Phil Twyford – Budget Ignores Housing Crisis

Written By: - Date published: 3:30 pm, May 16th, 2014 - 90 comments
Categories: uncategorized - Tags:

If New Zealanders needed any more proof of the National Government’s total failure on housing, this Budget has given them all they need to know.

The Budget does nothing to address New Zealand’s acute housing crisis.

There is nothing here for first home buyers.

Nothing to build a single new home. Nothing to make rentals warm and dry.

Nothing to stop offshore speculators driving up prices.

New Zealanders are crying out for a solution to our housing crisis.

A Fairfax poll released on Budget morning said 76% of Kiwis most wanted the Budget to help first home buyers. National ignored them.

And it’s ordinary Kiwis who are going to be paying the price. As Rob Salmond at Polity notes, by 2018/19, 63% of the average gross full time wage will be needed to service the average mortgage. For the already squeezed budgets of New Zealand families, that will be a bridge too far.

And the news is even worse in Auckland – by 2018 the average mortgage will eat up 83% of the average full time wage.

The housing crisis is bad, and the Budget shows it’s going to get much, much worse.

Yesterday, John Key, Bill English and Nick Smith had a chance to fix it and what did they do? What was their solution to the biggest pressure on the budgets of ordinary Kiwis?

Absolutely nothing that will make a difference.

Kiwi first-home buyers could get a better deal from their mortgage broker than the paltry $3500 the Government is offering in reduced building costs.

Average prices in Auckland rose by $6208 dollars last month. The Government’s lifting of tariffs on building materials will save just two to three weeks of Auckland house-price inflation. It’s less than 1% of the price of an average house.

But what about the most vulnerable New Zealanders? Well, Paul Bennett is trumpeting a paltry $30 m over the next three years to boost social housing. With that level of funding, and a $350,000 baseline for each home, it would take the Government 455 years to hit their target of giving housing NGO’s 13,000 new homes.

So on Housing, as on most things in this Budget, we see National playing politics as ususal – not making the changes we need, and hoping people won’t look past the spin.

We can do so much better than this.

Labour will build 100,000 affordable houses, introduce a Capital Gains Tax, impose restrictions on offshore property speculators, reform monetary policy which will help lower interest rates, and make every rental property warm and dry.

Labour understands how important housing is to New Zealanders, we know the pressure it is putting on families all around New Zealand.

We understand the worry of first home buyers finding themselves locked out of the market. We understand the anxiety of parents having to put their kids to bed in cold damp rooms in rental accommodation.

We understand the stress of sitting down with the budget at the end of the week and seeing more and more of it gobbled up by interest rates or rising rents.

In this Budget, New Zealanders asked the government to show that they understood too.

And in response, they got nothing.

Phil Twyford

90 comments on “Phil Twyford – Budget Ignores Housing Crisis ”

  • Comments are now closed

  1. ianmac 1
    16 May 2014 at 4:18 pm

    The Government claims that they have kept interest rates low to help home buyers.
    In the next breath they say that the Reserve Bank independently keeps the interest rates down.
    In the next breath they say that during their time Labour lifted the interest rates so high.
    In the next breath they say that currently rising interest rates is nothing to do with their policies.
    My next breath is to say I am confused.

  2. just saying 2
    16 May 2014 at 5:01 pm

    What is Labour’s specific policy on State Housing?
    $350,000 is not affordable for me. It may be affordable for the kids of the people you hang out with. I suspect many of them will start their portfolio with the middle-class welfare that Labour is offering with kiwibuild.
    I notice Labour is only proposing to raise the minimum wage to $15 per hour. And around twenty percent of the population is unemployed or underemployed. Others are unable to work because of health conditions. Many many people left in the cold with Labour’s housing policies as announced so far. Do you care about the quarter of the population who are hardest up?

    • Colonial Viper 2.1
      16 May 2014 at 5:19 pm

      Yep – the minimum wage is only a minimum wage if you can get a job – and if the job you get is only half time, then you are still screwed as there is no chance of making ends meet.

      $15/hr was a reasonable promise back in the 2011 elections, it’s 2014 now and at 3% increase a year the rate should now be $16.39/hr.

      • Draco T Bastard 2.1.1
        16 May 2014 at 10:14 pm

        $15/hr was a reasonable promise back in the 2011 elections

        Nah, wasn’t even reasonable then. Back then it should have been at least $17/hr. Now it needs to be closer to $20/hr.

    • geoff 2.2
      16 May 2014 at 6:02 pm

      I agree Labour’s policy is not as good as the Greens in this area. But I think Labour’s $350,000 new houses would definitely help to bring down the price of houses.

    • miravox 2.3
      16 May 2014 at 9:41 pm

      The real housing crisis is people living rough, outdoors, in cars, caravans, couch surfing and whole families living in the garages, or if they’re lucky, spare bedrooms – and that these families are not ‘just’ beneficiaries (demonised as they are), but also the working poor.

      The real housing crisis is when news items appear with these living arrangements mentioned as an aside to the main story, that people just take it as an everyday normality.

      The real housing crisis is that children in these living arrangements have to constantly change schools, doctors, friends and family networks.

    • Phil Twyford 2.4
      17 May 2014 at 9:06 pm

      The plight of the quarter of the population who are hardest up – that is the big task. Crappy and expensive housing is a big part of the problem, along with insecure and low paid work. Obviously we need to build more state houses. It is fundamental for Labour that state housing (and social housing provided by community organisations) is an essential part of how we deliver warm, dry and secure housing for people who need it, and give those kids a decent start in life.

      We have to build more state houses, but we are not going to be able to build our way out of the problem. State housing currently houses 4% of households. That is about 69,000 houses. To build another 5000 state houses would cost about $2 billion. You could double or triple that and it would only make a small dent in the housing challenges of that bottom 25%.

      So, we have to do two things. First, we need to fix the overall housing crisis that drives housing costs ever upwards, and condemns the bottom 25% to overcrowded and substandard housing. We’ll do this by increasing supply and lowering costs through Kiwibuild, and ramping up urban development supported by public transport investment, building a lot more houses than is currently the case, with more choice and more affordability. And easing the speculative pressures through a Capital Gains Tax, and putting a stop to offshore speculators biding prices up.

      Second, we have to make the private rental market a better place for the one-third of NZers for whom it is home. We will make sure every rental is warm and dry. And I think we have to look at how we can change the Residential Tenancies Act to give tenants more security of tenure.

      That’s just housing. Much of the equation is of course about generating more jobs and higher incomes.

      • karol 2.4.1
        17 May 2014 at 9:10 pm

        Not just more jobs – which is what Key and English crow about – but decrease underemployment. ie more full time, and secure jobs, with good working conditions.

  3. Johnm 3
    16 May 2014 at 5:06 pm

    The Neoliberal religion of the dolts Key and English says: no need to intervene, the market will solve this crisis. If you can’t afford to buy a house well too bad! that’s market reality. Landlord puts up the rent? too bad if you don’t want that rental someone else will gladly pay it, market rules. end result market non performers end up living in tents! At least tents are still cheap courtesy of Chinese manufacturers, pay someone to use their section and get started! They might let you dig a long drop in the section! Meanwhile the dolts continue to degrade NZ’s tax base with tax give aways and bribes. You voted this scum in so live with it!

  4. Clemgeopin 4
    16 May 2014 at 5:49 pm

    Phil, when will Labour announce a more detailed comprehensive housing policy?
    Labour needs to do this or revisit this issue again soon to reassure the public, before National pulls anther vote catching rabbit to fool the public once again.

    • miravox 4.1
      16 May 2014 at 9:11 pm

      Labour is remarkable silent on the state housing question. It’s been asked about repeatedly when Labour politicians write on The Standard, but seems to be studiously ignored.

      I’d very much like to know:
      – Is there a policy to increase the state housing supply?
      – If there is, is it being saved for closer to the election?
      – If there isn’t a policy to increase state housing, what is the thinking around that?

      I’m beginning to think that there is no plan to improve the housing situation for the most vulnerable, and that this, above any thing else, will swing my vote away from Labour to the Greens or Mana.

      • Clemgeopin 4.1.1
        16 May 2014 at 11:26 pm

        I agree with you that the housing crisis in the cities, especially Auckland, is indeed a serious issue. Labour has to come up blazing with a very bold policy, ASAP!

      • Phil Twyford 4.1.2
        17 May 2014 at 6:25 pm

        I certainly haven’t been silent on state housing issues. You might see or hear me in the media more often talking about home ownership, LVRs, house prices etc but that is because that is the big media issue that gets reported more often.

        Last weekend I broke the story of National’s plans to asset strip thousands of state houses out of regional New Zealand. A week before that I revealed National has been using Housing NZ as a cash cow, reducing the government’s annual capital contribution and cranking up dividends to fund the “surplus” – making a net withdrawal from HNZ’s balance sheet of $212m over the last 5 years, and budgeting to take another $250m out in the next three years.

        We’ve been critical of National’s policy of reviewable tenancies for state house tenants, and how Cabinet decided not to exempt pensioners, the disabled or families with young kids from being kicked out if they earn enough to pay a market rent.

        We’ve exposed the high number (currently 2800) of empty state houses lying vacant and boarded up while 5000 families languish on the waiting list. And the fact that Housing NZ is routinely referring people to live in campgrounds.

        I continue to speak out against National’s treatment of state house tenants in their so-called “redevelopment” projects in Maraenui, Glen Innes North and Pomare where they have evicted tenants and divided communities in the name of urban renewal. I have pledged that under Labour, tenants whose communities are being redeveloped will have the right to return, and the numbers of state and social housing units will not be reduced in the process.

        I constantly have a go at National for running down Housing NZ – they have reduced the state housing stock by 700 in the past year – in the middle of a housing crisis. And I have said repeatedly that Labour will increase the stock. We will put some detail on that between now and the election.

        • miravox 4.1.2.1
          17 May 2014 at 10:06 pm

          Thank you for the reply, I guess I used the wrong word – sorry – it’s not the speaking out on state housing issues, I appreciate that you do, and it’s good to have it reiterated ;-).

          It’s the silence about what Labour will do about the dire housing supply for the poorest, beyond simply criticising the current state of affairs. You’ve answered that to a degree here… thank you. I guess I need to temper my impatience.

          I do like the move to improve the security of tenure. It would be good to see some more rental controls, rather than landlord subsidies via the accommodation supplement (that will free up affordable housing /smirk). I’m convinced that as well as secure tenure, building/buying homes for state rentals and proactive planning by the state for future housing needs is a good idea.

          It’s a basic need for a cohesive and fair society to have affordable, safe and secure housing in places where it is needed, not were the money market ‘decides’. Certaintly not where some developer thinks s/he can make a quick buck and then declare bankruptcy before the faults are found

      • karol 4.1.3
        17 May 2014 at 6:41 pm

        miravox, Phil recently addressed state housing under one of my posts – here – in April.

    • Clemgeopin 4.2
      17 May 2014 at 12:08 am

      As this article is authored by Phil Twyford, and we are commenting on it, I hope he will come back here and respond to us.

      • Colonial Viper 4.2.1
        17 May 2014 at 12:16 am

        There is a desperate shortage of quality housing in NZ. Way too many young people are unemployed in this country. Compulsory KiwiSaver is going to mean many millions of extra dollars are going to be available to invest.

        Come on Labour, you can do the maths, use these building blocks to put together a policy
        which will deservedly sweep the Left into power for 4 full terms.

        • Draco T Bastard 4.2.1.1
          17 May 2014 at 11:07 am

          If a government can create the money necessary to produce full employment, which it can, and it has the projects necessary to utilise full employment, which we do, then why do we need monetary savings?

          • Colonial Viper 4.2.1.1.1
            17 May 2014 at 11:17 am

            Yeah I know, but I didn’t want to blow any more fuses with the crowd who think that the government has to first get money by taxing it before it can do any spending (when in reality it has to issue that money into the economy first otherwise there is nothing to tax – the best analogy I’ve heard is a concert promoter trying to collect tickets at the door when they haven’t issued any tickets to begin with – it doesn’t work).

        • sabine 4.2.1.2
          17 May 2014 at 7:18 pm

          unless the government is willing to guarantee the Kiwi Savings to the Saver ,i.e. assure me that the money that is taken out of my paycheck weekly is still there when i turn 65 – 75 – depending what the retirement age is in the future, they should not make any savings scheme compulsory.

          for a few it might be wiser to pay of debt charged 17.9 % interest instead of ‘saving’ 50 bucks weekly for use in 25 years…availability not guaranteed.

          also 10% compulsory Kiwi safer, for someone on the minimum wage, that might mean paying electricity or not. heck for someone on 500 (after tax) it will mean a Visa Card repayment, or going to the doctor.

          i would however support the government forcing banks to pay out interest on savings that amount to more then the usual 1.5 – 2 % on a standard savings account.

          There is a similar scheme to Kiwi Safer in Germany (http://de.wikipedia.org/wiki/Arbeitnehmersparzulage , sorry only in german) that allows People full access to the amount saved after every 6 years. This i could support, but wage theft to the tune of 10 % for a maybe payout when I am old/dead or decrepit….if the bank has not played it all away – no way.

      • Phil Twyford 4.2.2
        17 May 2014 at 5:30 pm

        My apologies for not being around earlier. Will respond to a few comments now.

        [lprent: Don’t apologize to these silly people living dangerously. They don’t expect to have demands about when they must comment. They sure as hell shouldn’t expect it from authors usually. And really they’re just lucky I didn’t notice them earlier. ]

        • Clemgeopin 4.2.2.1
          17 May 2014 at 7:01 pm

          Thanks for participating. Your approach of authoring an article and then responding to issues/questions is excellent. You should ask your other spokesmen to do the same as it will be helpful to all.
          Cheers!

    • Phil Twyford 4.3
      17 May 2014 at 5:52 pm

      We do have a fair bit of housing policy out there already:

      Affordable home ownership through Kiwibuild – 100,000 affordable starter homes
      Healthy Homes Guarantee – legislating to set minimum standards for heating and insulation of all rental properties
      Capital Gains Tax to take the speculative heat out of the market
      Monetary policy upgrade that will keep interest rates lower
      Putting a stop to offshore speculators buying Kiwi homes
      A package of housing measures for Canterbury that includes a commitment of 10,000 Kiwibuild homes in the first four years, and an urban development approach to revitalising New Brighton and other areas

      You can find more detail here https://www.labour.org.nz/affordable-and-healthy-homes

      We will have more to say in the course of the campaign on the future of state and social housing, and how we are going to deal to the housing crisis in Auckland.

      • Clemgeopin 4.3.1
        17 May 2014 at 6:48 pm

        That is good. Thanks. I am glad you will announce more stuff before the election. That is quite important due to MAS and people putting these things at the back of their minds somewhere when announced too early.

        At that time, it is also important to stress Labour’s policy of foreigners required to build rather than buy houses here.

  5. Binders full of women 5
    16 May 2014 at 7:45 pm

    Tonight’s paper.. a 21 year old couple buy a house for $227k. “they did it the old fashioned way, saving and no luxuries”

    • greywarbler 5.1
      16 May 2014 at 7:51 pm

      What does that indicate Binders? Everybody should be able to do this at 21? Did they live at home and save. Did they both work their butts off and never go out. Did they work in their parents’ firm? Did they not do any tertiary study? What sort of job did they have so everybody can aim to do the same. Did they cycle everywhere and so save on a car?

      It’s a comment that is like a stone in the pond. You dropped it all we can see is the ripple. Wot wot?

      • McFlock 5.1.1
        16 May 2014 at 9:31 pm

        So between the two of them, assuming they worked 4 years straight after school, they saved about $50k a year: or more than what half the households in NZ have to live on in a year.

        hmmm. #notthefullstory

      • Binders full of women 5.1.2
        16 May 2014 at 10:00 pm

        No I don’t think everybody could/should do it at 21. Just I reckon that the ‘crisis’ talk is a bit tiring. Boko Haran selling the girls is a crisis. But as a NACTOID I do like labours CGT and I love the Greens Progressive Housing. CGT would cool the market and Greens Progressive ownership would make life more like the 21 year old couple for more people. McFlock… I’m not for a second thinking they saved 227K for a freehold house.. guessing they have a mortgage.

        • McFlock 5.1.2.1
          16 May 2014 at 10:43 pm

          ah, so they saved $20-40k and made minimum payments on their student loans in order to buy a house at the peak of a bubble using as big a mortgage as possible.

          truly a nactoid success story.

    • lprent 5.2
      17 May 2014 at 9:30 am

      Where in Auckland could you buy even a one bedroom apartment for $227k? A link would help.

      But it wasn’t in Auckland right? It was in an area with high unemployment and a surplus of housing would be my bet. So your example is complete horseshit.

      The point about housing is that it is generally a problem where the jobs are or in the wake of a natural disaster.

      Arguing by an analogy from a area where is isn’t an issue on a moralistic basis just makes you look like a fool.

      • Ants 5.2.1
        17 May 2014 at 4:45 pm

        You can get $230,000 3 bedroom homes out in reasonable parts of Papakura (where I live), which are about 3 minutes drive from the train station if you need to work in town.

        You are talking complete horseshit, given you clearly don’t have any knowledge of the property market up here, and are basing your knowledge on media soundbites about how expensive Central Auckland is.

        • Tracey 5.2.1.1
          17 May 2014 at 5:52 pm

          can you post a definition of reasonable parts of papakura and some property examples to help clarify.

          • karol 5.2.1.1.1
            17 May 2014 at 6:34 pm

            Some examples for sale in Papakura

            And here

            But I wonder about the state of the houses in the $200-$300 range as that is around the same price as the cost of a section only.

            Papakura is also a long way from the central CBD, so, unless you have a job close to your home, there’s the factor of travelling cost and time. I understand first time buyers in west Auckland wouldn’t look at anything closer to the CBD than about Massey or Ranui.

            • Blue 5.2.1.1.1.1
              17 May 2014 at 7:23 pm

              First home buyers don’t buy houses in perfect condition in my experience. Fix it up turn into what you want or sell it to upgrade. There is an expectation that a cheap house is generally a fixer upper into experience. We bought out first house when we were 21, a real shit hole. Painted, wallpapers, fixed the plumbing, re carpeted and sold 18 months later for $30k more, then bought another. There wasn’t much in the way of profit, but it sold quickly. It can be done, if you choose to.

        • lprent 5.2.1.2
          17 May 2014 at 9:52 pm

          Bullshit. Just looked on Trademe real estate for houses in the Papakura area. Set to 3-4 bedrooms. Ordered by lowest price. Ignores the move-ons looking for land and the auctions.

          Out of the 257, there were 3 listed below $300k. After that I’d look at those closely with an engineer. There are a further 18 below $350k, and 26 more under $400k, and 45 at less than $500k. And a further 32 at less than $600k.

          More than two thirds of the houses below $500k had a asking price attached, so weren’t in “price by negotiation” or auction.

          I guess that you don’t know much about your own area. Perhaps you should get off your lazy arse and find out. That took me a grand total of 10 minutes.

          I’m pretty sure I could get that confirmed as being the general pattern from real estate agents with a few phone calls. But it also fits with the sales figures from that area according to QV.

      • Blue 5.2.2
        17 May 2014 at 4:50 pm

        Average house price in Dunedin is 257k. Unemployment rate is 4.4%.so no real correlation between cheap housing and high unemployment.

        • lprent 5.2.2.1
          17 May 2014 at 10:02 pm

          Except of course the number of homesick Dunedinites in Auckland, ChCh, and Wellington (including some of our authors) does rather say that there is a bit of an exodus of the unemployed towards where there are jobs.

          I’m afraid that I consider any area you have to move out of to be able to get job as having high unemployment. They can’t provide jobs to their own kids.

          You have to remember that while I’m that rarity – a native Aucklander – I haven’t spent all my life hiding behind the Bombays. Many decades ago I did my MBA at Otago, and then I worked there for 2 years while my partner finished her Llb/BCom. It isn’t like I am unaware of what the job-market is like there in what was in 20-20 hindsight a pretty good time for Dunedin jobwise.

          Not to mention that my current partner Lyn is from Invercargill and she moved north to Dunedin for uni, and then north to Auckland where the jobs are.

          It is a hell of a nice city in the right house (ie not those manky ones that are foisted on students). But the work opportunity choices are pretty limited if you don’t want to work for the uni, the DCC, or a retailer.

          • Colonial Viper 5.2.2.1.1
            17 May 2014 at 10:48 pm

            Also the DHB is a massive employer, and the ORC a sizeable one. But so much of Dunedin’s manufacturing is now gone, and with them many good jobs, supporting businesses and income have also left the region. Today, there is significant empty commercial space on George St and Moray Place which have not been tenanted for months or longer – some of which would have been considered prime retail and snapped up, just a few years ago.

            • Draco T Bastard 5.2.2.1.1.1
              17 May 2014 at 11:47 pm

              When I was down there I remember a letter to the ODT complaining about supporting local businesses only to have that local business up and move to Auckland. The business that she was complaining about had moved to Auckland simply because it couldn’t get staff as they had already moved to Auckland. The business’ industry? Tech.

  6. Naki man 6
    16 May 2014 at 8:00 pm

    Housing is not an issue for the majority of New Zealanders.
    The median house price in Hamilton is 303k and there are many cities where houses are very affordable.

    • Mike the Savage One 6.1
      16 May 2014 at 8:08 pm

      “Naki man” are you a “naked man”?

      That is a bit ridiculous, you do not seem to live anywhere near Auckland, where you now in most places need to be a millionaire to afford buying a new home.

      • bad12 6.1.1
        16 May 2014 at 10:12 pm

        Nakahi-man, the snake…

      • Disraeli Gladstone 6.1.2
        17 May 2014 at 11:12 pm

        With a decent rail system, you could live in Hamilton and work in Auckland. But good luck convincing the government or local authorities to invest any sizable amount in public transport.

    • Colonial Viper 6.2
      16 May 2014 at 11:48 pm

      Housing is not an issue for the majority of New Zealanders.

      It only needs to be an issue for 20% of the population to fuck the National Government in September.

    • Phil Twyford 6.3
      17 May 2014 at 6:36 pm

      In Auckland and Canterbury it is clearly a major issue. The other half of the population are getting increasingly pissed off that they have had to cop both LVRs’ 20% minimum deposits and interest rate hikes that are adding thousands to their mortgage repayments because the Government has failed to get a grip on the Auckland housing crisis. Now National wants to strip state housing out of the provinces. http://www.stuff.co.nz/national/politics/…/Axing-homes-will-bleed-regions

      • BM 6.3.1
        17 May 2014 at 6:55 pm

        I don’t see how it’s the governments fault.

        I see the issue being more along the lines of

        1)Auckland becoming a major international city, therefore land is at major international pricing.
        I actually consider this a good thing, NZ is rocking and we’re becoming a player in the world economy.

        2) Auckland council dicking around and getting in the way of land development.

        How do you think the government should deal with those two issues?:

        • Draco T Bastard 6.3.1.1
          17 May 2014 at 7:12 pm

          1.) NZ isn’t for foreigners.
          2.) Land development isn’t the solution as it just makes the city more unliveable. It costs more to run and more to transport across and through it.

          Basically, your ‘solutions’ make things worse.

        • Ad 6.3.1.2
          17 May 2014 at 7:45 pm

          Noting simply that demand is high in either Auckland or Christchurch simply doesn’t respect the degree of stress for simple shelter let alone home ownership felt by many hundreds of families right now.

          I’m not sure if you live in a city, but two counterfactuals: Christchurch City Council is one of the largest rental housing owners in the country. As well as that capacity, they also have the motivation within their council to face the housing shortage and to do something about it. That is an activist, motivated and strong council looking for an activist partnership from Central Government.
          Instead, Minister Brownlee takes every opportunity to undercut the very idea of partnership.

          In Auckland, there is low Council housing stock, since it was largely sold off under Mayor John Banks, and increasingly the state-owned housing is retreating to specific suburbs. Auckland Council is however allocating major areas for new housing acceleration under the Special Housing Area arrangement with central government.
          Auckland Council’s response so far is largely a planning one that lets the developer make purely market-based responses. There are some exceptions to this such as the Wiltshire Village project (but that itself was started by Waitakere City – a far more activist council).

          Neither Auckland Council nor central government have really opened the toolbox on what they could do to assist people seeking their basic human right for shelter and adequate housing. Instead the Salvation Army, Community of Refuge Trust and City Mission are overflowing and Queen Street sees beggars multiply daily.

          • BM 6.3.1.2.1
            17 May 2014 at 8:21 pm

            I don’t believe the answer is more state housing or the state building houses.

            It won’t work and will cause chaos.

            • Draco T Bastard 6.3.1.2.1.1
              17 May 2014 at 8:59 pm

              I don’t believe the answer is more state housing or the state building houses.

              Of course you don’t – because you’re delusional. Free-market capitalism isn’t providing the necessary services and yet still claim that it’s the only way.

              It won’t work and will cause chaos.

              Oh, it’ll work but it will undermine the rich and so they don’t want it and will do everything in their power to prevent it.

              • BM …
                17 May 2014 at 9:21 pm

                Unless you lefties intend to ban elections in NZ and turn the country into a police state, the rich will make so much money it’s not funny.

                The next real big money making opportunity is when Labour eventually gets back in and fucks with the economy.

                Wealthy people love it when Labour get into power, terrible for the country though.

                • Colonial Viper …
                  17 May 2014 at 10:44 pm

                  Cease your demented fictions, they’re worse than meaningless and flow with the consistency of lumpy dog shit.

            • lprent 6.3.1.2.1.2
              17 May 2014 at 10:07 pm

              It has worked before. How do you think about a quarter of Aucklands houses got built in the first place?

  7. Mike the Savage One 7
    16 May 2014 at 8:05 pm

    Free doctor’s visits to up to 13 year olds will hardly compensate for astronomical housing costs, nor will a few extra weeks of parental leave and limited tax credits to new parents address it.

    Yes, examining the budget in detail, we can see it is a smoke and mirrors exercise, looking “good” on the surface, but when looked at it closely, it is not offering that much at all, and what it offers is well short of what even so far “slack” Labour is offering.

    So things can only improve, that is if voters will be properly informed, about their options and what the budget really means.

    Phil Twyford and his buddies in Labour will be well advised to write and design a pamphlet, to reveal the truths of the “budget” and have them put into every letter box of every electorate, where Labour has an MP, ideally ALL letter boxes. I am sure, that Phil and his buddies are “working” on this, are you?

    Inform the public about the real details and less known bits that the Nats are now pushing the media to tell the public. It is all a “package” too, so when people will vote the Nats, they will have other, less savoury policies come with the “perks”. That must be pointed out firmly and clearly.

    So yes, Phil is working on that, I trust.

    The budget has delivered too little in too few areas, it looks good on the surface, but on housing it is a total failure, and must be exposed as such. You cannot have mass immigration, a hands off approach on housing, and expect that “the market” will solve all the problems that will come. We are in crisis already in Auckland and Christchurch, construction is far behind demand, and hence we have huge housing and also rental costs.

    There is NO information on non resident home buying, and migrants will count as New Zealanders also, but they push up demand further, so the statistics so far published are useless, as they are too unspecific about what really goes on.

    A home owner register is needed, and more, to stem the flood of demand, while insufficient is done to meet it. And also ask about building standards, as a recent survey revealed, that most housing is not up to it.

    Housing in New Zealand is a huge failure, it will take future governments to pick up the pieces.

    • Clemgeopin 7.1
      16 May 2014 at 11:44 pm

      Here is an idea:

      Whatever the WFF entitlement is for a worker, the employer should be billed for half of for the worker’s part of it (not the family’s part) + non deductible GST (or surcharge) of 15%.

      This may induce the employer to pay the best possible wage to the worker.

      Keen to hear your opinion on this as my idea may be stupid and I don’t know for sure the unwanted consequences of it. I am just kite flying here.

      • Colonial Viper 7.1.1
        16 May 2014 at 11:51 pm

        Loading more costs on to small to medium locally owned businesses which are already struggling with the downturn is hardly a solution. Foreign corporates are sucking up to $10B p.a. out of our economy that is the number one priority to sort.

        • Clemgeopin 7.1.1.1
          17 May 2014 at 1:15 am

          True, that and the reversal of Key’s tax cuts, the capital gains tax, plus the machanism to make big corporates/businesses to pay proper amount of taxes will help.

          WFF is an employer subsidy. My WFF compensation idea was to help encourage the employers to pay the best pay they can to begin with.

          The idea may be too complex, unworkable and unfair, but I am still interested to hear the practical drawbacks of this idea.

  8. Naki man 8
    16 May 2014 at 8:14 pm

    Binders, you are spoiling the spin, we can’t expect people to work and save like we did. We need spoon feeding with tax payers money

  9. Naki man 9
    16 May 2014 at 8:28 pm

    Mike I don’t live in Auckland because I am not a millionaire and I have got better things to do with my time than wait in traffic. But people who choose to live there and buy over priced houses have only got them selves to blame.

    • Mike the Savage One 9.1
      16 May 2014 at 8:32 pm

      “But people who choose to live there and buy over priced houses have only got them selves to blame.”

      Do you blame a person born with just one leg for their fate?

      And the home buyers in Auckland actually often blame National and John Key’ s policies, just for your info!!!

      You cannot simply blame people to be born into places and situations, and for what they face. There are greater powers at play, who determine what they have to live under.

      So after all, you have NO answers and just blame the suffering for their own suffering.

  10. bad12 10
    16 May 2014 at 10:06 pm

    ”Social housing” Mr Twyford, i see you have bought totally into this piece of ”new-speak”, in my parents day, both minimum wage workers with four kids A State House was what kept those four kids and their parents from (a),spending periods out in the street, or (b), spending periods when there would not be food on the table at the end of the day,

    Whats the new plan Mr Twyford, HousingNZ will now be ”social housing” strictly for beneficiaries to be adminstered,(apallingly), by WINZ, and NGO’s will be looked at to provide for the future need,???,(sounds a bit like a United Nations disaster relief effort doesn’t it),

    With the increasingly cyclical nature of employment State rentals have never been of greater need for those who provide their labour to the economy for close to the minimum wage while being a device to curb housing inflation both rental and purchase as well as being a subsidy to both the workers housed and low paying employers where 25% of income paid as rent means that wage demand is suppressed,

    i feel like expressing my chagrin here at the middle class mess for those left to the market your above post outlines Mr Twford and i aint talking about Smith, Bennett, and English flicking off our houses so that their mates can scoop them up and rent them back to us for four or five times the previous cost,

    Expressing such chagrin tho would be pretty pointless wouldn’t it Mr Twyford, the die as they say has already been cast,

    Do you tho have a measure of poverty Mr Twyford, a dollar amount below which even working people are said to be ”in poverty”, at that point i would suggest to you Mr Twyford, all those ”in poverty” whether working or not, should only be paying as rent 25% of their income,(and i don’t much care who to), just as my minimum wage working parents did as they brought up their 4 children,

    Achieving that Mr Twyford will in my opinion be the measure of the next Labour lead
    Government….

  11. Draco T Bastard 11
    16 May 2014 at 10:07 pm

    impose restrictions on offshore property speculators,

    That’s nice but the only real solution is a complete ban on foreign ownership. If we don’t we’ll continue to become poorer as we work harder and harder. As we’ve been doing for the last thirty years since the 4th Labour government brought in the delusional neo-liberal paradigm.

    • Clemgeopin 11.1
      17 May 2014 at 12:06 am

      I agree. I don’t understand how we can allow non residents/non citizens own ANYTHING in the country, land, farm or house. At the ‘most’, they could be allowed to lease in 10 year blocks.
      I am almost sure none of the Asian countries allow foreigners to own property in their countries unless one is a citizen or resident living continuously for at least 6 months there. We should bring in similar rules. If rule is broken, the property should be confiscated.

      • Colonial Viper 11.1.1
        17 May 2014 at 12:10 am

        I don’t understand how we can allow non residents/non citizens own ANYTHING in the country, land, farm or house.

        Let alone strategic assets like airports, power generators and banks.

        We’ve all been conned out of our inheritance.

        • Draco T Bastard 11.1.1.1
          17 May 2014 at 11:03 am

          +1

        • Chooky 11.1.1.2
          17 May 2014 at 6:50 pm

          +100…”Let alone strategic assets like airports, power generators and banks”…add ports to that list and special areas in the heart/ centre and harbour-side prime water frontage of cities.

          Lets hope Christchurch is not forced to relinquish its Lyttleton Port ( strategic Southern Ocean fishing grounds ) and Christchurch International Airport ( Antarctica strategic ) to Nacts mates here and overseas

      • Draco T Bastard 11.1.2
        17 May 2014 at 11:02 am

        I’m of the opinion that it wouldn’t be too hard to get an international agreement that bans foreign ownership. But we may as well start with ourselves.

        Piketty clearly shows that foreign investment doesn’t increase development and the Asian countries clearly show that no country needs foreign money to utilise their own resources. As these things are true then we must question why we have foreign ownership at all and the answer, IMO, lies in Africa where the Africans are obviously made poorer by foreign investment but a few rich people in rich countries are made massively richer by that same foreign investment.

        • Herodotus 11.1.2.1
          17 May 2014 at 2:18 pm

          You have to define foreign ownership, as a simple way around is setting up a trust, jv or reg a coy in nz.
          If you define foreign ownership as having less than 50% ownership in kiwi hands given companies like fletcher could be unable to acquire land with. To qualify nz residency there is an investment clause that many are using by complying in spec building. Will these potential residences be excluded ?
          I am still waiting on who will be able to buy these proposed 100k houses from Kiwibuild: those who qualify for student loans, residency, passport ?
          IMO better to allow foreigners to be limited in purchasing new housing stock and be excluded from existing, thus helping in adding to nz housing stock but not placing price pressure on existing areas with Auckland.

          • Draco T Bastard 11.1.2.1.1
            17 May 2014 at 2:29 pm

            What’s so fucken difficult to understand about banning foreign ownership? It means none, nada, zip. Not even 1%, not even one share is to be owned by foreigners.

            • Herodotus 11.1.2.1.1.1
              17 May 2014 at 3:43 pm

              Because there are many variations of what foreign ownership means, and if this is poorly defined then all that happens is a good headline but nothing changes. Like so many government policies, no change for the man on the street.
              So with not one share being owned by foreigners you would be excluding all listed companies in the nzx, most large unlisted coys and even co-ops where a co op member does not have nationality – which could exclude frontera. if it is so easy I would like to have some solutions to these ? If you do then you are wise enough to be ruling our country 🙂 !!!

              • Clemgeopin …
                17 May 2014 at 4:12 pm

                The foreign ownership issue should relate only to farms, land, buildings and houses.

                No ownership unless a permanent resident or citizen, just as is the case in many (all?) Asian countries.

                Does not apply to capital investment into business, shares, banks, factories etc. Find out how the Asian governments manage this issue.

                • Draco T Bastard …
                  17 May 2014 at 4:22 pm

                  Does not apply to capital investment into business, shares, banks, factories etc.

                  Nope, must apply across the board.

                  • Clemgeopin …
                    17 May 2014 at 5:21 pm

                    I am interested to know how China manages this ‘foreign ownership’ issue. Do any of you know?

                    • Draco T Bastard …
                      17 May 2014 at 6:31 pm

                      Not really but I’ve heard a couple of hints here and there so what follows could be wrong.

                      A foreign person/business can’t own land in China but then, neither can the Chinese. Technically the state owns all the land and people/businesses lease it. A foreign person/business can own part of a business but it must be less than 50% and there’s full disclosure on the technology being brought in. They are, of course, working furiously to reverse engineer that technology. Basically, China has set themselves up to get the full benefits of Western technology without doing the full research themselves.

                      I’m interested in how they’re going to handle it when they decide to kick everyone out which they will do at some point. People think that China has gone capitalist – uhuh, the Chinese bureaucracy is playing its ancient game of neutralising the capitalists.

              • Draco T Bastard …
                17 May 2014 at 4:20 pm

                So with not one share being owned by foreigners you would be excluding all listed companies in the nzx, most large unlisted coys and even co-ops where a co op member does not have nationality – which could exclude frontera.

                What do you mean “excluding”? I certainly see no exclusion.

                • Herodotus …
                  17 May 2014 at 5:40 pm

                  What’s so fucken difficult to understand about banning foreign ownership? It means none, nada, zip. Not even 1%, not even one share is to be owned by foreigners.
                  I was referring to this comment. If I take it literally, then all listed coys within the nzx, many unlisted as well that have any foreign ownership would be excluded from owning land within nz, was my interpretation right or have I misunderstood your meaning?
                  My intention was to point out that all these institutions would be unable to acquire new land holdings by your comment.
                  A suggestion that maybe more workable would be all offshore investment in land be taxed at the greater of coy or top personnel tax rate ( not the 15% CGT rate)and review what costs can be deducted to reduce tax payable eg exclude interest, rates etc, Another would be for residential developments, that offshore owners ( as I understand Aussie does) to limit them to only buying only new. This will still allow our building industry to operate, but limit the inflation to existing areas of housing.

                  • Draco T Bastard …
                    17 May 2014 at 6:16 pm

                    If I take it literally, then all listed coys within the nzx, many unlisted as well that have any foreign ownership would be excluded from owning land within nz, was my interpretation right or have I misunderstood your meaning?

                    That’s correct but it’s not a problem as those businesses wouldn’t have any foreign ownership anyway because such ownership would be banned.

    • Phil Twyford 11.2
      17 May 2014 at 5:42 pm

      Labour’s approach to this is to restrict the purchase of residential property to NZ citizens and permanent residents. Non-citizens and residents can purchase residential land if they build a new home on it (as opposed to buying a newly built one). This way they are adding to the stock.

      It was interesting this week with Nick Smith releasing IRD data showing 11% of landlords (or at least those reporting income or losses) were offshore. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11254241 Smith clearly thought that given some of those would be Kiwis who happen to be overseas, people would think it a small number and this would quieten down the debate. He forgot that ownership of ownership of multiple rental properties is common, so the number is possibly much larger than he thinks.

      In any case the whole debate underlined Smith’s and Key’s refusal to even collect data on sales of residential property to offshore speculators.

      Our policy is here https://www.labour.org.nz/sites/default/files/issues/Non%20Resident%20Residential%20Property%20Fact%20Sheets.pdf

      • Draco T Bastard 11.2.1
        17 May 2014 at 6:17 pm

        Yes, I’m aware of Labour’s policy – I’m pointing out that it doesn’t go far enough.

        We have never needed foreign investment and the foreign investment that we have is making us poorer.

      • Chooky 11.2.2
        17 May 2014 at 6:25 pm

        @ Phil Twyford …. sounds great to me …and it will be a big election winner for Labour!

        • Chooky 11.2.2.1
          17 May 2014 at 6:44 pm

          @ Phil Twyford re “Non-citizens and residents can purchase residential land if they build a new home on it (as opposed to buying a newly built one). This way they are adding to the stock.”

          …actually I do have reservations about Labours policy here and agree with DTB that it does not go far enough!

          I think foreigners and non NZ citizens should be BARRED from owning land and building properties in NZ…we have a very precious finite resource here!!!

  12. Populuxe1 12
    17 May 2014 at 11:13 am

    How on earth do you manage to write an entire piece on the housing crisis and not mention Christchurch once?

    • Chooky 12.1
      17 May 2014 at 6:24 pm

      @ Pop…i guess some of Christchurch’s housing problem is generic nationwide…however it does also have particular problems…like many people after the earthquake being forced to evacuate their homes and the consequent rental and housing shortage

      ok well here is a specific mention of Christchurch

      …is it true, as in anecdotal hearsay, that overseas students have been buying up Christchurch properties?…properties in the plural ?! …if so it is a disgrace!

  13. greywarbler 13
    17 May 2014 at 8:32 pm

    Was it Tonga who sold residency to foreigners. Our government might come up with that as a way of getting round banning foreigners buying in. We would have to be
    clever how we worded and handled the docos. Pollies would be selling themselves as Mr and Ms Fixits.

The server will be getting hardware changes this evening starting at 10pm NZDT.
The site will be off line for some hours.