Housing Minister wants house price-to-income ratio to halve to 3-5 over 10-20 years; Govt considering sharing GST with councils & 'value capture' rates; He wants to flood market with land
Bernard, do you actually think Bishop 1) means it, and 2) understands the obstacles well enough to make a credible plan for getting there? I'm not meaning to sound cynical, I would love to believe this government wants to do this & isn't just doing its own version of "Kiwibuild will solve everything, miracle to follow".
It’s hard to be optimistic when this government was brought in on tax cut rolling back bright line and reinstating tax deductions for interest on rental properties. The people who voted for those policies would be dead set against this
Saw this yesterday.. it was quite a compelling performance from KB. What it missed was the absence of questioning in the other know leavers of land and housing costs. Namely no one is talking about the treasury telling to gov that tax reform is clearly needed or that the Reserve bank effectively sets the price of housing with there lending restrictions. It was all about supply. What I did like is his frank comments about mixed use zonding and all his friends had already left NZ
Something like Germany's Trade Tax might be an option. It's a separate tax on profits, increases your tax burden by around 1%, but *stays within the community*, giving local government an incentive to develop high margin industries. Reduces the dependency on central government and turns you from a beggar to a self-provider. Won't say that our (2500 population) village in DE has gold-plated pedestrian crossings, but it's got a lot of high-tech SMEs and let's the local council do useful stuff, like the ability to re-zone and buy land for subdivision development, specify infrastructure standards, exclude property owners and flippers and make sure that local families have priority. https://allaboutberlin.com/guides/gewerbesteuer
Agreed. Bishop's word are encouraging, but I find it difficult to trust his just found interest in equity....will wait and see how this one plays out. "In the spirit of The Kākā Project, a ‘full court press’ to change incentives would include:
1. land tax on residential land values, and land-bankers in particular;
2. pension savings tax break;
3. water and public infrastructure paid for with Treasury bonds serviced by land tax, congestion charges, water charges and land uplift value capture revenues;
4. the reversion of interest deductibility and ‘bright-line’ house trading income rules to previous rules; and,
5. a proper carbon tax and taxes on nitrous oxide and methane emissions to pay for emissions-reducing and water-quality-improving infrastructure."
Maybe if he flatters ACT by saying GST sharing is their idea, and spins it as regional development to help NZF (after all funding for councils means funding for the regions right?), then he'll be able to convince Cabinet too?
We need an annual land tax as Bernard Hickey suggests and as TOP advocated (and, if it is hypothecated for distribution to councils for infrastructure development, possibly instead of GST on council rates).
However, we also need council rates to be levied solely on the unimproved value of land, to discourage land banking.
So the hundreds of trees I've planted mean my land wont be taxed as its improved the bird life soil retention and water release slowed? Not to mention absorbed carbon for now fee to the government. Replacing existing grass and trees with 5 townhouses is improving the land? Where is the logic- has 2023 record damage to infrastructure by removing watersinks been forgotten already?
At least if housing affordability is achieved the correct way then instead of about 60% of the population continually investing” in housing speculation then there may be more productive investment elsewhere improving our country’s productivity.
Yes but no mention of the big changes in affordability which imply either massive changes in income or house prices falling. He is not wrong diagnosing the problem just not prescribing the right treatment.
The improvement in affordability (or collapse in land price) was always implicit in removing the strictures in zoning that have made New Zealand urban land among the most overpriced in the world.
If he had included the imposition of capital gains, land or wealth tax... I may have thought he has been taking notes from your podcasts and writings! Feel free to open it from my side.
Great talk from Bishop, but we've had enough talk, time to walk the walk. Having affordable homes in 10-20 years, is 10-20 years too late. Maybe we actually need to have the economic reset to course correct for the future... and I say this as a homeowner.
In Christchurch - Urban Sprawl is already a blight. Housing subdivisions are built over productive land on the outskirts, far from access to public transport and alternate transport options and poorly connected to existing local communities. The result is everyone drives and congestion is a massive problem. We have a population larger than Wellington - yet don't even have a commuter rail system. I would like to know where else he thinks we can build? Pretty much most of the remaining land is fertile and productive around Christchurch. There is a lot of potential for further intensification, but the CCC is already beholden to the aging residents groups that want to extract every last $ out of their properties whilst they can.
Appreciate the right words by Bishop, it was great to hear him give some honest answers to the problem, but again, there has been 15 years of talk about the housing crisis and we're over the talk, we need action... and urgently.
Speeches are cheap. A previous National Minister said prisons were a moral and fiscal failure. Isn't the government now aiming to have an increased prison population?
I still cannot understand why people are talking about increasing housing in metropolitan areas. The infrastructure needed to support that increase in population is unbelievable. Just think, apart from roads, drains, water supply, the hospitals, schools, Drs, shops, dentists. It goes on and on. I live on a road in Christchurch where between 3pm -5.30pm the traffic is so dense that it barely moves. And that is with out all these so called MDRs that are going to solve the problem. It is a governments job to provide the infrastructure in a country so that people can have a good life. If a fast train service was introduced then people wouldn’t have to live cheek to jowl. The smaller towns would benefit. And the bigger cities would benefit. A person living in Ashburton could work in Christchurch and live in Ashburton. It would take about 20 minutes to get from Ashburton to Christchurch. That example would apply through out the country. If it were started now in silly Chris Bishops example of 20 years to get the income needed to buy a house down to whatever the fast train would be finished. Please please think of alternatives to this silly idea of us all living in apartments. The only thing I can think of is to apply to China to build one……
I am not denying that Peter. For some people they are but that is not the point. The point is that forcing everybody to live in apartments when there other alternatives that can benefit the whole country is a more sensible
No it would not. Yes e-bikes are fine for the young but not everybody can use them. With a fast train there would be buses or e-bikes available. The traffic would be reduced. And the need for infrastructure would be reduced. Intensification is fine for Europe but that need is hundreds of years off for New Zealand
Agreed on the urban sprawl. This would be bad for Christchurch. There is plenty of land within the current boundaries, Bishop needs to smash the NIMBYs
When any National minister talks, I’m reminded of the old western expression, usually delivered by some beaded approximation of an Indian chief; “White man speaks with forked tongue.”
I’m taking it from his comments that he wants income to double! Now that is something positive if unexpected from Bishop.
Bernard, do you actually think Bishop 1) means it, and 2) understands the obstacles well enough to make a credible plan for getting there? I'm not meaning to sound cynical, I would love to believe this government wants to do this & isn't just doing its own version of "Kiwibuild will solve everything, miracle to follow".
Lisa Owen certainly knocked some of the wind out of Bishop's hard sales. Or was it hot air 🤔
It’s hard to be optimistic when this government was brought in on tax cut rolling back bright line and reinstating tax deductions for interest on rental properties. The people who voted for those policies would be dead set against this
Saw this yesterday.. it was quite a compelling performance from KB. What it missed was the absence of questioning in the other know leavers of land and housing costs. Namely no one is talking about the treasury telling to gov that tax reform is clearly needed or that the Reserve bank effectively sets the price of housing with there lending restrictions. It was all about supply. What I did like is his frank comments about mixed use zonding and all his friends had already left NZ
BOTH his friends
Something like Germany's Trade Tax might be an option. It's a separate tax on profits, increases your tax burden by around 1%, but *stays within the community*, giving local government an incentive to develop high margin industries. Reduces the dependency on central government and turns you from a beggar to a self-provider. Won't say that our (2500 population) village in DE has gold-plated pedestrian crossings, but it's got a lot of high-tech SMEs and let's the local council do useful stuff, like the ability to re-zone and buy land for subdivision development, specify infrastructure standards, exclude property owners and flippers and make sure that local families have priority. https://allaboutberlin.com/guides/gewerbesteuer
"LETS." FFS...
Well, as my old auntie would say, who doesn't want "affordable housing"?
Oh that's right, Chris (7 houses) Luxon - up to his eyeballs in real estate "investment".
Look at what they do; not what they say.
Sorry to say this, talk is so cheap.
Agreed. Bishop's word are encouraging, but I find it difficult to trust his just found interest in equity....will wait and see how this one plays out. "In the spirit of The Kākā Project, a ‘full court press’ to change incentives would include:
1. land tax on residential land values, and land-bankers in particular;
2. pension savings tax break;
3. water and public infrastructure paid for with Treasury bonds serviced by land tax, congestion charges, water charges and land uplift value capture revenues;
4. the reversion of interest deductibility and ‘bright-line’ house trading income rules to previous rules; and,
5. a proper carbon tax and taxes on nitrous oxide and methane emissions to pay for emissions-reducing and water-quality-improving infrastructure."
I wish him the best of luck.
Maybe if he flatters ACT by saying GST sharing is their idea, and spins it as regional development to help NZF (after all funding for councils means funding for the regions right?), then he'll be able to convince Cabinet too?
We need an annual land tax as Bernard Hickey suggests and as TOP advocated (and, if it is hypothecated for distribution to councils for infrastructure development, possibly instead of GST on council rates).
However, we also need council rates to be levied solely on the unimproved value of land, to discourage land banking.
https://www.interest.co.nz/property/105862/auckland-councils-economists-investigate-idea-changing-rating-valuation-process
Absolutely agree. I'm also not going to criticise someone who's working on what can be done vs. what should be done.
It's not certain he'll even be able to get these small changes implemented!
Note, by the way, Dave Armstrong's and Dileepa Fonseka's comments on council rating systems and the Wellington Reading cinema brouhaha:
https://democracyproject.substack.com/p/how-wellington-city-council-got-captured
So the hundreds of trees I've planted mean my land wont be taxed as its improved the bird life soil retention and water release slowed? Not to mention absorbed carbon for now fee to the government. Replacing existing grass and trees with 5 townhouses is improving the land? Where is the logic- has 2023 record damage to infrastructure by removing watersinks been forgotten already?
Your improvements would not be taxed, only the land. But thank you for improving it. Perhaps 'improved' and 'unimproved' are a debatable nomenclature.
Would also love to hear some plans to have income double..
At least if housing affordability is achieved the correct way then instead of about 60% of the population continually investing” in housing speculation then there may be more productive investment elsewhere improving our country’s productivity.
I did wonder how Bishop would end up demoted/outside Government - looks like it'll be housing afterall! He'll be gone by the end of 2025.
Chris Bishop: "pledging to flood cities"
They were careful not to upset their voters by mentioning this before the election?
Announced in May 2023
https://www.stuff.co.nz/national/politics/132164048/national-announces-housing-growth-election-policy
Yes but no mention of the big changes in affordability which imply either massive changes in income or house prices falling. He is not wrong diagnosing the problem just not prescribing the right treatment.
The improvement in affordability (or collapse in land price) was always implicit in removing the strictures in zoning that have made New Zealand urban land among the most overpriced in the world.
If he had included the imposition of capital gains, land or wealth tax... I may have thought he has been taking notes from your podcasts and writings! Feel free to open it from my side.
"Flood the market with land" Flood the country with adequate infrastructure at the same time
A problem being, in Auckland’s case, it’s building cookie cutter suburbs over some of the country’s most fertile and productive soil.
I'm all for opening this up.
Great talk from Bishop, but we've had enough talk, time to walk the walk. Having affordable homes in 10-20 years, is 10-20 years too late. Maybe we actually need to have the economic reset to course correct for the future... and I say this as a homeowner.
In Christchurch - Urban Sprawl is already a blight. Housing subdivisions are built over productive land on the outskirts, far from access to public transport and alternate transport options and poorly connected to existing local communities. The result is everyone drives and congestion is a massive problem. We have a population larger than Wellington - yet don't even have a commuter rail system. I would like to know where else he thinks we can build? Pretty much most of the remaining land is fertile and productive around Christchurch. There is a lot of potential for further intensification, but the CCC is already beholden to the aging residents groups that want to extract every last $ out of their properties whilst they can.
Appreciate the right words by Bishop, it was great to hear him give some honest answers to the problem, but again, there has been 15 years of talk about the housing crisis and we're over the talk, we need action... and urgently.
Speeches are cheap. A previous National Minister said prisons were a moral and fiscal failure. Isn't the government now aiming to have an increased prison population?
I still cannot understand why people are talking about increasing housing in metropolitan areas. The infrastructure needed to support that increase in population is unbelievable. Just think, apart from roads, drains, water supply, the hospitals, schools, Drs, shops, dentists. It goes on and on. I live on a road in Christchurch where between 3pm -5.30pm the traffic is so dense that it barely moves. And that is with out all these so called MDRs that are going to solve the problem. It is a governments job to provide the infrastructure in a country so that people can have a good life. If a fast train service was introduced then people wouldn’t have to live cheek to jowl. The smaller towns would benefit. And the bigger cities would benefit. A person living in Ashburton could work in Christchurch and live in Ashburton. It would take about 20 minutes to get from Ashburton to Christchurch. That example would apply through out the country. If it were started now in silly Chris Bishops example of 20 years to get the income needed to buy a house down to whatever the fast train would be finished. Please please think of alternatives to this silly idea of us all living in apartments. The only thing I can think of is to apply to China to build one……
Apartments are good, actually.
I am not denying that Peter. For some people they are but that is not the point. The point is that forcing everybody to live in apartments when there other alternatives that can benefit the whole country is a more sensible
"I live on a road in Christchurch where between 3pm -5.30pm the traffic is so dense that it barely moves"
But I whizz past on my bike because I have chosen to work within biking distance of my job (with an eBike that is effectively 15km).
Your idea of having people work in one city while living in another would actually increase traffic movements, not decrease them.
Intensification works - look overseas. Sprawl does not work - again look overseas.
No it would not. Yes e-bikes are fine for the young but not everybody can use them. With a fast train there would be buses or e-bikes available. The traffic would be reduced. And the need for infrastructure would be reduced. Intensification is fine for Europe but that need is hundreds of years off for New Zealand
Agreed on the urban sprawl. This would be bad for Christchurch. There is plenty of land within the current boundaries, Bishop needs to smash the NIMBYs
When any National minister talks, I’m reminded of the old western expression, usually delivered by some beaded approximation of an Indian chief; “White man speaks with forked tongue.”