Robertson downplays poll showing 76% want house prices to drop; says Govt wants stability & admits it will take 'a long period of time' to solve housing affordability problem 'decades in the making'
When you talk about a percentage of disposable income going on rent or a mortgage, this isn’t total income right? Can you explain a little bit about what this means?
Thanks so much! Love your daily emails and pods and have learnt SO much!
Scary Kaka IMO, your final graph highlights the difference between NZ’s and AU’s rental affordability which surely makes Australia a far more attractive destination for the workers we desperately need? I feel our politicians have their heads in the sand on this matter!
Great job, thanks. It is clear labour have no interest in actually solving housing, instead they will nibble around the edges to avoid making difficult decisions. People should be outraged at Grant's nonsense gesturing to taking action when it has amounted to fuck all.
I'd actually point most to the RBNZ for removing LVR restrictions straight off the back of house market crash projections.
By all means drop the OCR (standard policy across most OECD) due to the lag in stimulus response. However, LVR restriction removals are an almost instant shot in the arm specific to the housing market. Should have been held back as policy of last resort.
Someone in the last day or two (sorry, can't find the comment to attribute the credit) observed that in addition to land banking there is also house banking.
If you've got a spare million dollars or so earning less than 1% in the bank then why not buy a new build and just park it for a year and get a 20% return.
And you don't want any of those poor people tenanting it because they will damage something and maybe lower the sale value by $10,000.
Maybe we need something along the lines of TOP's Deemed Rate of Return tax. A house un-occupied for more than x months in a year is subject to a tax set at the average rental return had it been rented out.
And let the councils enforce it and keep the tax collected.
Bernard, thanks for the great Kaka! Do they push you out to the peripheries on purpose at these press gatherings? Is because they know your going to ask the intelligent awkward questions they don’t want to answer?
Governments and councils have created the housing price inflation,we bought a house/property in 1981 for$59k now worth $3m..you seem to be saying it is our fault and TAX us.
Not your fault Edgar, but you have benefited hugely. Not your fault that my kids will never own a house and have had to move 3 times this year due to renting instability. But you have benefited and they have suffered. Just saying. Sincerely, bank of Mum just to keep a rental roof over the heads of my son-in-law, daughter and 3 kids.
Not about fault. Capital gains, wealth and/or land taxes are pretty standard around the world. NZ is an outlier in not having any of those.
Entirely fair and reasonable for you/I to pay a small % tax on the value of our assets, bearing in mind the public goods we have enjoyed in the meantime that have helped to support that asset growth.
I am with you 100%. The Government created the mess, and the left leaners go “he he, lets take some tax off those who have gained to prop up those who have nothing.” Why T.F did the Gov let this happen? Stop asking tax payers to continually bail them out for poor policy.
I will be paying capital gain or land tax should that come about, as a landlord providing housing for a family in a different town. I would consider it fair, but can't speak for you.
Its unfair. If I buy and hold shares long term, and do not trade, there is no tax payable on sale. If I buy a business, work my guts out 7-days a week, year in, year out then sell for a profit, there is no tax. Maintain a rental, manage expenses such as depreciation, damages, rates....then any gain should be mine. Here is the rub. Those left leaners will start looking at the family home and asking for tax on unrealised capital gain. You still live there but the Government will want something above an imaginary threshold eg $1m per person. Susan St John I believe has advocated for this. Fight those vermin at every opportunity. Parasites sucking money to pay for their ineptitude with policy.
Yes, I agree with taxing you. Not because you did nothing, and not because you didn't intend to make any profit, but because you DID.
What always seems to be missed in discussions around tax is why do we have a tax system at all? Because as a society we like to enjoy having things like an education system, a health system, a welfare state, a justice system, roads, water supplies, waste disposal services, the list goes on. But when it comes to it, nobody seems to want to pay for it all. So we have a tax system. NZ's tax system basically captures employees - people who are dumb enough to try to make their living by going out to work. More or less any other avenue of gain can be treated as tax free by claiming that I didn't intend to make a gain, so sorry, it won't happen again, but obviously I won't be paying any tax on that.
When I look at the tax system from the point of view of "who can afford to pay tax?" and I see all these classes of assets/investments on which gains are somehow not taxed compared to going out to work every day, I see a system that is inequitable and frankly, offensive.
Basically we have a tax system that captures people whose only income is salary/wages (or self employed income) and offers them little to no relief from that capture, and for those wealthy enough to buy property, shares and other investment classes there is access to untaxed capital gain. So for the non-wealthy (comparatively) there is no escape from paying tax. But for the (comparatively) wealthy, there is complete escape from paying tax.
Then there's the 'by the sweat off my back' argument of small (or not so small) business owners who claim that the gains they make by building up a business shouldn't be taxed either. What do you think the wage earner is doing every day? Sitting on the beach? No - they are out there and their back is sweating (literally or metaphorically) too, and somehow their sweat is taxable and yours isn't? Oh come on.
When are we as a society, and thus reflected by politicians and governments, going to realise that in a just society, gains are taxed no matter how they are earned? It shouldn't matter whether you intended to make a gain or not. It shouldn't matter whether there was sweat on your back or not. It shouldn't matter if the gain was actively or passively acquired. You made a profit. Some of that is due to society to benefit all. That way, maybe the imposition of tax on wage earners could be reduced, so perhaps one day, they too can own some of these wonderful money gaining assets...
And yes, the privately held home is just another asset, the gains on which should be just as taxable as any other.
Let us agree to disagree. The variance would be like Stalin and Hitler sitting round having a few beers (but Adolf didn’t imbibe). Capital gains taxes on unrealised gains are evil, and the family home should always be exempt.
I'm not suggesting taxing unrealised gain. That would be pernicious to the asset wealthy / cash poor. Realised gain, though is a different matter. Looking back at Edgar's post I realise he might have been referring to tax on unrealised gain. I guess he was relating his comment to Bernard's support of a land tax, which is whole other ball of wax.
I was more targeting the seemingly widespread objection to taxation on the basis that "I've worked hard for this, therefore it shouldn't be taxed". Employees work hard for their money, and it gets taxed at source.
I'm so disappointed in this Government's lack of courage to address housing affordability. It certainly doesn't bode well for making the tough calls required to properly address the climate crisis. With a majority government they have no-one else to hide behind. While their Covid management has been good, the multi generational impacts of the increasing inequality that their policies have created will be a terrible legacy for Labour in the long term.
Must admit, Robertson does play a solid poker face in the scene of great adversity. Suppose the government is buying time and waiting for the moment housing does crash, or face serious correction, and can then scapegoat out and say it was external factors out of their control. Nothing great was ever achieved in comfort zones, so why are they still comfortable? How can we make the government uncomfortable?
So by the government previously saying: "We are pulling all of the leavers", they were lying outright? The problem was in the too hard box from the start. The good news is, we are kiwis and we aren't very good at sitting back and letting problems like this get in the way of innovating our way out of them. If we can't rely on the government, what can we all be doing to make an actual difference? Where do we even start?
Hi Bernard,
When you talk about a percentage of disposable income going on rent or a mortgage, this isn’t total income right? Can you explain a little bit about what this means?
Thanks so much! Love your daily emails and pods and have learnt SO much!
Hi Bernard,
Scary Kaka IMO, your final graph highlights the difference between NZ’s and AU’s rental affordability which surely makes Australia a far more attractive destination for the workers we desperately need? I feel our politicians have their heads in the sand on this matter!
So Robertson has essentially confirmed that gross inequality is the government's genuine policy. Is that what we voted for?
Great job, thanks. It is clear labour have no interest in actually solving housing, instead they will nibble around the edges to avoid making difficult decisions. People should be outraged at Grant's nonsense gesturing to taking action when it has amounted to fuck all.
I'd actually point most to the RBNZ for removing LVR restrictions straight off the back of house market crash projections.
By all means drop the OCR (standard policy across most OECD) due to the lag in stimulus response. However, LVR restriction removals are an almost instant shot in the arm specific to the housing market. Should have been held back as policy of last resort.
‘Voters’ being the operative word.
You couldn't make it up
We learnt nothing from the Great Depression and what Aussie banks and uk bankers/government did to us then. Same thing again.
Someone in the last day or two (sorry, can't find the comment to attribute the credit) observed that in addition to land banking there is also house banking.
If you've got a spare million dollars or so earning less than 1% in the bank then why not buy a new build and just park it for a year and get a 20% return.
And you don't want any of those poor people tenanting it because they will damage something and maybe lower the sale value by $10,000.
Maybe we need something along the lines of TOP's Deemed Rate of Return tax. A house un-occupied for more than x months in a year is subject to a tax set at the average rental return had it been rented out.
And let the councils enforce it and keep the tax collected.
Bernard, thanks for the great Kaka! Do they push you out to the peripheries on purpose at these press gatherings? Is because they know your going to ask the intelligent awkward questions they don’t want to answer?
Bernard.
Governments and councils have created the housing price inflation,we bought a house/property in 1981 for$59k now worth $3m..you seem to be saying it is our fault and TAX us.
Not your fault Edgar, but you have benefited hugely. Not your fault that my kids will never own a house and have had to move 3 times this year due to renting instability. But you have benefited and they have suffered. Just saying. Sincerely, bank of Mum just to keep a rental roof over the heads of my son-in-law, daughter and 3 kids.
Bev..we did nothing , just lived in house and brought up our 2 daughter's
So you agree with taxing us
Not about fault. Capital gains, wealth and/or land taxes are pretty standard around the world. NZ is an outlier in not having any of those.
Entirely fair and reasonable for you/I to pay a small % tax on the value of our assets, bearing in mind the public goods we have enjoyed in the meantime that have helped to support that asset growth.
I am with you 100%. The Government created the mess, and the left leaners go “he he, lets take some tax off those who have gained to prop up those who have nothing.” Why T.F did the Gov let this happen? Stop asking tax payers to continually bail them out for poor policy.
I will be paying capital gain or land tax should that come about, as a landlord providing housing for a family in a different town. I would consider it fair, but can't speak for you.
Its unfair. If I buy and hold shares long term, and do not trade, there is no tax payable on sale. If I buy a business, work my guts out 7-days a week, year in, year out then sell for a profit, there is no tax. Maintain a rental, manage expenses such as depreciation, damages, rates....then any gain should be mine. Here is the rub. Those left leaners will start looking at the family home and asking for tax on unrealised capital gain. You still live there but the Government will want something above an imaginary threshold eg $1m per person. Susan St John I believe has advocated for this. Fight those vermin at every opportunity. Parasites sucking money to pay for their ineptitude with policy.
Yes, I agree with taxing you. Not because you did nothing, and not because you didn't intend to make any profit, but because you DID.
What always seems to be missed in discussions around tax is why do we have a tax system at all? Because as a society we like to enjoy having things like an education system, a health system, a welfare state, a justice system, roads, water supplies, waste disposal services, the list goes on. But when it comes to it, nobody seems to want to pay for it all. So we have a tax system. NZ's tax system basically captures employees - people who are dumb enough to try to make their living by going out to work. More or less any other avenue of gain can be treated as tax free by claiming that I didn't intend to make a gain, so sorry, it won't happen again, but obviously I won't be paying any tax on that.
When I look at the tax system from the point of view of "who can afford to pay tax?" and I see all these classes of assets/investments on which gains are somehow not taxed compared to going out to work every day, I see a system that is inequitable and frankly, offensive.
Basically we have a tax system that captures people whose only income is salary/wages (or self employed income) and offers them little to no relief from that capture, and for those wealthy enough to buy property, shares and other investment classes there is access to untaxed capital gain. So for the non-wealthy (comparatively) there is no escape from paying tax. But for the (comparatively) wealthy, there is complete escape from paying tax.
Then there's the 'by the sweat off my back' argument of small (or not so small) business owners who claim that the gains they make by building up a business shouldn't be taxed either. What do you think the wage earner is doing every day? Sitting on the beach? No - they are out there and their back is sweating (literally or metaphorically) too, and somehow their sweat is taxable and yours isn't? Oh come on.
When are we as a society, and thus reflected by politicians and governments, going to realise that in a just society, gains are taxed no matter how they are earned? It shouldn't matter whether you intended to make a gain or not. It shouldn't matter whether there was sweat on your back or not. It shouldn't matter if the gain was actively or passively acquired. You made a profit. Some of that is due to society to benefit all. That way, maybe the imposition of tax on wage earners could be reduced, so perhaps one day, they too can own some of these wonderful money gaining assets...
And yes, the privately held home is just another asset, the gains on which should be just as taxable as any other.
Let us agree to disagree. The variance would be like Stalin and Hitler sitting round having a few beers (but Adolf didn’t imbibe). Capital gains taxes on unrealised gains are evil, and the family home should always be exempt.
I'm not suggesting taxing unrealised gain. That would be pernicious to the asset wealthy / cash poor. Realised gain, though is a different matter. Looking back at Edgar's post I realise he might have been referring to tax on unrealised gain. I guess he was relating his comment to Bernard's support of a land tax, which is whole other ball of wax.
I was more targeting the seemingly widespread objection to taxation on the basis that "I've worked hard for this, therefore it shouldn't be taxed". Employees work hard for their money, and it gets taxed at source.
I'm so disappointed in this Government's lack of courage to address housing affordability. It certainly doesn't bode well for making the tough calls required to properly address the climate crisis. With a majority government they have no-one else to hide behind. While their Covid management has been good, the multi generational impacts of the increasing inequality that their policies have created will be a terrible legacy for Labour in the long term.
"Breaking Points" is a youtube show with hosts from both left and right of politics.
Here is a good 12 minute example on dark money funding:
https://youtu.be/rv5vxoEXVRk
Why would they want to slow it down; they're all making far too much themselves: https://thenzwitness.substack.com/p/do-mps-make-more-from-capital-gains
Please continue to help the electorate understand tax reform is the only lever left and we can't go another cycle without it
Must admit, Robertson does play a solid poker face in the scene of great adversity. Suppose the government is buying time and waiting for the moment housing does crash, or face serious correction, and can then scapegoat out and say it was external factors out of their control. Nothing great was ever achieved in comfort zones, so why are they still comfortable? How can we make the government uncomfortable?
There is only one way to make the government uncomfortable and that will happen in due course
So by the government previously saying: "We are pulling all of the leavers", they were lying outright? The problem was in the too hard box from the start. The good news is, we are kiwis and we aren't very good at sitting back and letting problems like this get in the way of innovating our way out of them. If we can't rely on the government, what can we all be doing to make an actual difference? Where do we even start?