TL;DR: You couldn’t make this stuff up.
A mayor determined to cut council debt by selling shares in a monopoly business because of the apparent financial stress of the public debt, has decided to borrow $11 million to buy one residential section in Manurewa for $12 million, just to stop houses being built on it. It will now sit in the Auckland Council land bank undeveloped for a decade.
The section is next to Manurewa’s Botanic Gardens and may eventually be publicly accessible as part of the park, but the acquisition by a land-banking Mayor (Wayne Brown) shows the double standard for borrowing and investing in Aotearoa: it’s ok to borrow for land to bank, but not to invest in a business or public infrastructure or house (without land).
It’s as if the investing practices of our land-owning gerontocracy based on leveraged and tax-free gains on residential land value inflation has become hardwired in as a conventional financial strategy for government. It's not just Wayne Brown. The Labour Government was comfortable with Kāinga Ora borrowing $2 billion in 2021 to buy land.
Paying subscribers can see more detail below the paywall fold and more of my analysis in the podcast above.
It’s ok to borrow and invest for the future, but only for land
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