Friday, 19 March 2021

Stand by for more dumb, ineffectual taxes

“No amount of sensible advice to the contrary will stand in the way of Labour’s dogma that there isn’t a problem you can’t tax your way out of,” says ACT Leader David Seymour.

“It’s clear that a big part of Labour’s upcoming series of silver bullets for the housing crisis will be some form of increased land and property taxes.

Answers to Written Parliamentary Questions from ACT show Grant Robertson saying he has received briefings from officials since December on demand side measures that include ‘vacant land taxes.’

“Add that to his earlier confirmation that he’s considering extending the bright line tax on selling investment property from five to 10 years – which is a capital gains tax by stealth – and it’s clear Labour hopes to tax its way out of the housing crisis.

“This is despite clear evidence these ‘demand side’ measures don’t work.

The New Zealand Initiative released a report on this last month. They ran the numbers and concluded ‘the focus on demand-side measures has been a failure.’

“It’s perfectly simple – you can’t live in a tax. How far can you extend the bright line before it disappears? Only building more houses will alleviate the housing crisis.

“We’ve already seen this in action in New Zealand. The emergency measures taken following the Canterbury earthquakes proved that mass, fast-track consenting of land is a key component to getting houses built and alleviating property price inflation.

“The other two components of tackling the housing crisis are infrastructure and the buildings themselves.

“ACT has been advocating making both things simpler with a root and branch replacement of the Resource Management Act – which the Government has declined to do, instead proposing to replace one cumbersome Act with three. This isn’t going to speed anything up.

“We’ve also said GST on new builds should be shared with local authorities to help fund infrastructure.

“None of this appears to be on the table. Instead the Government continues to obsess itself with taxes, grants, lending restrictions and overseas buyers – anything but making it easier to build the new homes New Zealanders desperately need.”