Oram on Nats’ economic bungles

Written By: - Date published: 8:44 am, August 19th, 2013 - 59 comments
Categories: economy, national - Tags: , ,

The first of two required reading pieces from the weekend. Financial journalist Rod Oram sums up the Nats’ economic performance in an excellent piece in the SST. Here are some extracts:

Full speed going backwards

…Our driverless Government is taking us for a ride. Guided by damage control, it is running amok over good governance, democracy and even its own policies and principles. … Prime Minister John Key prides himself on pragmatism. But his quick fixes, shortcuts and deals are piling up in a mass of contradictory and counter-productive actions.

First, the Government says it wants to help more first-time home buyers by expanding the Welcome Home programme it slashed in its first term. It is also easing the rules for using KiwiSaver funds for deposits, even though KiwiSaver is meant to encourage people to broaden their investments beyond the housing market. Those actions will increase demand for housing, thereby fuelling the damaging housing boom. …

Second, the Government says it wants to help increase the supply of housing by allowing open slather on subdivisions. But that will only make it harder for councils to deliver good urban development and efficient infrastructure, two crucial factors in making housing more affordable.

Third, the Government says it has brought certainty to the workers of the Tiwai Point smelter and investors in Meridian Energy by paying Rio Tinto $30 million to agree to a new electricity deal with Meridian. But the money, which breaks one of National’s much-cherished principles of no subsidies, does neither. The deal does nothing to secure the huge investment the elderly smelter urgently needs to regain its competitiveness. …

Fourth, these uncertainties in the electricity market continue to depress shares in Mighty River Power. It has yet to recover to its $2.50 float price. Despite investors sitting on a loss on MRP and the continuing threats hanging over the market, the Government is determined to float Meridian in October. It says such SOE sales are designed to encourage new retail investors into the stock market, while bolstering its own finances. But the poor showing of MRP, and thus the need to sharply discount Meridian to attract buyers, undercuts both goals.

Fifth, ultra-fast broadband (UFB) is another flagship policy of the Key Government. It is stumping up $1.35 billion to help fund the rollout of fibre to deliver it, with Chorus the main corporate recipient. … Telecommunications Minister Amy Adams is planning to intervene with a price up to four times higher than the regulator’s. Other telcos are complaining bitterly that this would inflate Chorus’ profits and share price, and reduce their ability to compete. …

Sixth, the Government has announced radical changes to the Resource Management Act. It says they will reduce uncertainty, legal wrangling and delays in the consenting progress. Some of the additional minor changes would be useful and are widely supported. But it is carving the heart out of the act. It will remove from Part 2, the purpose and priorities of the act, any reference to environmental bottom lines or aspects such as public amenity. This means the environment will take its chances alongside economic development, landowner’s rights and other considerations. …

Seventh, Key says that, once the Fonterra-tainted whey inquiries are completed, he will “travel to China and look down the barrel of their television cameras with the answers as to why this happened, give consumers confidence that it’s been fixed and all issues have been identified”. … He will damage, not rebuild, confidence in New Zealand.

If Key feels like apologising, he should start at home. Having ditched its roadmap of policies and principles, the Government is taking the public for a scary ride. It is getting more reckless by the day.

Go read the whole piece in the SST.

59 comments on “Oram on Nats’ economic bungles ”

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  1. mickysavage 1
    19 August 2013 at 9:04 am

    [Pssst it was in the SST]

    Excellent analytical piece by Oram. Government MPs should be strapped into chairs with their eyelids held open and forced to read this.

  2. vto 2
    19 August 2013 at 9:18 am

    The changes to the RMA are the ones that concern me. They are fundamental and they will have a significant effect on the environmental effects of proposals over many years…. unless it is changed back by the next government.

    • mickysavage 2.1
      19 August 2013 at 9:24 am

      Agreed.

      Amy Adams was on the Nation on the weekend and was trying to minimise the changes. She is totally wrong.

      Out of the principles of the RMA the Government is proposing to remove the ethic of stewardship, the maintenance and enhancement of amenity values, the maintenance and enhancement of the quality of the environment and consideration of any finite characteristics of natural and physical sources.

      This is head in the sand blind ideology thinking that we do not live on a world with finite resources.

      These guys have to be voted out of office before they wreck the place.

    • Macro 2.3
      19 August 2013 at 10:56 am

      Absolutely agreed vto the proposed changes to Part 2 are environmental vandalism at its worst. They must be repealed. National are nothing more than vandals and the sooner they are gone the better for humanity and the environment.

    • Macro 2.4
      19 August 2013 at 10:56 am

      Absolutely agreed vto the proposed changes to Part 2 are environmental vandalism at its worst. They must be repealed. National are nothing more than vandals and the sooner they are gone the better for humanity and the environment.

    • Bearded Git 2.5
      19 August 2013 at 11:57 am

      We are making the RMA a local election issue in the Queenstown Lakes District Council because the outstanding natural landscapes in this District will be wrecked by subdivision and development if the changes get through. This will appear in the Wanaka Messenger tomorrow:

      Council Response to Drastic Changes to RMA Pathetic

      The following was presented to council by UCES’s President last week at Public Forum:
      “The government is in the process of “gutting the RMA”. These are not my words, they are the words of respected financial commentator Rod Oram in last week’s Sunday Star Times. 13277 submissions were received from the public on the proposed changes to the Act- 99% opposed the changes.
      The changes allow new subdivision and development anywhere and everywhere unless a council expressly restricts this through a plan rule. The QLDC has a discretionary regime in its DP for subdivision and development which means no subdivision is expressly restricted. This change is a recipe for urban sprawl and ad hoc rural subdivision anywhere in the mountains and along around lakes and rivers in this District. This has the potential to devastate the landscape values-values that that this District largely relies upon for its economic wellbeing.
      Anyone who has a secluded rural residence should be scared because under the changes a subdivision will be able to be dumped next to you as of right.
      Commissioners at QLDC resource consent hearings will be powerless to decline subdivision and development. Council’s power to control adverse effects will be massively reduced. The changes overturn decades of planning law.
      There are major changes to s.6 and s.7 of the Act that will dilute provisions relating to matters of national importance. The requirements to maintain and enhance “amenity values” and the “quality of the environment” are deleted.
      There is a new requirement that Outstanding Natural Landscape (ONL) must be “specified”. In this District there is a gradual process taking place to identify landscape categorization boundaries through the Court. This process is far from complete. The changes will mean that large areas of ONL currently non-specified in the QLDC will be removed from protection from inappropriate subdivision and development.
      The changes reduce public participation. Councils currently notify only 4 to 6 per cent of applications for public submissions and only 1% of applications are appealed. The changes further reduce the need to publicly notify applications and further limit who is an affected party. The changes also further limit matters that submitters can comment on.
      The changes to the Act are based on ideology rather than any evidence of the need for change. They will make 22 years of case law largely irrelevant.
      The Society respectfully asks that when the Bill goes through the Select Committee process the QLDC submits in opposition to the changes described above especially any that reduce the protection of landscapes from inappropriate development.
      Council’s response has been through QLDC policy and planning general manager Marc Bretherton in the Central Otago News: “Council’s approach is to adopt a watching brief. These matters will be traversed by councils throughout New Zealand with deeper pockets. The council will participate where we see value in doing so to advance the interests and protect the values of this District.”

      Council proposes to do nothing because it doesn’t have the money. Future participation will be irrelevant as the bill will be progressed through parliament soon. This is a pathetic response-it pretends that the massive changes to landscape and lifestyles of people in this District resulting from the Resource Management Reform Bill is not worth $2,000 of planner’s time.

      The Society proposes this week to ask all of the 23 council and mayoral candidates at the upcoming election the following question:

      “Would you support council submitting to select committee in opposition to changes contained in the Resource Management Reform Bill where they will significantly reduce the protection of landscapes in this District from inappropriate subdivision and development. Please answer Yes or No.”

      The Society will publish the responses in the Messenger in 2 weeks time. If a candidate does not respond this will be taken as a “No” response.

      UPPER CLUTHA ENVIRONMENTAL SOCIETY, PO Box 443, Wanaka uces@xtra.co.nz

      I suggest other Districts similarly target their local council candidates.

  3. karol 3
    19 August 2013 at 9:27 am

    Yes Oram doesn’t hold back and focuses on the important issues of policy – unlike Colin Espiner in Sunday’s SST – praising Key as a politician at the peak of his powers, and for demolishing John Campbell – then ending with a small aside that the GCSB Bill is bad law passed in haste.

    Espiner says:

    But Key is coming into his own as a politician of considerable skill and finesse.
    […]
    The fact that Key is at the very peak of his powers will see the spying bill passed without too much fuss…

    Surely this makes Key a con man at the peak of his slippery powers, and not a brilliant politician?

    And the Chinese, on the attack over Fonterra, can’t be pleased at Key changing the GCSB Bill to please his US-Echelon masters?!

    • Veutoviper 3.1
      19 August 2013 at 9:36 am

      On your last para, Karol, I took a quick look at this special on TDB last night on the “China Issue” but was too tired to take it in properly. But the little I did read suggests that China is not happy with the GCSB/US situation – nor presumably the TPPA possibilties. [I heard that Groser has left for more TPPA discussions with pressure on to conclude the agreement by October. ]

      http://thedailyblog.co.nz/2013/08/18/special-feature-for-china-is-the-gcsb-bill-one-insult-too-many/

      • Rogue Trooper 3.1.1
        19 August 2013 at 9:54 am

        yes, wandered through that informative, if a little long, piece yesterday for my sins.

      • karol 3.1.2
        19 August 2013 at 9:54 am

        Yes, Veuto, I had that in mind with my comment above. I also have only skimmed it – after a day at work I was feeling a little jaded – on my must read and digest list.

    • Bunji 3.2
      19 August 2013 at 9:51 am

      makes Key a con man at the peak of his slippery powers, and not a brilliant politician

      karol: Colin Espiner probably sees those two as the same thing.

    • Macro 3.3
      19 August 2013 at 11:02 am

      Yes I read that Op Piece by Espiner in disbelief! Talk about fuzzy logic! How can anyone honestly praise someone for being a brilliant politician and at the same time be critical of the their Law making? Surely the definition of a good politician is the fact that they introduce policies and laws that protect the rights of individuals not trample over them.

      • Draco T Bastard 3.3.1
        19 August 2013 at 2:54 pm

        How can anyone honestly praise someone for being a brilliant politician and at the same time be critical of the their Law making?

        It seems that, in Espiner’s world, being a brilliant politician means being able to lie smoothly.

  4. bad12 4
    19 August 2013 at 9:29 am

    Rod Oram is always a good read or a listen to on His regular spots on RadioNZ Natioanal, His is not the dry economics of % of this that the other, we always get an explanation from Oram of how He has arrived at the economic conclusions he shares with us,

    i will tho disagree on one point that Rod makes in this article, his assertion that should the Tiwai Point aluminum smelter close electricity prices will be forced to drop,

    Rod of course is talking from a point of their being an actual free market operating within the electricity generators and the various retailers, this in my opinion is not the current practice, electricity pricing in New Zealand is a matter of ‘Cartel Price Fixing’, there is in fact no apparent competition based upon price evident anywhere among the major retailers…

  5. tracey 5
    19 August 2013 at 10:24 am

    They lie. People swallow. Nats win next election.

  6. Bob 6
    19 August 2013 at 10:30 am

    First: “Those actions will increase demand for housing, thereby fuelling the damaging housing boom”
    So what you are saying is first home buyers should be deterred from purchasing because they will make housing more expensive? Talk about damned if you do, damned if you don’t!

    Second: “the Government says it wants to help increase the supply of housing by allowing open slather on subdivisions. But that will only make it harder for councils to deliver good urban development and efficient infrastructure, two crucial factors in making housing more affordable.”
    All well and good, but councils have had years to come up with effective development plans, it hasn’t worked so now it is time for central government to step in, again damned if you do, damned if you don’t!

    Third: “the Government says it has brought certainty to the workers of the Tiwai Point smelter and investors in Meridian Energy by paying Rio Tinto $30 million to agree to a new electricity deal with Meridian. But the money, which breaks one of National’s much-cherished principles of no subsidies, does neither. The deal does nothing to secure the huge investment the elderly smelter urgently needs to regain its competitiveness”
    Think of this around the other way, the government doesn’t step in and 800 people and their families are directly affected, while another ~2000 people and their families are indirectly affected in the Southland region. If it was revealed it would only cost $30M to save all of those jobs for at least 3 years to give the Aluminium price time to recover, and they didn’t do it, could you imagine the uproar. Again damned if you do, damned if you don’t!

    Fourth: “these uncertainties in the electricity market continue to depress shares in Mighty River Power. It has yet to recover to its $2.50 float price”
    I fear this has more to do with Labour/Greens electricity policy more than anything the current government has done!

    Fifth: ultra-fast broadband (UFB), “Telecommunications Minister Amy Adams is planning to intervene”
    She is planning to intervene, so she hasn’t intervened, but she may intervene…..possibly, so the government is contradicting itself by apparently thinking of maybe doing something in the future. Top marks there.

    Sixth: “the Government has announced radical changes to the Resource Management Act”
    For the most part these are populist changes, however, the changes to part 2 do go too far. On this I am in agreeance.

    Seventh: “Key says that, once the Fonterra-tainted whey inquiries are completed, he will “travel to China and look down the barrel of their television cameras with the answers as to why this happened, give consumers confidence that it’s been fixed and all issues have been identified”. … He will damage, not rebuild, confidence in New Zealand”
    This is a fairly pointed, entirely political assumption! Just last week a number of people here were saying John Key only came across well (to those who had both eyes open) on Campbell Live because he had good media training, now this states he won’t come across well……..for no reason??? John Key is constantly under-estimated by opposition, you may not like what he stands for politically, but the one thing he can do is make an audience listen. Also, if he didn’t front in China to reassure our now biggest trading partner that we are still a safe nation to trade with he would be chastised! Again damned if you do, damned if you don’t!

    • karol 6.1
      19 August 2013 at 10:38 am

      Again damned if you do, damned if you don’t!

      I’d rather John Key just didn’t & packed his bags for a permanent retirement in Hawaii. He’s making one big mess of NZ that will take decades for others to clean up.

    • vto 6.2
      19 August 2013 at 10:42 am

      Bob

      “”First: “Those actions will increase demand for housing, thereby fuelling the damaging housing boom”
      So what you are saying is first home buyers should be deterred from purchasing because they will make housing more expensive? Talk about damned if you do, damned if you don’t!””

      No that is not what is being said. You should stop assuming. Try again.

      “”Second: “the Government says it wants to help increase the supply of housing by allowing open slather on subdivisions. But that will only make it harder for councils to deliver good urban development and efficient infrastructure, two crucial factors in making housing more affordable.”
      All well and good, but councils have had years to come up with effective development plans, it hasn’t worked so now it is time for central government to step in, again damned if you do, damned if you don’t!””

      No that is not the situation at all. You are confused as to what has not worked.

      “”Third: “the Government says it has brought certainty to the workers of the Tiwai Point smelter and investors in Meridian Energy by paying Rio Tinto $30 million to agree to a new electricity deal with Meridian. But the money, which breaks one of National’s much-cherished principles of no subsidies, does neither. The deal does nothing to secure the huge investment the elderly smelter urgently needs to regain its competitiveness”
      Think of this around the other way, the government doesn’t step in and 800 people and their families are directly affected, while another ~2000 people and their families are indirectly affected in the Southland region. If it was revealed it would only cost $30M to save all of those jobs for at least 3 years to give the Aluminium price time to recover, and they didn’t do it, could you imagine the uproar. Again damned if you do, damned if you don’t!””

      No that is not what Oram is saying. He is pointing out the sheer hypocrisy of Key and English in “picking winners”, which they rail against unless it helps their personal politics. He is also pointing out that this corporate welfare in fact does nothing to save jobs as the smelter is doomed. The people get an extra 18 months only

      • Bob 6.2.1
        19 August 2013 at 12:48 pm

        VTO
        “No that is not what is being said. You should stop assuming. Try again.”
        Please explain the situation to me. When I read “Those actions will increase demand for housing, thereby fuelling the damaging housing boom” in relation to first home buyers, I see political point scoring, not economic analysis.

        “No that is not the situation at all. You are confused as to what has not worked”
        So councils haven’t had years to come up with effective development plans? Or its not time for central government to step in? Those are the only two points I made in my statement, so I am confused by your response.

        “No that is not what Oram is saying. He is pointing out the sheer hypocrisy of Key and English in “picking winners”, which they rail against unless it helps their personal politics. He is also pointing out that this corporate welfare in fact does nothing to save jobs as the smelter is doomed. The people get an extra 18 months only”
        Correct, that is what Oram is saying, and I am saying look at this the other way, what would you say if the government let the smelter shut? Would you have congratulated the government for walking away from the smelter and letting it close? If not, then my statement is correct, damned if you do, damned if you don’t!

        • One Anonymous Knucklehead 6.2.1.1
          19 August 2013 at 12:53 pm

          The government could have said “we’ll let the smelter close, which will mean job losses, but we are going to save $Xbn in power costs by doing this, and get $Ybn in extra tax revenue, so we are going to put $Zbn into the region to boost the employment market there.”

          But that would require a pro-New Zealand approach to policy.

          • Colonial Viper 6.2.1.1.1
            19 August 2013 at 1:02 pm

            The $Ybn in extra tax revenue – is that from a tax increase? They will argue that closing the smelter means that the public balance sheet takes a big hit (financial value of Meridian and all other power assets declines), as well as a reduction in profitability of all generating assets – hits to the government’s revenue stream.

            • One Anonymous Knucklehead 6.2.1.1.1.1
              19 August 2013 at 1:10 pm

              Nope – from the bigger profits brought on by lower power prices across the whole economy.

    • karol 6.3
      19 August 2013 at 10:47 am

      but councils have had years to come up with effective development plans, it hasn’t worked so now it is time for central government to step in, again damned if you do, damned if you don’t!””

      Huh!? Auckland (supercity) Council went live in Oct 2010 – they have come up with comprehensive plans and are engaging in public consultation – Key’s government wants to step in and stop that in order to insert their damaging plan.

      • Bob 6.3.1
        19 August 2013 at 12:34 pm

        Huh!? Are you saying all seven local councils that merged into the Auckland (supercity) Council all had comprehensive plans in place prior to the merge? What about every other council in the country (excluding Chch as plans have obviously changed down there)? Or does your entire rebuttal revolve around one city’s council merge?

        • karol 6.3.1.1
          19 August 2013 at 1:07 pm

          In my area, New Lynn, Waitakere City Council had comprehensive development plans, already being built, then along cam Auckland Council, and continued many.

          My main knowledge is around Auckland Council – and it’s a major development issue on a national scale – it’s one where the government has stepped in. So you want to just ignore the biggest council in NZ to justify your original claim?

    • Murray Olsen 6.4
      19 August 2013 at 6:43 pm

      I can imagine Key saying that he’s not worried about Fonterra and that the Chinese regulatory agencies are all wrong will go down very well on Chinese television. His Crosby Textor training is all about how to make a Kiwi audience listen and think what a nice guy he’d be to have around for a barbecue. It’s just possible this won’t go down too well in China, where scientists and other academics are respected above spinners of idiotic anecdotes.

      I’d rather he didn’t go anywhere near China, but let MAF handle it, but that may not be an option since the Tories stripped that department bare as well.

  7. tracey 7
    19 August 2013 at 10:44 am

    Bob

    what makes you think lowering developers fees will be passed onto home buyers? In my experience developers will pocket it as profit.

  8. pollywog 8
    19 August 2013 at 11:04 am

    As it relates…

    Shades of Leaky building syndrome?

    http://www.stuff.co.nz/business/money/9047287/Council-development-costs-restricted

    By allowing the government to veto council development “contributions” currently paid by developers in a bid to lower costs passed on to home buyers, are we opening up the possibility for property developers to allow sub standard planning and materials which local bodies may have to pick up the charges for and remedy in the future? The cost of which will inevitably be passed on and paid for by the existing ratepayer in the form of exorbitant increases that already exceed the rate of inflation.

    And what guarantee will the government put in place to ensure that the developer will pass that current council development contribution saving on to the homebuyer?

    If local councils are to maintain, replace and upgrade current infrastructure to keep pace with population growth and technological progress, then a premium cost needs to be factored in to the price of new housing to reflect that, along with the environmental and social cost. It guarantees home buyers the satisfaction of knowing their property is futureproofed for some time to come and could hold developers to account for their work in any future insurance wrangles.

    No one wants to be replacing a burst sewer pipe or water mains to a new home within 10 years because the current government saw fit to play fast and loose in vetoing local council bylaws in favour of unscrupulous developers looking to save a buck and cut legislative corners.

    First world infrastructure comes with a first world price tag.The price may add to the cost of a new home but it also adds value. to your property, which in turn adds value to the community and the region

    By the same token, local councils shouldn’t use the Resource Management Act or Development levies as a means to gouge ratepayers and citizens. Either way, failed anecdotes are not evidence of a need to gut the Resource.Management Act in favour of economic development at the risk of polluting the environment further or detracting from the regions attractiveness. Nor should it give central government carte blanche to ride roughshod over local democracy and reduce council’s effectiveness in their regions by further centralizing power in Wellington through the Local Government Reform Bill to be introduced this year.

    I have a positive vision of how ethical government, both local and central should be, and it starts with us as individuals making informed choices and taking personal responsibility.

    • vto 8.1
      19 August 2013 at 11:11 am

      I think you are confusing two things there mr polly. Firstly, like foreign ownership, restricted land supply, building supplies cartels… so too do development contributions put the cost of housing up – and significantly. Each component of the housing supply cost structure needs to be attacked, which is slowly being realised and attended to. This is one of them.

      The things that development contributions are supposed to pay for have in the past been paid for by all home owners using them, which is as it should be. The current system means that the whole cost of those things is paid for by the first home owner, which is not right.

      The above has nothing to do with quality of work.

      • pollywog 8.1.1
        19 August 2013 at 11:26 am

        I think you are confusing two things there…

        Only 2 🙂

        I’m saying Local councils know best what the true costs of maintaining first world infrastructure is and that is factored into the development contribution of a new house.

        New homebuilders should accept that there is a Council premium to be paid to tap into existing infrastructure and allow for upgrading as well.

        It just seems like a Wellington power grab to weaken local bodies in favour of developers looking to grease Central gov’ts palms and get a sly backhander in the process, while also being seen to be doing something about lowering house prices.

        But really, it’s all smoke and mirrors stuff and if it turns to shit, it’ll be the rate payer and council who will pick up the tab to fix it not the gov’t or the developer..

        • vto 8.1.1.1
          19 August 2013 at 11:37 am

          The problem with current development contributions is that the first homeowner pays all of the cost of, for example, the sewer system that relates to that house whereas it should be spread over all homeowners who use that sewer system (through rates as had been the case in the past).

          This recent practice distorts the cost of housing.

          There is no argument about providing first world infrastructure or requiring homeowners to pay for it. It is the manner in which this is achieved that unreasonably puts the price of housing up.

          In addition, the quality of the work has nothing to do with development contributions.

          • pollywog 8.1.1.1.1
            19 August 2013 at 11:46 am

            The problem with current development contributions is that the first homeowner pays all of the cost of, for example, the sewer system that relates to that house whereas it should be spread over all homeowners who use that sewer system (through rates as had been the case in the past).

            Think of it as a connection fee like getting your phone on and then paying line charges thereafter. Developers are going to charge for it anyway and not pay it to the council or pass the savings on if they’re not forced to by law.

            If there is no development contribution to council, they won’t in principle have to monitor developers for compliance with codes and open the possibility for them to allow substandard planning, materials and workmanship.

            • vto 8.1.1.1.1.1
              19 August 2013 at 11:54 am

              Except that what is paid for is a connection fee, line charges, and the actual line installation costs all when you first get your phone on. That is the analogy.

              “Developers are going to charge for it anyway and not pay it to the council or pass the savings on if they’re not forced to by law.” That is not the way it works. Business will lower prices if they can while maintaining the same margins, in order to compete and sell their products. What you suggest there is simply not the case.

              Your last paragraph polly is also simply wrong. Any person building any such structure requires a building consent which complies with building code which is monitored by council inspectors for compliance. It bears no relation to financial contributions.

              • pollywog …
                19 August 2013 at 12:11 pm

                Any person building any such structure requires a building consent which complies with building code which is monitored by council inspectors for compliance. It bears no relation to financial contributions.

                Housing Minister Nick Smith and Local Government Minister Chris Tremain said they would restrict the charges developers paid to councils in a bid to lower costs passed on to home buyers.

                “We are going to narrow the charges councils can put on new sections, provide an independent objections process and encourage direct provision of necessary infrastructure to get costs down,” they said.

                Surely they’re implying they will also monitor compliance with codes themselves or trust developers to act in good faith ?

                Then it’ll be a case of letting the inmates run the asylum.

                It all relates directly to the contribution currently paid to Council.

                A commercial landlords group, the Property Council, said it had long campaigned for greater consistency in how local authorities calculated development contributions and on how the money was spent.

                “The existing policy frustrates affordable development and has done so for more than a decade,” chief executive Connal Townsend said.

                Development contributions were meant to be spent on essential infrastructure to support development but too often were being wrongly used to cross-subsidise other projects.

                Oooh yeah well that requires a law change then. Cos some privateer has a failed anecdote to trot out and justify it…pfffft

                • vto …
                  19 August 2013 at 12:22 pm

                  Such private provision of, for example, sewer still requires the building consent process. The ability of the private sector to process such consents and to monitor construction and to issue code compliance at the end has been removed as an option following the abject failure of this system which was one of the causes of the leaky building syndrome.

                  Private provision of, for example, sewer is a good idea. Subdivision roading is already provided by the private developer and transferred to Council ownership on completion (and through this same building consent process). Recently had some involvement with a developer who was looking at having to pay the local council about 50% more than it would cost for a private sewer system to be installed in the subdivision. (i.e. around $15,000 compared to around $25,000 for Council system).

                  I don’t like this government and its underhand ways and deceptive manners but on this issue it is right and will help with bringing down the cost of housing.

                  • pollywog …
                    19 August 2013 at 12:30 pm

                    Tremain said a law change would be included in the Local Government Reform Bill to be introduced this year

                    Development contributions needed to fairly balance the costs “that should rightly rest with a new development and those of community benefit that should be paid by general ratepayers”.

                    “There will always be pressure on councils over rates and we need a check on development contributions to ensure the new-home owner is not overcharged,” he said.

                    The check is to vote for more ethical local body politicians not change laws to weaken councils.

                    on this issue it is right and will help with bringing down the cost of housing.

                    Bet you it doesn’t 🙂

                    • vto …
                      19 August 2013 at 12:38 pm

                      Well mr polly, it already has – in Christchurch, where such contributions have been canned for new residential around the CBD as part of the earthquake rebuild, asking prices have been lowered as a result. Fact (trust me).

                    • pollywog …
                      19 August 2013 at 12:48 pm

                      Christchurch can be made an exception for pretty much anything.

                      Waiving council levies there is just an attempted sweetener to draw money in to what was already a dying cbd and surrounding shithole suburbs even before the earthquakes.

                      Seriously who the fuck wants to live in Sydenham, Richmond, Phillipstown or the non existent cbd itself ?

                      The smart money will move out and build by the airport.

                    • vto …
                      19 August 2013 at 12:56 pm

                      May well do. However the effect of dropping council contributions has been lower prices and that is the point.

                    • pollywog …
                      19 August 2013 at 5:19 pm

                      So new home prices in Christchurch have dropped by an average of 14 000 because of reduced council contributions and we can expect the same across the board when the gov’t starts over riding council consent procedures ?

                      I beg to differ…

                      Christchurch’s median house price has hit a record $381,250 as buyers continue to compete for properties.

                      http://www.stuff.co.nz/the-press/business/your-property/8787178/Median-house-price-hits-record

                      You’re missing the point, and that is National are going to weaken councils and change laws because of vested interest anecdotes. You can pretty much guarantee new house prices will increase in the next year regardless of whether developers pay a council levy or not.

    • Rogue Trooper 8.2
      19 August 2013 at 11:12 am

      raining ideas. 🙂

      • Greywarbler 8.2.1
        19 August 2013 at 12:40 pm

        Trouble to make any impact on those in the driving seat the drops need to expand in size to hailstones as big as golf balls. Having a thick skull and skin seems a core necessity for such.

  9. tracey 9
    19 August 2013 at 11:10 am

    Plus 1

    developers escaped largely unscathed from the leaky home abomination, especially when compared to builders yet their financial decisions dictated quality and price of materials systems and labour.

    funny how developers dont carry 10 years personal liability now like builders and designers.

  10. Wayne 10
    19 August 2013 at 12:16 pm

    The Nats tend not take too much notice of Rod. If an economic commentator opposses everything you do, it is not likely you will listen to that person. If on the other hand he was selective, said good policy in these 4 areas, but bad in this 1, well that would be different.

    By the way the Nats do actually beleive in the value of what they do, in the same way that the Labourites beleive in what they do. However they are two different world views. Of course the Nats do consider they have more economic rationality on their side.

    • One Anonymous Knucklehead 10.1
      19 August 2013 at 12:21 pm

      Yes, you display it ad nauseam, but I have a question. How are you measuring it? By GDP you’re a close second behind Labour, so what’s your benchmark? A higher GINI?

      • Greywarbler 10.1.1
        19 August 2013 at 12:55 pm

        By the way the Nats do actually beleive in the value of what they do, in the same way that the Labourites beleive in what they do. However they are two different world views. Of course the Nats do consider they have more economic rationality on their side.

        I wonder how the NACTs would define economic rationality and how it guides their thinking and what outcomes it leads to that help in their task of running a modern country accountable to all citizens.

        This economic rationality is a term amongst a maze of rationality types on the net.
        But there were some books on rationality. One sounded like the NACTs type –
        “Accounting for rationality: double-entry bookkeeping and the rhetoric of economic rationality”.

    • pollywog 10.3
      19 August 2013 at 12:23 pm

      National’s “short term gain, long term pain” ideology isn’t really economically rational though is it?.

    • Tracey 10.4
      19 August 2013 at 12:24 pm

      He was outlining the “contradictory and counter-productive actions” which by definition will probably not favour the Government but he was by no means highlighting all government policy Wayne.

      “Of course the Nats do consider they have more economic rationality on their side.” Of course they do and they regard the UK and USA as running “looney” and “money printing” economic policies. The fools.

  11. Mary 11
    19 August 2013 at 12:21 pm

    Add these seven things that’ve happened over just the past ten days to everything else that Key and this shonky government are doing and we have a very different New Zealand to what we had when Key lived in a state house and Bennett used the training incentive allowance to get her BA.

  12. peterlepaysan 12
    19 August 2013 at 9:16 pm

    We have a greedy heartless government led by an american citizen who likes to brown nose his wall street and hollywood cronies, (sorry, I forgot chicago economists).

    Er, excuse me where is there any opposition?

    Greens maybe but unlikely to get enough to scare national.

    Mana? not with their nonsensical gst policy.

    Peters, same as the greens, neither of those groups would agree except to disagree.

    Dunne? Done his chips.

    Conservative party? If they play it correctly could be very significant.

    Pity that there are no other viable alternatives to the national party.

    Whether Key stays or goes will still leave us with a heartless wall street, hollywood, washington brown nosing national party in power.

    groan…

    where is the opposition?

  13. BrucetheMoose 13
    19 August 2013 at 9:52 pm

    Like the government’s whole management of Christchurch and the ‘recovery’ is comming along superbly. Like a 747 that’s just dropped out of the sky and hit a fuel refinery.

  14. xtasy 14
    20 August 2013 at 1:30 am

    Yes, I heard Oram state pretty much the same on Radio NZ National a week ago, Tuesday last week. And he was so adament, that it was a stupid idea by the PM to go to China to basically apologise for the Fonterra stuff up. I have to agree with him totally, as that is not necessary.

    Apologising to a country and system, that had and still has its fair own dairy and food scandals, even more in numbers and frequency that little New Zealand, seems to be damned stupid idea. It is like inviting trouble. And on Monday this week, on Kathryn Ryan’s political commentators at 11 am, even damned Hooton agreed with Oram!!!

    So Oram is right again. He is not always right, but often he talks sense.

    Key seems to be keen to open up to a new large trading partner, that NZ has become too damned dependent on, and the country and people are paying the price now, with another scare published just yesterday.

    It is time to tidy up, to get things investigated and sorted, but also, to diversify in markets AND products, as this over dependence on basic dairy products is going to leave NZ too damned vulnerable. Value added manufacturing of high quality goods is needed, and if it cannot be done here by NZ companies and the government doing it themselves, better talk with the “devil” and invite investment from at least friendly countries. Many such in Europe are desperate for new investment in safe locations and markets, and they also have heaps to offer, that will benefit all involved.

    Do stop selling out to Mainland China, and do stop exposing the country and people to blackmail by one of the most corrupt and worst food standard delivering country there is, please. You would have to be an idiot to make yourself dependent on one such market. Only NZ First and Greens realised the dangers with the FTA with Mainland China. It is coming back to haunt NZ now. Forget the gold digger days, selling the “white gold” at ease!

  15. Greywarbler 15
    20 August 2013 at 9:11 am

    xtasy
    Gold rush, white gold rush, venison rush, deer horn rush, wine rush, free market rush, IT rush, surveillance rush – what other great ideas have we honed in on, abandoning previous ideas and procedural standards?

    We need new ideas but I think that analysis would show that those that get embraced would have similar attributes that group them away from the sustainable and secure multiple-employing group of both skilled and semi-skilled workers.

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