However, [epidemiologist Professor Nick] Wilson reiterated the Government should take this opportunity to review the alert levels, adding additional steps at 2.5 and 1.5 to create a “more nuanced” system.
I disagree. The advantage of the current system is its simplicity and familiarity. In addition, regional rather than blanket changes in alert levels allows for a more focussed use of the currently available tools.
yes, whenever I see a headline like " expert claims this" I think of a lazy journo, ringing up someone, looking for an easy column filler. If you got all of the "experts', and all of the economists in one room, apart from hot air, I dont think anything else useful would come out.
"As soon as this pandemic is over and burgeoning Government debt is under control we’ll get moving again. Ardern and Robertson’s hands are tight tied."
I hope you are right and the vaccines (once administered) make a huge difference. But I have doubts that they will. Will we be able to travel overseas once vaccinated without isolating when returning? Hopefully the answer will be yes once enough of the population has had the vaccine. And will we be able to have tourists again (if they are vaccinated).
I'm pretty sure Clark meant to put benefits up too – but somehow she never got around to it. While the "hands are tied" is considered an excuse, it will never happen.
It is a particularly gnarly issue for this Government but luckily they get strong support and in a self-reinforcing self-interested way.
S&P cautioned that the country’s financial system remained susceptible to a sharp correction in property prices, but indicated it didn’t see that on the horizon.
It was, but even then it was easy to see that they either just don't get it, or actually believe that helping beneficiaries stops them from working or something (eg the lack of an upfront cash payment so beneficiaries could buy hand sanitiser and make plans at the start of the pandemic and going into lock down). Or being really cynical, that was an election year move.
Ardern and Roberston have a real problem here. Unless they do the big transformation (something like the GP policy, or using the WEAG report as a road map, and it has to include non-neolib responses to the housing crisis), they will continue to tinker and never get ahead of the problem.
Tinkering will mean many people will end up hating Labour. Not their core vote, but it will play out in the MSM and SM in the third term, and this is how we end up with Luxon as PM.
Right-leaning voters do not want livable income support levels. A third-way govt like this wants to keep those votes. They are counting on left-leaning voters having nowhere else to go.
Agree, although my understanding is that the government favours social insurance (or something like that) as the leading option, so they aren't doing nothing.
Grant was muttering about some insurance type scheme. Personally I wondered how anyone would be able to afford it particularly the younger crowd.
Even the better off pay income tax of 20%- 30%, GST of 15%, Student loan repayments 12% , ACC about 2%, Kiwisaver if they want a home 3% or more, all of which adds up to about 62% of their wages. Not much room to add anything to that.
Plus these schemes are catnip to the RW who at some future time would expand them and let the welfare net go.
Benefit raises would be good but I'm a lot more in favour of the lower paid getting better wages than continuing to subsidise employers. Wage and salary earners need a bigger share of the GDP plus spreading it more equally.
Also wonder if it’s time to go back to the old days of flat child benefits.
Income support levels have been at least 20% too low since Richardson's 'Motherfucker of all Budgets'.
The NZ economy is going very well post-COVID (for most people – not all) and move to restore them back to a 'liveable' level in this year's Budget. The opportunity and timing has never been better.
Ideally I'd love to see some form of GMI as a baby step towards reforming the entire welfare system.
I'd like to see a New Zealand economy that doesn't depend on public infrastructure to prop up our entire economy for years on end. It's kinda useful, kinda good at soaking up unemployment, but not going to to drive wages up higher enough to pull the working poor out of poverty.
I'd like to see an unemployment rate with the number 3 in front of it, and Maori and Pasifika unemployment down from 10 to a number 5 in front of it.
I heard that Robertson's main economic advisor for several years just gave up and left and went to the CTU.
We are far, far too dependent on government to be a high functioning economy.
"I'd like to see an unemployment rate with the number 3 in front of it, and Maori and Pasifika unemployment down from 10 to a number 5 in front of it."
Write to the stats Minister then….the numbers are largely made up anyway
Totally agree. Another way of putting it is that because so much of our economy effectively 'farms for capital gain rather than cashflow' – too much equity 'sticks' in places where it's not very productive. And as a result we finish up relying the govt (one way or another) to keep money flowing rather than private enterprise.
Which in turn means that opportunities to invest outside of property have been very thin indeed. It's become a very 'unvirtuous' feedback loop.
I keep coming back to the tranche of tax reforms that TOP were proposing, especially their Comprehensive Capital Tax, an intelligently designed measure that was specifically designed to address this exact issue. You don't have to like the party to look at the concept and think about pinching it.
I can easily see by the end of March New Zealand will have the Reserve Bank requiring an LTV ratio of 40% deposit to buy a flat, and also Governmetn making the Bright Line Test extend to 10 years for properties bought after Budget this year, and also Government proposing something tough like floating a maximum number of rental properties able to be owned by a single person or company or Trust that doesn't have charitable status, and also some stronger social or 'sweat' equity moves for getting people with poor credit records into home ownership.
And I would not put it past the major banks to go: we expect you to get to 60% equity within a year to bring down our Bad Debt risk which the Reserve Bank tracks. I think the major banks can read.
I think this Government in the mood to act.
After the May budget, those who are on a near-50% debt-to-equity ratio might start to divest a few more.
If they are leveraged that much that they’d do better to sell now before any announcement and get out with the handsome capital gain provided by the FOMO…it pays to panic first.
Stopping business that have owning property as part of the setup from running in interest only would be a good start ,many of the empire builders in farming never plan to pay principal so can pay over the odds for property,.
If they had to pay 3% principle every year then they could only purchase land at a cost that allows 5,or 6% profit each year.
On the contrary to your characterisation of TOPs politics, I disagree with their policy. The problem is their over reliance on economic theoretical ideas which have a poor track record in practice. On the UBI front this has lead to positions (from Morgan) where beneficiaries are thrown into an insufficient UBI regime without necessary topups based on their actual circumstances.
On the CCT proposal the basic assumption is that property and other investors are 'rational' (meaning they know the actual odds of their investments succeeding and invest accordingly, as if playing roulette). If they are not and don't then there is no reason for investment to reposition itself more productively in response to a CCT anyway. This is coupled with an idea that there is a relatively fixed amount of investment available to the economy and so its about how that is distributed. In practice the amount of investment isn't really traded off between sectors, somebody investing in their property business doesn't detract from somebody investing in their orchard business in almost every case. Of course you can always do your analysis by turning all these individual investments into proportions of total investment but that is not how the institutions involved work and looks like the tail wagging the dog form of analysis.
As you have identified, a lot of property investors don't seem actually rational, in fact they don't seem to even be investing very wisely and could probably be earning more in equity funds. At least we should understand everyone definitely isn't cashing out at present prices.
If you think that the CTU is equivalent to the office of the Minister of Finance, you're dreaming. Even the most starry-eyed socialist deep mole in The Terrace would laugh.
You should demonstrate your claim with OECD figures. The last I can find are from 2018.
I'd see an extra $70billion into the economy from government spend in just 2 financial years as a massive over-reliance on the government to prop up our economy.
The alternative of the economy cratering in response to lockdown would still seem to be vastly inferior of course.
But your looking at govt financial indicators of govt intervention and then concluding things about how 'normal' the economy looks. Say the RBNZ writes off 37% of central govt debt (which they could) does that make the economy 37% less govt involved? Well no, it makes no difference at all outside of the govt books. If there must be another lockdown then it should obviously be accompanied by a similar wage subsidy and this should be understood as sensible economic policy, not some unhealthy dependence of the economy on the countries policy.
As you've pointed out yourself before, ours is the government that has had to make the largest per capita set of interventions.
Pointing out that we are so brittle that the same scale of intervention would have to be done again is not a note in our favour. It points simply that we are one of the least resilient developed economies in the world.
This is completely incorrect. The government didn't have to intervene, they decided to and the economy is doing better than others partly due to that (and partly due to fewer lockdowns).
This is not a sign of economic weakness, its a sign that the government is able to intervene in the economy to halt recessions. In fact basically it works in the other direction and the willingness of the govt to step in will determine how much/little any recession bites. Other countries have done less and are economically weaker as a consequence.
It's sophistry to say they didn't have to intervene in what was the largest economic shock we'd had in a century. Even in the National counterfactual they would have intervened – as Canterbury showed multiple times over. Their intervention at scale is not a note of weakness on their part as government.
It is however an economic catastrophe.W hat's inarguable is the scale of shock we faced compared to other developed countries. Any of treasury's GDP graphs show it. Our largest industry has been shown to also be the most vulnerable to economic shock, and other large industries have been devastated. It's a very definition of brittleL easily snapped.
Most of this massive economic shift we are having to go through is being smoothed over with public spending on public projects. So in the medium term all we've been given is just the time it takes to do infrastructure projects to completely rebuild both tourism and tertiary education.
I remember reading about it in the Tax Working Group initial issues document which had charts, but that seems to have disappeared from their website. However, from memory, NZ is a bit under 30% for central gov't (not increasing this was also a focus of the 2017 election debates) and another 5% for local govt. OECD average is somewhat higher than that, mostly because of European countries with stronger safety nets and more subsidised education (for example).
Bill was the main economist voice of unions and consequently was on a lot of tripartite forums and working groups – hardly just a socialist in an office somewhere.
You don't need a study to be able to look at the numbers do your math and realise that the math of the government does not work.
Sadly we don't have someone like Katie Porter – who is good with numbers – and her magic white board to question the power that are currently as to their math, their compassion, and their fuckwittery that keeping people below the poverty level begging for help is going to teach anyone the value of work.
Maybe that would be a question for Jacinda Ardern, Grant Robertson and Carmel Sepuloni. Mind they know the value, that is why they are polititans and not workers.
I probably came across as being naive. I have been a benefit rights service advocate for 3 years 20 years ago. I still look up stuff. I am aware of the imbalance of income and the cost of rent.
A study needs to establish how many in a dwelling, how much income and the cost of rent or mortgage payments?
The median figure does not give a true representation of how much a person is left with once the rent is paid.
This looks at households with kids (because "Child Poverty Monitor"), but the MSD report (cited as "Perry 2019" in the current link) includes households with high "outgoing to income" ratios.
So the population is in income quintiles (20% blocks from poorest to richest), and we can look up a variety of stats on the proportion of household income that is spent on housing costs.
Again, relating only to households with kids, half of the poorest fifth of households spend more than 40% of their income on housing, while only 10-15% of wealthier households spend >40% of their income on housing.
I could probably look through the MSD report for specific information tomorrow if you want, depending on whether my boss is watching lol.
Some sort of precision monitor is required. If genome sequencing can be done for a virus the same needs to be done for the proportion of household income (of everyone recieving income in the dwelling) that is spent on rent and mortgage payment.
This would need to be expanded further for other living and health costs.
Basically, what statistic are you actually looking for? The proportion of household income spent on housing is sliced and diced multiple ways in the perry report. We can explore that before expanding the scope to other costs.
P40, figure C.11 Shows the proportion of all households that are paying more than 40% of their incomes on housing, by quintile. For the poorest quintile, it's 30%. But recall the same data with households containing children, it's ~50% for that quintile. So now we have an idea on the position of households without children, too.
Genome sequencing tracks a single type of virus as it infects from patient to patient. It doesn't really apply as an analogy to economic data as far as I can see.
Genome sequencing deals with precision, not the best analogy.
When it comes to data for housing I want to know what the income is without the accommodation supplement (AS) and then with the AS and if temporary additional support (TAS) is accessed for rent?
I just skimmed through your links and I will read them properly.
MSD has one or two people who do massive amounts of work on incomes material hardship.
The "incomes report" has a lot of before- and after-housing-costs information by demographic and income. The downside is that it's almost a data dump, easy to drown in, running to 360 pages. But if questions can be nailed down enough, it's pretty useful when talking poverty and equity.
maybe increase the number from 1 to 2 people working in that rather understaffed department to say maybe 10?
and if you only dumb raw data you can still say you did a report. You just have to know how to find it, read it, and put it together. Its done…here ….have the raw data and a few filters. That counts as doing it or cya.
Well good to now that despite pretty much all of the NGO's saying so, all of the non formal NGO's – local help groups saying so, and people like me and Weka or Bill and thousands others saying so Jacinda Adern has yet to make any statement about her statement before the election …….there will be no increase in base welfare levels.
She did not have an excuse then, and she still has no excuse. But she got her national voters to vote for her and her troupe of handmens, and I guess that was important to her.
Priorities, she has them, and one was getting re-elected and well now she is elected. Why on earth would she bother finding an excuse?
An incredibly popular proposal that a particularly popular PM could use their personal popularity to push for policy implementation:
A survey has found seven out of 10 New Zealanders believe the government should increase income support for those on low wages or not in paid work.
…
"Prime Minister Jacinda Ardern promised to govern for all New Zealanders but right now many members of our communities are being locked into poverty by low income support rates," Ruby Powell, the economic fairness campaigner from ActionStation said.
"The time for excuses is up. This poll shows the government has a clear social licence and mandate, on top of its moral obligation, to lift inadequate welfare payments to 'liveable' levels, and it needs to be done now, in this Budget round."
Raising income levels is all very well, if it happens, but until something meaningful is done about housing and rents it's a complete waste of time. We all know where the increased income will go – landlords' pockets.
Agree totally Rosie Lee – nearly 200,000 empty houses in the last census = property owners bricking their investments only looking for tax free capital gains.
The excessive commidification of housing has given us obscene numbers of empty houses while people are living in garages, couch surfing, in cars and on the street.
Exacerbating a housing shortage by "investors" bricking them also helps greatly distort rental prices in an upward direction. Can we have a large "ghost house" tax please……FFS
We all know where the increased income will go – landlords' pockets.
And from there is it will go into the capacious pockets of – the bank, the council rates, the insurance company, the property manager, the guys going gangbusters putting in insulation, kitchen vents, painting, replacing the hotwater cylinders, fixing windows, unblocking drains again, the lawnmowing dude, the people doing the smoke alarm inspection, the accountant, and of course the taxman.
Yep agree Red, when I used to work Public Practice accountancy (a fate worse than death), I can't say I ever saw many landlords making much in the way of income profit, or even a meaningful return on monies invested.
And then there's the stress of bad tenants, unpaid rent, damage, compliance requirements so on. Domestic rentals are sure not something that i would ever take part in.
#notalllandlords only works if the industry heads and most landlords aren't rorting. But they are. Yes, there are good landlords (mine are relatively good), but the point here is that there is a culture, sanctioned by lack of legislation and policy, that means landlords get to make excess income at the expense of poor people. It's just wrong.
Not sure when you were an accountant, but obviously the current situation is that many people are making very large sums of money from capital gains and that rents are going up beyond what people can afford to pay.
Weka, yes I agree that rents in many parts of NZ are getting to crazy and unaffordable levels, but I would disagree as to cause.
And yes again, huge tax free capital gains are possible, especially in the likes of Auckland, and I think that is the key.
I would strongly disagree that '.. landlords makes excess income…'. Of course some do, but in our society (for better or worse) both tenants and landlords need to understand that domestic rentals are a business, just like any other.
I am not too sure what '.. lack of legislation…' you are referring too, but the most obvious one and the most fairest would be to introduce a capital gains tax – and actually enforce it (taxing capital gains is already in the Income Tax Act, but I have yet to see applied by the IRD).
Its weird, if I sell a business asset for a profit, depreciation recovered is taxed, yet if I was to sell a domestic rental at a profit/capital gain, it is tax free.
P.S. I left public practice in 2007 and regained my sanity.
I still prefer the Green's Wealth Tax that they put forward at the election (or similar). It has the potential to reduce house prices as well as making NZ a fairer place to live.
Incidentally, and this is anecdotal, rents in Queenstown and Wanaka have dropped considerably due to the crash in the local economies due to the borders being closed.
ok, so you understand that what is happening now is completely different from 2007?
This piece from the Spinoff is an eyeopener,
We made 110% profit in two and a half years and once we pay back the bank we will have a new car, a holiday, and a lot left over. We put none of our own income into the property and ‘wrote it off’ against our personal taxes as well. It was all legal, and easy – like a joke really, or a game. And this story is nothing new or unusual in this country. It happens every day. It’s The Kiwi Way of Life, Simon Bridges said. If anyone ever tries to tell you they are not making money at this game, feel free to tell them they must be playing it horribly wrong. Landlords are making plenty of money out of this game.
Mum and Dad investors. And yes, they put the rent up by 1/3, not because they had to, but because "That’s what landlords do".
That is excess income. Both the capital gains and the rent increase. I'm not saying landlords should make nothing, or that it's not a business. I'm saying that too many landlords are making more than a living at the expense of poor people.
The legislation and policy I was referring to was tenancy rights. But yep, the govt needs to make major moves on the whole crisis, CGT is but a small part of that. They won't though, because people making money from housing is propping up the economy and too many of those people are Labour voters.
I bought our below average rental in its unpopular town, dragged it into the 21st century with a few improvements,
I guarantee you they bought it really cheap – spent a minimum on it – and then sold in a rising market. The difference between this story and providing a modern, comfortable, 3 bed home in a popular city suburb is night and day.
The people who wrote this piece were never landlords – they were property speculators right from the outset with no long term intention of staying in the business. That they rented it out for a few years was just a minor consideration on the side.
Can all of these nice landlords join the real estate lobby groups and ask for rent controls and housing quality standards? I mean, they're already charging below market rates for good properties, so they won't face the same costs as slumlords or profiteers.
that means landlords get to make excess income at the expense of poor people.
An actual 'in the hand cash flow income' usually only happen if the business is carrying no mortgage, and in the normal course of events it can take 2 – 3 decades to get to that stage.
Before this the owner of the business is often subsidising the company with their PAYE income from their day job. (The old LAQC tax smoothing scheme was introduced to specifically handle this almost universal scenario.)
And yes the capital gains have meant a big increase in equity – but that can only be accessed when you sell. Well not only can you only do that once – and of course on the tenant side it hugely contributes to insecurity of tenure.
Or if you refinance. At current interest rates, I am sure many are taking tax free cash out of their rental by increasing the mortgage, and this must surely be a contributor to rising rents.
Beyond introducing and applying a capital gains tax, I think only increasing supply can make a meaningful difference. Lets hope that now Twyford is gone, this term the government will make some meaningful increase in supply.
Supply is not the issue…as Christchurch demonstrates…zero population growth, excess subdivision and development and yet the prices and rents continue to rise.
The (main) cause is excess liquidity and the wrong incentives.
Hi Pat. I think that ChCh is a bad example. Since the earthquake the city has spread out hugely to the west, north west and south west. In the east of course, which has historically been lower cost housing, its just one huge barren landscape in many areas. The whole market is totally distorted.
The new dwellings are all of a certain type. Flashy, expensive and not really good rental material. So, I would strongly disagree that supply has increased in the rental market.
Agree with you re excess liquidity, along with interest rates sub 3% and the wrong incentives (lack of Capital Gains Tax).
PS: Are you sure that there is zero population growth in ChCh? That just seems counter to what I am seeing.
Would love to hear your views on other wrong incentives, and actions to take. This is a complex area for sure!
The growth is in Selwyn and Waimakariri…Christchurch city has barely recovered to its pre quake population…and the number of subdivisions particularly around Halswell and Hornby/Wigram makes the lie of insufficient land being a major driver, not to mention the number of unoccupied sites and unoccupied houses.
The wrong incentives relate to preferential tax treatment, artificially supporting above market rents with AS and no real control on outside speculation…we dont measure the true rate of offshore investment because we dont wish to have to address it.
The strategy is ever increasing house prices to provide the 'growth the financial system needs to continue as we have given up on being competitive with production.
Changing the incentives towards production carries big financial risk and will take time to show effect….risks the politicians (and in all honesty , most voters) are not willing to take.
Exactly. The equity is not locked away but can be used (semi-unlocked) in all sorts of various ways without having to sell up. It is completely different from an asset-rich but cash-poor super annuitant who cannot afford to pay the rates on their own home, for example.
The equity is not locked away but can be used (semi-unlocked) in all sorts of various ways without having to sell up.
It's not quite like going to an ATM. And once you stop working full time the big issue in accessing equity is serviceability. And of course with a bigger debt, comes bigger repayments, so all you've really done is kick the can down the road. I would only consider it in the event I had an investment opportunity that was going to put the equity to better use.
So yes you can go to the bank to get a bigger loan, but it's not 'free money'.
The bank only considers some fraction of the rental income. It's not usually enough by itself – they definitely want to see evidence of other income to cover your living costs.
Yes Incognito, pull out $100,000 tax free by increasing the mortgage by $100,000. Thats only an extra $60 or so per week in cost (tax deductible) for the landlord, which in turn can easily be passed over to the tenant in the form of increased rent.
And of course the reduction in equity (of $100,000) will be replaced over time by the capital gain. Yes, not 'free money', but a helluva incentive to take tax free money now and let the tenant pay for it.
There appears to be a renovation boom that’s partly driven by low interest rates and partly by Covid-19. Much of these are done with an eye on the future at which they need to give a return, e.g. a higher asking price when put on the market. This will drive up house prices for some time. The other thing to note is that some people will want or need to free up equity as you explained to fund those renovations. This, in turns, puts an upward pressure on rents. Lastly, some property owners will take the opportunity to renovate their rentals. You can guess what that will do to rents for a long time to come. It is too easy, relatively speaking, to get credit from banks and/or to free equity for property owners and I don’t blame landlords for that. Of course, the tax regime helps too.
Increasing your mortgage is not as simple as ringing the bank and demanding they give you money.
The three big hurdles are proof of equity, your ability to service the loan, and age.
Serviceability relates to income – and the bank never allows for the whole rental income. Usually they only count some fraction of it like 60% or even less. These days with rents so low compared to the value of the property (I know that sounds bizarre) this is usually the limiting factor on how much equity you can access.
Plus they have their own internal policies around exposure to specific risks that change all the time and you only find them out when you thought you had a watertight case – they say 'no'.
Increasing your mortgage is not as simple as ringing the bank and demanding they give you money.
That sounds more like an armed hold-up 😉
Actually, it is, although banks prefer things in writing so e-mail generally works better, via the internet banking channel, of course. In some cases, you won’t even have to go into an actual bank for anything! For example, do you know how easy it is to apply for a new credit card with a ridiculous limit? Hint: way too easy! Yes, I know, it is guaranteed but it is essentially the same thing: increased funds for ‘discretionary spending’ AKA consumption.
The three big hurdles are proof of equity, your ability to service the loan, and age.
Depending on your situation and what you’re instructing the bank to do, these are not all that big hurdles. Proof of equity is not always required if you have a long-term relationship (AKA history) with your bank and do all your business with/through them. They have their own ways of doing background checks too. Banks want to know about change of circumstances regardless whether you refinance and increase the mortgage on one property and decrease it on another (e.g. your home). Yeah, age is a bit of bastard but if you have a good personal super scheme a lot of things are possible with a kind and friendly bank 🙂
I guess my real point is that it's the wider housing market in NZ is where the locus of the problem lies. At present tenants are living in fear of the next rent rise, and their landlord who is likely doing their annual accounts this month – looks at their very thin, or negative, cash flow and realises the rents have to go up again.
So in essence Rosie is correct – unless this govt can find a package of measures to reduce housing costs and asset inflation – then any improvement in income support will indeed likely get absorbed in housing costs. Blaming the landlord does diddlysquat to fix this.
The anxiety will go down somewhat now that rents can now only go up once a year, it's now very hard to give tenants notice, and the minimum standards for heating and insulation have gone up significantly.
It might take a few months for all to catch up with that.
Simply really. Don't be a landlord if it's not working for you.
I was a landlord once. It came about not because I bought an investment property (that would be against my principles) but because I moved cities and I wanted to keep my house in the city I moved from in case it didn't work out in the new city.
I eventually sold it when I realized I wasn't going to move back. The realtor at the time broke the "bad" news to me that I could have been charging $100 extra a week in rent. I told him I thought I had charged a fair rent and thats what mattered to me. The rent covered my expenses a little bit plus.
I don't believe its o.k. to make a big profit out of offering a basic need to others.
to make a big profit out of offering a basic need to others.
What 'big profit'? Even if you'd been charging that extra $100pw that amounts to barely another $5kpa. Before tax.
As for ' basic needs' how do feel about your supermarket, and all their suppliers? Or any of the myriad other businesses/services you use to meet your 'needs'. Are all of these 'against your principles'?
I have absolutely no truck with this idea that all landlords have horns and a tail and are exploiting renters by making excess profits out of supplying basic needs. Of course some do, but in my experience they tend to be of certain migrant groups exploiting their fellow migrants. Most Kiwi landlords are just ordinary middle income people who think they will make their fortune in RE and find out its just not that easy.
they tend to be of certain migrant groups exploiting their fellow migrants
This isn't my experience, and this statement feels a little more problematic than "All Landlords are Bad" which precisely no-one in this thread has said except for you and RL.
No I never said 'all landlords are bad'. In fact have repeatedly said the exact opposite. Best you read my postings again if you think that. LOL.
As for migrant groups, browse through the court cases and prosecutions and you will see that two particular groups stand out for appalling rental abuses, the same two groups that stand out for paying appalling wages. LOL (which seems your default answer to everything Arkie).
No one is 'demonising all landlords', no one has said 'all landlords have horns and a tail'. You said both of these in response to reasonable criticism of the current system, it's disingenuous as no one was arguing that.
Otherwise I have no time for forming problematic opinions of migrants, thanks.
I do feel a bit sorry for you RL, but that’s just the way the cookie crumbles – not everyone can turn the size of profit they feel they’re entitled to.
The NZ housing market has many, many problems – and while for many people the rent they pay is the most proximate symptom of this, and the one they get most upset about – the root causes lie elsewhere.
Good to know. Re "root causes lie elsewhere", might the growing inequality of wealth distribution in NZ be a root cause?
In a more equal New Zealand we'll all be better off. Like anker, I don't believe its o.k. to make a big profit out of offering a basic need to others, mainly because that grows inequality, and inequality is, if not the root cause, certainly a root cause of social problems. A little bit like the love of money, tbh.
Life as a renter holds up the enticing possibilities of freedom and choice about when to move and where to live without the burdens of property ownership, debt and maintenance. The reality is that for many people on low incomes choice is seldom the case. The 90-day notice option for landlords hangs over every renter’s head. The desire to maintain social and community networks often means accepting sub-standard housing. Changing personal circumstances (separation, becoming a sole-parent, growing families, disability or illness) can suddenly threaten the ability to stay in your chosen home. The average tenancy lasts around 18 months which points to the transient and short-term nature of the NZ rental housing market.
Like anker, I don't believe its o.k. to make a big profit out of offering a basic need to others, mainly because that grows inequality,
And like anker I invite you to explain why you believe it's OK to provide other legitimate needs like food, clothing, etc for profit – but for some unspecified reason it's wrong to do this for housing.
Taken to it's conclusion this logic means that anyone who profits from providing housing – builders, banks, developers, material suppliers, etc – should all be condemned as equally illegitimate.
As for this idea that 'big equity = big profit' – well that's only partially true. It's not always so easy to access, and there are downstream consequences of doing so.
RL seems to be on the cusp of recognising an inherent flaw in capitalism: people profit most off folks who can't avoid it, regardless of the product or service.
Take the Hutt Valley landlord of a couple of days ago – literally putting someone out of their home of seven years because he wanted more money. Or the repeated accusations of profiteering by NZ's supermarket duopoly (didn't some supermarkets get bad press for hiking prices during the covid panic buying?). Or tobacco companies actively misleading their customers about addiction and health effects related to their product.
And many get a pass on their behaviour because "it's just business", as if greed is an excuse for exploitation. "Business" reduces every other person into two categories: a resource to be consumed in the production of the product being sold, or a customer to from which to extract as much money as possible.
Every person in a capitalist society is guitly of this alienated behaviour, the only question is the extent of our own personal guilt. But pretending that we're somehow the blameless exception is a fantasy.
When goods & services are sold, they change hands. You have certain protections under the Law too. It operates as a market as much as can be expected between fairly equal parties.
When a hotel charges for a room, it incurs GST. The price reflects quality of room & service and availability.
When a landlord rents out a property, nothing changes hands, and no GST is paid. There are few protections. The power balance is badly skewed in favour of the owners. There’s a relatively weak correlation with quality, at best. It seems to be scarce all the time.
Take the Hutt Valley landlord of a couple of days ago – literally putting someone out of their home of seven years because he wanted more money.
And as I showed at the time – the rent was still $100pw less than the market rent he could have asked. And you moan about it this.
What level of rent would you have been happy with?
people profit most off folks who can't avoid it, regardless of the product or service.
Well no – the tenant is in principle free at any time to leave with minimal notice and find something better. That they would prefer to stay and enjoy their community roots and connections – well that's their choice surely?
That in reality the NZ housing market isn't providing much in the way of better choices at the moment, is a much wider problem than just me providing a service to people that they're happy to pay for.
And as I showed at the time – the rent was still $100pw less than the market rent he could have asked.
No, you you made assumptions that a specific property was of a certain value based on only two dimensions: geography and bedroom number. You don't even know the dwelling could be legally rented out beyond 1 July, which would limit its "market rent" to the short-term low-quality section of the market, for a start.
That in reality the NZ housing market isn't providing much in the way of better choices at the moment, is a much wider problem than just me providing a service to people that they're happy to pay for.
"happy to pay for" lol.
But you obviously missed the bit where I said it was a wider problem than just being about you. Those particular blinkers are common in people "just doing business" – it's part of the alienation caused by the "wider problem"*
*It's capitalism. Capitalism is the wider problem.
The average tenancy lasts around 18 months which points to the transient and short-term nature of the NZ rental housing market.
In the first 15 yrs of running our business, this was pretty much our experience too. But not counting a couple of legitimate evictions that we had to undertake – in every single case the tenant moved on for reasons that had absolutely nothing to do with us, the quality of the unit, or it's affordability. Usually they just wanted to move elsewhere because something in their life had changed.
People rent mostly because owning just doesn't make any sense for them at this particular stage of their life. They value the flexibility renting gives them.
People rent mostly because owning just doesn't make any sense for them at this particular stage of their life. They value the flexibility renting gives them.
Alex, I'll take "What the more mild-mannered capitalists tell themselves to sleep at night" for $100, please.
No, you you made assumptions that a specific property was of a certain value based on only two dimensions: geography and bedroom number. You don't even know the dwelling could be legally rented out beyond 1 July, which would limit its "market rent" to the short-term low-quality section of the market, for a start.'
Do you have any evidence of these assertions?
And as a rule the govt tenancy website that lists rental bands is very reliable. In this case the band for this type of property in Wainui is $500 – 550pw and even the 'increased rent' was well under this at $430pw. For the purposes of this discussion it's entirely reasonable we regard this information as accurate unless proven otherwise.
Besides if we go with your idea that maybe the property was not legally rentable after 1 July – then why are we blaming the landlord? The tenant has been living there for seven years, and seems very unhappy at the prospect of having to leave – and if the landlord reluctantly decides to sell because he chooses not to keep throwing good money at it – then exactly who is to 'blame' here?
For the purposes of this discussion it's entirely reasonable we regard this information as accurate unless proven otherwise.
I'm not saying it's inaccurate. Population statistics do not give reliable inferences to individual case conditions.
I'm suggesting that the "bottom quartile" value is not the same as "absolute lowest rate charged in every tenancy agreement lodged in the last six months".
I'm suggesting that the "bottom quartile" value is not the same as "absolute lowest rate charged in every tenancy agreement lodged in the last six months".
Having spent 20 odd years doing this, all I can tell you is that the quartile bands pretty much cover at least 90% of new bonds lodged.
Sure there will be some exceptional outliers that fall well outside the band, but basing your case on them takes the discussion nowhere.
Sure there will be some exceptional outliers that fall well outside the band, but basing your case on them takes the discussion nowhere
So you didn't show that he was undercharging, as you previously claimed. You were simply guessing that a landlord who thinks healthy housing regs will force him out of the market was not renting out homes in the bottom 5% of value.
Now, you might be right and the landlord is a charitable dude. But in my 30 years in the rental market, charitable landlords are pretty rare. Easygoing, sure. Willing to ignore a missed payment if we ignore the slight fire hazard or poor maintenance, sure. But charitable? Rare as hen's teeth.
Given the tenant's circumstances – I'd bet good money on this being exactly the case.
And some landlords – especially the ones who're not using professional managers – put off increasing the rent until a change of tenancy. Given that on average this happens about every 18mths it's not an unreasonable, if somewhat lazy strategy, but it can bite you in the arse when a tenant stays for many years.
And it especially bites you in the butt when you realise the rent has fallen to 30% below market (530 – 380) *100 /520 and the govt is going to limit any future rises to 10% pa. Oh well unintended consequences and all …
Or he could just be kicking them out because although they were stable tenants for a substandard house, he won't be legally able to rent it out in a few months so needs to either fix it or sell it while it's rentable.
Or he could just be kicking them out because although they were stable tenants for a substandard house, he won't be legally able to rent it out in a few months so needs to either fix it or sell it while it's rentable.
Not really. Regulations are needed to keep arseholes out of the market, in order to stop people figuring out that capitalism is exploitation.
But it would mean that a particular home needs significant renovation or would most likely be purchased as owner-occupier home rather than a rental. But then the new occupiers lived somewhere else previously, so that home is freed up…
But of course that's all a distraction from your assertion that random landlord in the news is charging a low rent purely out of the kindness of his heart rather than the quality of his property.
But of course that's all a distraction from your assertion that random landlord in the news is charging a low rent purely out of the kindness of his heart rather than the quality of his property.
Because you have zero experience of being a landlord you have no reference point for what is likely or not.
What almost certainly happened here is an aggregation of factors – that he'd let the rent fall so far behind market (for whatever reason), and that he had determined a need to upgrade the property (for whatever reason) – and that new govt rules were closing down his opportunity to resolve both problems.
As I said – good rules but unintended consequences.
As for your implication that some alternate economic system (that you don't specify but I'm going to assume in the absence of information is some form of neo-Marxism) – would somehow quite magically not require any regulation … well here you are worrying about me making informed guesses about a business I know quite well.
Because you have zero experience of being a landlord you have no reference point for what is likely or not.
My "reference point" is every landlord I've ever had.
We know two things:
His rent was at the lower end of the scale; and
he was concerned that healthy housing regulations might force him out of the market
You might think they are largely unrelated.
And Big Tobacco just wanted to make cigarettes a more pleasant experience for consumers, not more addictive. /sarc
As for your implication that some alternate economic system (that you don’t specify but I’m going to assume in the absence of information is some form of neo-Marxism) – would somehow quite magically not require any regulation
There you go again, making shit up. I made no such implication.
And like anker I invite you to explain why you believe it's OK to provide other legitimate needs like food, clothing, etc for profit – but for some unspecified reason it's wrong to do this for housing.
Dear RL, I will politely but firmly reject your efforts to attribute to me beliefs that are not in evidence. At the risk of repeating myself, and as anker stated, I don't believe it's o.k. to make a big profit out of offering a basic need (food and water, sufficient rest, clothing and shelter, overall health) to others. Like anker, that's just the way I see the world.
Question for you; is NZ’s private rental market decreasing inequality, decreasing inequality, or making little difference to inequality?
Heck, since we're talking "root causes", why not go for broke. Is the current level of inequality in NZ sustainable? I don't see how it can be, but maybe the answer depends on personal wealth – which could explain why one’s answer might change over time
I will politely but firmly reject your efforts to attribute to me beliefs that are not in evidence.
And then you go and repeat the exact belief you claim is ‘not in evidence’.
At the risk of repeating myself, and as anker stated, I don't believe it's o.k. to make a big profit out of offering a basic need (food and water, sufficient rest, clothing and shelter, overall health) to others.
As I've explained carefully a number of times – your characterisation of 'big profit' just doesn't match up to reality. Unless of course you're talking equity inflation which applies regardless of who owns the property, and what purposes they put it to.
Personally I would much prefer just to run my business for a reasonable cash flow return and forget about the equity – because the moment capital gain becomes the main consideration I'm in a different kind of business altogether.
And that's a much wider problem across many NZ business sectors, than just residential rentals.
Careful RL, you're on quicksand. At 1:14 pm you replied to me:
And like anker I invite you to explain why you believe it's OK to provide other legitimate needs like food, clothing, etc for profit – but for some unspecified reason it's wrong to do this for housing.
I intepreted that as an attempt by you to attribute to me the belief that "it's OK to provide other legitimate needs like food, clothing, etc for profit – but for some unspecified reason it's wrong to do this for housing." As it was youwho introduced "supermarket" and "the myriad other businesses/services" (@3.1.3.2.3.1), and the idea of a distinction between shelter and other basic human needs vis-à-vis profits, into this thread, I politely reaffirm my rejection of your erroneous attribution of belief.
To be absolutely clear, it was you who introduced basic needs other than shelter into this thread, and I’ve made no distinction between the various basic needs when providing them for a (big) profit – that’s all on you.
, and I’ve made no distinction between the various basic needs when providing them for a (big) profit
OK so that's the answer I was looking for. Essentially you're rejecting the idea that it's acceptable to make profit. Which is a very common left wing sentiment but it just took a while to get it out of you.
And just one last time – in terms of cash flow most residential rental businesses make very little, if any profit, directly off their tenants. So that gets rid of your (big) qualifier.
Indeed the primary reason for anyone to stay in the business at present is in fact the capital gain – and as I've said before – there really is no particular distinction here between rentals and many other business sectors in NZ.
After all most farmers make most of their (big) money from capital gains – are you suggesting this makes their business somehow 'wrong' as well.
Essentially you're rejecting the idea that it's acceptable to make profit.
An intriguing conclusion, reflecting a common right-wing belief. I do believe that the pursuit of excessive profit is problematic, as is the definition of ‘excessive’ in this context.
Oh, the morality: why ethics matters in economics
Writing four decades ago and seeking to give some respectability to this ideological perspective, the right-wing US economist Milton Friedman posited that “the social responsibility of business is to increase its profits”. “Maximising shareholder value” is how it would be described today.
It should be patently evident, however, that this is not a reliable route to a good society. Five big problems bedevil the strategy: instability, insecurity, inequality, monopoly power and unsustainability.
Btw, any thoughts about these questions?
Question for you; is NZ’s private rental market decreasing inequality, decreasing inequality, or making little difference to inequality?
Heck, since we're talking "root causes", why not go for broke. Is the current level of inequality in NZ sustainable? I don't see how it can be, but maybe the answer depends on personal wealth – which could explain why one’s answer might change over time
Moral Recovery and Ethical Leadership
Interface’s customers were no different and had begun to ask what the organization were doing for the natural environment. The research division of the company organized a task force made up of the company’s international representatives to develop a response to this question. Anderson was invited to make an address to initiate the first meeting of the taskforce, and admits to not being initially interested in the question beyond the level of legal compliance.
In preparing to deliver this address, he read Paul Hawken’s The Ecology of Commerce (1993) which details the huge amount of irreparable damage which industrial processes inflict on the natural world. Anderson described its impact as a life altering moment in injurious terms: “Hawken’s message was a spear in my chest that is still there”. Anderson’s description of the impact of this knowledge, and his investigations in the damage that his own company was doing to the natural world, are full of the language of sickness. For example, near the beginning of Mid-Course Correction he writes that learning the amount of material extracted from the earth “made me want to throw up”.
Anderson’s ‘spear in the chest’ analogy has been described by him and others (e.g., Bakan, 2004*) as an ‘epiphany,’ but this paper posits that it might be better described as a moral injury. Epiphanies are “sudden and abrupt insights and/or changes in perspective that transform the individual’s concept of self and identity through the creation of new meaning in the individual’s life”. Epiphanies result in an individual changing their pre-existing idea of who they are, or what their life means. “The experience of epiphany involves an often sudden realization by an individual that they have been living their lives according to a framework that has not served them or others well, and a shift to another which is more positive”. Epiphanies, however, “are preceded by periods of anxiety, depression, and inner turmoil”. Moral Injuries, on the other hand produce mental anguish rather than preceding it. Prior to his engagement with questions of what damage being done the natural environment by Interface’s operations, Anderson initially “never ‘gave a thought to what we were taking from the earth or doing to the earth in the making of our products’”.
*Bakan, J. (2004). The corporation: The pathological pursuit of profit and power. London: Constable.
That's a whole other discussion – but in a nutshell if you want to make an argument to burn down the entire modern economy – because it's 'pathological' – then I'll call you on the inevitable consequences.
but in a nutshell if you want to make an argument to burn down the entire modern economy – because it's 'pathological'
It's a hackneyed argument, no future in it and best avoided imho.
Transitioning to a sustainable economy might be possible – some would say essential. But your defense of (and desire for?) big profits, and this critique of 'doughnut economics', don't fill me with hope.
Doughnut (economic model)
Branko Milanovic, at CUNY’s Stone Center on Socio-Economic Inequality, said that for the donut theory to work, people would have to "magically" become "indifferent to how well we do compared to others, and not really care about wealth and income.
Mmm… Donuts! Like profit, you can have too much of a good thing.
Question for you RL; is NZ’s private rental market decreasing inequality, decreasing inequality, or making little difference to inequality?
Heck, since we’re talking “root causes”, why not go for broke. Is the current level of inequality in NZ sustainable? I don’t see how it can be, but maybe the answer depends on personal wealth – which could explain why one’s answer might change over time.
Question for you RL; is NZ’s private rental market decreasing inequality, decreasing inequality, or making little difference to inequality?
The interesting thing about a society that's growing more prosperous is that the nature of that growth is more like multiplication rather than addition. The fundamental way to think of multiplication is that it takes a base vector and stretches it, while addition takes that same vector and shiftsit.
In other words as we become more prosperous, those who start close to zero tend not to move much, while everyone else does, and those with a small advantage at the beginning – all other things being equal – gain much more in absolute terms. So while everyone might gain at a constant rate – the absolute gap between the richest and poorest innately grows over time.
At core we should recognise that inequality is an unavoidable result of all human progress – and once we have this firmly in mind – we can then start to define why we think the extremes of wealth and poverty are a problem, and what actions we might take to start shifting the people at the bottom of the scale up toward those at the top. (A fundamentally different kind of operation to our pure economic growth model.)
And quite different than the ideas you seem to keep returning to which is to somehow cancel the modern economy so that we all collapse back into poverty. Sure that's one trivial solution to inequality, but most people are not going to think it an impressive one.
And what am I to make of your argument when all you ever seem to do is characterise modernity solely by it’s flaws.
More hyperbole RL? You’re nothing if not reliable. I have, however, written here about the benefits of modern medical care and treatments, e.g. vaccines, so make of that what you will.
Despite some Luddite proclivities I'm a fan of many aspects of modernity – quite dependent/captured in fact. This hasn't blinded me to its flaws, chief among them the unsustainable nature of civilisation.
At my age the prospect of collapse doesn't worry me on a personal level, but I do wonder how our collective love of money will play out for human civilisation.
“Man is a victim of dope/In the incurable form of hope” – Ogden Nash
Civilisation peaked in 1940 and will collapse by 2040: the data-based predictions of 1973 Their view is a bit sunnier, anticipating a world where global governments are forced to cooperate to solve complex problems, people widen their cultural horizons and work fewer hours, and limited consumption – not wealth – becomes a mark of prestige. Viewed today, it makes for an engrossing artifact, raising far more questions than it answers about humanity’s ability to effectively predict its future and correct its course.
In other words as we become more prosperous, those who start close to [or below] zero tend not to move much, while everyone else does…
At core we should recognise that inequality is an unavoidable result of all human progress…
Does it follow that less progress would mean less inequality? And is there truly no example of human progress that doesn't result in greater inequality? Personally I reject such a bleak worldview. Wealth inequality, and particularly the magnitude of that inequality, is a choice, one that we've both made.
And quite different than the ideas you seem to keep returning to which is to somehow cancel the modern economy so that we all collapse back into poverty. Sure that’s one trivial solution to inequality, but most people are not going to think it an impressive one.
You know my proposed solution to extreme poverty (perpetual indebtedness) in NZ . And you know that it doesn’t require that we “somehow cancel the modern economy so that we all collapse back into poverty“, but whatever floats your boat.
Why poverty in New Zealand is everyone's concern
Liang describes poverty as a "heritable condition" that perpetuates and amplifies through generations: "It is also not hard to see how individual poverty flows into communities and society, with downstream effects on economics, crime and health, as well as many other systems. Loosen one strand and everything else unravels."
A Kete Half Empty Poverty is your problem, it is everyone's problem, not just those who are in poverty. – Rebecca, a child from Te Puru
Does it follow that less progress would mean less inequality? And is there truly no example of human progress that doesn't result in greater inequality? Personally I reject such a bleak worldview.
Take a rubber band, hold one end of it fixed at some point on a table top and stretch the other end to say double the length. Congratulation's you've just doubled activity and wealth in this tiny little toy economy. (It's not an even close to accurate model, but it'll do for a first pass.)
Note carefully, while on average everyone is better off, the people who were close to the fixed (the poor) end have scarcely moved at all, while those close to the end you moved (the well-off) are now doing twice as well. And that while the gap between the poor and rich started out as say 1unit – the gap is now roughly 2units.
So while we've increased total prosperity on average, we've also increased relative inequality at the same time. What then is the best strategy for retaining prosperity while at the same time decreasing inequality?
Ideally we might propose releasing the fixed end of the rubber band so that instead of growth being all about stretching the band to achieve growth, instead is became more a case of shifting the whole band in the desired direction.
Closer to reality we might think of what has happened globally in the past 200 years as a combination of both stretching and shifting, that while the very richest have extended their wealth by some huge non-linear factor, the poorest in the world have actually seen their absolute position shift significantly as well. So all is not lost – we know that in practice something of what we would like to achieve can and has been done.
Part of the solution is I think going to happen anyway over the course of this century, as demographics age almost everywhere, the nature of economic growth may well shift from being dominated by 'stretch mode' as it has been for the past two centuries, to more of a 'shift everyone up mode'. And indeed the so-called “Elephant Curve” can be interpreted as a direct demonstration of this happening.
The other reason for hope is that capitalism in itself is not really an ideology, rather I see it as an emergent economic methodology that's demonstrated a remarkable adaptability over time.
What I do reject however is any suggestion that amounts to saying that inequality is all the pathological fault of the rubber band for being elastic and getting longer over time – and therefore we should burn it.
What I do reject however is any suggestion that amounts to saying that inequality is all the fault of the rubber band for being elastic and getting longer over time – and therefore we should burn it.
The rubber band is blameless. Burning it isn't a good idea – so smelly!
Could we perhaps stretch your rubber band analogy to include the 10% of NZers carrying a collective $13 billion of debt?
If so, then I would amend your analogy by placing the fixed point some 10% from one end of the rubber band, and then stretch the band in opposite directions away from that fixed point. Is growing debt (stretching the band in one direction) a necessary consequence of growing wealth (stretching the band in the other direction)?
One thing your analogy makes abundantly clear (pun intended) is that there's plenty of wealth in NZ, and that net wealth is growing all the time. What I don't understand is why those at the weathly end of the band (and if the band represents wealth, then the wealthy end is large indeed) suffer so greatly from ‘sharing hesitancy‘; it's almost as if what's happening at the other end of the band is of no concern. How might that play out? Still, it's only a rubber band; gummit will sort it out.
Let's not park that thought. If the 'top' 10% sacrificed ~1.6% of their collective wealth, that would be sufficient to forgive the crippling debt of the 'bottom' 10%.
While I acknowledge that a 1.6% decrease in wealth could cause mental anguish, it's doubtful that the material comfort of many 'top' 10-percenters would be seriously compromised. Some might even derive satisfaction from thoughts of the good their gift would do to improve the quality of life and mental health of tens of thousands of NZ families facing life in debt.
The questions you raise are intriguing, but IMHO they're poor reasons for doing nothing. If you have an idea for an easier way to address the indebtedness of the 'bottom' 10% of NZers, then by all means let's hear it.
In her essay below, Liang describes poverty as a “heritable condition” that perpetuates and amplifies through generations: “It is also not hard to see how individual poverty flows into communities and society, with downstream effects on economics, crime and health, as well as many other systems. Loosen one strand and everything else unravels.”
A Kete Half Empty
Poverty is your problem, it is everyone’s problem, not just those who are in poverty. – Rebecca, a child from Te Puru
What I don't understand is why those at the weathly end of the band (and if the band represents wealth, then the wealthy end is large indeed) are reluctant to share; it's almost as if what's happening at the other end of the band is of no concern.
As I hinted above, and the Elephant curve I referenced shows, the stretching of the rubber band globally has probably not been a simple linear 'stretch'.
At the very top 0.1% level income growth has been astronomical, and the coarse percentile aggregation in the graph hides that. At this level I think we both agree there is a very good case to unwind the gross extremes at the billionaire level and above.
But interestingly if we look again at the Elephant Curve, while it describes global income growth, the whole of NZ would probably fit in the percentiles from 90% up. In effect NZ's experience with growing inequality is only a small slice of a much larger global story.
And to loop back to something else we touched on a while back – you ask why it is that the extremely wealthy don't seem to 'care' about the fate of those so much further down the wealth ladder than themselves. This is a fair and valid question, and does touch on why I keep thinking that inequality is less of a strictly economic issue, and much more of a moral one. And that maybe arguing to 'smash capitalism' to solve inequality is a bit like burning down the house because your partner had an affair.
At present humans value wealth because of the status and power it bestows on them – perhaps a world in which wealth was seen as a means to improve society and be of service to others would see this whole question in a quite different light.
At present humans value wealth because of the status and power it bestows on them – perhaps a world in which wealth was seen as a means to improve society and be of service to others would see this whole question in a quite different light.
Well said RL, certainly we can agree that some people value wealth because of the status and power it bestows. For myself it's about financial security, which in my case doesn't take much wealth.
What behaviours might model the sharing wealth to reduce inequality and be of service. Philanthropy, certainly, but how to grow charitable behaviour? So many seem to be in need in NZ alone.
Is there something similar to GiveWell for Australasia?
Btw, I’d like to meet these people that are arguing to ‘smash capitalism’ to solve inequality and give them a stern talking to. But I do wonder if ‘sharing hesitancy’ and capitalism are inextricably linked, and if so then what’s the best way to decouple them.
Still had to pay the bill for it this year out of this year's cash flow. And as a capital improvement item it will be depreciated off taxable income, that doesn't mean 'I'll never have to pay a cent for it".
In our experience adding value to a property like this has a very marginal impact on rent. Rents are primarily determined by location, number of bedrooms and condition – in that order. Improvements do potentially make the property more attractive, which helps with good occupancy rates in an over-supplied market, but if it has an impact of rent, it's maybe $10 -20pw which would take 4 yrs or more to repay the investment.
As for it increasing the value of the asset – that's an even more marginal assumption. Valuers simply don't drill down to this kind of detail.
Yes it's a 'cost of doing business' – but so are a lot of other things and they all add up. And then you wonder why the damn rent is so high.
I have to eat so therefore like most urban kiwis I have to use the supermarket.
I don't have to own a rental property, although actually I could. I have a choice, like all landlords. I am not aware of anyone who owns a rental property who got their arm twisted to do so…………but if someone knows of examples of this, by all mean let me know.
I am glad the Govt has launched some sort of enquiry into the profits supermarkets make.
I am really sorry I haven't been following your arguements Red.
I have very little if not xero empathy for landlords. I suppose I have a little empathy if there places are trashed.
My empathy lies with the tenants unless they are very bad tenants.
You might be making very little on your property, but you will realize capital gains unless there is a crash. So now might be the time to take the money and run although I am not predicting there will be a crash. When I was a landlord it didn't involve too much work.
I have to eat so therefore like most urban kiwis I have to use the supermarket.
I don't have to own a rental property,
That's comparison just doesn't work – the 'basic need' is not to be in business to provide the housing service, it's the need people have to be housed, like they do to eat. You’ve stacked oranges up against apples there.
My question to you is this – why do you think providing housing for people is an illegitimate business, while providing food for them (for example) is not?
lol Red. No not an accountant. Many years ago when I let our my house my lawyer referred me to an accountant though who gave advice as to how to set up my affairs to pay as little tax as possible. I think accountants are probably reasonably empathic towards property investors.
I didn't say being a landlord was an illegitimate business just one I don't have much empathy for.
I'd like to see the state provide housing and Kiwibuild to help young people get into homes.
If landlords aren't happy campers and are not making enough money then they know what to do. Sell up and let young first home buyers have a better chance of getting a house.
Btw, the $5000 extra I could have earned didn't seem right as I had to do so little to earn it and I worked a 40 hour week to make a living
Sell up and let young first home buyers have a better chance of getting a house.
That would be nice if total supply was keeping up with demand – but it isn't. At present all that would do is drive a shortage of rentals and push up rents even further.
Keep in mind there is always a legitimate demand for rental housing. Roughly 15% of the population will for one reason or another never qualify for a bank mortgage, and another 15 – 20% are at a stage in their lives where they are not interested in or needing to buy a home – regardless of affordability.
At present all that would do is drive a shortage of rentals and push up rents even further.
Why? Does the house stop existing if the rentier sells it? Surely the new owners were living somewhere before they bought that particular house – wouldn't their old home be freed up? Or the old home of the people who bought their old home? Sooner or later a renter will buy some home in the chain…
The only things that lower the rental market are 2nd homes and ghost homes. A beefed up CGT would deal to both – not on Lab6's radar, but sooner or later it'll happen.
Well McF – all the evidence suggests this is exactly what is happening at the moment. As I said – if total supply isn't keeping up with total demand – then everything else is just shuffling deck chairs.
The particular symptom through which the capitalist problem currently manifests itself in the housing market isn't a lack of homes.
It's a surplus of capitalists: ghost homes in Auckland – 39,000 empty dwellings. 200k in NZ overall.
But the odds are still good that a currently-occupied home would get re-occupied after being sold. So no, a sale doesn't destroy a dwelling. What makes a home vacant is a landlord who sees more profit in accruing capital value than in providing a home, and bugger the renting class.
Pretty much by definition if the house is vacant – they're not a landlord. It makes them property speculators first and foremost.
lol now you're doing the No True Scotsman.
They're all capitalists who buy up homes to make money. Whether they rent out those homes or feel sitting on them for the capital gain is better value for their time is moot. As markets change they switch from one to the other. You're just as much a speculator as someone who owns a ghost home.
You're just as much a speculator as someone who owns a ghost home.
Or anyone who owns any asset that increases in value, including ordinary homeowners for that matter.
But I think I'm pretty safe to say that someone who owns a property that they neither live in, nor have tenanted, are first and foremost property speculators.
I think it is a false belief that that way lies riches, which for most it does not. that is based on having done maybe hundreds of financial statements and tax returns as a chartered accountant for landlords.
Which is something the rental business has in common with many other business sectors in NZ – too many are operated for capital gain not cashflow.
What we have here is an awful intersection of this entrenched structural issue, the relatively high capital intensity of the rental business, and high levels of deprivation at the bottom of the income scales.
If we want to fix this chronic problem – we need to look at the real causes. Tinkering with band-aids on symptoms usually only has unintended consequences.
"too many are operated for capital gain not cashflow."
Could you give me an example where the capital gain on a business equals that of a rental property and where similarly tax on the capital gain is not paid?
Residential property is inherently a very capital intensive business, so it's always going to be more susceptible to the impact of capital gain than many others.
Farming would be another obvious example. And many small businesses that depend on property, goodwill, or intellectual stock of some kind will look to capital gain on the hoped for sale of the business to make up for decades of marginal operating profits.
McDonald's is another example that comes to mind – the capital gains many franchisees make on their shop location may well exceed that of the actual food business.
Are rates correlated to the average house price? I don’t think so. For example, if all house prices go up by 10%, the rates will essentially stay the same.
I don't demonize landlords – I just call them silly buggers for borrowing too much, and then acting surprised when they find that interest is gobbling up all their profits. Make interest non deductible and they would then be looking at a much improved bottom line (in bookkeeping terms) and paying a decent amount of tax – even though they would have to pay that tax from their own pockets. Under those circumstances I think that many would be thinking about off-selling their unsound investments.
There are some really great tenants who maintain the property and require a tradesman yearly if that. House prices increasing are the only sure thing for home investors. If you cannot afford the cost of being a landlord don't be one.
If a tenant had a community services card the landlord got a 50% subsidy for insulation.
I do have sympathy for landlords who get the place trashed and ripped off with unpaid rent.
More than 90% of tenants are wonderful and look after their home better than we might even. (Or at least they do on the inside – we always pay to have the sections maintained.)
But all properties need maintenance no matter how well the tenants look after them – lawns mowed, walls and roofs washing, blocked gutters, fences, drains, trees trimming, appliances like stoves, hot water cylinders and heaters break, carpets wear out, windows get broken, door locks and window stays replaced. In the usual course of events we budget for about 6% of the rental income towards R&M over the long term.
I have noticed that less and less landlords maintain the section with the exception of the lawn mowing. I would like to see landlords offer to dump the weeds. Many tenants would do weeding and benefit from the out door exercise.
I lived in a row of 7 flats and I used to weed the whole drive, fence line and door paths, (I did ask permission from any new tenant). I am no longer there but I walk past regularly – it is all over grown now. A looked after drive and section greets you.
The Child Poverty Action Group’s stocktake of progress on the Welfare Expert Advisory Group’s (WEAG) 42 key recommendations has found none of them have been fully implemented.
I know, I read it and if you read the full article there's a contradiction with that statement. For example, indexing benefits to wage growth was a recommendation was it not? that's been implemented and note, the government doesn't agree with all of the recommendations.
The Government set up the Welfare Expert Advisory Group in May 2018 with the explicit purpose to investigate the welfare system. Surely having commissioned the report they are not in the position to disagree with any of the recommendations but simply implement them.
Otherwise what was the point of the group or the report?
ACT bleating again. Seymour seems to want business to have its cake and to eat it too as the MBIE figure only covers one side of the equation. However, if any of the existing holidays are to be done away with, in exchange for Matariki, there are plenty of Christian ones that could go. Would he want to explain his decision to the God Squaders who vote for ACT?
There is no reason why, once the Queen dies, we cannot do away with QB weekend, leaving Matariki as the main public holiday between Easter and Labour weekend.
So many cultures around the world have festivals connected to the summer and winter solstices and the passing of the seasons. Think Stonehenge and the Scandinavian festivals. Matariki marks so much in this regard if we study the history of Polynesian cultures, the significance of the Pleiades etc – and it's distinctly NZ. It's not just about another public holiday.
I wonder if act actually do any real research. long holiday weekends are a real boost to NZ economy. even the moaners who have to pay for a days holiday for their workers do well out of them. economic activity spikes every long weekend, and a mid winter long weekend will be a real economic winner. all to difficult for actoids to understand.
With Boeing having its entire 777 fleet grounded, it's pretty easy to see an increased likelihood of squealing about bankruptcy to get more billions of Federal aid.
I see its only related to P&W Engines only not GE, RR, CFM Engines. It's very rare for an engine explosion like to happen and I think the last one to happen from memory was the Qantas A380 after takeoff from Singers a few yrs back. Old mate flying that A380 was very lucky to get that A380 bird back on the tarmac from all accounts (I haven't read old mates book, but read most of the summaries incl Training & crew management or whatever its called when i was doing training and training development on top of my Operations/ Plans for the RAAF Darwin Sec FLT before i got the boot.
Yesterday I received come lovely feedback following my Star Wars themed newsletter. A few people mentioned they’d enjoyed reading the personal part at the beginning.I often begin newsletters with some memories, or general thoughts, before commencing the main topic. This hopefully sets the mood and provides some context in which ...
April 30 was going to be the day we’d be calling Mum from London to wish her a happy birthday. Then it became the day we would be going to St. Paul's at Evensong to remember her. The aim of the cathedral builders was to find a way to make their ...
Rob MacCulloch writes – Can’t remember the last book by a Kiwi author you read? Think the NZ government should spend less on the arts in favor of helping the homeless? If so, as far as Newsroom is concerned, you probably deserve to be called a cultural ignoramus ...
Eric Crampton writes – Grudges are bad. Better to move on. But it can be fun to keep a couple of really trivial ones, so you’re not tempted to have other ones. For example, because of the rootkit fiasco of 2005, no Sony products in our household. ...
A new report warns an estimated third of the adult population have unmet need for health care.Photo: Lynn Grieveson / The KākāHere’s the six key things I learned about Aotaroa’s political economy this week around housing, climate and poverty:Politics - Three opinion polls confirmed support for PM Christopher Luxon ...
Today is May the fourth. Which was just a regular day when my mother took me to see the newly released Star Wars at the Odeon in Rotorua. The queue was right around the corner. Some years later this day became known as Star Wars Day, the date being a ...
Buzz from the Beehive Much more media attention is being paid to something Winston Peters said about former Australian Foreign Minister Bob Carr than to a speech he delivered to the New Zealand China Council. One word is missing from the speech: AUKUS. But AUKUS loomed large in his considerations ...
Is the economy in another long stagnation? If so, why?This is about the time that the Treasury will be locking up its economic forecasts to be published in the 2024 Budget Economic and Fiscal Update (BEFU) on budget day, 30 May. I am not privy to what they will be ...
The annual list of who's been bribing our politicians is out, and journalists will no doubt be poring over it to find the juiciest and dirtiest bribes. The government's fast-track invite list is likely to be a particular focus, and we already know of one company on the list which ...
In the weeks after the October 7 Hamas attacks on Southern Israel I wrote about the possible 2nd, 3rd and even 4th order effects of the conflict. These included new fronts being opened in the West Bank (with Hamas), Golan … Continue reading → ...
Peter Dunne writes – It is one of the oldest truisms that there is never a good time for MPs to get a pay rise. This week’s announcement of pay raises of around 2.8% backdated to last October could hardly have come at a worse time, with the ...
David Farrar writes – Newshub reports: Newshub can reveal a fresh allegation of intimidation against Green MP Julie-Anne Genter. Genter is subject to a disciplinary process for aggressively waving a book in the face of National Minister Matt Doocey in the House – but it’s not the first time ...
The Treasury has published a paper today on the global productivity slowdown and how it is playing out in New Zealand: The productivity slowdown: implications for the Treasury’s forecasts and projections. The Treasury Paper examines recent trends in productivity and the potential drivers of the slowdown. Productivity for the whole economy ...
Winston Peters’ comments about former Australian foreign minister look set to be an ongoing headache for both him and Luxon. Photo: Lynn Grieveson / The KākāTL;DR: The podcast above of the weekly ‘hoon’ webinar for subscribers features co-hosts and , along with regular guests on Gaza and ...
These puppet strings don't pull themselvesYou're thinking thoughts from someone elseHow much time do you think you have?Are you prepared for what comes next?The debating chamber can be a trying place for an opposition MP. What with the person in charge, the speaker, typically being an MP from the governing ...
The land around Lyme Regis, where Meryl Streep once stood, in a hood, on the Cobb, is falling into the sea.MerylThe land around Lyme Regis, around the Cobb that made it rich, has always been falling slowly but surely into the sea. Read more ...
Buzz from the Beehive Foreign Affairs Minister Winston Peters was bound to win headlines when he set out his thinking about AUKUS in his speech to the New Zealand Institute of International Affairs. The headlines became bigger when – during an interview on RNZ’s Morning Report today – he criticised ...
The Post reports on how the government is refusing to release its advice on its corrupt Muldoonist fast-track law, instead using the "soon to be publicly available" refusal ground to hide it until after select committee submissions on the bill have closed. Fast-track Minister Chris Bishop's excuse? “It's not ...
As pressure on it grows, the livestock industry’s approach to the transition to Net Zero is increasingly being compared to that of fossil fuel interests. Photo: Lynn Grieveson / Getty ImagesTL;DR: Here’s the top five news items of note in climate news for Aotearoa-NZ this week, and a discussion above ...
The New Zealand Herald reports – Stats NZ has offered a voluntary redundancy scheme to all of its workers as a way to give staff some control over their “future” amidst widespread job losses in the public sector. In an update to staff this morning, seen by the Herald, Statistics New Zealand ...
On Werewolf/Scoop, I usually do two long form political columns a week. From now on, there will be an extra column each week about music and movies. But first, some late-breaking political events:The rise in unemployment numbers for the March quarter was bigger than expected – and especially sharp ...
David Farrar writes – The Herald reports: TVNZ says it is dealing with about 50 formal complaints over its coverage of the latest 1News-Verian political poll, with some viewers – as well as the Prime Minister and a former senior Labour MP – critical of the tone of the 6pm report. ...
Muriel Newman writes – When Meridian Energy was seeking resource consents for a West Coast hydro dam proposal in 2010, local Maori “strenuously” objected, claiming their mana was inextricably linked to ‘their’ river and could be damaged. After receiving a financial payment from the company, however, the Ngai Tahu ...
Alwyn Poole writes – “An SEP,’ he said, ‘is something that we can’t see, or don’t see, or our brain doesn’t let us see, because we think that it’s somebody else’s problem. That’s what SEP means. Somebody Else’s Problem. The brain just edits it out, it’s like a ...
Our trust in our political institutions is fast eroding, according to a Maxim Institute discussion paper, Shaky Foundations: Why our democracy needs trust. The paper – released today – raises concerns about declining trust in New Zealand’s political institutions and democratic processes, and the role that the overuse of Parliamentary urgency ...
This article was prepared for publication yesterday. More ministerial announcements have been posted on the government’s official website since it was written. We will report on these later today …. Buzz from the BeehiveThere we were, thinking the environment is in trouble, when along came Jones. Shane Jones. ...
New Zealand now has the fourth most depressed construction sector in the world behind China, Qatar and Hong Kong. Photo: Lynn Grieveson / The KākāTL;DR: These are the six things that stood out to me in news and commentary on Aotearoa-NZ’s political economy at 8:46am on Thursday, May 2:The Lead: ...
Hi,I am just going to state something very obvious: American police are fucking crazy.That was a photo gracing the New York Times this morning, showing New York City police “entering Columbia University last night after receiving a request from the school.”Apparently in America, protesting the deaths of tens of thousands ...
Winston Peters’ much anticipated foreign policy speech last night was a work of two halves. Much of it was a standard “boilerplate” Foreign Ministry overview of the state of the world. There was some hardening up of rhetoric with talk of “benign” becoming “malign” and old truths giving way to ...
Graham Adams assesses the fallout of the Cass Review — The press release last Thursday from the UN Special Rapporteur on violence against women and girls didn’t make the mainstream news in New Zealand but it really should have. The startling title of Reem Alsalem’s statement — “Implementation of ‘Cass ...
This open-for-business, under-new-management cliché-pockmarked government of Christopher Luxon is not the thing of beauty he imagines it to be. It is not the powerful expression of the will of the people that he asserts it to be. It is not a soaring eagle, it is a malodorous vulture. This newest poll should make ...
The latest labour market statistics, showing a rise in unemployment. There are now 134,000 unemployed - 14,000 more than when the National government took office. Which is I guess what happens when the Reserve Bank causes a recession in an effort to Keep Wages Low. The previous government saw a ...
Three opinion polls have been released in the last two days, all showing that the new government is failing to hold their popular support. The usual honeymoon experienced during the first year of a first term government is entirely absent. The political mood is still gloomy and discontented, mainly due ...
National's Finance Minister once met a poor person.A scornful interview with National's finance guru who knows next to nothing about economics or people.There might have been something a bit familiar if that was the headline I’d gone with today. It would of course have been in tribute to the article ...
Rob MacCulloch writes – Throughout the pandemic, the new Vice-Chancellor-of-Otago-University-on-$629,000 per annum-Can-you-believe-it-and-Former-Finance-Minister Grant Robertson repeated the mantra over and over that he saved “lives and livelihoods”.As we update how this claim is faring over the course of time, the facts are increasingly speaking differently. NZ ...
Chris Trotter writes – IT’S A COMMONPLACE of political speeches, especially those delivered in acknowledgement of electoral victory: “We’ll govern for all New Zealanders.” On the face of it, the pledge is a strange one. Why would any political leader govern in ways that advantaged the huge ...
Bryce Edwards writes – The list of former National Party Ministers being given plum and important roles got longer this week with the appointment of former Deputy Prime Minister Paula Bennett as the chair of Pharmac. The Christopher Luxon-led Government has now made key appointments to Bill ...
TL;DR: These are the six things that stood out to me in news and commentary on Aotearoa-NZ’s political economy at 10:06am on Wednesday, May 1:The Lead: Business confidence fell across the board in April, falling in some areas to levels last seen during the lockdowns because of a collapse in ...
Over the past 36 hours, Christopher Luxon has been dong his best to portray the centre-right’s plummeting poll numbers as a mark of virtue. Allegedly, the negative verdicts are the result of hard economic times, and of a government bravely set out on a perilous rescue mission from which not ...
Auckland Transport have started rolling out new HOP card readers around the network and over the next three months, all of them on buses, at train stations and ferry wharves will be replaced. The change itself is not that remarkable, with the new readers looking similar to what is already ...
Completed reads for April: The Difference Engine, by William Gibson and Bruce Sterling Carnival of Saints, by George Herman The Snow Spider, by Jenny Nimmo Emlyn’s Moon, by Jenny Nimmo The Chestnut Soldier, by Jenny Nimmo Death Comes As the End, by Agatha Christie Lord of the Flies, by ...
On February 14, 2023 we announced our Rebuttal Update Project. This included an ask for feedback about the added "At a glance" section in the updated basic rebuttal versions. This weekly blog post series highlights this new section of one of the updated basic rebuttal versions and serves as a ...
Have a story to share about St Paul’s, but today just picturesPopular novels written at this desk by a young man who managed to bootstrap himself out of father’s imprisonment and his own young life in a workhouse Read more ...
The list of former National Party Ministers being given plum and important roles got longer this week with the appointment of former Deputy Prime Minister Paula Bennett as the chair of Pharmac. The Christopher Luxon-led Government has now made key appointments to Bill English, Simon Bridges, Steven Joyce, Roger Sowry, ...
Newsroom has a story today about National's (fortunately failed) effort to disestablish the newly-created Inspector-General of Defence. The creation of this agency was the key recommendation of the Inquiry into Operation Burnham, and a vital means of restoring credibility and social licence to an agency which had been caught lying ...
Holding On To The Present:The moment a political movement arises that attacks the whole idea of social progress, and announces its intention to wind back the hands of History’s clock, then democracy, along with its unwritten rules, is in mortal danger.IT’S A COMMONPLACE of political speeches, especially those delivered in ...
Stuck In The Middle With You:As Christopher Luxon feels the hot breath of Act’s and NZ First’s extremists on the back of his neck and, as he reckons with the damage their policies are already inflicting upon a country he’s described as “fragile”, is there not some merit in reaching out ...
The unpopular coalition government is currently rushing to repeal section 7AA of the Oranga Tamariki Act. The clause is Oranga Tamariki's Treaty clause, and was inserted after its systematic stealing of Māori children became a public scandal and resulted in physical resistance to further abductions. The clause created clear obligations ...
Buzz from the Beehive The government’s official website – which Point of Order monitors daily – not for the first time has nothing much to say today about political happenings that are grabbing media headlines. It makes no mention of the latest 1News-Verian poll, for example. This shows National down ...
It Takes A Train To Cry:Surely, there is nothing lonelier in all this world than the long wail of a distant steam locomotive on a cold Winter’s night.AS A CHILD, I would lie awake in my grandfather’s house and listen to the traffic. The big wooden house was only a ...
Packing A Punch: The election of the present government, including in its ranks politicians dedicated to reasserting the rights of the legislature in shaping and determining the future of Māori and Pakeha in New Zealand, should have alerted the judiciary – including its anomalous appendage, the Waitangi Tribunal – that its ...
Dead Woman Walking: New Zealand’s media industry had been moving steadily towards disaster for all the years Melissa Lee had been National’s media and communications policy spokesperson, and yet, when the crisis finally broke, on her watch, she had nothing intelligent to offer. Christopher Luxon is a patient man - but he’s not ...
Chris Trotter writes – New Zealand politics is remarkably easy-going: dangerously so, one might even say. With the notable exception of John Key’s flat ruling-out of the NZ First Party in 2008, all parties capable of clearing MMP’s five-percent threshold, or winning one or more electorate seats, tend ...
Bryce Edwards writes – Polling shows that Wellington Mayor Tory Whanau has the lowest approval rating of any mayor in the country. Siting at -12 per cent, the proportion of constituents who disapprove of her performance outweighs those who give her the thumbs up. This negative rating is ...
Luxon will no doubt put a brave face on it, but there is no escaping the pressure this latest poll will put on him and the government. Photo: Lynn Grieveson / The KākāTL;DR: These are the six things that stood out to me in news and commentary on Aotearoa-NZ’s political ...
This is a re-post from The Climate Brink by Andrew Dessler In the wake of any unusual weather event, someone inevitably asks, “Did climate change cause this?” In the most literal sense, that answer is almost always no. Climate change is never the sole cause of hurricanes, heat waves, droughts, or ...
Something odd happened yesterday, and I’d love to know if there’s more to it. If there was something which preempted what happened, or if it was simply a throwaway line in response to a journalist.Yesterday David Seymour was asked at a press conference what the process would be if the ...
Hi,From time to time, I want to bring Webworm into the real world. We did it last year with the Jurassic Park event in New Zealand — which was a lot of fun!And so on Saturday May 11th, in Los Angeles, I am hosting a lil’ Webworm pop-up! I’ve been ...
Education Minister Erica Standford yesterday unveiled a fundamental reform of the way our school pupils are taught. She would not exactly say so, but she is all but dismantling the so-called “inquiry” “feel good” method of teaching, which has ruled in our classrooms since a major review of the New ...
Exactly where are we seriously going with this government and its policies? That is, apart from following what may as well be a Truss-Lite approach on the purported economic “plan“, and Victorian-era regression when it comes to social policy.Oh it’ll work this time of course, we’re basically assured, “the ...
Hey Uncle Dave, When the Poms joined the EEC, I wasn't one of those defeatists who said, Well, that’s it for the dairy job. And I was right, eh? The Chinese can’t get enough of our milk powder and eventually, the Poms came to their senses and backed up the ute ...
Polling shows that Wellington Mayor Tory Whanau has the lowest approval rating of any mayor in the country. Siting at -12 per cent, the proportion of constituents who disapprove of her performance outweighs those who give her the thumbs up. This negative rating is higher than for any other mayor ...
Buzz from the Beehive Pharmac has been given a financial transfusion and a new chair to oversee its spending in the pharmaceutical business. Associate Health Minister David Seymour described the funding for Pharmac as “its largest ever budget of $6.294 billion over four years, fixing a $1.774 billion fiscal cliff”. ...
Bryce Edwards writes – Many criticisms are being made of the Government’s Fast Track Approvals Bill, including by this writer. But as with everything in politics, every story has two sides, and both deserve attention. It’s important to understand what the Government is trying to achieve and its ...
TL;DR: Here’s my top 10 ‘pick ‘n’ mix of links to news, analysis and opinion articles as of 10:10am on Monday, April 29:Scoop: The children's ward at Rotorua Hospital will be missing a third of its beds as winter hits because Te Whatu Ora halted an upgrade partway through to ...
span class=”dropcap”>As hideous as David Seymour can be, it is worth keeping in mind occasionally that there are even worse political figures (and regimes) out there. Iran for instance, is about to execute the country’s leading hip hop musician Toomaj Salehi, for writing and performing raps that “corrupt” the nation’s ...
Yesterday marked 10 years since the first electric train carried passengers in Auckland so it’s a good time to look back at it and the impact it has had. A brief history The first proposals for rail electrification in Auckland came in the 1920’s alongside the plans for earlier ...
The Government is again adding to New Zealand’s growing unemployment, this time cutting jobs at the agencies responsible for urban development and growing much needed housing stock. ...
With Minister Karen Chhour indicating in the House today that she either doesn’t know or care about the frontline cuts she’s making to Oranga Tamariki, we risk seeing more and more of our children falling through the cracks. ...
The Labour Party is saddened to learn of the death of Sir Robert Martin, a globally renowned disability advocate who led the way for disability rights both in New Zealand and internationally. ...
Labour is calling for the Government to urgently rethink its coalition commitment to restart live animal exports, Labour animal welfare spokesperson Rachel Boyack said. ...
Today’s Financial Stability Report has once again highlighted that poverty and deep inequality are political choices - and this Government is choosing to make them worse. ...
The Green Party is calling on the Government to do more for our households in most need as unemployment rises and the cost of living crisis endures. ...
Unemployment is on the rise and it’s only going to get worse under this Government, Labour finance spokesperson Barbara Edmonds said. Stats NZ figures show the unemployment rate grew to 4.3 percent in the March quarter from 4 percent in the December quarter. “This is the second rise in unemployment ...
The New Zealand Labour Party welcomes the entering into force of the European Union and New Zealand free trade agreement. This agreement opens the door for a huge increase in trade opportunities with a market of 450 million people who are high value discerning consumers of New Zealand goods and ...
The National-led Government continues its fiscal jiggery pokery with its Pharmac announcement today, Labour Health spokesperson Ayesha Verrall says. “The government has increased Pharmac funding but conceded it will only make minimal increases in access to medicine”, said Ayesha Verrall “This is far from the bold promises made to fund ...
This afternoon’s interim Waitangi Tribunal report must be taken seriously as it affects our most vulnerable children, Labour children’s spokesperson Willow-Jean Prime. ...
Te Pāti Māori are demanding the New Zealand Government support an international independent investigation into mass graves that have been uncovered at two hospitals on the Gaza strip, following weeks of assault by Israeli troops. Among the 392 bodies that have been recovered, are children and elderly civilians. Many of ...
Our two-tiered system for veterans’ support is out of step with our closest partners, and all parties in Parliament should work together to fix it, Labour veterans’ affairs spokesperson Greg O’Connor said. ...
Stripping two Ministers of their portfolios just six months into the job shows Christopher Luxon’s management style is lacking, Labour Leader Chris Hipkins said. ...
Tonight’s court decision to overturn the summons of the Children’s Minister has enabled the Crown to continue making decisions about Māori without evidence, says Te Pāti Māori spokesperson for Children, Mariameno Kapa-Kingi. “The judicial system has this evening told the nation that this government can do whatever they want when ...
It appears Nicola Willis is about to pull the rug out from under the feet of local communities still dealing with the aftermath of last year’s severe weather, and local councils relying on funding to build back from these disasters. ...
The Government is making short-sighted changes to the Resource Management Act (RMA) that will take away environmental protection in favour of short-term profits, Labour’s environment spokesperson Rachel Brooking said today. ...
Labour welcomes the release of the report into the North Island weather events and looks forward to working with the Government to ensure that New Zealand is as prepared as it can be for the next natural disaster. ...
The Labour Party has called for the New Zealand Government to recognise Palestine, as a material step towards progressing the two-State solution needed to achieve a lasting peace in the region. ...
Some of our country’s most important work, stopping the sexual exploitation of children and violent extremism could go along with staff on the frontline at ports and airports. ...
The Government’s Fast Track Approvals Bill will give projects such as new coal mines a ‘get out of jail free’ card to wreak havoc on the environment, Labour Leader Chris Hipkins said today. ...
The government's decision to reintroduce Three Strikes is a destructive and ineffective piece of law-making that will only exacerbate an inherently biased and racist criminal justice system, said Te Pāti Māori Justice Spokesperson, Tākuta Ferris, today. During the time Three Strikes was in place in Aotearoa, Māori and Pasifika received ...
Cuts to frontline hospital staff are not only a broken election promise, it shows the reckless tax cuts have well and truly hit the frontline of the health system, says Labour Health spokesperson Ayesha Verrall. ...
The Green Party has joined the call for public submissions on the fast-track legislation to be extended after the Ombudsman forced the Government to release the list of organisations invited to apply just hours before submissions close. ...
New Zealand’s good work at reducing climate emissions for three years in a row will be undone by the National government’s lack of ambition and scrapping programmes that were making a difference, Labour Party climate spokesperson Megan Woods said today. ...
More essential jobs could be on the chopping block, this time Ministry of Education staff on the school lunches team are set to find out whether they're in line to lose their jobs. ...
Te Pāti Māori is disgusted at the confirmation that hundreds are set to lose their jobs at Oranga Tamariki, and the disestablishment of the Treaty Response Unit. “This act of absolute carelessness and out of touch decision making is committing tamariki to state abuse.” Said Te Pāti Māori Oranga Tamariki ...
The Government is trying to bring in a law that will allow Ministers to cut corners and kill off native species, Labour environment spokesperson Rachel Brooking said. ...
Cancelling urgently needed new Cook Strait ferries and hiking the cost of public transport for many Kiwis so that National can announce the prospect of another tunnel for Wellington is not making good choices, Labour Transport Spokesperson Tangi Utikere said. ...
The Government has delivered on its election promise to provide a financially sustainable model for Auckland under its Local Water Done Well plan. The plan, which has been unanimously endorsed by Auckland Council’s Governing Body, will see Aucklanders avoid the previously projected 25.8 per cent water rates increases while retaining ...
Foreign Minister Winston Peters discussed the need for an immediate ceasefire in Gaza, and enhanced cooperation in the Pacific with German Foreign Minister Annalena Baerbock during her first official visit to New Zealand today. "New Zealand and Germany enjoy shared interests and values, including the rule of law, democracy, respect for the international system ...
The Minister Responsible for RMA Reform, Chris Bishop today released his decision on four recommendations referred to him by the Western Bay of Plenty District Council, opening the door to housing growth in the area. The Council’s Plan Change 92 allows more homes to be built in existing and new ...
Thank you, John McKinnon and the New Zealand China Council for the invitation to speak to you today. Thank you too, all members of the China Council. Your effort has played an essential role in helping to build, shape, and grow a balanced and resilient relationship between our two ...
The Government is modernising insurance law to better protect Kiwis and provide security in the event of a disaster, Commerce and Consumer Affairs Minister Andrew Bayly announced today. “These reforms are long overdue. New Zealand’s insurance law is complicated and dated, some of which is more than 100 years old. ...
The coalition Government is refreshing its approach to supporting pay equity claims as time-limited funding for the Pay Equity Taskforce comes to an end, Public Service Minister Nicola Willis says. “Three years ago, the then-government introduced changes to the Equal Pay Act to support pay equity bargaining. The changes were ...
Structured literacy will change the way New Zealand children learn to read - improving achievement and setting students up for success, Education Minister Erica Stanford says. “Being able to read and write is a fundamental life skill that too many young people are missing out on. Recent data shows that ...
Trade Minister Todd McClay says Canada’s refusal to comply in full with a CPTPP trade dispute ruling in our favour over dairy trade is cynical and New Zealand has no intention of backing down. Mr McClay said he has asked for urgent legal advice in respect of our ‘next move’ ...
The rights of our children and young people will be enhanced by changes the coalition Government will make to strengthen oversight of the Oranga Tamariki system, including restoring a single Children’s Commissioner. “The Government is committed to delivering better public services that care for our most at-risk young people and ...
The Government is making it easier for minor changes to be made to a building consent so building a home is easier and more affordable, Building and Construction Minister Chris Penk says. “The coalition Government is focused on making it easier and cheaper to build homes so we can ...
New Zealand lost a true legend when internationally renowned disability advocate Sir Robert Martin (KNZM) passed away at his home in Whanganui last night, Disabilities Issues Minister Louise Upston says. “Our Government’s thoughts are with his wife Lynda, family and community, those he has worked with, the disability community in ...
Good evening – Before discussing the challenges and opportunities facing New Zealand’s foreign policy, we’d like to first acknowledge the New Zealand Institute of International Affairs. You have contributed to debates about New Zealand foreign policy over a long period of time, and we thank you for hosting us. ...
From today, passengers travelling internationally from Auckland Airport will be able to keep laptops and liquids in their carry-on bags for security screening thanks to new technology, Transport Minister Simeon Brown says. “Creating a more efficient and seamless travel experience is important for holidaymakers and businesses, enabling faster movement through ...
People with an interest in the health of Northland’s marine ecosystems are invited to a public meeting to discuss how to deal with kina barrens, Oceans and Fisheries Minister Shane Jones says. Mr Jones will lead the discussion, which will take place on Friday, 10 May, at Awanui Hotel in ...
Kiwi exporters are $100 million better off today with the NZ EU FTA entering into force says Trade Minister Todd McClay. “This is all part of our plan to grow the economy. New Zealand's prosperity depends on international trade, making up 60 per cent of the country’s total economic activity. ...
There are heartening signs that the extractive sector is once again becoming an attractive prospect for investors and a source of economic prosperity for New Zealand, Resources Minister Shane Jones says. “The beginnings of a resurgence in extractive industries are apparent in media reports of the sector in the past ...
The return of the historic Ō-Rākau battle site to the descendants of those who fought there moved one step closer today with the first reading of Te Pire mō Ō-Rākau, Te Pae o Maumahara / The Ō-Rākau Remembrance Bill. The Bill will entrust the 9.7-hectare battle site, five kilometres west ...
Energy Minister Simeon Brown has announced 25 new high-speed EV charging hubs along key routes between major urban centres and outlined the Government’s plan to supercharge New Zealand’s EV infrastructure. The hubs will each have several chargers and be capable of charging at least four – and up to 10 ...
The coalition Government will not proceed with the previous Government’s plans to regulate residential property managers, Housing Minister Chris Bishop says. “I have written to the Chairperson of the Social Services and Community Committee to inform him that the Government does not intend to support the Residential Property Managers Bill ...
The Government has announced an independent review into the disability support system funded by the Ministry of Disabled People – Whaikaha. Disability Issues Minister Louise Upston says the review will look at what can be done to strengthen the long-term sustainability of Disability Support Services to provide disabled people and ...
Justice Minister Paul Goldsmith has attended the Universal Periodic Review in Geneva and outlined the Government’s plan to restore law and order. “Speaking to the United Nations Human Rights Council provided us with an opportunity to present New Zealand’s human rights progress, priorities, and challenges, while responding to issues and ...
The Government and Rotorua Lakes Council are committed to working closely together to end the use of contracted emergency housing motels in Rotorua. Associate Minister of Housing (Social Housing) Tama Potaka says the Government remains committed to ending the long-term use of contracted emergency housing motels in Rotorua by the ...
Trade Minister Todd McClay heads overseas today for high-level trade talks in the Gulf region, and a key OECD meeting in Paris. Mr McClay will travel to Riyadh to meet with counterparts from Saudi Arabia and the Gulf Cooperation Council (GCC). “New Zealand’s goods and services exports to the Gulf region ...
Education Minister Erica Stanford has outlined six education priorities to deliver a world-leading education system that sets Kiwi kids up for future success. “I’m putting ambition, achievement and outcomes at the heart of our education system. I want every child to be inspired and engaged in their learning so they ...
The new NZ Transport Agency (NZTA) App is a secure ‘one stop shop’ to provide the services drivers need, Transport Minister Simeon Brown and Digitising Government Minister Judith Collins say. “The NZTA App will enable an easier way for Kiwis to pay for Vehicle Registration and Road User Charges (RUC). ...
Whānau with tamariki growing up in emergency housing motels will be prioritised for social housing starting this week, says Associate Housing Minister Tama Potaka. “Giving these whānau a better opportunity to build healthy stable lives for themselves and future generations is an essential part of the Government’s goal of reducing ...
Racing Minister Winston Peters has paid tribute to an icon of the industry with the recent passing of Dave O’Sullivan (OBE). “Our sympathies are with the O’Sullivan family with the sad news of Dave O’Sullivan’s recent passing,” Mr Peters says. “His contribution to racing, initially as a jockey and then ...
Assalaamu alaikum, greetings to you all. Eid Mubarak, everyone! I want to extend my warmest wishes to you and everyone celebrating this joyous occasion. It is a pleasure to be here. I have enjoyed Eid celebrations at Parliament before, but this is my first time joining you as the Minister ...
Associate Health Minister David Seymour has announced Pharmac’s largest ever budget of $6.294 billion over four years, fixing a $1.774 billion fiscal cliff. “Access to medicines is a crucial part of many Kiwis’ lives. We’ve committed to a budget allocation of $1.774 billion over four years so Kiwis are ...
Hon Paula Bennett has been appointed as member and chair of the Pharmac board, Associate Health Minister David Seymour announced today. "Pharmac is a critical part of New Zealand's health system and plays a significant role in ensuring that Kiwis have the best possible access to medicines,” says Mr Seymour. ...
Hundreds of New Zealand families affected by Fetal Alcohol Spectrum Disorder (FASD) will benefit from a new Government focus on prevention and treatment, says Health Minister Dr Shane Reti. “We know FASD is a leading cause of preventable intellectual and neurodevelopmental disability in New Zealand,” Dr Reti says. “Every day, ...
Regional Development Minister Shane Jones today attended the official opening of Kaikohe’s new $14.7 million sports complex. “The completion of the Kaikohe Multi Sports Complex is a fantastic achievement for the Far North,” Mr Jones says. “This facility not only fulfils a long-held dream for local athletes, but also creates ...
Foreign Minister Winston Peters’ engagements in Türkiye this week underlined the importance of diplomacy to meet growing global challenges. “Returning to the Gallipoli Peninsula to represent New Zealand at Anzac commemorations was a sombre reminder of the critical importance of diplomacy for de-escalating conflicts and easing tensions,” Mr Peters ...
Ambassador Millar, Burgemeester, Vandepitte, Excellencies, military representatives, distinguished guests, ladies and gentlemen – good morning and welcome to this sacred Anzac Day dawn service. It is an honour to be here on behalf of the Government and people of New Zealand at Buttes New British Cemetery, Polygon Wood – a deeply ...
Distinguished guests - It is an honour to return once again to this site which, as the resting place for so many of our war-dead, has become a sacred place for generations of New Zealanders. Our presence here and at the other special spaces of Gallipoli is made ...
Mai ia tawhiti pamamao, te moana nui a Kiwa, kua tae whakaiti mai matou, ki to koutou papa whenua. No koutou te tapuwae, no matou te tapuwae, kua honoa pumautia. Ko nga toa kua hinga nei, o te Waipounamu, o te Ika a Maui, he okioki tahi me o ...
Paul Goldsmith will take on responsibility for the Media and Communications portfolio, while Louise Upston will pick up the Disability Issues portfolio, Prime Minister Christopher Luxon announced today. “Our Government is relentlessly focused on getting New Zealand back on track. As issues change in prominence, I plan to adjust Ministerial ...
Recreational catch limits will be reduced in areas of Fiordland and the Chatham Islands to help keep those fisheries healthy and sustainable, Oceans and Fisheries Minister Shane Jones says. The lower recreational daily catch limits for a range of finfish and shellfish species caught in the Fiordland Marine Area and ...
Energy Minister Simeon Brown has welcomed an important milestone in New Zealand’s hydrogen future, with the opening of the country’s first network of hydrogen refuelling stations in Wiri. “I want to congratulate the team at Hiringa Energy and its partners K one W one (K1W1), Mitsui & Co New Zealand ...
The coalition Government is delivering on its commitment to improve resource management laws and give greater certainty to consent applicants, with a Bill to amend the Resource Management Act (RMA) expected to be introduced to Parliament next month. RMA Reform Minister Chris Bishop has today outlined the first RMA Amendment ...
RNZ News A group of academic staff at New Zealand’s largest university have expressed concern at the administration’s move to block a protest encampment that was planned to take place on campus calling for support for the rights of Palestinians. This week, the University of Auckland warned that while it ...
Genterwocky After a hard days marching, Sir Doocey calls in at the Village Tavern For a pint of ale and a pork pie. The grim villagers stare at him. “Do not be travelling on the forest road,” warns a crusty old beak. “And why is that, antique peasant?” Grins Sir ...
Political conferences after a party returns to power are usually a chance for some healthy, even unhealthy backslapping. Yet National Party president Sylvia Wood’s address to its mainland representatives on Saturday hardly contained the unalloyed delight that one might have expected following National’s escape from the wilderness of opposition. Yes, ...
Comment: Almost half the world is voting in national elections this year and artificial intelligence is the elephant in the room. There are genuine fears AI-generated or AI-edited deepfakes will potentially manipulate election outcomes not just in the US and UK, but critically in countries such as India. For that ...
Ahead of the reality franchise’s return to New Zealand, allow us to introduce the eight brides and grooms. Chuck on a veil and tie back your man bun, because it’s time to say “I do” to a new season of Married at First Sight NZ. The reality TV “social experiment” ...
Source: The Conversation (Au and NZ) – By Andrew Norton, Professor in the Practice of Higher Education Policy, Australian National University Every year on June 1, student debt in Australia is indexed to inflation. In 2023, high inflation pushed the indexation rate to 7.1%, the highest since 1990. This ...
Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra Changes in the May 14 budget will cut the student debt of more than three million people, wiping more than $3 billion from what people owe. The government will cap the HELP indexation rate ...
Asia Pacific Report The prosecutor’s office at the International Criminal Court (ICC) has appealed for an end to what it calls intimidation of its staff, saying such threats could constitute an offence against the “administration of justice” by the world’s permanent war crimes court. The Hague-based office of ICC Prosecutor ...
By Patrick Decloitre, RNZ Pacific correspondent French Pacific desk A women’s union in New Caledonia has staged a sit-in protest this week to support senior Kanak indigenous journalist Thérèse Waia, who works for public broadcaster Nouvelle-Calédonie la Première, after a smear attack by critics. The peaceful demonstration was held on ...
New Zealand Food Safety is monitoring overseas recalls of Indian packaged spice products manufactured by MDH and Everest due to concerns over a cancer-causing pesticide. ...
By Stephen Wright and Stefan Armbruster of BenarNews Fiji’s ranking in a global press freedom index has jumped into the top tier of countries with free or mostly free media after its government last year repealed a draconian law that threatened journalists with prison for doing their jobs. Fiji’s improvement ...
We might be in Invercargill but all anyone can talk about is Gore. Specifically, Salford Street. That’s where three-year-old Lachlan Jones lived, south of the centre of town, between the A&P Showgrounds and the Mataura River. Roughly 1.2 km away from the single level home he lived in with his ...
Keen hiker and second-year MSc student Liam Hewson wears two hats when he’s in the great outdoors. “The scientist in me appreciates nature and goes, ‘Oh, there’s that thing and there’s another thing,’ but then the tramper and the outdoorsy person in me thinks, ‘Cool bush.’” Born and bred in ...
MONDAY I lined up the latest round of civil servants from city hall against the wall, and signalled for the firing squad to drop their rifles. I stepped up onto a wooden crate to look at the office workers in the eye. But that didn’t feel right, so I found ...
After a long and illustrious career as a goal kicker, Dan Carter’s favourite way to unwind is… kicking goals. Why can’t he get enough of it? And what it’s like to watch him do it for an hour straight? A semicircle of people wielding cameras and phones has formed in ...
Dame Susan Devoy takes us through her life in television, including late night ER debriefs, her proudest CTI moment and the show she watches in secret. Quite aside from her four world champion squash titles, Dame Susan Devoy will likely go down in history as one of the best Celebrity ...
Hera Lindsay Bird reveals the best places in Ōtepoti to score more for your apocalypse-prep book hoard.Sometimes I get the feeling I’ve been killed in a car crash, and this second half of my life is just the brain unspooling itself, like one of those episodes of a hospital ...
ThreeNow’s new murder mystery series takes us on a dark, damp journey into the Australian wilderness.This is an excerpt from our weekly pop culture newsletter Rec Room. Sign up here. High Country is ThreeNow’s new Australian eight-part crime drama, set in a remote part of the Victorian highlands. It tells ...
Introducing a new way to read The Spinoff every weekend. After nearly 10 years of being an online magazine, we’re finally embracing the weekend liftout. Despite our best efforts to convince you otherwise, writers and editors at The Spinoff don’t work weekend. It is through the sheer power of technology ...
Tip one: let yourself be nurtured by this big old man. Tip two: don’t ask him to adopt you. So, you’ve arrived at your first session with a new therapist. He tells you to make yourself comfortable and you opt for the tweed armchair, hoping it makes you look like ...
I didn’t know books could open you back up; that there were books that stayed with you, where reading was like a chemical event. I knew nothing.The Sunday Essay is made possible thanks to the support of Creative New Zealand.Not too long ago, I was listening to the American ...
Former Olympic swimmer James Magnussen has already started training for the Enhanced games, though says he won’t start taking performance enhancing substances until about nine months out from the competition. The Australian world champion was the first athlete to be announced by Enhanced, but he says the organisation has had ...
Everyone thinks he’s dead. Every day they expect his body to be washed up along the coast. Most likely up Karitane way, the way the tide’s running. But nobody’ll be too surprised if his body’s never found. Even in death he wouldn’t have wished for such attention. He would have ...
Council members voted 21 to 4 in favour of Ahluwalia returning to the Laucala campus following a much-awaited meeting in Vanuatu this week. It comes as USP and its two unions — the Association of the University of the South Pacific Staff (AUSPS) and the Administration and Support Staff Union ...
Source: The Conversation (Au and NZ) – By Nicola Henry, Professor & Australian Research Council Future Fellow, Social and Global Studies Centre, RMIT University Shutterstock Following an emergency meeting of the National Cabinet this week, Prime Minister Anthony Albanese has announced a raft of measures to tackle the problem ...
Analysis - A poll showing the opposition is more popular than the government raises questions, politicians go through their 'trial by pay rise' and a Green MP loses her cool in the debating chamber. ...
The entire stretch of Tokomaru Bay on the East Coast will be subject to a joint customary marine title for two hapū, and extending up to four miles out to sea. A High Court judge has found the two groups, who during the case settled a dispute over boundaries for ...
Source: The Conversation (Au and NZ) – By James Hall, Lecturer, Media & Cultural Studies, Edith Cowan University A longstanding feud between TikTok and Universal Music Group seems to have finally reached an end, with both parties signing a deal that will see Universal-backed music returned to the social media ...
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Political parties have now fully disclosed the donations they received last year - with National getting more than double the cash of any other party. ...
A Pacific regionalism expert has called out New Zealand's Foreign Affairs Minister Winston Peters for withholding information from the public on AUKUS military pact. ...
Source: The Conversation (Au and NZ) – By Richard de Grijs, Professor of Astrophysics, Macquarie University Bruno Scramgnon/Pexels All systems are “go” for tonight’s launch of China’s next step in a carefully planned lunar exploration program. Placed on top of a powerful Long March 5 rocket, the Chang’e 6 ...
National returned a massive donation the day after a Newsroom story linked the donors to a property being investigated for operating unlawfully as a migrant workers’ hostel. The party’s 2023 donation filings, released on Friday, show it returned a $200,000 donation from Buen Holdings on August 23. That was the ...
Pacific Media Watch New Zealand has slumped to an unprecedented 19th place in the annual Reporters Without Borders World Press Freedom Index survey released today on World Press Freedom Day — May 3. This was a drop of six places from 13th last year when it slipped out of its ...
Source: The Conversation (Au and NZ) – By Joshua Black, Political Historian and Administrator Officer, Australian Historical Association, Australian National University Australia has had its fair share of public record-keeping controversies in recent years. Some have been mere farce, as in the case of two formerly government-owned filing cabinets (containing ...
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In this excerpt from her new memoir, Dame Susan Devoy remembers her turn as star contestant on the 2022 season of Celebrity Treasure Island. The most anxious time of every day was pre-elimination, when you knew this could be your final day on the show. I felt such contradictory emotions, ...
A week that began in triumph ended in an all-too-familiar disaster for the Green Party. Duncan Greive asks if there’s something in the mission that breaks its best and brightest. A long, strange week for the Green party began with a fantastic poll result. On one level this is hardly ...
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In 1995, Sally Clark went out on her own in a bold and unorthodox attempt to join an illustrious group of equestrian riders conquering the world. In the days of glovebox road maps, brick cell phones, and the hit song How Bizarre, Clark refused to follow Sir Mark Todd, Blyth ...
https://www.stuff.co.nz/national/health/coronavirus/300235706/covid19-no-reason-auckland-shouldnt-move-to-alert-level-1-on-monday
I disagree. The advantage of the current system is its simplicity and familiarity. In addition, regional rather than blanket changes in alert levels allows for a more focussed use of the currently available tools.
We all owe him so much for the Covid modelling work that persuaded our government to switch to an elimination goal, but Wilson is not a comms expert.
Precisely! A few experts are starting to stray into areas where they trample around like an elephant in a China shop.
You couldn't possibly be thinking of Des Gorman by any chance?
I certainly think of Des Gorman every time.
yes, whenever I see a headline like " expert claims this" I think of a lazy journo, ringing up someone, looking for an easy column filler. If you got all of the "experts', and all of the economists in one room, apart from hot air, I dont think anything else useful would come out.
yes – nuance is good, but alert levels are aimed at the lowest common denominator.
Yes, that’s us here
Good to see 7 out of 10 kiwis saying benefit levels for both waged and unwaged are too low.
https://www.nzherald.co.nz/nz/survey-finds-support-for-increasing-income-for-low-or-non-waged/YQRTL5WGZPR2HBCHRL32QNVOJU/
It 's a UMR polls commissioned by more than 40 organisations including unions, iwi groups and poverty-focused organisations.
Surely Ardern must be running out of excuses by now.
As soon as this pandemic is over and burgeoning Government debt is under control we’ll get moving again. Ardern and Robertson’s hands are
tighttied."As soon as this pandemic is over and burgeoning Government debt is under control we’ll get moving again. Ardern and Robertson’s hands are
tighttied."That could be a long long long time away.
But what about the vaccines?
I hope you are right and the vaccines (once administered) make a huge difference. But I have doubts that they will. Will we be able to travel overseas once vaccinated without isolating when returning? Hopefully the answer will be yes once enough of the population has had the vaccine. And will we be able to have tourists again (if they are vaccinated).
I'm pretty sure Clark meant to put benefits up too – but somehow she never got around to it. While the "hands are tied" is considered an excuse, it will never happen.
Isn't debt now predicted to be $3.5b lower than forecast and budgeted for already?
https://www.nzherald.co.nz/business/stronger-than-expected-tax-take-sees-smaller-than-forecast-deficit-for-start-of-the-year/X3KTV4O73DA4OTQISATLSS45HA/
Those ties look pretty loose to me.
If I had $3.5b extra to play with and had promises on child poverty, I know what I'd spend it on.
If only Parker and Hipkins will loosen the knots. Scallywags!
It is a particularly gnarly issue for this Government but luckily they get strong support and in a self-reinforcing self-interested way.
https://www.stuff.co.nz/business/124320206/sp-raises-nzs-credit-ratings-sees-property-prices-moving-higher
That's all well and good but what do 70% of donors, weighted for contribution, think? What will auntie Helen approve?
won't be long now, just need a bit more time to [burble, burble, economy, burble, don't scare the horses, burble burble]
The first benefit increase last year was a start.
It's not making evident inroads into our very high levels of deprivation.
It was, but even then it was easy to see that they either just don't get it, or actually believe that helping beneficiaries stops them from working or something (eg the lack of an upfront cash payment so beneficiaries could buy hand sanitiser and make plans at the start of the pandemic and going into lock down). Or being really cynical, that was an election year move.
Ardern and Roberston have a real problem here. Unless they do the big transformation (something like the GP policy, or using the WEAG report as a road map, and it has to include non-neolib responses to the housing crisis), they will continue to tinker and never get ahead of the problem.
Tinkering will mean many people will end up hating Labour. Not their core vote, but it will play out in the MSM and SM in the third term, and this is how we end up with Luxon as PM.
They don't have a plan. How is that even possible?
Right-leaning voters do not want livable income support levels. A third-way govt like this wants to keep those votes. They are counting on left-leaning voters having nowhere else to go.
But they do have somewhere else to go. Why aren't they?
Large widespread emergencies tend to reinforce conservatism. Let's see if that effect lasts until the next election..
seems like an opportunity.
Agree, although my understanding is that the government favours social insurance (or something like that) as the leading option, so they aren't doing nothing.
Grant was muttering about some insurance type scheme. Personally I wondered how anyone would be able to afford it particularly the younger crowd.
Even the better off pay income tax of 20%- 30%, GST of 15%, Student loan repayments 12% , ACC about 2%, Kiwisaver if they want a home 3% or more, all of which adds up to about 62% of their wages. Not much room to add anything to that.
Plus these schemes are catnip to the RW who at some future time would expand them and let the welfare net go.
Benefit raises would be good but I'm a lot more in favour of the lower paid getting better wages than continuing to subsidise employers. Wage and salary earners need a bigger share of the GDP plus spreading it more equally.
Also wonder if it’s time to go back to the old days of flat child benefits.
GST is so regressive to inequality.
Income support levels have been at least 20% too low since Richardson's 'Motherfucker of all Budgets'.
The NZ economy is going very well post-COVID (for most people – not all) and move to restore them back to a 'liveable' level in this year's Budget. The opportunity and timing has never been better.
Ideally I'd love to see some form of GMI as a baby step towards reforming the entire welfare system.
I'd like to see a New Zealand economy that doesn't depend on public infrastructure to prop up our entire economy for years on end. It's kinda useful, kinda good at soaking up unemployment, but not going to to drive wages up higher enough to pull the working poor out of poverty.
I'd like to see an unemployment rate with the number 3 in front of it, and Maori and Pasifika unemployment down from 10 to a number 5 in front of it.
I heard that Robertson's main economic advisor for several years just gave up and left and went to the CTU.
We are far, far too dependent on government to be a high functioning economy.
"I'd like to see an unemployment rate with the number 3 in front of it, and Maori and Pasifika unemployment down from 10 to a number 5 in front of it."
Write to the stats Minister then….the numbers are largely made up anyway
Totally agree. Another way of putting it is that because so much of our economy effectively 'farms for capital gain rather than cashflow' – too much equity 'sticks' in places where it's not very productive. And as a result we finish up relying the govt (one way or another) to keep money flowing rather than private enterprise.
Which in turn means that opportunities to invest outside of property have been very thin indeed. It's become a very 'unvirtuous' feedback loop.
I keep coming back to the tranche of tax reforms that TOP were proposing, especially their Comprehensive Capital Tax, an intelligently designed measure that was specifically designed to address this exact issue. You don't have to like the party to look at the concept and think about pinching it.
I can easily see by the end of March New Zealand will have the Reserve Bank requiring an LTV ratio of 40% deposit to buy a flat, and also Governmetn making the Bright Line Test extend to 10 years for properties bought after Budget this year, and also Government proposing something tough like floating a maximum number of rental properties able to be owned by a single person or company or Trust that doesn't have charitable status, and also some stronger social or 'sweat' equity moves for getting people with poor credit records into home ownership.
And I would not put it past the major banks to go: we expect you to get to 60% equity within a year to bring down our Bad Debt risk which the Reserve Bank tracks. I think the major banks can read.
I think this Government in the mood to act.
After the May budget, those who are on a near-50% debt-to-equity ratio might start to divest a few more.
If they are leveraged that much that they’d do better to sell now before any announcement and get out with the handsome capital gain provided by the FOMO…it pays to panic first.
Stopping business that have owning property as part of the setup from running in interest only would be a good start ,many of the empire builders in farming never plan to pay principal so can pay over the odds for property,.
If they had to pay 3% principle every year then they could only purchase land at a cost that allows 5,or 6% profit each year.
On the contrary to your characterisation of TOPs politics, I disagree with their policy. The problem is their over reliance on economic theoretical ideas which have a poor track record in practice. On the UBI front this has lead to positions (from Morgan) where beneficiaries are thrown into an insufficient UBI regime without necessary topups based on their actual circumstances.
On the CCT proposal the basic assumption is that property and other investors are 'rational' (meaning they know the actual odds of their investments succeeding and invest accordingly, as if playing roulette). If they are not and don't then there is no reason for investment to reposition itself more productively in response to a CCT anyway. This is coupled with an idea that there is a relatively fixed amount of investment available to the economy and so its about how that is distributed. In practice the amount of investment isn't really traded off between sectors, somebody investing in their property business doesn't detract from somebody investing in their orchard business in almost every case. Of course you can always do your analysis by turning all these individual investments into proportions of total investment but that is not how the institutions involved work and looks like the tail wagging the dog form of analysis.
As you have identified, a lot of property investors don't seem actually rational, in fact they don't seem to even be investing very wisely and could probably be earning more in equity funds. At least we should understand everyone definitely isn't cashing out at present prices.
NZ businesses are far far to dependent on the government to be a high functioning economy. .there, fixed it for you.
Said economic advisor is now the chief economist of the CTU (Bill Rosenberg's former position), so hardly a downgrade.
We have among the lowest government economies in the OECD as a % of GDP, so it’s not like the government spend up large compared to other economies.
If you think that the CTU is equivalent to the office of the Minister of Finance, you're dreaming. Even the most starry-eyed socialist deep mole in The Terrace would laugh.
You should demonstrate your claim with OECD figures. The last I can find are from 2018.
I'd see an extra $70billion into the economy from government spend in just 2 financial years as a massive over-reliance on the government to prop up our economy.
The alternative of the economy cratering in response to lockdown would still seem to be vastly inferior of course.
But your looking at govt financial indicators of govt intervention and then concluding things about how 'normal' the economy looks. Say the RBNZ writes off 37% of central govt debt (which they could) does that make the economy 37% less govt involved? Well no, it makes no difference at all outside of the govt books. If there must be another lockdown then it should obviously be accompanied by a similar wage subsidy and this should be understood as sensible economic policy, not some unhealthy dependence of the economy on the countries policy.
As you've pointed out yourself before, ours is the government that has had to make the largest per capita set of interventions.
Pointing out that we are so brittle that the same scale of intervention would have to be done again is not a note in our favour. It points simply that we are one of the least resilient developed economies in the world.
This is completely incorrect. The government didn't have to intervene, they decided to and the economy is doing better than others partly due to that (and partly due to fewer lockdowns).
This is not a sign of economic weakness, its a sign that the government is able to intervene in the economy to halt recessions. In fact basically it works in the other direction and the willingness of the govt to step in will determine how much/little any recession bites. Other countries have done less and are economically weaker as a consequence.
It's sophistry to say they didn't have to intervene in what was the largest economic shock we'd had in a century. Even in the National counterfactual they would have intervened – as Canterbury showed multiple times over. Their intervention at scale is not a note of weakness on their part as government.
It is however an economic catastrophe.W hat's inarguable is the scale of shock we faced compared to other developed countries. Any of treasury's GDP graphs show it. Our largest industry has been shown to also be the most vulnerable to economic shock, and other large industries have been devastated. It's a very definition of brittleL easily snapped.
Most of this massive economic shift we are having to go through is being smoothed over with public spending on public projects. So in the medium term all we've been given is just the time it takes to do infrastructure projects to completely rebuild both tourism and tertiary education.
I remember reading about it in the Tax Working Group initial issues document which had charts, but that seems to have disappeared from their website. However, from memory, NZ is a bit under 30% for central gov't (not increasing this was also a focus of the 2017 election debates) and another 5% for local govt. OECD average is somewhat higher than that, mostly because of European countries with stronger safety nets and more subsidised education (for example).
Bill was the main economist voice of unions and consequently was on a lot of tripartite forums and working groups – hardly just a socialist in an office somewhere.
A study needs to be done to establish how much rent people are paying on a benefit or low waged and how much they are left with once the rent is paid.
Treetop
i read a few weeks ago that the median rent in Rotorua was 460.00 per week.
And article from feb last year stated that the median rent in NZ was 515.00 per week.
https://www.newshub.co.nz/home/money/2020/02/national-median-rents-hit-record-high-of-515-per-week-trade-me-says.html
Here you can have a look at the benefit rates 2020
https://www.workandincome.govt.nz/products/benefit-rates/benefit-rates-april-2020.html#null
You don't need a study to be able to look at the numbers do your math and realise that the math of the government does not work.
Sadly we don't have someone like Katie Porter – who is good with numbers – and her magic white board to question the power that are currently as to their math, their compassion, and their fuckwittery that keeping people below the poverty level begging for help is going to teach anyone the value of work.
Maybe that would be a question for Jacinda Ardern, Grant Robertson and Carmel Sepuloni. Mind they know the value, that is why they are polititans and not workers.
I probably came across as being naive. I have been a benefit rights service advocate for 3 years 20 years ago. I still look up stuff. I am aware of the imbalance of income and the cost of rent.
A study needs to establish how many in a dwelling, how much income and the cost of rent or mortgage payments?
The median figure does not give a true representation of how much a person is left with once the rent is paid.
So would this be in the ballpark of what you are after?
This looks at households with kids (because "Child Poverty Monitor"), but the MSD report (cited as "Perry 2019" in the current link) includes households with high "outgoing to income" ratios.
So the population is in income quintiles (20% blocks from poorest to richest), and we can look up a variety of stats on the proportion of household income that is spent on housing costs.
Again, relating only to households with kids, half of the poorest fifth of households spend more than 40% of their income on housing, while only 10-15% of wealthier households spend >40% of their income on housing.
I could probably look through the MSD report for specific information tomorrow if you want, depending on whether my boss is watching lol.
Thank you for that.
Some sort of precision monitor is required. If genome sequencing can be done for a virus the same needs to be done for the proportion of household income (of everyone recieving income in the dwelling) that is spent on rent and mortgage payment.
This would need to be expanded further for other living and health costs.
I'm not sure what your genome analogy means.
Basically, what statistic are you actually looking for? The proportion of household income spent on housing is sliced and diced multiple ways in the perry report. We can explore that before expanding the scope to other costs.
P40, figure C.11 Shows the proportion of all households that are paying more than 40% of their incomes on housing, by quintile. For the poorest quintile, it's 30%. But recall the same data with households containing children, it's ~50% for that quintile. So now we have an idea on the position of households without children, too.
Genome sequencing tracks a single type of virus as it infects from patient to patient. It doesn't really apply as an analogy to economic data as far as I can see.
Genome sequencing deals with precision, not the best analogy.
When it comes to data for housing I want to know what the income is without the accommodation supplement (AS) and then with the AS and if temporary additional support (TAS) is accessed for rent?
I just skimmed through your links and I will read them properly.
Hmmm. There's a little bit about AS payments and housing costs in Perry, some of which seems to be from "iMSD".
If there's nothing specific enough, it might be a job for an OIA.
There was a stat a few years ago about the number of AS recipients receiving the maximum amount of AS. I'll have a think.
It might take a carefully-crafted OIA, especially regarding the pre-AS income.
A very interesting question, though.
MSD has one or two people who do massive amounts of work on incomes material hardship.
The "incomes report" has a lot of before- and after-housing-costs information by demographic and income. The downside is that it's almost a data dump, easy to drown in, running to 360 pages. But if questions can be nailed down enough, it's pretty useful when talking poverty and equity.
maybe increase the number from 1 to 2 people working in that rather understaffed department to say maybe 10?
and if you only dumb raw data you can still say you did a report. You just have to know how to find it, read it, and put it together. Its done…here ….have the raw data and a few filters. That counts as doing it or cya.
Yeah, lots of research units could do with more staff, not just in government, either.
And sure, data analysts just press a button and the outputs generate themselves, lol
Well good to now that despite pretty much all of the NGO's saying so, all of the non formal NGO's – local help groups saying so, and people like me and Weka or Bill and thousands others saying so Jacinda Adern has yet to make any statement about her statement before the election …….there will be no increase in base welfare levels.
She did not have an excuse then, and she still has no excuse. But she got her national voters to vote for her and her troupe of handmens, and I guess that was important to her.
Priorities, she has them, and one was getting re-elected and well now she is elected. Why on earth would she bother finding an excuse?
An incredibly popular proposal that a particularly popular PM could use their personal popularity to push for policy implementation:
https://www.rnz.co.nz/news/national/436866/survey-finds-69-percent-want-income-support-for-those-in-need-increased
Raising income levels is all very well, if it happens, but until something meaningful is done about housing and rents it's a complete waste of time. We all know where the increased income will go – landlords' pockets.
Indeed
Agree totally Rosie Lee – nearly 200,000 empty houses in the last census = property owners bricking their investments only looking for tax free capital gains.
The excessive commidification of housing has given us obscene numbers of empty houses while people are living in garages, couch surfing, in cars and on the street.
Exacerbating a housing shortage by "investors" bricking them also helps greatly distort rental prices in an upward direction. Can we have a large "ghost house" tax please……FFS
We all know where the increased income will go – landlords' pockets.
And from there is it will go into the capacious pockets of – the bank, the council rates, the insurance company, the property manager, the guys going gangbusters putting in insulation, kitchen vents, painting, replacing the hotwater cylinders, fixing windows, unblocking drains again, the lawnmowing dude, the people doing the smoke alarm inspection, the accountant, and of course the taxman.
All going well that is.
lol
Yep agree Red, when I used to work Public Practice accountancy (a fate worse than death), I can't say I ever saw many landlords making much in the way of income profit, or even a meaningful return on monies invested.
And then there's the stress of bad tenants, unpaid rent, damage, compliance requirements so on. Domestic rentals are sure not something that i would ever take part in.
Demonising all landlords is just plain silly.
#notalllandlords only works if the industry heads and most landlords aren't rorting. But they are. Yes, there are good landlords (mine are relatively good), but the point here is that there is a culture, sanctioned by lack of legislation and policy, that means landlords get to make excess income at the expense of poor people. It's just wrong.
Not sure when you were an accountant, but obviously the current situation is that many people are making very large sums of money from capital gains and that rents are going up beyond what people can afford to pay.
Weka, yes I agree that rents in many parts of NZ are getting to crazy and unaffordable levels, but I would disagree as to cause.
And yes again, huge tax free capital gains are possible, especially in the likes of Auckland, and I think that is the key.
I would strongly disagree that '.. landlords makes excess income…'. Of course some do, but in our society (for better or worse) both tenants and landlords need to understand that domestic rentals are a business, just like any other.
I am not too sure what '.. lack of legislation…' you are referring too, but the most obvious one and the most fairest would be to introduce a capital gains tax – and actually enforce it (taxing capital gains is already in the Income Tax Act, but I have yet to see applied by the IRD).
Its weird, if I sell a business asset for a profit, depreciation recovered is taxed, yet if I was to sell a domestic rental at a profit/capital gain, it is tax free.
P.S. I left public practice in 2007 and regained my sanity.
I still prefer the Green's Wealth Tax that they put forward at the election (or similar). It has the potential to reduce house prices as well as making NZ a fairer place to live.
Incidentally, and this is anecdotal, rents in Queenstown and Wanaka have dropped considerably due to the crash in the local economies due to the borders being closed.
ok, so you understand that what is happening now is completely different from 2007?
This piece from the Spinoff is an eyeopener,
Mum and Dad investors. And yes, they put the rent up by 1/3, not because they had to, but because "That’s what landlords do".
https://thespinoff.co.nz/society/26-02-2019/i-was-a-landlord-and-i-hated-the-person-it-made-me-become/
That is excess income. Both the capital gains and the rent increase. I'm not saying landlords should make nothing, or that it's not a business. I'm saying that too many landlords are making more than a living at the expense of poor people.
The legislation and policy I was referring to was tenancy rights. But yep, the govt needs to make major moves on the whole crisis, CGT is but a small part of that. They won't though, because people making money from housing is propping up the economy and too many of those people are Labour voters.
That kind of story is only possible because:
I guarantee you they bought it really cheap – spent a minimum on it – and then sold in a rising market. The difference between this story and providing a modern, comfortable, 3 bed home in a popular city suburb is night and day.
The people who wrote this piece were never landlords – they were property speculators right from the outset with no long term intention of staying in the business. That they rented it out for a few years was just a minor consideration on the side.
"Mum and Dad investors. And yes, they put the rent up by 1/3, not because they had to, but because "That’s what landlords do"."
I've never done that. And the term Mum and Dad investors? Pick a different term.
oh look, another #notalllandlords.
Can all of these nice landlords join the real estate lobby groups and ask for rent controls and housing quality standards? I mean, they're already charging below market rates for good properties, so they won't face the same costs as slumlords or profiteers.
lol. How do we tell which are the nice ones? Do they hand in their excess capital gains?
Every time not-nice landlords are discussed on the internet, the nice landlords use the opportunity to tell people how nice they, personally, are.
ok, so that's some pretty sound basis for policy development and legislation.
'cept, don't we need kind landlords with this govt?
lol fair call.
You've never done that but plenty do. Have you not been paying attention to what is going on?
that means landlords get to make excess income at the expense of poor people.
An actual 'in the hand cash flow income' usually only happen if the business is carrying no mortgage, and in the normal course of events it can take 2 – 3 decades to get to that stage.
Before this the owner of the business is often subsidising the company with their PAYE income from their day job. (The old LAQC tax smoothing scheme was introduced to specifically handle this almost universal scenario.)
And yes the capital gains have meant a big increase in equity – but that can only be accessed when you sell. Well not only can you only do that once – and of course on the tenant side it hugely contributes to insecurity of tenure.
Or if you refinance. At current interest rates, I am sure many are taking tax free cash out of their rental by increasing the mortgage, and this must surely be a contributor to rising rents.
Beyond introducing and applying a capital gains tax, I think only increasing supply can make a meaningful difference. Lets hope that now Twyford is gone, this term the government will make some meaningful increase in supply.
Supply is not the issue…as Christchurch demonstrates…zero population growth, excess subdivision and development and yet the prices and rents continue to rise.
The (main) cause is excess liquidity and the wrong incentives.
Hi Pat. I think that ChCh is a bad example. Since the earthquake the city has spread out hugely to the west, north west and south west. In the east of course, which has historically been lower cost housing, its just one huge barren landscape in many areas. The whole market is totally distorted.
The new dwellings are all of a certain type. Flashy, expensive and not really good rental material. So, I would strongly disagree that supply has increased in the rental market.
Agree with you re excess liquidity, along with interest rates sub 3% and the wrong incentives (lack of Capital Gains Tax).
PS: Are you sure that there is zero population growth in ChCh? That just seems counter to what I am seeing.
Would love to hear your views on other wrong incentives, and actions to take. This is a complex area for sure!
The growth is in Selwyn and Waimakariri…Christchurch city has barely recovered to its pre quake population…and the number of subdivisions particularly around Halswell and Hornby/Wigram makes the lie of insufficient land being a major driver, not to mention the number of unoccupied sites and unoccupied houses.
The wrong incentives relate to preferential tax treatment, artificially supporting above market rents with AS and no real control on outside speculation…we dont measure the true rate of offshore investment because we dont wish to have to address it.
The strategy is ever increasing house prices to provide the 'growth the financial system needs to continue as we have given up on being competitive with production.
Changing the incentives towards production carries big financial risk and will take time to show effect….risks the politicians (and in all honesty , most voters) are not willing to take.
Pat. Difficult to disagree with your points and thank you for well thought out reply.
Exactly. The equity is not locked away but can be used (semi-unlocked) in all sorts of various ways without having to sell up. It is completely different from an asset-rich but cash-poor super annuitant who cannot afford to pay the rates on their own home, for example.
The equity is not locked away but can be used (semi-unlocked) in all sorts of various ways without having to sell up.
It's not quite like going to an ATM. And once you stop working full time the big issue in accessing equity is serviceability. And of course with a bigger debt, comes bigger repayments, so all you've really done is kick the can down the road. I would only consider it in the event I had an investment opportunity that was going to put the equity to better use.
So yes you can go to the bank to get a bigger loan, but it's not 'free money'.
Servicing is done by tenants, which is one reason why rents go up even when interest rates are going down: freeing up money for the owner.
The bank only considers some fraction of the rental income. It's not usually enough by itself – they definitely want to see evidence of other income to cover your living costs.
Huh??
Yes Incognito, pull out $100,000 tax free by increasing the mortgage by $100,000. Thats only an extra $60 or so per week in cost (tax deductible) for the landlord, which in turn can easily be passed over to the tenant in the form of increased rent.
And of course the reduction in equity (of $100,000) will be replaced over time by the capital gain. Yes, not 'free money', but a helluva incentive to take tax free money now and let the tenant pay for it.
There appears to be a renovation boom that’s partly driven by low interest rates and partly by Covid-19. Much of these are done with an eye on the future at which they need to give a return, e.g. a higher asking price when put on the market. This will drive up house prices for some time. The other thing to note is that some people will want or need to free up equity as you explained to fund those renovations. This, in turns, puts an upward pressure on rents. Lastly, some property owners will take the opportunity to renovate their rentals. You can guess what that will do to rents for a long time to come. It is too easy, relatively speaking, to get credit from banks and/or to free equity for property owners and I don’t blame landlords for that. Of course, the tax regime helps too.
@Incog
Increasing your mortgage is not as simple as ringing the bank and demanding they give you money.
The three big hurdles are proof of equity, your ability to service the loan, and age.
Serviceability relates to income – and the bank never allows for the whole rental income. Usually they only count some fraction of it like 60% or even less. These days with rents so low compared to the value of the property (I know that sounds bizarre) this is usually the limiting factor on how much equity you can access.
Plus they have their own internal policies around exposure to specific risks that change all the time and you only find them out when you thought you had a watertight case – they say 'no'.
That sounds more like an armed hold-up 😉
Actually, it is, although banks prefer things in writing so e-mail generally works better, via the internet banking channel, of course. In some cases, you won’t even have to go into an actual bank for anything! For example, do you know how easy it is to apply for a new credit card with a ridiculous limit? Hint: way too easy! Yes, I know, it is guaranteed but it is essentially the same thing: increased funds for ‘discretionary spending’ AKA consumption.
Depending on your situation and what you’re instructing the bank to do, these are not all that big hurdles. Proof of equity is not always required if you have a long-term relationship (AKA history) with your bank and do all your business with/through them. They have their own ways of doing background checks too. Banks want to know about change of circumstances regardless whether you refinance and increase the mortgage on one property and decrease it on another (e.g. your home). Yeah, age is a bit of bastard but if you have a good personal super scheme a lot of things are possible with a kind and friendly bank 🙂
So, it all depends.
I guess my real point is that it's the wider housing market in NZ is where the locus of the problem lies. At present tenants are living in fear of the next rent rise, and their landlord who is likely doing their annual accounts this month – looks at their very thin, or negative, cash flow and realises the rents have to go up again.
So in essence Rosie is correct – unless this govt can find a package of measures to reduce housing costs and asset inflation – then any improvement in income support will indeed likely get absorbed in housing costs. Blaming the landlord does diddlysquat to fix this.
The anxiety will go down somewhat now that rents can now only go up once a year, it's now very hard to give tenants notice, and the minimum standards for heating and insulation have gone up significantly.
It might take a few months for all to catch up with that.
Simply really. Don't be a landlord if it's not working for you.
I was a landlord once. It came about not because I bought an investment property (that would be against my principles) but because I moved cities and I wanted to keep my house in the city I moved from in case it didn't work out in the new city.
I eventually sold it when I realized I wasn't going to move back. The realtor at the time broke the "bad" news to me that I could have been charging $100 extra a week in rent. I told him I thought I had charged a fair rent and thats what mattered to me. The rent covered my expenses a little bit plus.
I don't believe its o.k. to make a big profit out of offering a basic need to others.
to make a big profit out of offering a basic need to others.
What 'big profit'? Even if you'd been charging that extra $100pw that amounts to barely another $5kpa. Before tax.
As for ' basic needs' how do feel about your supermarket, and all their suppliers? Or any of the myriad other businesses/services you use to meet your 'needs'. Are all of these 'against your principles'?
Ha! You've got him there Red.
I have absolutely no truck with this idea that all landlords have horns and a tail and are exploiting renters by making excess profits out of supplying basic needs. Of course some do, but in my experience they tend to be of certain migrant groups exploiting their fellow migrants. Most Kiwi landlords are just ordinary middle income people who think they will make their fortune in RE and find out its just not that easy.
This isn't my experience, and this statement feels a little more problematic than "All Landlords are Bad" which precisely no-one in this thread has said except for you and RL.
No I never said 'all landlords are bad'. In fact have repeatedly said the exact opposite. Best you read my postings again if you think that. LOL.
As for migrant groups, browse through the court cases and prosecutions and you will see that two particular groups stand out for appalling rental abuses, the same two groups that stand out for paying appalling wages. LOL (which seems your default answer to everything Arkie).
No one is 'demonising all landlords', no one has said 'all landlords have horns and a tail'. You said both of these in response to reasonable criticism of the current system, it's disingenuous as no one was arguing that.
Otherwise I have no time for forming problematic opinions of migrants, thanks.
LOL
$5kpa here, $5k there, pretty soon we're talking real money – for some
I do feel a bit sorry for you RL, but that’s just the way the cookie crumbles – not everyone can turn the size of profit they feel they’re entitled to.
I was never here for sympathy.
The NZ housing market has many, many problems – and while for many people the rent they pay is the most proximate symptom of this, and the one they get most upset about – the root causes lie elsewhere.
Good to know. Re "root causes lie elsewhere", might the growing inequality of wealth distribution in NZ be a root cause?
In a more equal New Zealand we'll all be better off. Like anker, I don't believe its o.k. to make a big profit out of offering a basic need to others, mainly because that grows inequality, and inequality is, if not the root cause, certainly a root cause of social problems. A little bit like the love of money, tbh.
Some small improvements are now in effect. which is good.
https://www.newshub.co.nz/home/money/2021/02/what-the-residential-tenancies-act-changes-mean-for-you.html
Like anker, I don't believe its o.k. to make a big profit out of offering a basic need to others, mainly because that grows inequality,
And like anker I invite you to explain why you believe it's OK to provide other legitimate needs like food, clothing, etc for profit – but for some unspecified reason it's wrong to do this for housing.
Taken to it's conclusion this logic means that anyone who profits from providing housing – builders, banks, developers, material suppliers, etc – should all be condemned as equally illegitimate.
As for this idea that 'big equity = big profit' – well that's only partially true. It's not always so easy to access, and there are downstream consequences of doing so.
RL seems to be on the cusp of recognising an inherent flaw in capitalism: people profit most off folks who can't avoid it, regardless of the product or service.
Take the Hutt Valley landlord of a couple of days ago – literally putting someone out of their home of seven years because he wanted more money. Or the repeated accusations of profiteering by NZ's supermarket duopoly (didn't some supermarkets get bad press for hiking prices during the covid panic buying?). Or tobacco companies actively misleading their customers about addiction and health effects related to their product.
And many get a pass on their behaviour because "it's just business", as if greed is an excuse for exploitation. "Business" reduces every other person into two categories: a resource to be consumed in the production of the product being sold, or a customer to from which to extract as much money as possible.
Every person in a capitalist society is guitly of this alienated behaviour, the only question is the extent of our own personal guilt. But pretending that we're somehow the blameless exception is a fantasy.
When goods & services are sold, they change hands. You have certain protections under the Law too. It operates as a market as much as can be expected between fairly equal parties.
When a hotel charges for a room, it incurs GST. The price reflects quality of room & service and availability.
When a landlord rents out a property, nothing changes hands, and no GST is paid. There are few protections. The power balance is badly skewed in favour of the owners. There’s a relatively weak correlation with quality, at best. It seems to be scarce all the time.
Take the Hutt Valley landlord of a couple of days ago – literally putting someone out of their home of seven years because he wanted more money.
And as I showed at the time – the rent was still $100pw less than the market rent he could have asked. And you moan about it this.
What level of rent would you have been happy with?
people profit most off folks who can't avoid it, regardless of the product or service.
Well no – the tenant is in principle free at any time to leave with minimal notice and find something better. That they would prefer to stay and enjoy their community roots and connections – well that's their choice surely?
That in reality the NZ housing market isn't providing much in the way of better choices at the moment, is a much wider problem than just me providing a service to people that they're happy to pay for.
No, you you made assumptions that a specific property was of a certain value based on only two dimensions: geography and bedroom number. You don't even know the dwelling could be legally rented out beyond 1 July, which would limit its "market rent" to the short-term low-quality section of the market, for a start.
"happy to pay for" lol.
But you obviously missed the bit where I said it was a wider problem than just being about you. Those particular blinkers are common in people "just doing business" – it's part of the alienation caused by the "wider problem"*
*It's capitalism. Capitalism is the wider problem.
The average tenancy lasts around 18 months which points to the transient and short-term nature of the NZ rental housing market.
In the first 15 yrs of running our business, this was pretty much our experience too. But not counting a couple of legitimate evictions that we had to undertake – in every single case the tenant moved on for reasons that had absolutely nothing to do with us, the quality of the unit, or it's affordability. Usually they just wanted to move elsewhere because something in their life had changed.
People rent mostly because owning just doesn't make any sense for them at this particular stage of their life. They value the flexibility renting gives them.
Alex, I'll take "What the more mild-mannered capitalists tell themselves to sleep at night" for $100, please.
No, you you made assumptions that a specific property was of a certain value based on only two dimensions: geography and bedroom number. You don't even know the dwelling could be legally rented out beyond 1 July, which would limit its "market rent" to the short-term low-quality section of the market, for a start.'
Do you have any evidence of these assertions?
And as a rule the govt tenancy website that lists rental bands is very reliable. In this case the band for this type of property in Wainui is $500 – 550pw and even the 'increased rent' was well under this at $430pw. For the purposes of this discussion it's entirely reasonable we regard this information as accurate unless proven otherwise.
Besides if we go with your idea that maybe the property was not legally rentable after 1 July – then why are we blaming the landlord? The tenant has been living there for seven years, and seems very unhappy at the prospect of having to leave – and if the landlord reluctantly decides to sell because he chooses not to keep throwing good money at it – then exactly who is to 'blame' here?
I'm not saying it's inaccurate. Population statistics do not give reliable inferences to individual case conditions.
I'm suggesting that the "bottom quartile" value is not the same as "absolute lowest rate charged in every tenancy agreement lodged in the last six months".
but I'm totes sure #notalllandlords /sarc.
I'm suggesting that the "bottom quartile" value is not the same as "absolute lowest rate charged in every tenancy agreement lodged in the last six months".
Having spent 20 odd years doing this, all I can tell you is that the quartile bands pretty much cover at least 90% of new bonds lodged.
Sure there will be some exceptional outliers that fall well outside the band, but basing your case on them takes the discussion nowhere.
So you didn't show that he was undercharging, as you previously claimed. You were simply guessing that a landlord who thinks healthy housing regs will force him out of the market was not renting out homes in the bottom 5% of value.
Now, you might be right and the landlord is a charitable dude. But in my 30 years in the rental market, charitable landlords are pretty rare. Easygoing, sure. Willing to ignore a missed payment if we ignore the slight fire hazard or poor maintenance, sure. But charitable? Rare as hen's teeth.
But charitable? Rare as hen's teeth.
Given the tenant's circumstances – I'd bet good money on this being exactly the case.
And some landlords – especially the ones who're not using professional managers – put off increasing the rent until a change of tenancy. Given that on average this happens about every 18mths it's not an unreasonable, if somewhat lazy strategy, but it can bite you in the arse when a tenant stays for many years.
And it especially bites you in the butt when you realise the rent has fallen to 30% below market (530 – 380) *100 /520 and the govt is going to limit any future rises to 10% pa. Oh well unintended consequences and all …
Or he could just be kicking them out because although they were stable tenants for a substandard house, he won't be legally able to rent it out in a few months so needs to either fix it or sell it while it's rentable.
Toss a coin.
Or he could just be kicking them out because although they were stable tenants for a substandard house, he won't be legally able to rent it out in a few months so needs to either fix it or sell it while it's rentable.
More unintended consequences …
Not really. Regulations are needed to keep arseholes out of the market, in order to stop people figuring out that capitalism is exploitation.
But it would mean that a particular home needs significant renovation or would most likely be purchased as owner-occupier home rather than a rental. But then the new occupiers lived somewhere else previously, so that home is freed up…
But of course that's all a distraction from your assertion that random landlord in the news is charging a low rent purely out of the kindness of his heart rather than the quality of his property.
But of course that's all a distraction from your assertion that random landlord in the news is charging a low rent purely out of the kindness of his heart rather than the quality of his property.
Because you have zero experience of being a landlord you have no reference point for what is likely or not.
What almost certainly happened here is an aggregation of factors – that he'd let the rent fall so far behind market (for whatever reason), and that he had determined a need to upgrade the property (for whatever reason) – and that new govt rules were closing down his opportunity to resolve both problems.
As I said – good rules but unintended consequences.
As for your implication that some alternate economic system (that you don't specify but I'm going to assume in the absence of information is some form of neo-Marxism) – would somehow quite magically not require any regulation … well here you are worrying about me making informed guesses about a business I know quite well.
My "reference point" is every landlord I've ever had.
We know two things:
You might think they are largely unrelated.
And Big Tobacco just wanted to make cigarettes a more pleasant experience for consumers, not more addictive. /sarc
There you go again, making shit up. I made no such implication.
Dear RL, I will politely but firmly reject your efforts to attribute to me beliefs that are not in evidence. At the risk of repeating myself, and as anker stated, I don't believe it's o.k. to make a big profit out of offering a basic need (food and water, sufficient rest, clothing and shelter, overall health) to others. Like anker, that's just the way I see the world.
Question for you; is NZ’s private rental market decreasing inequality, decreasing inequality, or making little difference to inequality?
Heck, since we're talking "root causes", why not go for broke. Is the current level of inequality in NZ sustainable? I don't see how it can be, but maybe the answer depends on personal wealth – which could explain why one’s answer might change over time
I will politely but firmly reject your efforts to attribute to me beliefs that are not in evidence.
And then you go and repeat the exact belief you claim is ‘not in evidence’.
At the risk of repeating myself, and as anker stated, I don't believe it's o.k. to make a big profit out of offering a basic need (food and water, sufficient rest, clothing and shelter, overall health) to others.
As I've explained carefully a number of times – your characterisation of 'big profit' just doesn't match up to reality. Unless of course you're talking equity inflation which applies regardless of who owns the property, and what purposes they put it to.
Personally I would much prefer just to run my business for a reasonable cash flow return and forget about the equity – because the moment capital gain becomes the main consideration I'm in a different kind of business altogether.
And that's a much wider problem across many NZ business sectors, than just residential rentals.
Careful RL, you're on quicksand. At 1:14 pm you replied to me:
I intepreted that as an attempt by you to attribute to me the belief that "it's OK to provide other legitimate needs like food, clothing, etc for profit – but for some unspecified reason it's wrong to do this for housing." As it was you who introduced "supermarket" and "the myriad other businesses/services" (@3.1.3.2.3.1), and the idea of a distinction between shelter and other basic human needs vis-à-vis profits, into this thread, I politely reaffirm my rejection of your erroneous attribution of belief.
To be absolutely clear, it was you who introduced basic needs other than shelter into this thread, and I’ve made no distinction between the various basic needs when providing them for a (big) profit – that’s all on you.
, and I’ve made no distinction between the various basic needs when providing them for a (big) profit
OK so that's the answer I was looking for. Essentially you're rejecting the idea that it's acceptable to make profit. Which is a very common left wing sentiment but it just took a while to get it out of you.
And just one last time – in terms of cash flow most residential rental businesses make very little, if any profit, directly off their tenants. So that gets rid of your (big) qualifier.
Indeed the primary reason for anyone to stay in the business at present is in fact the capital gain – and as I've said before – there really is no particular distinction here between rentals and many other business sectors in NZ.
After all most farmers make most of their (big) money from capital gains – are you suggesting this makes their business somehow 'wrong' as well.
An intriguing conclusion, reflecting a common right-wing belief. I do believe that the pursuit of excessive profit is problematic, as is the definition of ‘excessive’ in this context.
Btw, any thoughts about these questions?
Question for you; is NZ’s private rental market decreasing inequality, decreasing inequality, or making little difference to inequality?
Heck, since we're talking "root causes", why not go for broke. Is the current level of inequality in NZ sustainable? I don't see how it can be, but maybe the answer depends on personal wealth – which could explain why one’s answer might change over time
That's a whole other discussion – but in a nutshell if you want to make an argument to burn down the entire modern economy – because it's 'pathological' – then I'll call you on the inevitable consequences.
It's a hackneyed argument, no future in it and best avoided imho.
Transitioning to a sustainable economy might be possible – some would say essential. But your defense of (and desire for?) big profits, and this critique of 'doughnut economics', don't fill me with hope.
Mmm… Donuts! Like profit, you can have too much of a good thing.
Question for you RL; is NZ’s private rental market decreasing inequality, decreasing inequality, or making little difference to inequality?
Heck, since we’re talking “root causes”, why not go for broke. Is the current level of inequality in NZ sustainable? I don’t see how it can be, but maybe the answer depends on personal wealth – which could explain why one’s answer might change over time.
It's a hackneyed argument.
And what am I to make of your argument when all you ever seem to do is characterise modernity solely by it's flaws.
Question for you RL; is NZ’s private rental market decreasing inequality, decreasing inequality, or making little difference to inequality?
The interesting thing about a society that's growing more prosperous is that the nature of that growth is more like multiplication rather than addition. The fundamental way to think of multiplication is that it takes a base vector and stretches it, while addition takes that same vector and shiftsit.
In other words as we become more prosperous, those who start close to zero tend not to move much, while everyone else does, and those with a small advantage at the beginning – all other things being equal – gain much more in absolute terms. So while everyone might gain at a constant rate – the absolute gap between the richest and poorest innately grows over time.
At core we should recognise that inequality is an unavoidable result of all human progress – and once we have this firmly in mind – we can then start to define why we think the extremes of wealth and poverty are a problem, and what actions we might take to start shifting the people at the bottom of the scale up toward those at the top. (A fundamentally different kind of operation to our pure economic growth model.)
And quite different than the ideas you seem to keep returning to which is to somehow cancel the modern economy so that we all collapse back into poverty. Sure that's one trivial solution to inequality, but most people are not going to think it an impressive one.
More hyperbole RL? You’re nothing if not reliable. I have, however, written here about the benefits of modern medical care and treatments, e.g. vaccines, so make of that what you will.
Despite some Luddite proclivities I'm a fan of many aspects of modernity – quite dependent/captured in fact. This hasn't blinded me to its flaws, chief among them the unsustainable nature of civilisation.
At my age the prospect of collapse doesn't worry me on a personal level, but I do wonder how our collective love of money will play out for human civilisation.
“Man is a victim of dope/In the incurable form of hope” – Ogden Nash
@RL (4:39 pm)
Does it follow that less progress would mean less inequality? And is there truly no example of human progress that doesn't result in greater inequality? Personally I reject such a bleak worldview. Wealth inequality, and particularly the magnitude of that inequality, is a choice, one that we've both made.
You know my proposed solution to extreme poverty (perpetual indebtedness) in NZ . And you know that it doesn’t require that we “somehow cancel the modern economy so that we all collapse back into poverty“, but whatever floats your boat.
Does it follow that less progress would mean less inequality? And is there truly no example of human progress that doesn't result in greater inequality? Personally I reject such a bleak worldview.
Take a rubber band, hold one end of it fixed at some point on a table top and stretch the other end to say double the length. Congratulation's you've just doubled activity and wealth in this tiny little toy economy. (It's not an even close to accurate model, but it'll do for a first pass.)
Note carefully, while on average everyone is better off, the people who were close to the fixed (the poor) end have scarcely moved at all, while those close to the end you moved (the well-off) are now doing twice as well. And that while the gap between the poor and rich started out as say 1unit – the gap is now roughly 2units.
So while we've increased total prosperity on average, we've also increased relative inequality at the same time. What then is the best strategy for retaining prosperity while at the same time decreasing inequality?
Ideally we might propose releasing the fixed end of the rubber band so that instead of growth being all about stretching the band to achieve growth, instead is became more a case of shifting the whole band in the desired direction.
Closer to reality we might think of what has happened globally in the past 200 years as a combination of both stretching and shifting, that while the very richest have extended their wealth by some huge non-linear factor, the poorest in the world have actually seen their absolute position shift significantly as well. So all is not lost – we know that in practice something of what we would like to achieve can and has been done.
Part of the solution is I think going to happen anyway over the course of this century, as demographics age almost everywhere, the nature of economic growth may well shift from being dominated by 'stretch mode' as it has been for the past two centuries, to more of a 'shift everyone up mode'. And indeed the so-called “Elephant Curve” can be interpreted as a direct demonstration of this happening.
https://en.wikipedia.org/wiki/The_Elephant_Curve
The other reason for hope is that capitalism in itself is not really an ideology, rather I see it as an emergent economic methodology that's demonstrated a remarkable adaptability over time.
What I do reject however is any suggestion that amounts to saying that inequality is all the pathological fault of the rubber band for being elastic and getting longer over time – and therefore we should burn it.
The rubber band is blameless. Burning it isn't a good idea – so smelly!
Could we perhaps stretch your rubber band analogy to include the 10% of NZers carrying a collective $13 billion of debt?
If so, then I would amend your analogy by placing the fixed point some 10% from one end of the rubber band, and then stretch the band in opposite directions away from that fixed point. Is growing debt (stretching the band in one direction) a necessary consequence of growing wealth (stretching the band in the other direction)?
One thing your analogy makes abundantly clear (pun intended) is that there's plenty of wealth in NZ, and that net wealth is growing all the time. What I don't understand is why those at the weathly end of the band (and if the band represents wealth, then the wealthy end is large indeed) suffer so greatly from ‘sharing hesitancy‘; it's almost as if what's happening at the other end of the band is of no concern. How might that play out? Still, it's only a rubber band; gummit will sort it out.
https://blogs.worldbank.org/governance/wealth-tax-address-five-global-disruptions
What I don't understand is why those at the weathly end of the band (and if the band represents wealth, then the wealthy end is large indeed) are reluctant to share; it's almost as if what's happening at the other end of the band is of no concern.
As I hinted above, and the Elephant curve I referenced shows, the stretching of the rubber band globally has probably not been a simple linear 'stretch'.
At the very top 0.1% level income growth has been astronomical, and the coarse percentile aggregation in the graph hides that. At this level I think we both agree there is a very good case to unwind the gross extremes at the billionaire level and above.
But interestingly if we look again at the Elephant Curve, while it describes global income growth, the whole of NZ would probably fit in the percentiles from 90% up. In effect NZ's experience with growing inequality is only a small slice of a much larger global story.
And to loop back to something else we touched on a while back – you ask why it is that the extremely wealthy don't seem to 'care' about the fate of those so much further down the wealth ladder than themselves. This is a fair and valid question, and does touch on why I keep thinking that inequality is less of a strictly economic issue, and much more of a moral one. And that maybe arguing to 'smash capitalism' to solve inequality is a bit like burning down the house because your partner had an affair.
At present humans value wealth because of the status and power it bestows on them – perhaps a world in which wealth was seen as a means to improve society and be of service to others would see this whole question in a quite different light.
Well said RL, certainly we can agree that some people value wealth because of the status and power it bestows. For myself it's about financial security, which in my case doesn't take much wealth.
What behaviours might model the sharing wealth to reduce inequality and be of service. Philanthropy, certainly, but how to grow charitable behaviour? So many seem to be in need in NZ alone.
http://www.nzchildren.co.nz/
https://www.greatpotentials.org.nz/
https://philanthropy.org.nz/
https://www.onepercentcollective.org/
https://www.acornfoundation.org.nz/application/files/3216/0332/3111/Acorn_Foundation_Annual_Report_2020_WEBSITE.pdf
http://montececilia.org.nz/uploads/8a12f4509874b6a26db5a8e5a0f5c6b8.pdf
https://atwc.org.nz/wp-content/uploads/2020/09/ATWC-Annual-Report-2019.pdf
Is there something similar to GiveWell for Australasia?
Btw, I’d like to meet these people that are arguing to ‘smash capitalism’ to solve inequality and give them a stern talking to. But I do wonder if ‘sharing hesitancy’ and capitalism are inextricably linked, and if so then what’s the best way to decouple them.
I'll never understand how capitalists can be convinced they're barely getting by while regarding thousands of dollars as chump change.
Well the bill I paid a few weeks back for a new heat pump install was over $4k. Chump change?
"barely".
It raises a separate question though. A heat pump is basically a fridge – why are they so expensive?
It was a decent sized Mitsubihi (much bigger than any refrigerator ) and I paid to have it installed.
If your business is set up correctly ill will go against your taxable income, write offs etc and you – in the end will not pay a cent for it.
You can now charge more for your dwelling because a law change forced you to add integral heating to your rental property.
Thus you increased the value of your asset and could potentially get more from a buyer, but also from your bank as your asset has increased in value.
You know what that is called?
Cost of doing business.
in the end will not pay a cent for it.
Still had to pay the bill for it this year out of this year's cash flow. And as a capital improvement item it will be depreciated off taxable income, that doesn't mean 'I'll never have to pay a cent for it".
In our experience adding value to a property like this has a very marginal impact on rent. Rents are primarily determined by location, number of bedrooms and condition – in that order. Improvements do potentially make the property more attractive, which helps with good occupancy rates in an over-supplied market, but if it has an impact of rent, it's maybe $10 -20pw which would take 4 yrs or more to repay the investment.
As for it increasing the value of the asset – that's an even more marginal assumption. Valuers simply don't drill down to this kind of detail.
Yes it's a 'cost of doing business' – but so are a lot of other things and they all add up. And then you wonder why the damn rent is so high.
I have to eat so therefore like most urban kiwis I have to use the supermarket.
I don't have to own a rental property, although actually I could. I have a choice, like all landlords. I am not aware of anyone who owns a rental property who got their arm twisted to do so…………but if someone knows of examples of this, by all mean let me know.
I am glad the Govt has launched some sort of enquiry into the profits supermarkets make.
I am really sorry I haven't been following your arguements Red.
I have very little if not xero empathy for landlords. I suppose I have a little empathy if there places are trashed.
My empathy lies with the tenants unless they are very bad tenants.
You might be making very little on your property, but you will realize capital gains unless there is a crash. So now might be the time to take the money and run although I am not predicting there will be a crash. When I was a landlord it didn't involve too much work.
Sorry its just the way I see the world.
I have to eat so therefore like most urban kiwis I have to use the supermarket.
I don't have to own a rental property,
That's comparison just doesn't work – the 'basic need' is not to be in business to provide the housing service, it's the need people have to be housed, like they do to eat. You’ve stacked oranges up against apples there.
My question to you is this – why do you think providing housing for people is an illegitimate business, while providing food for them (for example) is not?
Food isn't rented out.
DB Export is, if you use the pub toilet.
xero empathy for landlords
lol … are you sure you’re not an accountant?.
lol Red. No not an accountant. Many years ago when I let our my house my lawyer referred me to an accountant though who gave advice as to how to set up my affairs to pay as little tax as possible. I think accountants are probably reasonably empathic towards property investors.
I didn't say being a landlord was an illegitimate business just one I don't have much empathy for.
I'd like to see the state provide housing and Kiwibuild to help young people get into homes.
If landlords aren't happy campers and are not making enough money then they know what to do. Sell up and let young first home buyers have a better chance of getting a house.
Btw, the $5000 extra I could have earned didn't seem right as I had to do so little to earn it and I worked a 40 hour week to make a living
Sell up and let young first home buyers have a better chance of getting a house.
That would be nice if total supply was keeping up with demand – but it isn't. At present all that would do is drive a shortage of rentals and push up rents even further.
Keep in mind there is always a legitimate demand for rental housing. Roughly 15% of the population will for one reason or another never qualify for a bank mortgage, and another 15 – 20% are at a stage in their lives where they are not interested in or needing to buy a home – regardless of affordability.
Why? Does the house stop existing if the rentier sells it? Surely the new owners were living somewhere before they bought that particular house – wouldn't their old home be freed up? Or the old home of the people who bought their old home? Sooner or later a renter will buy some home in the chain…
The only things that lower the rental market are 2nd homes and ghost homes. A beefed up CGT would deal to both – not on Lab6's radar, but sooner or later it'll happen.
Why?
Well McF – all the evidence suggests this is exactly what is happening at the moment. As I said – if total supply isn't keeping up with total demand – then everything else is just shuffling deck chairs.
"if".
The particular symptom through which the capitalist problem currently manifests itself in the housing market isn't a lack of homes.
It's a surplus of capitalists: ghost homes in Auckland – 39,000 empty dwellings. 200k in NZ overall.
But the odds are still good that a currently-occupied home would get re-occupied after being sold. So no, a sale doesn't destroy a dwelling. What makes a home vacant is a landlord who sees more profit in accruing capital value than in providing a home, and bugger the renting class.
What makes a home vacant is a landlord
Pretty much by definition if the house is vacant – they're not a landlord. It makes them property speculators first and foremost.
lol now you're doing the No True Scotsman.
They're all capitalists who buy up homes to make money. Whether they rent out those homes or feel sitting on them for the capital gain is better value for their time is moot. As markets change they switch from one to the other. You're just as much a speculator as someone who owns a ghost home.
You're just as much a speculator as someone who owns a ghost home.
Or anyone who owns any asset that increases in value, including ordinary homeowners for that matter.
But I think I'm pretty safe to say that someone who owns a property that they neither live in, nor have tenanted, are first and foremost property speculators.
"Domestic rentals are sure not something that i would ever take part in."
I wonder why so many do then
I think it is a false belief that that way lies riches, which for most it does not. that is based on having done maybe hundreds of financial statements and tax returns as a chartered accountant for landlords.
Then surely that should be demonstrated by there being truck loads of rental property on the market.
I think we know that their motivation is not to gain profit from renting but the tax free capital gain.
Which is something the rental business has in common with many other business sectors in NZ – too many are operated for capital gain not cashflow.
What we have here is an awful intersection of this entrenched structural issue, the relatively high capital intensity of the rental business, and high levels of deprivation at the bottom of the income scales.
If we want to fix this chronic problem – we need to look at the real causes. Tinkering with band-aids on symptoms usually only has unintended consequences.
"too many are operated for capital gain not cashflow."
Could you give me an example where the capital gain on a business equals that of a rental property and where similarly tax on the capital gain is not paid?
Residential property is inherently a very capital intensive business, so it's always going to be more susceptible to the impact of capital gain than many others.
Farming would be another obvious example. And many small businesses that depend on property, goodwill, or intellectual stock of some kind will look to capital gain on the hoped for sale of the business to make up for decades of marginal operating profits.
McDonald's is another example that comes to mind – the capital gains many franchisees make on their shop location may well exceed that of the actual food business.
Peter maybe they don't make so much from the rent, but they do on the capital gain.
BTW whoever said about the council taking the profit I agree with. We pay o much for so little
Are rates correlated to the average house price? I don’t think so. For example, if all house prices go up by 10%, the rates will essentially stay the same.
I don't demonize landlords – I just call them silly buggers for borrowing too much, and then acting surprised when they find that interest is gobbling up all their profits. Make interest non deductible and they would then be looking at a much improved bottom line (in bookkeeping terms) and paying a decent amount of tax – even though they would have to pay that tax from their own pockets. Under those circumstances I think that many would be thinking about off-selling their unsound investments.
Under those circumstances I think that many would be thinking about off-selling their unsound investments.
And the landlords remaining in business would simply increase rents in the face of increasing costs and demand. How do you think this helps?
There are some really great tenants who maintain the property and require a tradesman yearly if that. House prices increasing are the only sure thing for home investors. If you cannot afford the cost of being a landlord don't be one.
If a tenant had a community services card the landlord got a 50% subsidy for insulation.
I do have sympathy for landlords who get the place trashed and ripped off with unpaid rent.
More than 90% of tenants are wonderful and look after their home better than we might even. (Or at least they do on the inside – we always pay to have the sections maintained.)
But all properties need maintenance no matter how well the tenants look after them – lawns mowed, walls and roofs washing, blocked gutters, fences, drains, trees trimming, appliances like stoves, hot water cylinders and heaters break, carpets wear out, windows get broken, door locks and window stays replaced. In the usual course of events we budget for about 6% of the rental income towards R&M over the long term.
I have noticed that less and less landlords maintain the section with the exception of the lawn mowing. I would like to see landlords offer to dump the weeds. Many tenants would do weeding and benefit from the out door exercise.
I lived in a row of 7 flats and I used to weed the whole drive, fence line and door paths, (I did ask permission from any new tenant). I am no longer there but I walk past regularly – it is all over grown now. A looked after drive and section greets you.
"none of the recommendations from the Welfare Expert Advisory Group have yet been implemented"
Your link doesn't show that.
https://www.rnz.co.nz/news/national/431739/work-to-reform-welfare-system-unjustifiably-slow-child-poverty-action-group
Yes it does. Twice. Those are direct quotes from the article, no editorial.
I know, I read it and if you read the full article there's a contradiction with that statement. For example, indexing benefits to wage growth was a recommendation was it not? that's been implemented and note, the government doesn't agree with all of the recommendations.
Well take it up with the authors of the RNZ article I quoted, the 'contradiction' is not of my doing.
Why would I? and I never said it was your doing arkie.
The Government set up the Welfare Expert Advisory Group in May 2018 with the explicit purpose to investigate the welfare system. Surely having commissioned the report they are not in the position to disagree with any of the recommendations but simply implement them.
Otherwise what was the point of the group or the report?
They do disagree with some of it, its in the linked article, but it doesn't say which recommendations the govt disagrees with.
ACT bleating again. Seymour seems to want business to have its cake and to eat it too as the MBIE figure only covers one side of the equation. However, if any of the existing holidays are to be done away with, in exchange for Matariki, there are plenty of Christian ones that could go. Would he want to explain his decision to the God Squaders who vote for ACT?
There is no reason why, once the Queen dies, we cannot do away with QB weekend, leaving Matariki as the main public holiday between Easter and Labour weekend.
So many cultures around the world have festivals connected to the summer and winter solstices and the passing of the seasons. Think Stonehenge and the Scandinavian festivals. Matariki marks so much in this regard if we study the history of Polynesian cultures, the significance of the Pleiades etc – and it's distinctly NZ. It's not just about another public holiday.
Bring it on.
QB weekend is officially "the birthday of the reigning Sovereign (observed on the first Monday in June)".
So without a law change, it would simply become "King's Birthday weekend".
We can ditch it at any time.
But it was chosen as the anniversary of the Queen's ascension to the throne – the anniversary of her father's death.
And yes, we can ditch it.
I wonder if act actually do any real research. long holiday weekends are a real boost to NZ economy. even the moaners who have to pay for a days holiday for their workers do well out of them. economic activity spikes every long weekend, and a mid winter long weekend will be a real economic winner. all to difficult for actoids to understand.
Yes.
With Boeing having its entire 777 fleet grounded, it's pretty easy to see an increased likelihood of squealing about bankruptcy to get more billions of Federal aid.
https://www.theguardian.com/business/2021/feb/22/boeing-777-grounded-by-airlines-after-faa-japan-issues-emergency-order
Taking out the 777s will also be a hit to the remaining airlines.
I see its only related to P&W Engines only not GE, RR, CFM Engines. It's very rare for an engine explosion like to happen and I think the last one to happen from memory was the Qantas A380 after takeoff from Singers a few yrs back. Old mate flying that A380 was very lucky to get that A380 bird back on the tarmac from all accounts (I haven't read old mates book, but read most of the summaries incl Training & crew management or whatever its called when i was doing training and training development on top of my Operations/ Plans for the RAAF Darwin Sec FLT before i got the boot.
Well there's always one that doesn't want to follow the rules.
Australian woman refusing a Covid swab in MIQ had already protested against lockdowns – NZ Herald
I'm kinda curious what harm she thinks might come to her from getting a nasal swab done. They might harvest some precious bodily fluids?
Nose-gold -it's a thing (not really) 🙂
But so many people look at their tissues after a good blow, just in case they'd been sniffing gold dust I guess…
Fortunately NZ is a country that still has laws against compelling medical treatment.
I hope her flight home is not delayed.
Totally agree!