Monday, 16 November 2020

One by one, Labour's excuses on housing are evaporating


“Labour blamed the housing crisis on foreigners and the tax system, but its excuses are evaporating, and now it has no idea how to solve the problem,” says ACT Leader David Seymour.

“According to Labour, people with Chinese sounding names were to blame, but experts have found the foreign home-buyer ban had no impact on house prices.

“Then it was the tax system, but Labour’s own Tax Working Group found a CGT would have little impact on house prices. Extending the bright-line test has made no difference.

“Then, it was immigration. But with the borders closed, and net migration at historic lows, house prices keep rising.

“Now, the PM is arguing with herself about the cause. Two weeks ago, on rising house prices, she said ‘a lot of that will be, probably, New Zealanders coming home.’ But today, according to Ardern, ‘There’s no real evidence at the moment that returning Kiwis are causing that heat in the market.’

“Labour is misdiagnosing the problem and it’s confused about the solution.

“Ardern suggests her Government will ‘help’ the situation by giving first home buyers more taxpayer money through schemes like HomeStart Grants. That will just inflate house prices further.

“The issue is, and always has been, one of supply constraints.

“Since the 1970s, our population has grown by two million, and today we’re building fewer houses than we did then. It’s little wonder that house prices have skyrocketed. We are simply not building enough houses.

“In 2017, a government report found more than 50 percent of the price of the average Auckland home was due to artificial scarcity created by land-use restrictions.

“ACT would repeal the Resource Management Act and replace it with separate Environmental Protection and Urban Development Acts. The Urban Development Act would be based on the recommendations of the Productivity Commission’s Better Urban Planning report.

“Labour was elected because it effectively politicised housing by blaming foreigners and the tax system. But, one by one, its excuses are evaporating. Now, it has no idea how to solve the crisis.

“It must reform the RMA quickly so the private sector can get on with building more houses.

“With the Reserve Bank pumping $100 billion into the economy, the task is even more urgent.”