Long stories short, the top six things in Aotearoa’s political economy around housing, climate and poverty on Monday, February 10 are:
A loosening of rules to entice rich foreigners to invest more here is unlikely to “turbocharge our economic growth,” as claimed by the Government, because they will still have to rent when they live here, and most of the money will be lent to the Government in bonds, rather than invested directly in businesses;
The revelation in yesterday’s Herald on Sunday-$$$ that ACT Leader David Seymour wrote a letter to Police in support of Philip Polkinghorne would have forced him to resign if he had been minister, Audrey Young writes in today’s NZ Herald-$$$;
Chris Bishop has started back-pedalling on former Transport minister Simeon Brown’s blanket speed limit increases after revolts from National’s provincial heartland electorates, RNZ has reported;
Simeon Brown was warned before deciding to push ahead with massively expensive road tunnels in Wellington that they would increase (not decrease) congestion by 15% and 20% on two key roads, but he went ahead anyway, The Post-$$$’s Tom Hunt reported this morning.
More than half of cardiac surgery patients are overdue for surgery, according to Health NZ figures reported by NZ Herald-$$$’s Nicholas Jones on Saturday, while The Press-$$$’s Louisa Steyl reported on Saturday 30% of dermatology referrals to Christchurch Hospital were not being accepted because there are now only two dermatologists in the South Island’s entire public health system; and,
Donald Trump’s massive tariff plans are mostly stalled this morning, with Mexico and Canada still avoiding the 25% tax on imports and Trump having to back-track over the weekend on his plan to apply a 10% tariff on all small parcels imported Temu-style from China after chaos at the borders. Reuters
(There is more detail, analysis and links to documents below the paywall fold and in the 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.)
Looser ‘golden visa’ rules unlikely to ‘turbocharge’ GDP
The Government has presented looser ‘golden visa’ rules as a major measure to ‘turbocharge economic growth’ this year, but the reality is it’s unlikely to generate many new jobs or businesses because most of the new money will go into New Zealand Government bonds and any real explosion of foreign direct investment would require Winston Peters to allow rich foreigners to buy existing homes and land. The new visa rules will, however, allow foreign residents who lend $13 million to the Government to get residency for five years, but only have to spend an average of six days per year in the country.
PM Christopher Luxon, Economic Growth Minister Nicola Willis and Immigration Minister Erica Stanford yesterday jointly announced a loosening of rules and investment thresholds for New Zealand’s Active Investor Plus scheme to encourage wealthy foreigners to invest more here, which Stanford said would “turbocharge our economic growth, bringing brighter days ahead for all Kiwis.”
The new rules applying from April 1 will grant a residency visa to anyone who invests either $5 million directly in New Zealand businesses over three years, or $10 million in bonds, stocks and new residential properties over five years, which is less than the $15 million threshold under the previous Labour Government and allows more market investments.
The new residents also won’t have to pass an English language test and can reduce the usual residency requirement of 105 days over five years to just 18 days over five years if they invest $13 million1, rather than the minimum of $10 million, in the new ‘balanced’ category of the visa allowing ‘passive’ investments in bonds.
The previous Labour Government toughened the rules on the ‘golden visa’ scheme in September 2022 to require $15 million of direct investment in businesses, rather than in vanilla Government bonds. Just 33 visas were issued in the first two years to investors who put $65 million into the economy2. That contrasted with more than 3,000 visas being issued to investors over the visa’s previous 12 years when bond investments were allowed, which saw $14 billion into the economy, mostly in bonds.
A return to those policies would see an average of $1 billion put into the economy each year, but most of it would simply go to the Government as purchases of Government and Local Government bonds, rather than investment in actual businesses.
‘It’s peanuts without an end to the foreign buying ban’
Lawyers and real estate agents said that the changes were unlikely to unleash a flood of new investment because of the restriction on buying residential property.
Immigration Lawyer Nick Mason told RNZ’s Anneke Smith the retention of the 2018 ban on foreigners buying residential properties and land would continue to handicap the scheme. He said the adoption of National’s election policy of allowing foreign buyers of homes worth more than $2 million would make a difference and was a “no brainer”.
"If we want these people to come establish a life here, which is the end goal, we need to let them buy a house and buy a house reasonably quickly because these people have options and I expect, given the current geopolitical state, we're going to see a lot of interest out of the US and those people are going to want to make permanent shifts and not necessarily be in temporary housing while they do it." Immigration Lawyer Nick Mason via 1News last night.
Marcus Beveridge, a business migration specialist and managing director at Queen City Law in Auckland, welcomed the changes as being well over due, and predicted to Bloomberg-$$$ they could give New Zealand’s sluggish residential property market a shot in the arm.
“Over the last couple of decades every time we do something like this the property market picks up. It’s not so much about huge numbers coming across the border but what happens is that the cash investment primes the pumps and our local market takes off.” Immigration lawyer Marcus Beveridge via Bloomberg-$$$
Further reading elsewhere
Scoop: Patient data at risk over ‘dangerous’ IT job cuts, union warns. The Public Services Association wants the Privacy Commissioner to step in, as Health NZ touts a “fail early, fail often, succeed over time” strategy to IT staff. The Post-$$$’s Rachel Thomas
Scoop: Palliative care reform at risk from possible Health NZ cuts RNZ’s Rachel Graham
Interview: The independent candidate looking to shake up Auckland’s mayoralty election. The current councillor for the Auckland Whau ward, Kerrin Leoni, says it’s time to turn attention to the city’s suburbs. Stuff’s David Long
Interview: The economist (Kerrin Leoni) who wants to be Auckland’s first Māori mayor NZ Herald’s Joseph Los’e
Deep-dive: Is our love of utes and SUVs going to be the death of us?They’re big, and aggressive, but researchers suggest most of the risk they pose comes from drivers, rather than the vehicles themselves. Sunday Star Times-$$$’s Kevin Norquay
Analysis: Flood-threatened ratepayers pay insurance triple-whammy Newsroom’s Jonathan Milne
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Ka kite ano
Bernard
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