I'm inclined to agree. Shortages are simply an intractable backdrop against which interest, and monetary policy generally, serve to exacerbate the problems that shortages cause.
owning and renting are two different things. And renting to use for a while should never cost more then owning does, and currently renters pay the mortgage, the interest, and what ever else the owner wants out of the property.
btw, my mortgage that i pay currently is 200$ per week.
you can't even rent a dog kennel for that amount anywhere in NZ.
I reckon, my mortgage is $210 a week, if I rented the same house it would be double, and with no return. Free insulation, cheap rates, I could also halve that if I got a flatmate (which I may do once my kids leave). I don't take this for granted, I realise I'm one of the lucky few.
Have to strongly disagree with you there RL, we are in our first own house (nearly freehold) after renting for 30+years the last 15 of those with three children, owning your own home has for us probably been pretty similar, maybe a bit more expensive but not a lot, and especially when you take into account all the benefits…the main one is not having to deal with Ma&Pa landlords they are generally like spawns from hell, they have made renting a fucking nightmare, it is awful, and no country that has the resources NZ has should let it’s citizens endure that type of life…welcome to free market liberalism I guess, markets operating just as they should…Thanks David Lange.
Gone are the old days when you would rent a house and live in it for years and hardly be bothered as long as you paid your rent and maintained the property…our last ten years of renting were a disaster (with one exception) as far as landlords went…even if owning a home was/is more expensive, how can you put a price on the endless stress and worry and more importantly the hundred of subtle ways it damages and undermines children having little to no long term home security.
Owning a home provides security that no amount of rental law cannot.
The trouble is that house prices do not reflect the cost of owning a home. They reflect the cost of the expected medium-term capital gains (post bright-line). It wasn't a problem when they reflected the expected gains upon retirement and downsizing, but now who honestly expects to be in that house for thirty years? Or do they expect to flip it in ten years or so?
Agree with the security bit. I've seen the pro's and cons of home ownership debated at length in New Zealand literature. They're pretty even.
I'd like to see some proper policy work done on the effects of Andrew Little's current extension of the Bright Line test, and the likeley extension to 10 coming up. Doesn't seem to have made much difference to house prices at all – so if it's not working as intended it should be removed.
Perhaps that is a point of the Easton paper – no one issue will solve the housing crisis. After all the current presumption of intent is flawed, but reversing it would mean that gains up to the time legislation takes effect are likely to remain tax free, so most people would not pay much tax for many years; but owners of rental properties may hold for longer to defer the payment. Requiring a bigger amount of real (not borrowed) equity may be possible , but that would be easier if we increased wages so that the government does not need social welfare or Working for Families to enable new home buyers to afford to live with a family.
I have a good landlord. Doesn't put the rent up every week etc. . But a batten holder wore out 8 months ago – and it only got fixed last month – no bedroom light all winter. Rentiers are oppressors, even the the good ones.
And of course the inability of contemporary NZers to afford their own homes is the final disproof of neoliberalism. It was supposed to make us more prosperous if you remember – on the contrary, it has impoverished us. Voters, looking at neoliberals think: "Were you really that stupid that you swallowed the hype in spite of our warnings? Or were you just corrupt?"
Because their speculative growth is entrenching even more deeply NZ's trans-generational class system.
Even if a full-time worker can rustle up a 10-20% deposit, I strongly suspect most NZers probably wouldn't earn enough to service the mortgage on a median-priced house.
For me, it was break-even with no margin for error five years ago. Now? It's a joke. And I have a good job, no dependants, and a retirement fund, but houses are more than twice the price. Almost literally – I looked up that house recently. It's gone from $230k to $450k. Has any actual worker's salary doubled in five years?
I'm kinda waiting for evidence of the K-shaped economy to hit.
And it's indisputable that salaries haven't kept up with house prices.
But if Easton had tracked house prices, salaries, and national home ownership, he would have seen no collapse in average ownership at all. Even as prices skyrocketed.
In fact we're still better than nearly all other developed countries for home ownership.
Easton calls it speculation. 65% of us call it risk management.
Easton’s analysis is sound and he is not alone with the conclusions….it has been well canvassed and the only major dispute is around to what degree other factors impact.
stating 65% mean sweet FA unless you also state from where it came and what the trend is…as you well know.
and I too have checked…"and falling"
"Home Ownership Rate in New Zealand is expected to reach 64.29 percent by the end of 2020, according to Trading Economics global macro models and analysts expectations."
And as outlined below there is more to it than just economics – it's the relentlessly increasing age of first marriage that also means that 20-29 age group just aren't interested in buying homes.
Another factor is the rise in divorce rates – usually one partner will finish up renting for a period afterward.
This doesn't discount the obvious affordability issue in play – but it does suggest there are often more factors involved than the headlines make out.
Of course, unmarried people dont buy houses….how could i miss that.
And the 20 -29 year olds arnt interested in buying homes….because they increasingly cant afford them….the same applies to those in their 30s…and the ones that eventually can take considerably longer to raise the increasing deposits.
Those decreased ownership rates in the cohorts coming through are going to have a major impact on the total ownership rates as the proportionately higher ownership rate cohort approaching 70 move into care/die
30 per cent of homes are owned by people who only own one home.
Another 13 per cent is owned by people who have two homes. Six per cent is owned by people who have three homes. Ten per cent is owned by people who have between four and six homes.
And another 10 per cent is owned by those who have between seven and 20 homes.
I would argue one can own multiple houses but only one is ever your home but that's an aside.
To do a real comparison a similar breakdown as above is needed for the historical data.
And that's households (where homeowners are a member of the household). Only half of individuals own the home they live in, directly or indirectly (same link, p34).
Additionally, although $value of lending to first home buyers peaked last year at 20%, the proportion of actual borrowers at the time was 12%.
The longer this situation goes on, the more nailed in the inequity will be.
If by "generation" you mean the peak in the early 1990s, I'd agree.
If by "generation" you mean back to the 1960s when everything about New Zealand was supposed to be our egalitarian apogee, no not really it's the same.
Yup – the demographics don't lie. Before Rogergnomics the median age at marriage was around 23. After it was 33. Poverty. The social science folk can give the lie to every pretense of good governance.
That would be of course because the data aren't set up to capture it.
Measure GDP alone and you could imagine Rogergnomics as something other than a brutal failure. But you would be letting data trickle through your fingers – politically convenient no doubt.
The first world nations have been lying to themselves for a good while now – with falling "labour force participation" instead of unemployment and so on. The lies are getting pretty thick. If everything were apples home ownership wouldn't have had to fall, nor would child (the only politically acceptable poverty) be so high.
All those suicides blamed on mental health too – same trick the Soviets resorted to. Our governors have no standards at all.
Hardly – I'm not trying to extend my assertion around the world – it was you that had to reach beyond NZ to grasp at the straw that because other countries experience lesser forms of the same graphic failure, the brutal sham that was Rogergnomics was somehow excusable.
We all understand the appeal to the vanity of policy makers of a ‘great leap forward’, and I use Mao’s term deliberately, because Rogergnomics was every bit as hubris-laden, destructive, misguided, and undemocratic.
Liberals when their desire for ‘freedom’ becomes a repudiation of society and manifests as libertarianism and neo-liberal economic theories.
So nowhere have I attempted to excuse Rogernomics – that’s a just a figment of your imagination. But to attribute everything bad that ever happened in this country to this singular cause is another kind of fail.
It isn't the price of the house that is relevant to the person buying it. It is the cost of servicing the mortgage. Here are a few graphs on housing costs. Between 2008 and 2019 the average household income in Auckland went up by about 50%. Thar was from $61.4k to $95.2k. The average weekly payment for people who had a mortgage only went up by about 20%. That was from $384/week to $460/week
When you look at the cost of buying a home the most important factor is going to be the mortgage interest rate. First mortgage rates in 2008 were about 8%. They are now, if the ASB quote in front of me is typical 2.29% for a 1 year fixed rate.
The second most important factor is going to be the deposit. If house prices go up by 17%, as they typically did last year the deposit will do the same and that is really going to hurt the first home buyer.
A note. This is not an area on Economics in which I have much knowledge or experience so all the numbers I have reference may be irrelevant. At a first glance though it wouldn't appear that people are much affected by the price rises while interest rates are dropping to the point that in real terms the money is free to borrow.
The commentary in the Stats NZ work on this supports this cost-of-mortgage issue. But it fails the obvious corollary: as prices go up, so too does the potential equity for deposits from Bank Of Mum And Dad (especially when they downsize, or die).
Even without interest, the average borrowing for a first home loan is almost half a mil.
That ain't chump change to pay back weekly, by itself.
People buying their first homes need to be doing damned well.
Unless you can figure out some way of paying the same price while not borrowing so much, the two figures are pretty good substitutes for each other when it comes to looking at why people can't afford to own their own hovel.
I am not disputing that it isn't easy. Mind you I can remember when my mortgage rate was 13%. That was back in the 70's and I knew people who were paying more.
However I had a quick look at payments using the BNZ calculator.
On an $800k house with a 20% deposit and a 30 year term at 2.29% you pay $1,132,fortnight. On a property at half the price, and half the deposit for the same 30 years loan you would pay exactly the same amount if you were paying 8.5% which would have been quite likely back in 2008. Half the amount borrowed but the same $1,132 at the much higher interest rate.
On the monthly income for a household at the average number of $$95.2k/year you would be paying 31% of your income on your mortgage.
Where did the first home buyer get the extra $80k for the 20% deposit in 2020? Their income only went up by less than 50%. And their rent payments are through the roof, as well, so their savings might struggle to hit a wage inflation equivalent.
"The second most important factor is going to be the deposit. If house prices go up by 17%, as they typically did last year the deposit will do the same and that is really going to hurt the first home buyer."
I don't know. I haven't been in the market for a mortgage for 30 years. We did save our deposit for our first house in about 18 months though by living on about half of one of our two incomes. The total furniture we had in a one bedroom flat cost us about $100 dollars. I will admit we had one 10 year old car though. Entertainment was limited to barbecues with friends or going to the beach.
Well the Chinese especially tend to regard their elders with considerable respect – and not so much of the 'ok boomer'.
The point is that if you want to be prosperous it takes more than just a good job – you need to plan ahead and use each generation's capacities and abilities for the benefit of the entire family.
And of course rising divorce rates over the period in question also have their impact – nothing destroys family wealth over time quite like it.
The point is that if you want to be prosperous it takes more than just a good job – you need to plan ahead and use each generation's capacities and abilities for the benefit of the entire family.
Only in a society with entrenched inequity and social mobility that does not reflect individual merit.
It's not a binary choice. Yes merit and mobility are valued highly in the West – but a well ordered and stable family over multiple generations will always have an advantage.
Why not? And how would you prevent family success from benefiting the whole family? Are parents to be prohibited from helping their children if they can?
Insisting on nothing but a pure meritocracy seems an absolutist view to me.
In a meritocracy, it doesn't matter if parents help their kids or not. That's the point.
But my objection to the current situation isn't that NZ isn't a perfect meritocracy. My objection is that we're becoming less of a meritocracy. You can cloak it in "respect for elders" and "family stability" all you want, it's the simple greed of a previous generation turning into a dynastic problem.
I've said it before and I'll say it again: his solutions to the problems he described were bunk, but Marx was a spot-on critic of capitalism and feudalism. They're just two sides of the same coin. The Duke's ancestor hit peasants over the head with clubs, the magnate's ancestor paid other people to hit workers over the head with clubs.
So today to save a $160k deposit in 18 months from one income, that would be an income of $100k a year.
Basically, the govt needs to either build shitloads of affordable homes or build shitloads of state houses and have say a HNZ 5% stock turnover for modernisation in addition to a general increase in stock levels, sold through a rent to own equity deal.
Because this is a formalisation of an intergenerational class system. Not the one we've been ignoring and pretending doesn't exist, an actual regression back towards feudalism. Not all the way back, but a definite step back.
"So today to save a $160k deposit in 18 months from one income".
A minor correction but it wasn't one income. It was one and a half incomes. We lived on one quarter of our after tax income and saved the rest.
That was quite common at the time. We were, like all our friends, trying very hard to get to own our own home. We were also willing to live a great deal further out from the CDB than many people seem to be willing to do today and lots of people did not have a car.
I found it quite hilarious a couple of years ago to read about a 30 something woman who was complaining that she couldn't afford a first house. Her idea of a first house was 4 bedrooms and 2 bathrooms in Roseneath, Mt Vic or Mt Cook. There was no way she was going out to the distant suburb of Hataitai. If you aren't a Wellingtonian look it up. It would be comparable to refusing to live way out in the wilds of Epsom I suppose.
This article is in some ways quite good on looking separately at both sides of the housing market. Though I didn't really like Eastons alternative of demand backed by offshore financing, as this doesn't either fit the facts.
First the banking system doesn't lend out existing deposits but instead creates additional deposits when extending loans. Second the fact that a trade deficit was occuring simultaneously to an expansion in borrowing will mean an expansion in overseas ownership domestically, but a lot of the overseas trades are not in $NZ so in what sense is that supporting lending into a housing market almost exclusively trading in $NZ. This explanation is equally likely to misslead as the explanation it replaces.
The bank may create credit but they are still required to hold reserves and the size of those reserves determines how much credit they can create…..and a glut of international liquidity looking for a safe home and return knows which side their bread is buttered on.
Your talking about 'capital' not reserves there (especially in the context of overseas funding), and capital is still not a constraint on lending. It might place limits on the interest rates accessible in some cases.
But the simpler explanation is just that a lot of those recent house sellers at the time also took overseas trips.
Wrong …the amount of credit a bank can create is directly linked to their reserves and that capital can (and does) come from offshore…the interest rates are a consequence of the ability to service the level of debt (credit).
The country didn't instigate a housing bubble based on money it borrowed overseas. That would be a very missleading claim, and I expect you would not claim it happened either. Yes, the implication is that the country can manufacture as much capital as it needs to facilitate lending for itself.
the glut of money sloshing around the world looks for a home and preferably a safe one with good access…..where better than backing the banks of open economies, ones with a political class wedded to the idea of free capital flows. The Banks use that increased reserve capacity to grow their loan books and thereby increase their profits, everybody wins,,,except for the poor mugs being milked for every available penny when they try and enter the housing market,
And the Gov is trapped because if they seriously try to do anything about housing affordability that capital in the banks reserves will find a new home …and probably not in NZ.
Capital outflow equals negative growth not to mention all the associated problems
Under the Pope’s guidance, these “guardians” aim to “reform capitalism into a powerful force for the good of humanity” and create a “more inclusive, sustainable and trusted form of capitalism.”
Capitalism has lifted billions of people out of poverty, but many in society have been left behind and the planet has paid a price. There is a moral imperative to address this challenge, and we are taking action.
What a lot of people here have missed is that many boardrooms across the US and EU have been quietly working toward all kinds of social and economic reforms. But because it's 'fucking capitalists' it never gets onto our radar.
It's a theme I'd have picked up on more – but every time I type the word 'capitalist' a kind of red mist descends. eg McF predictably above.
Well history is tilting in ways never encountered before.
Basically we've tried three major economic variants – capitalism, communism and fascism – and of the three only the first has shown the necessary evolutionary capacity to adapt to the new world we're heading into.
It's all about the demographics. Young adults are consumers of goods and services, mid-aged adults are investors in capital and services, and retired adults are consumers of capital. At least in very broad terms.
For the first time in all of our history our populations are now quite rapidly becoming dominated by late adult to retired aged populations. Fully half of all Boomers will retire in 2022. Suddenly growth is no longer possible or even desirable. And none of the economic systems we've ever attempted have ever been exposed to this scenario – but I'd put my bet on capitalism being the one most likely to evolve to meet the challenge.
major economic variants – capitalism, communism and fascism
Could you perhaps explain the differences between these 'economic variants'? Particularly the economic differences between capitalism and fascism.
Thanks in advance.
I see China are trying to join the TPP as is the UK. Does this mean that a large state actor like China or the UK could sue our government if we don't toe their line with regard to commercial companies. Given that a lot of chinese commercial investment seems to have some sort of state back up how exposed does this leave us?
I'm pretty confused but is it time that the existing TPP members rolled back a lot of the not actual trading and tariffs parts of the agreement so that the grouping is less attractive to major players. It all seems to reduce our ability both domestically and internationally? Should a trade agreement affect domestic politics that much?
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It’s Friday and we’re halfway through March Madness. Here’s some of the things that caught our attention this week. This Week in Greater Auckland On Monday Matt asked how we can get better event trains and an option for grade separating Morningside Dr. On Tuesday Matt looked into ...
Something you might not know about me is that I’m quite a stubborn person. No, really. I don’t much care for criticism I think’s unfair or that I disagree with. Few of us do I suppose.Back when I was a drinker I’d sometimes respond defensively, even angrily. There are things ...
Photo: Lynn Grieveson / The KākāTL;DR: The five things that mattered in Aotearoa’s political economy that we wrote and spoke about via The Kākā and elsewhere for paying subscribers in the last week included:PM Christopher Luxon said the reversal of interest deductibility for landlords was done to help renters, who ...
It was not so much the Labour Party but really the Chris Hipkins party yesterday at Labour’s caucus retreat in Martinborough. The former Prime Minister was more or less consistent on wealth tax, which he was at best equivocal about, and social insurance, which he was not willing to revisit. ...
Buzz from the BeehiveThe text reproduced above appears on a page which records all the media statements and speeches posted on the government’s official website by Melissa Lee as Minister of Media and Communications and/or by Jenny Marcroft, her Parliamentary Under-secretary. It can be quickly analysed ...
For forty years, Robert Muldoon has been a dirty word in our politics. His style of government was so repulsive and authoritarian that the backlash to it helped set and entrench our constitutional norms. His pig-headedness over forcing through Think Big eventually gave us the RMA, with its participation and ...
Bryce Edwards writes – Is the new government reducing tax on rental properties to benefit landlords or to cut the cost of rents? That’s the big question this week, after Associate Finance Minister David Seymour announced on Sunday that the Government would be reversing the Labour Government’s removal ...
Saudi Arabia is rarely far from the international spotlight. The war in Gaza has brought new scrutiny to Saudi plans to normalise relations with Israel, while the fifth anniversary of the controversial killing of Jamal Khashoggi was marked shortly before the war began on October 7. And as the home ...
Questions need to be asked on both sides of the worldPeter Williams writes – The NRL Judiciary hands down an eight week suspension to Sydney Roosters forward Spencer Leniu , an Auckland-born Samoan, after he calls Ezra Mam, Sydney-orn but of Aboriginal and Torres Strait ...
Ele Ludemann writes – Contrary to what many headlines and news stories are saying, residential landlords are not getting a tax break. The government is simply restoring to them the tax deductibility of interest they had until the previous government removed it. There is no logical reason ...
I can't remember when it was goodMoments of happiness in bloomMaybe I just misunderstoodAll of the love we left behindWatching our flashbacks intertwineMemories I will never findIn spite of whatever you becomeForget that reckless thing turned onI think our lives have just begunI think our lives have just begunDoes anyone ...
Michael Bassett writes – At first reading, a front-page story in the New Zealand Herald on 13 March was bizarre. A group of severely intellectually limited teenagers, with little understanding of the law, have been pleading to the Justice Select Committee not to pass a bill dealing with ram ...
How much political capital is Christopher Luxon willing to burn through in order to deliver his $2.9 billion gift to landlords? Evidently, Luxon is: (a) unable to cost the policy accurately. As Anna Burns-Francis pointed out to him on Breakfast TV, the original ”rock solid” $2.1 billion cost he was ...
TL;DR: My top 10 news and analysis links this morning include:Today’s must-read:Jonathon Porritt calling bullshit in his own blog post on mainstream climate science as ‘The New Denialism’.Local scoop:The Wellington City Council’s list of proposed changes to the IHP recommendations to be debated later today was leaked this ...
TL;DR:Prime Minister Christopher Luxon said yesterday tenants should be grateful for the reinstatement of interest deductibility because landlords would pass on their lower tax costs in the form of lower rents. That would be true if landlords were regulated monopolies such as Transpower or Auckland Airport1, but they’re not, ...
This is a re-post from Yale Climate Connections by Tom Toro Tom Toro is a cartoonist and author. He has published over 200 cartoons in The New Yorker since 2010. His cartoons appear in Playboy, the Paris Review, the New York Times, American Bystander, and elsewhere. Related: What 10 EV lovers ...
The business section of the NZ Herald is full of opinion. Among the more opinionated of all is the ex-Minister of Transport, ex-Minister of Railways, ex MP for Auckland Central (1975-93, Labour), Wellington Central (1996-99, ACT, then list-2005), ex-leader of the ACT Party, uncle to actor Antonia, the veritable granddaddy ...
Hi,Just quickly — I’m blown away by the stories you’ve shared with me over the last week since I put out the ‘Gary’ podcast, where I told you about the time my friend’s flatmate killed the neighbour.And you keep telling me stories — in the comments section, and in my ...
The first season of Rings of Power was not awful. It was thoroughly underwhelming, yes, and left a lingering sense of disappointment, but it was more expensive mediocrity than catastrophe. I wrote at length about the series as it came out (see the Review section of the blog, and go ...
Buzz from the Beehive Workplace Relations and Safety Minister Brooke van Velden told Auckland Business Chamber members they were the first audience to hear her priorities as a minister in a government committed to cutting red tape and regulations. She brandished her liberalising credentials, saying Flexible labour markets are the ...
Chris Trotter writes – TO UNDERSTAND WHY NEWSHUB FAILED, it is necessary to understand how TVNZ changed. Up until 1989, the state broadcaster had been funded by a broadcasting licence fee, collected from every citizen in possession of a television set, supplemented by a relatively modest (compared ...
Bob Edlin writes – The Māori Party has been busy issuing a mix of warnings and threats as its expresses its opposition to interest deductibility for landlords and the plans of seabed miners. It remains to be seen whether they follow the example of indigenous litigants in Australia, ...
Every year, in the Budget, Parliament forks out money to government agencies to do certain things. And every year, as part of the annual review cycle, those agencies are meant to report on whether they have done the things Parliament gave them that money for. Agencies which consistently fail to ...
Mike Grimshaw writes – Recent events in American universities point to an underlying crisis of coherent thinking, an issue that increasingly affects the progressive left across the Western world. This of course is nothing new as anyone who can either remember or has read of the late ...
The thing about life’s little victories is that they can be followed by a defeat.Reader Darryl told me on Monday night:Test again Dave. My “head cold” last week became COVID within 24 hours, and is still with me. I hear the new variants take a bit longer to show up ...
TL;DR: My top 10 news and analysis links this morning include:Today’s must-read:Angus Deaton on rethinking his economics IMFLocal scoop: The people behind Tamarind, the firm that left a $500m cleanup bill for taxpayers at Taranaki’s Tui oil well, are back operating in Taranaki under a different company name. Jonathan ...
Normally when we talk about accessing public transport it’s about improving how easy it is to get to, such as how easy is it to cross roads in a station/stop’s walking catchment, is it possible to cycle to safely, do bus connections work, or even if are there new routes/connections ...
Politicians are not renowned for telling the truth. Some tell us things that are verifiably not true. They offer statements that omit critical pieces of information. Gloss over risks, preferring to offer the best case scenario.Some not truths are quite small, others amusing in their transparency. There are those repeated ...
Kicking the most vulnerable people out of state housing and pushing them towards homelessness will result in a proliferation of poverty and trauma across our most vulnerable communities. ...
Te Pāti Māori co-leader and MP for Waiariki, Rawiri Waititi has penned a letter asking MPs to support his members bill to remove GST from all food. The bill is expected to go through its first reading in parliament this Wednesday. “I’m calling on all political parties to support my ...
This year is about getting real with Kiwis and discussing the tough issues, as the National Government exacerbates inequality and divides New Zealand, Labour Leader Chris Hipkins said ...
The Government adding Significant Natural Areas (SNAs) to its already roaring environmental policy bonfire is an assault on the future of wildlife that makes Aotearoa unique. ...
After 12 years of fighting to protect our moana we are finding ourselves back at square one and back at court. Today, the Environmental Protection Agency is sitting in Hawera to reconsider an application from Trans-Tasman Resources to dig up 50 million tonnes of the seabed in South Taranaki. This ...
Minister Shane Jones’ decision to step away from a seabed mining project is evidence of the murky waters surrounding the Government’s fast-track legislation. ...
The growth of Treaty of Waitangi clauses in legislation caused so much worry that a special oversight group was set up by the last government in a bid to get greater coherence in the publicservice on Treaty matters. When ministers first considered the need for tighter oversight in 2021, there ...
The growth of Treaty of Waitangi clauses in legislation caused so much worry that a special oversight group was set up by the last government in a bid to get greater coherence in the publicservice on Treaty matters. When ministers first considered the need for tighter oversight in 2021, there ...
The Coalition Government’s miscalculation saga continues as it has forgotten an eyewatering $90 million gap in its interest deductibility cost figures, say Labour Finance spokesperson Barbara Edmonds and Revenue Spokesperson Deborah Russell. ...
He Pou a Rangi Climate Change Commission has today released advice that says if the Government doesn’t act now New Zealand is at risk of not meeting its climate goals. ...
The Coalition Government has today confirmed it is abandoning first home buyers who are struggling to get ahead, says Labour Finance spokesperson Barbara Edmonds. ...
The New Zealand public voted for a change in direction at the 2023 general election and that is exactly what this coalition government has been delivering in its first 100 days. There was an immediate focus on the economy, easing the cost of living, cracking down on law and order ...
The Government has left the health system as an afterthought, announcing half-baked targets at the last minute of their 100-day plan, says Labour Health spokesperson Ayesha Verrall. ...
Kiwis are still waiting for their promised cost of living support after 100 days of a National Government that is taking us backwards, Labour Leader Chris Hipkins said today. ...
The National Government has spent its first 100 days stopping, cutting and reversing. They have scrapped stuff for stuff for the sake of it, without putting up any solutions of their own – and it’s hardworking New Zealanders who will pay for it. ...
100 days of National taking NZ backwardsThe National Government has spent its first 100 days stopping, cutting and reversing. They have scrapped stuff for stuff for the sake of it, without putting up any solutions of their own – and it’s hardworking New Zealanders who will pay for it. ...
The Government must commit to funding free and healthy school lunches, as thousands of people sign the petition to keep them, education spokesperson Jan Tinetti says. ...
If the Government was serious about moving families into public housing, they would build more houses so there is actually somewhere for people to go. ...
The free and healthy school lunches programme feeds our kids, helps them to learn, and saves families money – but it is at risk under this Government, education spokesperson Jan Tinetti said. ...
The Government’s proposed changes to Firearms Prohibition Orders (FPO) add almost nothing new and are merely an attempt to distract from its plans to loosen gun laws, police spokesperson Ginny Andersen and justice spokesperson Dr Duncan Webb said. ...
The great Victorian era English politician Lord Macauley stood in the British House of Parliament and said, "The gallery in which the reporters sit has become a fourth estate of the realm".He understood and outlined even way back then, the significant role and influence media have in a democracy. ...
The government’s attack on Māori health this week is committing tangata-whenua to a premature death, says Te Pāti Māori. “The government have begun their onslaught on Māori health with the abolishment of the Māori Health Authority and smokefree laws in the same day” said health spokesperson and co-leader, Debbie Ngarewa-Packer. ...
Today marks a tragic milestone for New Zealanders as the Coalition Government side with big tobacco to repeal the Smokefree Environments and Regulated Products (Smoked Tobacco) Amendment Act 2022, Labour Leader Chris Hipkins and Labour Health spokesperson Ayesha Verrall said. ...
New Zealand’s social workers are qualified, experienced, and more representative of the communities they serve, Social Development and Employment Minister Louise Upston says. “I want to acknowledge and applaud New Zealand’s social workers for the hard work they do, providing invaluable support for our most vulnerable. “To coincide with World ...
Cabinet has agreed to a reduced road user charge (RUC) rate for plug-in hybrid electric vehicles (PHEVs), Transport Minister Simeon Brown says. Owners of PHEVs will be eligible for a reduced rate of $38 per 1,000km once all light electric vehicles (EVs) move into the RUC system from 1 April. ...
Minister of Agriculture and Trade, Todd McClay, says that today’s opening of Riverland Foods manufacturing plant in Christchurch is a great example of how trade access to overseas markets creates jobs in New Zealand. Speaking at the official opening of this state-of-the-art pet food factory the Minister noted that exports ...
Minister of Foreign Affairs Winston Peters met with Chinese Foreign Minister Wang Yi in Wellington today. “It was a pleasure to host Foreign Minister Wang Yi during his first official visit to New Zealand since 2017. Our discussions were wide-ranging and enabled engagement on many facets of New Zealand’s relationship with China, including trade, ...
Kāinga Ora – Homes & Communities has been instructed to end the Sustaining Tenancies Framework and take stronger measures against persistent antisocial behaviour by tenants, says Housing Minister Chris Bishop. “Earlier today Finance Minister Nicola Willis and I sent an interim Letter of Expectations to the Board of Kāinga Ora. ...
Tēna koutou katoa. Greetings everyone. Thank you to the Auckland Chamber of Commerce and the Honourable Simon Bridges for hosting this address today. I acknowledge the business leaders in this room, the leaders and governors, the employers, the entrepreneurs, the investors, and the wealth creators. The coalition Government shares your ...
Minister Winston Peters completed the final leg of his visit to South and South East Asia in Singapore today, where he focused on enhancing one of New Zealand’s indispensable strategic partnerships. “Singapore is our most important defence partner in South East Asia, our fourth-largest trading partner and a ...
Minister of Internal Affairs and Workplace Relations and Safety, Hon. Brooke van Velden, will travel to the Republic of Korea to represent New Zealand at the Third Summit for Democracy on 18 March. The summit, hosted by the Republic of Korea, was first convened by the United States in 2021, ...
ICNZ Speech 7 March 2024, Auckland Acknowledgements and opening Mōrena, ngā mihi nui. Ko Andrew Bayly aho, Nor Whanganui aho. Good morning, it’s a privilege to be here to open the ICNZ annual conference, thank you to Mark for the Mihi Whakatau My thanks to Tim Grafton for inviting me ...
Prime Minister Christopher Luxon and Lead Coordination Minister Judith Collins have expressed their deepest sympathy on the five-year anniversary of the Christchurch terror attacks. “March 15, 2019, was a day when families, communities and the country came together both in sorrow and solidarity,” Mr Luxon says. “Today we pay our respects to the 51 shuhada ...
Speech for Financial Advice NZ Conference 5 March 2024 Acknowledgements and opening Morena, Nga Mihi Nui. Ko Andrew Bayly aho, Nor Whanganui aho. Thanks Nate for your Mihi Whakatau Good morning. It’s a pleasure to formally open your conference this morning. What a lovely day in Wellington, What a great ...
Foreign Minister Winston Peters held discussions in Jakarta today about the future of relations between New Zealand and South East Asia’s most populous country. “We are in Jakarta so early in our new government’s term to reflect the huge importance we place on our relationship with Indonesia and South ...
Deputy Prime Minister and Minister of Foreign Affairs Winston Peters has announced that the Foreign Minister of China, Wang Yi, will visit New Zealand next week. “We look forward to re-engaging with Foreign Minister Wang Yi and discussing the full breadth of the bilateral relationship, which is one of New Zealand’s ...
Transport Minister Simeon Brown has today opened the new Auckland Rail Operations Centre, which will bring together KiwiRail, Auckland Transport, and Auckland One Rail to improve service reliability for Aucklanders. “The recent train disruptions in Auckland have highlighted how important it is KiwiRail and Auckland’s rail agencies work together to ...
The Government is proud to support the 10th edition of Crankworx Rotorua as the Crankworx World Tour returns to Rotorua from 16-24 March 2024, says Minister for Economic Development Melissa Lee. “Over the past 10 years as Crankworx Rotorua has grown, so too have the economic and social benefits that ...
Legislation implementing coalition Government tax commitments and addressing long-standing tax anomalies will be progressed in Parliament next week, Finance Minister Nicola Willis says. The legislation is contained in an Amendment Paper to the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Bill issued today. “The Amendment Paper represents ...
Associate Environment Minister Andrew Hoggard has today announced that the Government has agreed to suspend the requirement for councils to comply with the Significant Natural Areas (SNA) provisions of the National Policy Statement for Indigenous Biodiversity for three years, while it replaces the Resource Management Act (RMA).“As it stands, SNAs ...
Agriculture Minister Todd McClay has classified the drought conditions in the Marlborough, Tasman, and Nelson districts as a medium-scale adverse event, acknowledging the challenging conditions facing farmers and growers in the district. “Parts of Marlborough, Tasman, and Nelson districts are in the grip of an intense dry spell. I know ...
The Government is helping farmers eradicate the significant impact of facial eczema (FE) in pastoral animals, Agriculture Minister Todd McClay announced. “A $20 million partnership jointly funded by Beef + Lamb NZ, the Government, and the primary sector will save farmers an estimated NZD$332 million per year, and aims to ...
Foreign Minister Winston Peters has completed a successful visit to India, saying it was an important step in taking the relationship between the two countries to the next level. “We have laid a strong foundation for the Coalition Government’s priority of enhancing New Zealand-India relations to generate significant future benefit for both countries,” says Mr Peters, ...
Cabinet has agreed to provide $7 million to ensure the 2024 ski season can go ahead on the Whakapapa ski field in the central North Island but has told the operator Ruapehu Alpine Lifts it is the last financial support it will receive from taxpayers. Cabinet also agreed to provide ...
Health Minister Dr Shane Reti says the launch of a new mobile breast screening unit in Counties Manukau reinforces the coalition Government’s commitment to drive better cancer services for all New Zealanders. Speaking at the launch of the new mobile clinic, Dr Reti says it’s a great example of taking ...
Health Minister Dr Shane Reti says the launch of a new mobile breast screening unit in Counties Manukau reinforces the coalition Government’s commitment to drive better cancer services for all New Zealanders. Speaking at the launch of the new mobile clinic, Dr Reti says it’s a great example of taking ...
Unlocking economic growth and land for housing are critical elements of the Government’s plan for our transport network, and planned upgrades to State Highway 29 (SH29) near Tauriko will deliver strongly on those priorities, Transport Minister Simeon Brown says. “The SH29 upgrades near Tauriko will improve safety at the intersections ...
Unlocking economic growth and land for housing are critical elements of the Government’s plan for our transport network, and planned upgrades to State Highway 29 (SH29) near Tauriko will deliver strongly on those priorities, Transport Minister Simeon Brown says. “The SH29 upgrades near Tauriko will improve safety at the intersections ...
Lower fruit and vegetable prices are welcome news for New Zealanders who have been doing it tough at the supermarket, Finance Minister Nicola Willis says. Stats NZ reported today the price of fruit and vegetables has dropped 9.3 percent in the 12 months to February 2024. “Lower fruit and vege ...
Tēnā koutou katoa and greetings to you all. Chair, I am honoured to address the sixty-eighth session of the Commission on the Status of Women. I acknowledge the many crises impacting the rights of women and girls. Heightened global tensions, war, climate related and humanitarian disasters, and price inflation all ...
Tēnā koutou katoa and greetings to you all. Chair, I am honoured to address the 68th session of the Commission on the Status of Women. I acknowledge the many crises impacting the rights of women and girls. Heightened global tensions, war, climate related and humanitarian disasters, and price inflation all ...
The coalition Government is supporting farmers to enhance land management practices by investing $3.3 million in locally led catchment groups, Agriculture Minister Todd McClay announced. “Farmers and growers deliver significant prosperity for New Zealand and it’s vital their ongoing efforts to improve land management practices and water quality are supported,” ...
Good evening everyone and thank you for that lovely introduction. Thank you also to the Honourable Simon Bridges for the invitation to address your members. Since being sworn in, this coalition Government has hit the ground running with our 100-day plan, delivering the changes that New Zealanders expect of us. ...
Recommendations from the Climate Change Commission for New Zealand on the Emissions Trading Scheme (ETS) auction and unit limit settings for the next five years have been tabled in Parliament, Climate Change Minister Simon Watts says. “The Commission provides advice on the ETS annually. This is the third time the ...
The coalition Government is beginning its fight to lower building costs and reduce red tape by exempting minor building work from paying the building levy, says Building and Construction Minister Chris Penk. “Currently, any building project worth $20,444 including GST or more is subject to the building levy which is ...
Proposed changes to tax legislation to prevent the over-taxation of low-earning trusts are welcome, Finance Minister Nicola Willis says. The changes have been recommended by Parliament’s Finance and Expenditure Committee following consideration of submissions on the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Bill. “One of the ...
Assalaamu alaikum. السَّلَام عليكم In light of the holy month of Ramadan, I want to extend my warmest wishes to our Muslim community in New Zealand. Ramadan is a time for spiritual reflection, renewed devotion, perseverance, generosity, and forgiveness. It’s a time to strengthen our bonds and appreciate the diversity ...
Former Transport Minister and CEO of the Auckland Business Chamber Hon Simon Bridges has been appointed as the new Board Chair of the New Zealand Transport Agency (NZTA) for a three-year term, Transport Minister Simeon Brown announced today. “Simon brings extensive experience and knowledge in transport policy and governance to the role. He will ...
Good morning all, it is a pleasure to be here as Minister of Science, Innovation and Technology. It is fantastic to see how connected and collaborative the life science and biotechnology industry is here in New Zealand. I would like to thank BioTechNZ and NZTech for the invitation to address ...
Regional Development Minister Shane Jones says he is looking forward to the day when three key water projects in Northland are up and running, unlocking the full potential of land in the region. Mr Jones attended a community event at the site of the Otawere reservoir near Kerikeri on Friday. ...
Associate Finance Minister David Seymour has today announced that the Government has agreed to restore deductibility for mortgage interest on residential investment properties. “Help is on the way for landlords and renters alike. The Government’s restoration of interest deductibility will ease pressure on rents and simplify the tax code,” says ...
Sport and Recreation Minister Chris Bishop will travel to Switzerland today to attend an Executive Committee meeting and Symposium of the World Anti-Doping Agency (WADA). Mr Bishop will then travel on to London where he will attend a series of meetings in his capacity as Infrastructure Minister. “New Zealanders believe ...
This year’s Pacific Language Weeks celebrate regional unity and the contribution of Pacific communities to New Zealand culture, says Minister for Pacific Peoples Dr Shane Reti. Dr Reti announced dates for the 2024 Pacific Language Weeks during a visit to the Pasifika festival in Auckland today and says there’s so ...
Greater Wellington is inviting feedback on proposed changes to its Revenue and Financing Policy. The Revenue and Financing Policy covers the Council’s various sources of funding, and how the cost of services is shared across the region. This includes ...
Labour has conceded it could have done more to deal with disruptive state housing tenants while in government but says the current coalition is going too far. ...
The band has asked their record label to issue a cease and desist to stop the NZ First leader using their 1997 hit to support his ‘misguided political views’. “I get knocked down, but I get up again,” blared through the speakers on Sunday as Winston Peters took the stage ...
By Lydia Lewis, RNZ Pacific journalist Food rationing is underway in remote areas in Papua New Guinea’s Highlands following torrential rain and flash flooding. More than 20 people have been reported dead in Chimbu Province. In nearby Enga Province, the centre of last month’s massacre, a 15-year-old boy has been ...
Source: The Conversation (Au and NZ) – By Andrew Hughes, Lecturer, Research School of Management, Australian National University After months of debate and intrigue, the AFL’s 19th and newest team, the Tasmania Devils, finally launched its jumper, logo and colours in Devonport this week. The Devils will wear green, ...
Brannavan Gnanalingam reviews the debut novel by Saraid de Silva.One of the most baffling things for children who move to a new country is what their parents’ (or grandparents’) lives were like prior to moving – for kids in particular, they’re too busy trying to fit in in their ...
Source: The Conversation (Au and NZ) – By Stephen Gaunson, Associate Professor in Cinema Studies, RMIT University Narelle Portanier/Binge “If you don’t know who your mob are, you don’t know who you are,” Detective Andrea “Andie” Whitford (played by Leah Purcell) is told early into the new crime ...
Source: The Conversation (Au and NZ) – By Elise Klein, Associate professor, Australian National University It’s commonly accepted that women do the vast majority of caregiving in Australian society. But less appreciated is that Indigenous women do larger amounts of unpaid care than any other group. Working with the Aboriginal ...
Source: The Conversation (Au and NZ) – By Adrian Beaumont, Election Analyst (Psephologist) at The Conversation; and Honorary Associate, School of Mathematics and Statistics, The University of Melbourne Joe Biden and Donald Trump have both secured their parties’ nominations for the November 5 United States general election by winning a ...
Comment: There has been a striking contrast in trans-Tasman interest about Chinese foreign minister Wang Yi’s visit to New Zealand and Australia. While the Australian press has been full of articles about the visit – including his curious decision to meet with former prime minister and China booster Paul Keating ...
After years of pressuring banks and other institutions to stop investing in fossil fuels, climate campaigners are making some progress. So how does divestment work?For years, climate activists have been pushing banks and other big institutions to divest from fossil fuels. New research from climate advocacy group 350 Aotearoa ...
For Boba, Ethan and Ashley, K-pop is a place to belong, a way to express themselves, and a bridge to connect with others. The three young Polynesians are part of a K-pop fan community in Tāmaki Makaurau. It’s one of many that have sprung up worldwide as K-pop has gone ...
For Boba, Ethan and Ashley, K-pop is a place to belong, a way to express themselves, and a bridge to connect with others. This one-off documentary presents three intimate portraits of young Polynesians who are pulled into a Korean cultural phenomenon. K-POLYS is directed by Litia Tuiburelevu, Produced by Hex ...
There’s ample evidence demonstrating free school lunch programmes provide wide benefits across schools, households and communities according to public health researchers. ACT Minister David Seymour wants to reduce the spending on Aotearoa New Zealand’s ...
By Wata Shaw in Suva Fiji is facing an exodus of Fijians as many are leaving for overseas seeking employment and education and others are migrating, says Opposition MP Viliame Naupoto. Speaking in Parliament, he said: “His Excellency’s speech (Ratu Wiliame Katonivere) comes after a little over one year of ...
The Taxpayers’ Union is welcoming comments from Christopher Luxon this morning recommitting to ‘no new taxes’ as part of Budget 2024. “Mr Luxon’s refusal at the Post-Cabinet press conference yesterday to repeat the ‘no new taxes’ promise ...
SAFE is urgently calling on the Environment Committee to reject the Government’s Fast-Track Approvals Bill, and is urging New Zealanders to rally behind the call. The proposed Bill, currently under consideration with the Environment select committee, ...
Teammates who spend all their time picking fights with spectators are only helpful for the other team, writes Madeleine Chapman. Anyone who has ever played a team sport competitively, particularly as a child and particularly, for some reason, basketball, will know that there’s a lot of politics involved. While there ...
The long-running Wellington music festival is too focused on the Jim Beam-ness and not enough on the Homegrown-ness.There is something about Homegrown that’s difficult to place. A barely perceptible-ness. Like feeling a ghost is watching you from the corner of the room but when you look, there’s nothing there. ...
The latest Ipsos New Zealand Issues Monitor reveals that fewer New Zealanders believe crime / law and order is one of the top issues facing our country. In 2018, Ipsos New Zealand started tracking the key issues facing New Zealand. In this wave ...
Source: The Conversation (Au and NZ) – By Kate Griffiths, Deputy Program Director, Budgets and Government, Grattan Institute Australia’s political donations rules are woefully inadequate, but donations reform is finally on the agenda. The federal government has signalled its interest in reform and will soon begin briefing MPs on its ...
Source: The Conversation (Au and NZ) – By Mark Patrick Taylor, Chief Environmental Scientist, EPA Victoria; Honorary Professor, School of Natural Sciences, Macquarie University Naiyana Somchitkaeo/Shutterstock A recent study published in the prestigious New England Journal of Medicine has linked microplastics with risk to human health. The study ...
Source: The Conversation (Au and NZ) – By Albert Van Dijk, Professor, Water and Landscape Dynamics, Fenner School of Environment & Society, Australian National University Global climate records were shattered in 2023, from air and sea temperatures to sea-level rise and sea-ice extent. Scores of countries recorded their hottest year ...
As part of our series exploring how New Zealanders live and our relationship with money, a teacher explains why he and his partner are in frugal mode – and how they’re making it work. Gender: Male Age: 35Ethnicity: Pākehā Role: I am an intermediate school teacher and my partner is ...
Source: The Conversation (Au and NZ) – By Sarah Bendall, Senior Lecturer, Institute for Humanities and Social Sciences, Australian Catholic University Binge Mary & George, the new British television drama series, depicts the real-life story of Mary Villiers and her son George, and their social climbing at the ...
Source: The Conversation (Au and NZ) – By Jason Nassios, Associate Professor, Centre of Policy Studies, Victoria University This article is part of The Conversation’s series examining the housing crisis. Read the other articles in the series here. Australian state and federal governments spend money in many ways to ...
The finance minister is denying that there’s a $5.6b shortfall in paying for the government’s campaign promises, including tax cuts. At his post-cabinet press conference yesterday, the PM refused to rule out new taxes to pay for the cuts, writes Anna Rawhiti-Connell in this excerpt from The Bulletin, The Spinoff’s ...
Kāinga Ora tenants abused by their neighbours are doubting the government's crackdown on disruptive tenants will make a difference on their behaviour. ...
Kāinga Ora is New Zealand’s biggest residential landlord, housing more than 180,000 vulnerable people in more than 67,000 properties. Yesterday the government announced a crackdown on its tenants who fall behind on rent. One longtime Kāinga Ora tenant shares her experience.For 18 years I lived in a 1960s standalone ...
Why does this myth persist, and what’s the real reason our skin is suffering?It’s one of the biggest international grievances New Zealanders hold, up there with the sinking of the Rainbow Warrior and 1981’s underarm incident. We’re quick to tell international travellers that the world’s pollution led to the ...
SailGP’s races feature in-your-face action, with agile, hydro-foiling catamarans tacking and jibing for the title over several days. However, public comments ahead of the global series’ return to New Zealand have left this past year’s controversy in the shadows, as a key appointment attracts criticism from dolphin advocates. A year ...
Opinion: We are fast approaching a fundamental change in prisons. As the number of people on custodial remand looks set to overtake the number of sentenced prisoners, the main function of prisons in New Zealand may become incarcerating un-sentenced people who may not be guilty of offending. We have already ...
A huge seven months lies in store for the White Ferns, beginning this week with the visit of England and culminating with the T20 World Cup in Bangladesh in September and October. Starting on Tuesday in Dunedin, the world ranked No. 2 visitors will play five T20s and three ODIs, ...
Opinion: In a move that has shocked road safety advocates across the country, the new Minister of Transport, Simeon Brown, is poised to abandon the previous government’s speed limit reduction policy, particularly around schools. Even more alarmingly, he wants school speed limits to be variable rather than full-time, arguing ...
Auckland Council is opposing a fast-track development backed by Sir John Kirwan and Spark NZ, because it doesn’t meet stringent new climate adaptation requirements The post Surf-data centre faces new 3.8C climate warming rules appeared first on Newsroom. ...
When the Criminal Proceeds (Recovery) Act was introduced in 2009 it was firmly targeted at gangs and drugs. The legislation means police no longer need a conviction to seize assets that criminals can’t prove were paid for legitimately, as long as their alleged offences are punishable by more than a ...
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Why building more houses will not fix prices – economist Brian Easton. https://www.pundit.co.nz/content/the-sources-of-house-price-inflation
I'm inclined to agree. Shortages are simply an intractable backdrop against which interest, and monetary policy generally, serve to exacerbate the problems that shortages cause.
Why must house prices be fixed?
because people need to be able to afford to live in them.
If you had answered:
Because people need to be able to afford to own them, I would have agreed.
House price fixing concerns ownership. It certainly has secondary effects, but mostly, the price of the house is the cost of owning it.
Easton is making some massive correlations, but no useful causes.
but mostly, the price of the house is the cost of owning it.
As I've said a few times before; if you think the rent is high – try owning it.
owning and renting are two different things. And renting to use for a while should never cost more then owning does, and currently renters pay the mortgage, the interest, and what ever else the owner wants out of the property.
btw, my mortgage that i pay currently is 200$ per week.
you can't even rent a dog kennel for that amount anywhere in NZ.
I reckon, my mortgage is $210 a week, if I rented the same house it would be double, and with no return. Free insulation, cheap rates, I could also halve that if I got a flatmate (which I may do once my kids leave). I don't take this for granted, I realise I'm one of the lucky few.
+1
ditto here. And the bank don't come to inspect every three month.
Have to strongly disagree with you there RL, we are in our first own house (nearly freehold) after renting for 30+years the last 15 of those with three children, owning your own home has for us probably been pretty similar, maybe a bit more expensive but not a lot, and especially when you take into account all the benefits…the main one is not having to deal with Ma&Pa landlords they are generally like spawns from hell, they have made renting a fucking nightmare, it is awful, and no country that has the resources NZ has should let it’s citizens endure that type of life…welcome to free market liberalism I guess, markets operating just as they should…Thanks David Lange.
Gone are the old days when you would rent a house and live in it for years and hardly be bothered as long as you paid your rent and maintained the property…our last ten years of renting were a disaster (with one exception) as far as landlords went…even if owning a home was/is more expensive, how can you put a price on the endless stress and worry and more importantly the hundred of subtle ways it damages and undermines children having little to no long term home security.
Nope.
Owning a home provides security that no amount of rental law cannot.
The trouble is that house prices do not reflect the cost of owning a home. They reflect the cost of the expected medium-term capital gains (post bright-line). It wasn't a problem when they reflected the expected gains upon retirement and downsizing, but now who honestly expects to be in that house for thirty years? Or do they expect to flip it in ten years or so?
Agree with the security bit. I've seen the pro's and cons of home ownership debated at length in New Zealand literature. They're pretty even.
I'd like to see some proper policy work done on the effects of Andrew Little's current extension of the Bright Line test, and the likeley extension to 10 coming up. Doesn't seem to have made much difference to house prices at all – so if it's not working as intended it should be removed.
Perhaps that is a point of the Easton paper – no one issue will solve the housing crisis. After all the current presumption of intent is flawed, but reversing it would mean that gains up to the time legislation takes effect are likely to remain tax free, so most people would not pay much tax for many years; but owners of rental properties may hold for longer to defer the payment. Requiring a bigger amount of real (not borrowed) equity may be possible , but that would be easier if we increased wages so that the government does not need social welfare or Working for Families to enable new home buyers to afford to live with a family.
If he had started with the 1% homeless crisis – which is about as bad as it gets in the OECD, I would have agreed with him. He didn't.
Pretty even for people who can afford to choose their housing tenure type.
For people at the mercy of a speculative landlord, not so much.
I have a good landlord. Doesn't put the rent up every week etc. . But a batten holder wore out 8 months ago – and it only got fixed last month – no bedroom light all winter. Rentiers are oppressors, even the the good ones.
And of course the inability of contemporary NZers to afford their own homes is the final disproof of neoliberalism. It was supposed to make us more prosperous if you remember – on the contrary, it has impoverished us. Voters, looking at neoliberals think: "Were you really that stupid that you swallowed the hype in spite of our warnings? Or were you just corrupt?"
Because their speculative growth is entrenching even more deeply NZ's trans-generational class system.
Even if a full-time worker can rustle up a 10-20% deposit, I strongly suspect most NZers probably wouldn't earn enough to service the mortgage on a median-priced house.
For me, it was break-even with no margin for error five years ago. Now? It's a joke. And I have a good job, no dependants, and a retirement fund, but houses are more than twice the price. Almost literally – I looked up that house recently. It's gone from $230k to $450k. Has any actual worker's salary doubled in five years?
Absolutely the personal stories are valid.
I'm kinda waiting for evidence of the K-shaped economy to hit.
And it's indisputable that salaries haven't kept up with house prices.
But if Easton had tracked house prices, salaries, and national home ownership, he would have seen no collapse in average ownership at all. Even as prices skyrocketed.
In fact we're still better than nearly all other developed countries for home ownership.
Easton calls it speculation. 65% of us call it risk management.
Might pay to check the stats before making wild claims
https://www.stats.govt.nz/reports/housing-in-aotearoa-2020#:~:text=At%20the%20time%20of%20the%202018%20Census%2C%20New%20Zealand's%20homeownership,to%2064.5%20percent%20of%20households.
and falling.
Easton’s analysis is sound and he is not alone with the conclusions….it has been well canvassed and the only major dispute is around to what degree other factors impact.
Oh don't worry I checked. Which is why I stated 65% home ownership.
And I also checked on the international benchmarks for developed countries.
It's barely moved downward since the last time they measured. You can check.
You just have to read beyond the hysteria.
stating 65% mean sweet FA unless you also state from where it came and what the trend is…as you well know.
and I too have checked…"and falling"
"Home Ownership Rate in New Zealand is expected to reach 64.29 percent by the end of 2020, according to Trading Economics global macro models and analysts expectations."
If youre not already you should be a politician
The home owner percentage has barely moved since 2013.
In the site you cite, go into the full statistical report, fig 15 p 28.
https://www.stats.govt.nz/reports/housing-in-aotearoa-2020
Maybe 2021 changes all of that, looking forward to the evidence.
You will get your evidence (sadly)…
"In 1991, 61% of people aged 25-29 owned their own home, but by 2018 this had dropped to 44%.
Ownership rates have also fallen for people in their 30s, dropping from 79% in 1991 to 59% in 2018."
https://www.interest.co.nz/property/108312/home-ownership-levels-are-continuing-decline-especially-younger-people
figures 17 -20 from the report if I recall correctly
And the explanation is glaringly obvious, the inflated prices relative to income
And as outlined below there is more to it than just economics – it's the relentlessly increasing age of first marriage that also means that 20-29 age group just aren't interested in buying homes.
Another factor is the rise in divorce rates – usually one partner will finish up renting for a period afterward.
This doesn't discount the obvious affordability issue in play – but it does suggest there are often more factors involved than the headlines make out.
Of course, unmarried people dont buy houses….how could i miss that.
And the 20 -29 year olds arnt interested in buying homes….because they increasingly cant afford them….the same applies to those in their 30s…and the ones that eventually can take considerably longer to raise the increasing deposits.
Those decreased ownership rates in the cohorts coming through are going to have a major impact on the total ownership rates as the proportionately higher ownership rate cohort approaching 70 move into care/die
I would argue one can own multiple houses but only one is ever your home but that's an aside.
To do a real comparison a similar breakdown as above is needed for the historical data.
https://www.newstalkzb.co.nz/news/business/mum-and-dad-landlords-own-more-than-a-third-of-property/
And that's households (where homeowners are a member of the household). Only half of individuals own the home they live in, directly or indirectly (same link, p34).
Additionally, although $value of lending to first home buyers peaked last year at 20%, the proportion of actual borrowers at the time was 12%.
The longer this situation goes on, the more nailed in the inequity will be.
"no collapse in average ownership at all"
Are you serious?
65% is barely moved from the last time they measured.
You sound like a CC denialist – "oooh look, this part of the graph is flat!"
A 13% drop in fact.
Go into the full statistical report, fig 15 p 28.
https://www.stats.govt.nz/reports/housing-in-aotearoa-2020
Maybe 2021 changes all of that, looking forward to the evidence.
Maybe 2021 will be the start of an ice age.
Heck of a change within a generation, though
If by "generation" you mean the peak in the early 1990s, I'd agree.
If by "generation" you mean back to the 1960s when everything about New Zealand was supposed to be our egalitarian apogee, no not really it's the same.
You not only can't read a graph it seems you can't even read:
"Homeownership at lowest rate since the 1950s" – the heading of the graph you link to.
I thought "generation" generally referred to thirty years or so?
But then if 68.9% is "the same" as 64.5%, I suspect we need to find a specific dictionary to agree upon for a common vernacular.
so not just 1950s but early 1950s.
Yup – the demographics don't lie. Before Rogergnomics the median age at marriage was around 23. After it was 33. Poverty. The social science folk can give the lie to every pretense of good governance.
Not everything is primarily caused by rogernomics. Reducing the social expectation for marriage wasn't just economic.
Keep telling yourself that – the old prof that ranted it at me would not be persuaded. He had plenty more too.
Data doesn't seem to match his claim.
It definitely moved a couple of years in the 1980s, but nowhere near ten years and the median age is still only around 31.
The data here suggests that the more developed a nation is, the faster the rate at which the age of 'first marriage' has been increasing.
The best explanation does not appear to be 'poverty'.
That would be of course because the data aren't set up to capture it.
Measure GDP alone and you could imagine Rogergnomics as something other than a brutal failure. But you would be letting data trickle through your fingers – politically convenient no doubt.
The first world nations have been lying to themselves for a good while now – with falling "labour force participation" instead of unemployment and so on. The lies are getting pretty thick. If everything were apples home ownership wouldn't have had to fall, nor would child (the only politically acceptable poverty) be so high.
All those suicides blamed on mental health too – same trick the Soviets resorted to. Our governors have no standards at all.
All those different countries – and none of them 'properly' capturing age of first marriage to your satisfaction.
Amazing.
Hardly – I'm not trying to extend my assertion around the world – it was you that had to reach beyond NZ to grasp at the straw that because other countries experience lesser forms of the same graphic failure, the brutal sham that was Rogergnomics was somehow excusable.
We all understand the appeal to the vanity of policy makers of a ‘great leap forward’, and I use Mao’s term deliberately, because Rogergnomics was every bit as hubris-laden, destructive, misguided, and undemocratic.
Typical debating fail – jumping to unjustified conclusions. Nowhere have I attempted to excuse neo-liberalism. Indeed if you'd been paying attention I have explicitly written a post on exactly why I regard it as 'out of bounds'.
So nowhere have I attempted to excuse Rogernomics – that’s a just a figment of your imagination. But to attribute everything bad that ever happened in this country to this singular cause is another kind of fail.
The inability to confront and address mistakes is typical of dysfunctional institutions like corporations or corrupted governments.
It isn't the price of the house that is relevant to the person buying it. It is the cost of servicing the mortgage. Here are a few graphs on housing costs. Between 2008 and 2019 the average household income in Auckland went up by about 50%. Thar was from $61.4k to $95.2k. The average weekly payment for people who had a mortgage only went up by about 20%. That was from $384/week to $460/week
https://figure.nz/chart/0Z1fITz5qe80b2tD-szOL5Pza2PB8N51f
When you look at the cost of buying a home the most important factor is going to be the mortgage interest rate. First mortgage rates in 2008 were about 8%. They are now, if the ASB quote in front of me is typical 2.29% for a 1 year fixed rate.
https://teara.govt.nz/files/g-23100-data_0.txt
https://www.goodreturns.co.nz/mortgage-rates.html
The second most important factor is going to be the deposit. If house prices go up by 17%, as they typically did last year the deposit will do the same and that is really going to hurt the first home buyer.
A note. This is not an area on Economics in which I have much knowledge or experience so all the numbers I have reference may be irrelevant. At a first glance though it wouldn't appear that people are much affected by the price rises while interest rates are dropping to the point that in real terms the money is free to borrow.
The commentary in the Stats NZ work on this supports this cost-of-mortgage issue. But it fails the obvious corollary: as prices go up, so too does the potential equity for deposits from Bank Of Mum And Dad (especially when they downsize, or die).
As a sort of comparison.
Bought house in 1980 with 30% deposit Interest was abt 30% of salary then
Now a 60% loan would cost about 25% of the same level of salary.
Having said that the amount of deposit today would be about 300k
Even without interest, the average borrowing for a first home loan is almost half a mil.
That ain't chump change to pay back weekly, by itself.
People buying their first homes need to be doing damned well.
Unless you can figure out some way of paying the same price while not borrowing so much, the two figures are pretty good substitutes for each other when it comes to looking at why people can't afford to own their own hovel.
I am not disputing that it isn't easy. Mind you I can remember when my mortgage rate was 13%. That was back in the 70's and I knew people who were paying more.
However I had a quick look at payments using the BNZ calculator.
On an $800k house with a 20% deposit and a 30 year term at 2.29% you pay $1,132,fortnight. On a property at half the price, and half the deposit for the same 30 years loan you would pay exactly the same amount if you were paying 8.5% which would have been quite likely back in 2008. Half the amount borrowed but the same $1,132 at the much higher interest rate.
On the monthly income for a household at the average number of $$95.2k/year you would be paying 31% of your income on your mortgage.
coolcool.
Where did the first home buyer get the extra $80k for the 20% deposit in 2020? Their income only went up by less than 50%. And their rent payments are through the roof, as well, so their savings might struggle to hit a wage inflation equivalent.
You did notice I said, in my first comment.
"The second most important factor is going to be the deposit. If house prices go up by 17%, as they typically did last year the deposit will do the same and that is really going to hurt the first home buyer."
I don't know. I haven't been in the market for a mortgage for 30 years. We did save our deposit for our first house in about 18 months though by living on about half of one of our two incomes. The total furniture we had in a one bedroom flat cost us about $100 dollars. I will admit we had one 10 year old car though. Entertainment was limited to barbecues with friends or going to the beach.
These days families are going to have to start thinking intergenerationally – as the Indians and Chinese are accustomed to doing.
Folks know which generation fucked it up.
Well the Chinese especially tend to regard their elders with considerable respect – and not so much of the 'ok boomer'.
The point is that if you want to be prosperous it takes more than just a good job – you need to plan ahead and use each generation's capacities and abilities for the benefit of the entire family.
And of course rising divorce rates over the period in question also have their impact – nothing destroys family wealth over time quite like it.
Only in a society with entrenched inequity and social mobility that does not reflect individual merit.
It's not a binary choice. Yes merit and mobility are valued highly in the West – but a well ordered and stable family over multiple generations will always have an advantage.
Not in a meritocracy.
Why not? And how would you prevent family success from benefiting the whole family? Are parents to be prohibited from helping their children if they can?
Insisting on nothing but a pure meritocracy seems an absolutist view to me.
In a meritocracy, it doesn't matter if parents help their kids or not. That's the point.
But my objection to the current situation isn't that NZ isn't a perfect meritocracy. My objection is that we're becoming less of a meritocracy. You can cloak it in "respect for elders" and "family stability" all you want, it's the simple greed of a previous generation turning into a dynastic problem.
I've said it before and I'll say it again: his solutions to the problems he described were bunk, but Marx was a spot-on critic of capitalism and feudalism. They're just two sides of the same coin. The Duke's ancestor hit peasants over the head with clubs, the magnate's ancestor paid other people to hit workers over the head with clubs.
In a meritocracy, it doesn't matter if parents help their kids or not.
Tell that to the Chinese or Indians busy building lots of intergenerational wealth in this country – property, businesses, you name it.
The simple reality is that a stable family is one of the best predictors of good social outcomes across the board.
Correction: the one of the biggest predictors of future wealth is parental wealth, and it's getting worse.
BTW, not sure where you're getting your data on household wealth by ethnicity?
So today to save a $160k deposit in 18 months from one income, that would be an income of $100k a year.
Basically, the govt needs to either build shitloads of affordable homes or build shitloads of state houses and have say a HNZ 5% stock turnover for modernisation in addition to a general increase in stock levels, sold through a rent to own equity deal.
Because this is a formalisation of an intergenerational class system. Not the one we've been ignoring and pretending doesn't exist, an actual regression back towards feudalism. Not all the way back, but a definite step back.
"So today to save a $160k deposit in 18 months from one income".
A minor correction but it wasn't one income. It was one and a half incomes. We lived on one quarter of our after tax income and saved the rest.
That was quite common at the time. We were, like all our friends, trying very hard to get to own our own home. We were also willing to live a great deal further out from the CDB than many people seem to be willing to do today and lots of people did not have a car.
I found it quite hilarious a couple of years ago to read about a 30 something woman who was complaining that she couldn't afford a first house. Her idea of a first house was 4 bedrooms and 2 bathrooms in Roseneath, Mt Vic or Mt Cook. There was no way she was going out to the distant suburb of Hataitai. If you aren't a Wellingtonian look it up. It would be comparable to refusing to live way out in the wilds of Epsom I suppose.
So to do it today, that's still two people in the same household earning well above the median income.
You forgot to bring up coffee and avocado smash.
This article is in some ways quite good on looking separately at both sides of the housing market. Though I didn't really like Eastons alternative of demand backed by offshore financing, as this doesn't either fit the facts.
First the banking system doesn't lend out existing deposits but instead creates additional deposits when extending loans. Second the fact that a trade deficit was occuring simultaneously to an expansion in borrowing will mean an expansion in overseas ownership domestically, but a lot of the overseas trades are not in $NZ so in what sense is that supporting lending into a housing market almost exclusively trading in $NZ. This explanation is equally likely to misslead as the explanation it replaces.
The bank may create credit but they are still required to hold reserves and the size of those reserves determines how much credit they can create…..and a glut of international liquidity looking for a safe home and return knows which side their bread is buttered on.
Your talking about 'capital' not reserves there (especially in the context of overseas funding), and capital is still not a constraint on lending. It might place limits on the interest rates accessible in some cases.
But the simpler explanation is just that a lot of those recent house sellers at the time also took overseas trips.
Wrong …the amount of credit a bank can create is directly linked to their reserves and that capital can (and does) come from offshore…the interest rates are a consequence of the ability to service the level of debt (credit).
Still its, not a constraint on lending.
Of course it is…unless the bank wishes to breach its conditions of licence
The country didn't instigate a housing bubble based on money it borrowed overseas. That would be a very missleading claim, and I expect you would not claim it happened either. Yes, the implication is that the country can manufacture as much capital as it needs to facilitate lending for itself.
the glut of money sloshing around the world looks for a home and preferably a safe one with good access…..where better than backing the banks of open economies, ones with a political class wedded to the idea of free capital flows. The Banks use that increased reserve capacity to grow their loan books and thereby increase their profits, everybody wins,,,except for the poor mugs being milked for every available penny when they try and enter the housing market,
And the Gov is trapped because if they seriously try to do anything about housing affordability that capital in the banks reserves will find a new home …and probably not in NZ.
Capital outflow equals negative growth not to mention all the associated problems
I have no idea what this is going to achieve, but it's hard to fault the ambition. Pope Francis has just
https://www.prnewswire.com/news-releases/the-council-for-inclusive-capitalism-with-the-vatican-a-new-alliance-of-global-business-leaders-launches-today-301187931.html
launched a partnership between the Vatican and some of the world’s largest companies, nonprofits and government agencies to reform capitalism.
The Council for Inclusive Capitalism with the Vatican is led by Guardians for Inclusive Capitalism, a group of officials representing such entities as the Bank of America, BP, Dupont, the Ford Foundation, Mastercard, Merck, the Rockefeller Foundation, Salesforce, Visa and the State of California.
Under the Pope’s guidance, these “guardians” aim to “reform capitalism into a powerful force for the good of humanity” and create a “more inclusive, sustainable and trusted form of capitalism.”
https://www.inclusivecapitalism.com/
Their mission is "to harness the private sector to create a more inclusive, sustainable and trusted economic system."
Just occasionally I wish Bruce Jesson and Christopher Hitchings were still alive to comment.
It's too weird for me to even try to comment yet.
Should have just called it FaustianPact.com
That's quite remarkable. From your second link:
What a lot of people here have missed is that many boardrooms across the US and EU have been quietly working toward all kinds of social and economic reforms. But because it's 'fucking capitalists' it never gets onto our radar.
It's a theme I'd have picked up on more – but every time I type the word 'capitalist' a kind of red mist descends. eg McF predictably above.
It's also not unreasonable to look at the Catholic Church's own historical approach to wealth management and go what the actual fuck.
Well history is tilting in ways never encountered before.
Basically we've tried three major economic variants – capitalism, communism and fascism – and of the three only the first has shown the necessary evolutionary capacity to adapt to the new world we're heading into.
It's all about the demographics. Young adults are consumers of goods and services, mid-aged adults are investors in capital and services, and retired adults are consumers of capital. At least in very broad terms.
For the first time in all of our history our populations are now quite rapidly becoming dominated by late adult to retired aged populations. Fully half of all Boomers will retire in 2022. Suddenly growth is no longer possible or even desirable. And none of the economic systems we've ever attempted have ever been exposed to this scenario – but I'd put my bet on capitalism being the one most likely to evolve to meet the challenge.
Could you perhaps explain the differences between these 'economic variants'? Particularly the economic differences between capitalism and fascism.
Thanks in advance.
The other day I found this amazing website …
Was Henry Ford fascist or capitalist? Or is it not an "or"?
He had a pretty good idea of the solution.https://www.financialexpress.com/auto/car-news/forget-electric-cars-henry-fords-cannabis-car-was-made-from-hemp-10xstronger-than-steel-100-green/1384733/ . I think he offered another way, one that may not have had us in our present situation.
I was asking you RL as you are perhaps the only person I've ever heard claim fascism is an economic system.
So please back up your statement with some facts or you're the one who needs that site you just found.
I see China are trying to join the TPP as is the UK. Does this mean that a large state actor like China or the UK could sue our government if we don't toe their line with regard to commercial companies. Given that a lot of chinese commercial investment seems to have some sort of state back up how exposed does this leave us?
I'm pretty confused but is it time that the existing TPP members rolled back a lot of the not actual trading and tariffs parts of the agreement so that the grouping is less attractive to major players. It all seems to reduce our ability both domestically and internationally? Should a trade agreement affect domestic politics that much?
https://www.interest.co.nz/news/109042/big-japanese-quake-china-targets-nz-over-tpp-application-us-sentiment-waivers-canada
https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-A-new-Anglo-Japanese-alliance-threatens-China-s-TPP-plans
Dorklander here. Oh the evils of a lockdown. No warning and the bottle store closes. Have to sundown on a 15 year Chivas Regal rather than my ho hum teachers
NZ hellhole.
For the radio listeners among us.
This link is a big bad rabbit hole to follow, so don't say you weren't warned.
Essentially every little green dot is a radio station. Have fun.
http://radio.garden/
lol, fair warning!
Thanks Sabine – amazing.
Watercare does Watercare, again.
https://www.nzherald.co.nz/nz/contractors-accidentally-pour-2000-tonnes-of-cement-like-grout-into-auckland-water-main/SURUDLSTLBJU7BDNL4XWMEY52U/