Benefit indexation savings under forecast; Fiscal hole up to $4.3b; Leaks show National wants to allow foreign investors to buy land for new homes, but not live in them, & to invest in Build-To-Rent
Foreign Investment in rental stock hasn’t been pleasant in Ireland as I understand it.
I can imagine that this could still be used to back door into landownership, with little interest in actually renting.
This feels like the most cynical leadership we have had in my living memory. Key / English I could sense the good intentions, even if I often disagree with their methods.
I smell a rat with this overseas buyers exemption for new builds. Won't this encourage more Greenfield's developments in the 'easy' out of town places like Drury and Pokeno in Auckland and Aotea near Wellington? But that cost a lot in infrastructure and lock in car dependence for unfortunate renters.
I do like the build to rent work that Simplicity Living has been doing. Their repeated announcements of new and bigger projects suggests they are not short of investors. Perhaps you could ask them if they need foreign buyer funds?
I thought Winston hated the idea of us becoming tenants in our own country?
Love the cartoons and cleansing pic and all the points you make Bernard.
Re welfare cuts and recently, the Coalition going hard on those who do not comply with requirements for the dole. Re the latter, of course those who are just not trying should be penalised. However some jobless are less capable. Add in this factor. What if you were one of this last decade's 40% who left school functionally illiterate? As per Crocodile Dundee, 'that's a stat'. How much fun going to job interviews. I hope this is taken into account.
How we could really help NZ climb out of this third world type stat is having highly accessible user-friendly reading and maths classes for adults, or is it all too late?
Another 3rd world fat stat impacting on learning and schools operating well is NZ being 2nd highest vapers globally. This reeks of corruption and exploitation. Nothing is being done here! or I would stop bringing it bavk to the table. Triumvirate, stop criminally pretending they are virtually harmless, for the 15% GST, licences and corporate tobacco/vape lobbyists, don't leave addicts hanging with no quitting programmes, and stop allowing their display like chocolates and with no health warnings. We now have many primary school addicts, some as young as 5.
Mobile phones ban in class was helpful but cheap, no tobacco company was harmed in the process.
Sorry to disagree about mobiles in classrooms but as most of our future is going to be controlled by AI, surely our children need to be as software/computer/app literate as they can be. Today's mobiles and tablets are a major part of it all and along with knowledge of apps and AI, a necessary part of the future learning process.
I didn't think tablets were to be banned. I utterly agree re computer literacy and use of course. Tablets can potentially be better 'monitored'. Phones, although they could be used for some online learning, are much more likely to be a distraction, and the argument for only using other means such as tablets, laptops or other computers for accessing the internet, doing searches, and using software and great online interactive learning tools is very strong. A student on their phone in some activity unrelated to the class is effectively absent for that time.
The only difference between a phone and a tablet is the capability to make a phone call.
The technology is here, instead of trying to fight fights we can not win, let's see how we can make school interesting for kids so they will not be looking for the distraction.
It certainly depends on many factors, eg teacher to student ratio, nature of the class etc. Sometimes its chicken and egg .. eg even with great teachers students usually need to focus for a while to get the picture, get engaged with and be rewarded by a subject. There are some quite compelling findings where sec schools in NSW sans phones got much better HSC marks, but its a correlation so other factors could well be in play.
Like you, Bernard, I was appalled that Social Development Minister Louise Upston, describing herself as ‘compassionate’, expects more beneficiaries to face sanctions under the current government’s plans (12/2/2024). Meanwhile, will Prime Minister Christopher Luxon, who owns seven properties (11/6/2023), receive a share of the $3 billion tax relief for landlords under proposals to restore mortgagee interest deductibility (29/11/2023)? If so, would Luxon’s windfall be regarded as a pecuniary conflict of interest derived from some decision or action of his government? See Cabinet Manual, #2.65. In my mind, this would be perilously close to corruption. Jocelyn.
I was reading yesterday that apparently we currently subsidise landlords (accommodation supplement) for almost 1/2 (!) the rentals in NZ. Given that level of eligibility (~280k households across ~600k rentals), this is clearly now more a rort than a safety net... If National were so serious about "improving incentives" maybe they should be asking themselves why landlords are so unable to operate in a 'free market' as a path to filling some of their fiscal hole?
This! I've always said that people honk on about "hard working Kiwi's tax dollars going to lazy people on the benefit" but landlords are subsidized very heavily by 'the taxpayer dollar' via the Accommodation Supplement, and no one seems to mention it. I just worked out that one of our landlords was given approx $37,000 by the government in the form of the Accom Supp in the six years we rented from him. Why don't landlords have to operate in the 'free market' like everyone else?! I'm no economist, and correct me if I'm wrong about this, but surely the Accom Supp has helped push rents up?
Yes, Tim! All the more reason for a complete overhaul of the tax system in NZ. Unearned wealth needs to be taxed effectively as does the vast sums of profit pouring out of the country through tax havens, overseas owned companies (BANKS!) and global tax evading companies. Neither the previous govt or this mob will address these problems because individually they benefit from it. Luxon was always on about how rich he is, multi property owning landlord, so could he be be trusted to do anything, not a chance!
It feels pointless to point out, but I assume Upston is aware that having stability in life (by not being pushed into homelessness, for example) is an effective platform to paid employment, and being punished is not. Just another move where the evidence of the outcomes of actions taken by this Government is completely at odds with the stated goal.
The Foreign Investment in land for new homes has some significant loopholes but firstly, until immigration policy is agreed (as you keep on about), we will never ever build enough to keep up with demand.
I thought of this scenario as I listened yesterday to the news. The paper indicates "any rental accommodation" If a foreign buyer who had family in New Zealand who owned and lived in a property that could be subdivided simply split the land, built another house and "rented" it to the existing family (who checks who ends up renting it after it's built) especially if the family already here was an extended/inter-generational one then we get nowhere apart from a foreigner owing that property that part of his/her family now live in.
Probably haven't been that clear but happy for anyone to debunk and I'll crawl back under my rock!
I have a friend who works with not-in-work, not-in-training benefit recipients, giving them work experience in the heavy lifting side of an op shop.
In the past he was very successful, but he has noticed over the last few years it is almost impossible to turn some of these young people round. He picks them up from home in a van, but after a day or two they decide that getting up early so they can be collected at 8 am, and staying the course for a work day is just too much for them and they quit.
As a country we need to understand why this cohort of young men is entirely lacking in motivation, purpose and drive and how to turn them round. Benefit reduction or cancellation is a very blunt tool to deal with this.
I have wondered about waning ambition in some young people too. I can't help concluding that many are rightly coming to the conclusion that even working multiple jobs cannot get you on the property ladder so why bother getting out of bed at all? We are setting young people up to fail. In my own extended family I see delayed "growing up" as Auckland twenty somethings are stuck living with their parents, not getting into stable relationships, not having OE's, delaying parenthood perilously and generally living like permanent 17 year olds even though some of them are nearing 40. What a cruel toll extreme house prices are having on so many. Hope those capital gains and protected view shafts are worth it!
Unaffordable house prices may well be a factor for some, but I think your observations about not growing up and accepting responsibility for your own life has somehow become pervasive. They are the generation whose day was organised by Mum, unlike previous generations who were told to Go Outside and Play, or, in response to boredom, Find Something to Do
Talk to young people and you will find out why. Even my two, who come from a stable home that supports them, can afford to subsidize their apprenticeships (car, tools, petrol etc.) and everything in between are very disheartened by the world we are creating for them. So many young people are looking into a world where they will never be able to buy a house or to have a meaningful, stable job that pays enough for them to not just survive but actually live. And all that before we talked about the climate crisis we are leaving them to deal with.
So Nationals problem definition of housing affordability is that New Zealanders can't afford housing because there isn't enough foreign investment towards new supply. Sensational mental gymnastics.
'A bunch of idiots' is a correct and usable expression in written English. It is usually used to describe a group of people who are not particularly intelligent, or acting foolishly or in a way that is not sensible. I don't know what else to say that encapsulates the shenanigans going on in the 'Hallowed Halls'.
Does anyone have the numbers for how many beneficiaries are "able" to go back to work vs those who are not (basically disabled & on superannuation, I think)?
don't need an incentive to go back to work as I'm disabled & the condition is degenerative but I get the message the government's sending me
Clickbait headings? There is no such thing as "paying for" tax cuts. A tax cut means (all other things equal) more currency left in the non-government sector. So that is increasing private wealth measured in NZD somewhere. A tax increase does not increase the government capacity to spend, and a tax cut does not reduce the government capacity to spend. They increase/reduce psychological willingness to invest/spend (because leaders do not understand basic monetary operations, they still think in terms of money as gold, or equivalently (self-imposed) fixed exchange rate constraints). There is a cost for tax cuts/hikes in terms of political support, we can grant that, political cost though, not directly monetary.
All you need to know at a high macro level of understanding is to know if a government spends for goods already available at a price higher than present market value then it could (sometimes) result in one-off price adjustment upwards. They cannot produce inflation this way unless they pay higher prices continuously.
If government wishes to draw real resources (workers) out of the private sector without paying a higher wage they can tax that specific sector. They do not have the awareness nor guts to do so I presume. You can call that specific tax imposition abstractly a "pay for" then - it is a tax imposed on a single sector to avoid an upwards price adjustment in that sector. But when you understand fiat money operations you realize that upwards price adjustment is neither here nor there in operational terms, you don't want it purely for *psychological reasons* or maybe because it might result in unfair economic *distribution* of real output (hurts the poorest the most).
Always feels weird ‘hearting’ a piece with that kind of heading. 🥲 if only there was another way then benefit bashing and pushing kids into poverty 🙄🥲
Foreign Investment in rental stock hasn’t been pleasant in Ireland as I understand it.
I can imagine that this could still be used to back door into landownership, with little interest in actually renting.
This feels like the most cynical leadership we have had in my living memory. Key / English I could sense the good intentions, even if I often disagree with their methods.
Loved the cicada dawn chorus this morning!
I smell a rat with this overseas buyers exemption for new builds. Won't this encourage more Greenfield's developments in the 'easy' out of town places like Drury and Pokeno in Auckland and Aotea near Wellington? But that cost a lot in infrastructure and lock in car dependence for unfortunate renters.
I do like the build to rent work that Simplicity Living has been doing. Their repeated announcements of new and bigger projects suggests they are not short of investors. Perhaps you could ask them if they need foreign buyer funds?
I thought Winston hated the idea of us becoming tenants in our own country?
Great question to finish the podcast on. Is there a shortage of capital?
As with a lot of these things, it is often difficult to see what problem the powers of the day are trying to solve.
Love the cartoons and cleansing pic and all the points you make Bernard.
Re welfare cuts and recently, the Coalition going hard on those who do not comply with requirements for the dole. Re the latter, of course those who are just not trying should be penalised. However some jobless are less capable. Add in this factor. What if you were one of this last decade's 40% who left school functionally illiterate? As per Crocodile Dundee, 'that's a stat'. How much fun going to job interviews. I hope this is taken into account.
How we could really help NZ climb out of this third world type stat is having highly accessible user-friendly reading and maths classes for adults, or is it all too late?
Another 3rd world fat stat impacting on learning and schools operating well is NZ being 2nd highest vapers globally. This reeks of corruption and exploitation. Nothing is being done here! or I would stop bringing it bavk to the table. Triumvirate, stop criminally pretending they are virtually harmless, for the 15% GST, licences and corporate tobacco/vape lobbyists, don't leave addicts hanging with no quitting programmes, and stop allowing their display like chocolates and with no health warnings. We now have many primary school addicts, some as young as 5.
Mobile phones ban in class was helpful but cheap, no tobacco company was harmed in the process.
Sorry - go back to the cleansing picture.
Sorry to disagree about mobiles in classrooms but as most of our future is going to be controlled by AI, surely our children need to be as software/computer/app literate as they can be. Today's mobiles and tablets are a major part of it all and along with knowledge of apps and AI, a necessary part of the future learning process.
I didn't think tablets were to be banned. I utterly agree re computer literacy and use of course. Tablets can potentially be better 'monitored'. Phones, although they could be used for some online learning, are much more likely to be a distraction, and the argument for only using other means such as tablets, laptops or other computers for accessing the internet, doing searches, and using software and great online interactive learning tools is very strong. A student on their phone in some activity unrelated to the class is effectively absent for that time.
The only difference between a phone and a tablet is the capability to make a phone call.
The technology is here, instead of trying to fight fights we can not win, let's see how we can make school interesting for kids so they will not be looking for the distraction.
It certainly depends on many factors, eg teacher to student ratio, nature of the class etc. Sometimes its chicken and egg .. eg even with great teachers students usually need to focus for a while to get the picture, get engaged with and be rewarded by a subject. There are some quite compelling findings where sec schools in NSW sans phones got much better HSC marks, but its a correlation so other factors could well be in play.
Like you, Bernard, I was appalled that Social Development Minister Louise Upston, describing herself as ‘compassionate’, expects more beneficiaries to face sanctions under the current government’s plans (12/2/2024). Meanwhile, will Prime Minister Christopher Luxon, who owns seven properties (11/6/2023), receive a share of the $3 billion tax relief for landlords under proposals to restore mortgagee interest deductibility (29/11/2023)? If so, would Luxon’s windfall be regarded as a pecuniary conflict of interest derived from some decision or action of his government? See Cabinet Manual, #2.65. In my mind, this would be perilously close to corruption. Jocelyn.
Uffph - a grim one today Bernard!
I was reading yesterday that apparently we currently subsidise landlords (accommodation supplement) for almost 1/2 (!) the rentals in NZ. Given that level of eligibility (~280k households across ~600k rentals), this is clearly now more a rort than a safety net... If National were so serious about "improving incentives" maybe they should be asking themselves why landlords are so unable to operate in a 'free market' as a path to filling some of their fiscal hole?
This! I've always said that people honk on about "hard working Kiwi's tax dollars going to lazy people on the benefit" but landlords are subsidized very heavily by 'the taxpayer dollar' via the Accommodation Supplement, and no one seems to mention it. I just worked out that one of our landlords was given approx $37,000 by the government in the form of the Accom Supp in the six years we rented from him. Why don't landlords have to operate in the 'free market' like everyone else?! I'm no economist, and correct me if I'm wrong about this, but surely the Accom Supp has helped push rents up?
many of us have repeatedly stated that the accommodation supplement is massively enriching residential rental property owners and bank shareholders.
many politicians are residential rental property owners.
part of the answer is to construct 200,000 public/state houses as fast/rapidly as possible in the locations they are needed/required.
Yes, Tim! All the more reason for a complete overhaul of the tax system in NZ. Unearned wealth needs to be taxed effectively as does the vast sums of profit pouring out of the country through tax havens, overseas owned companies (BANKS!) and global tax evading companies. Neither the previous govt or this mob will address these problems because individually they benefit from it. Luxon was always on about how rich he is, multi property owning landlord, so could he be be trusted to do anything, not a chance!
It feels pointless to point out, but I assume Upston is aware that having stability in life (by not being pushed into homelessness, for example) is an effective platform to paid employment, and being punished is not. Just another move where the evidence of the outcomes of actions taken by this Government is completely at odds with the stated goal.
The same sort of rhetoric we were served up to try to justify the evil 1991 benefit cuts.
The Foreign Investment in land for new homes has some significant loopholes but firstly, until immigration policy is agreed (as you keep on about), we will never ever build enough to keep up with demand.
I thought of this scenario as I listened yesterday to the news. The paper indicates "any rental accommodation" If a foreign buyer who had family in New Zealand who owned and lived in a property that could be subdivided simply split the land, built another house and "rented" it to the existing family (who checks who ends up renting it after it's built) especially if the family already here was an extended/inter-generational one then we get nowhere apart from a foreigner owing that property that part of his/her family now live in.
Probably haven't been that clear but happy for anyone to debunk and I'll crawl back under my rock!
I have a friend who works with not-in-work, not-in-training benefit recipients, giving them work experience in the heavy lifting side of an op shop.
In the past he was very successful, but he has noticed over the last few years it is almost impossible to turn some of these young people round. He picks them up from home in a van, but after a day or two they decide that getting up early so they can be collected at 8 am, and staying the course for a work day is just too much for them and they quit.
As a country we need to understand why this cohort of young men is entirely lacking in motivation, purpose and drive and how to turn them round. Benefit reduction or cancellation is a very blunt tool to deal with this.
I have wondered about waning ambition in some young people too. I can't help concluding that many are rightly coming to the conclusion that even working multiple jobs cannot get you on the property ladder so why bother getting out of bed at all? We are setting young people up to fail. In my own extended family I see delayed "growing up" as Auckland twenty somethings are stuck living with their parents, not getting into stable relationships, not having OE's, delaying parenthood perilously and generally living like permanent 17 year olds even though some of them are nearing 40. What a cruel toll extreme house prices are having on so many. Hope those capital gains and protected view shafts are worth it!
Unaffordable house prices may well be a factor for some, but I think your observations about not growing up and accepting responsibility for your own life has somehow become pervasive. They are the generation whose day was organised by Mum, unlike previous generations who were told to Go Outside and Play, or, in response to boredom, Find Something to Do
Talk to young people and you will find out why. Even my two, who come from a stable home that supports them, can afford to subsidize their apprenticeships (car, tools, petrol etc.) and everything in between are very disheartened by the world we are creating for them. So many young people are looking into a world where they will never be able to buy a house or to have a meaningful, stable job that pays enough for them to not just survive but actually live. And all that before we talked about the climate crisis we are leaving them to deal with.
So Nationals problem definition of housing affordability is that New Zealanders can't afford housing because there isn't enough foreign investment towards new supply. Sensational mental gymnastics.
'A bunch of idiots' is a correct and usable expression in written English. It is usually used to describe a group of people who are not particularly intelligent, or acting foolishly or in a way that is not sensible. I don't know what else to say that encapsulates the shenanigans going on in the 'Hallowed Halls'.
Does anyone have the numbers for how many beneficiaries are "able" to go back to work vs those who are not (basically disabled & on superannuation, I think)?
don't need an incentive to go back to work as I'm disabled & the condition is degenerative but I get the message the government's sending me
Clickbait headings? There is no such thing as "paying for" tax cuts. A tax cut means (all other things equal) more currency left in the non-government sector. So that is increasing private wealth measured in NZD somewhere. A tax increase does not increase the government capacity to spend, and a tax cut does not reduce the government capacity to spend. They increase/reduce psychological willingness to invest/spend (because leaders do not understand basic monetary operations, they still think in terms of money as gold, or equivalently (self-imposed) fixed exchange rate constraints). There is a cost for tax cuts/hikes in terms of political support, we can grant that, political cost though, not directly monetary.
All you need to know at a high macro level of understanding is to know if a government spends for goods already available at a price higher than present market value then it could (sometimes) result in one-off price adjustment upwards. They cannot produce inflation this way unless they pay higher prices continuously.
If government wishes to draw real resources (workers) out of the private sector without paying a higher wage they can tax that specific sector. They do not have the awareness nor guts to do so I presume. You can call that specific tax imposition abstractly a "pay for" then - it is a tax imposed on a single sector to avoid an upwards price adjustment in that sector. But when you understand fiat money operations you realize that upwards price adjustment is neither here nor there in operational terms, you don't want it purely for *psychological reasons* or maybe because it might result in unfair economic *distribution* of real output (hurts the poorest the most).
FYI this one has now been opened up for all to read.