Govt eyes big new infrastructure levies, but no value-capture rates

Will a Government-set and regulated system of infrastructure levies replace council-set development contributions and open up new land supply for housing? Photo: Lynn Grieveson / The Kākā

Long stories short, the top six things that stood out to me in our political economy around housing, climate and poverty on Friday, February 28:

1. Infrastructure Minister Chris Bishop is set to announce¹ a massive shakeup of the way councils fund new developments in a speech at 12.30 pm today, with a Government-set and regulated system of infrastructure levies to replace council-set development contributions to try to open up new land supply for housing;

2. But the plan appears to have left out the long-discussed but unpopular-with-land-bankers idea of value capture rates to tax a portion of the unearned capital gain on a surge in land values after a rezoning;

3. The Government’s Energy Competition Task Force yesterday announced it preferred non-discrimination measures to level the playing field between the four large gentailers, Genesis, Contact, Meridian and Mercury, and independent retail competitors;

4. Those measures include forcing the big four to offer hedging contracts to competitors on the same terms they offer them to their own internal retail arms, which some independent electricity retailers welcomed;

5. The Principals Federation has called on Acting PM David Seymour to revert to the old school lunches programme, saying² it had been prepared to tolerate teething issues with the new cheaper and centralised scheme, citing issues with portion size, food quality, delivery timeliness, and unsealed containers;

6. In another blow to the Government’s hopes for a quick rebound in economic growth, ANZ’s Business Outlook survey for February released yesterday found firms’ confidence about their own activity fell, as did their measures of their own activity vs a year ago, which is the most accurate leading indicator of GDP.

(There is more detail, analysis and links to documents below the paywall fold and in the video and podcast above for paying subscribers. If we get over 100 likes from paying subscribers we’ll open it up for public reading, listening and sharing.)

Replacing DCs with levies, but not taxing higher land values