TL;DR: Aotearoa-NZ’s utterly broken, expensive and unhealthy housing market is at the heart of our economic, social and political problems. It distorts our behaviour, dominates our aspirations and complaints, and has again taken centre stage in our political economy in the most personal and stark way.
PM Christopher Luxon’s decision to claim $1,000/week in expenses from taxpayers for living in his own apartment in Wellington when he could have lived in Premier House has again illustrated how our society has become a housing-market-with-bits tacked-on.
Elsewhere in Aotearoa-NZ’s political economy at 8 am:
Infrastructure Minister Chris Bishop is expected to release details for a National Infrastructure Agency and plans to move families out of emergency motels by Friday, which is the formal end of the new Government’s 100-day plan, Andrea Vance reported for The Post-$$$ this morning, adding Bishop was considering merging the Infrastructure Commission, Crown Infrastructure Partners and Rua Paenga (the Government’s former quake rebuild agency).
Bishop also rejected Christchurch City Council’s plea to delay the implementation of all of its more intense housing plan put together under the MDRS rules, but he did allow the Council to pause the application of MDRS rules in suburban areas. Higher density rules would still apply to the city centre and and around commercial centres.
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The PM’s housing-market-with-bits-tacked-on moment
PM Christopher Luxon failed to read the room or even the renovated villa on Friday when he initially defended claiming $1,000/week from the taxpayer to rent his own apartment in Wellington, saying it was his entitlement.
Newsroom’s Marc Daalder reported earlier in the day Luxon was claiming the full $1,000/week entitlement to stay in his apartment in the Kate Sheppard complex directly across from Parliament two nights a week, having decided not to stay in the apartment on the upper floor of Premier House slightly further away on Tinakori Rd. He chose not to because he said it needed renovations and has been described in an official report leaked to reporters over the weekend as ‘drafty, noisy, lacking insulation and having small bathrooms.’
“It's an entitlement and I'm well within the rules.” Christopher Luxon early on Friday to reporters in Queenstown. RNZ
He backed down late in the day after hearing the outraged response on NewstalkZB, telling Heather du Plessis-Allan in an interview:
“For me, I’m well within the rights, and well within the rules, but frankly it’s a distraction - I will live on my own costs.”
Having become Parliament’s wealthiest MP by owning seven residential properties and banking their capital gains tax free (which have dwarfed his savings from his work as one of the best paid CEOs in the country), the episode exposed how crucial maximising payments from the state to support residential land values has become to this wealth-creation model.
And Luxon is not alone in our governing, land-owning and voting classes in focusing on growing and maintaining private land values through Government actions and subsidies. These landowners have worked out building real wealth is about owning land, finding a state-subsidised tenant or the state itself as a tenant, and then waiting for the inevitably massive, leveraged and tax-free capital gains when too-few homes are built for a fast-growing population.
The Government currently spends over $5 billion a year in accommodation supplements, rent subsidies, first-home-buyer deposit grants and capital grants to support tenants paying the most expensive rents in the world relative to incomes, which in turns supports land values.
Parliamentary expenses disclosures on Thursday showed Luxon claimed $57,581 in expenses between October 1 and December 31 last year, including $5,987 for the apartment. He has also bought a house in his Auckland electorate of Botany, which he rents back to Parliamentary services for $3,750 a month. Luxon is one of four MPs who did this last year, including two National MPs (Luxon and Melissa Lee) and two Labour MPs (Chris Hipkins and Tracey McLellan)1.
Luxon was one of 20 MPs (12 National and eight Labour) who claimed the rent for apartments and homes they owned in Wellington in 2023, which they are entitled to do as MPs from outside Wellington.
‘Taxpayers as a bottomless ATM?’
Luxon was challenged about the apparent hypocrisy of claiming for rent when he had previously said people who could afford to pay for prescription charges should pay.
"Well, what I'm saying, I don't know how to explain it any clearer to you, as prime minister of New Zealand ideally you want to be able to live in Premier House when you're in Wellington," he said, when that was put to him.
Labour leader Chris Hipkins said Luxon should not have claimed the allowance.
"Christopher Luxon's treating hard-working Kiwis like a bottomless ATM. He needs to apply his own tough-love standard to himself.
"I think it's absolutely hypocritical for Christopher Luxon to be saying that every other New Zealander needs to stomach cuts, while he's claiming a $52,000 a year - that's $1000 a week - allowance to live in his own house mortgage free.
"The fact that it's within the rules doesn't mean that it's the right thing to do." Hipkins statement.
Quotes of the day
Judging entitlement
“Staggeringly bad judgement from PM here. During Covid recession in 2020, Jacinda Ardern cut her own pay and pay of all MPs (while raising a toddler in Premier House). Regardless of your entitlement, you’ve got to lead from the front.” NZ Herald Deputy Political Editor Thomas Coughlan via X
‘Koru lounge scrounger?’
“Bill English got Double Dipton. Could Luxon be…wait for it… Koru Lounger Scrounger?” Newshub reporter Anna Bracewell-Worrall via X
Off the charts
“The sea ice minimum around Antarctica has basically fallen off the charts at the wrong end.” NIWA oceanographer Craig Stevens. He was New Zealand science lead on the research vessel Laura Bassi and was speaking on its return from Antarctica to Lyttelton yesterday via Newshub Mitchell Redman
Number of the day
14 - The number of pieces of legislation passed under urgency in the first seven weeks of the 54th Parliament. A study from Victoria University of Wellington of 24 years of New Zealand’s Parliaments (from 1987 until 2010), the average number of bills passed through all stages under was 10. That’s 10 per Parliament, which are usually terms of three years. Via RNZ Phil Smith
Climate chart of the day
Starting 2024 off the charts
Cartoons of the day
‘A housing market with bits tacked on’
‘Do what I say, not what I do’
‘I’m sorry. I got caught’
Kicking down
Timeline-cleansing nature pic of the day
Beach sunrise on Saturday
Ka kite ano
Bernard
Parliamentary disclosures on conflicts of interest.
Luxon's housing-market-with-bits-tacked-on moment