        I seem to recall that at least one of the massive online games (everquest?) actually employs economists to examine and tweak the economy of the virtual universe – if some areas get low on resources, they inject items and quest rewards etc, and put money sinks into overheated areas. Much more hands on, but much better at preventing localised collapses that can bring the whole economy into recession. A much better model than a simple economy-wide accelerator/brake mechanism.

        Definitely a plausible idea. I might even be interested to hear the nightmare scenario from one of our community tory shills.

  10. BrucetheMoose 10

    Looks like more marketing toilet rolls as Xmas Crackers.

  11. Draco T Bastard 11

    Minister sees interest rate rise as inevitable

    Speaking on TV3’s The Nation programme on Saturday, Dr Smith said interest rates had been at historic lows for some time, and at some point they would increase again.
    He said it was inevitable as the economy improved that the 50-year low mortgage interest rates would rise.

    The banksters must be getting pissed with the low record profits.

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