By Alex Tarrant
Monday’s politics got so crazy that we didn’t even have time to bring you Bill English’s comments on house prices. So, before we get to our review of what else happened yesterday, here’s a sugar-hit:
Journalist: Are you concerned that we’re going to see another spike in house prices if you guys get into government, like we did last election?
English: “The market will do what the market does. I think the indications are the flattening out of house prices is more than just a pre-election…"
Journalist: There was a similar pattern last election though, with Labour campaigning on – they’ve said they will potentially do a Capital Gains Tax, which is what they were saying last election. So it’s a similar sort of scenario.
English: “Well I don’t think there’s any doubt there’ll be concern about the Capital Gains Tax proposals. I think Labour are trying not to say it. But for those couples who bought another house as their retirement savings vehicle, they’ll be pretty keen to hear the answers to the questions about just what the Labour Party mean on Capital Gains Tax.”
Meanwhile, the PM was also asked for his views on Labour’s proposal to crack down on foreign purchasers. The last part of the answer is potentially interesting – is he warning investors to be careful? Here it is:
“They’ve reheated this announcement for the last couple of elections. Overseas buyers have been a small influence on the housing market. All the work that’s gone in to KiwiSaver, Homestart…working with councils, funding infrastructure – all that is now working. There’s 200,000 houses being built over the next six years. And with rising incomes, that gives people a much greater chance of affordability. Whoever’s buying and selling houses is probably going to find they’re taking significantly more risk in a market that’s now flattened out.”
There you go. In terms of what happened yesterday in relation to the election campaign, we covered National’s announcement of $18 GP visits, Labour’s regional trains plan & the Greens on public transport, Nikki Kaye’s plan to attract teachers back to New Zealand with relocation packages and Peter Dunne’s shock retirement from politics. After all that, the PM said the election had now become a drag race and called on soft Nats to come back in from the cold.
What else happened?
Well, TOP’s Gareth Morgan set everyone off by calling Jacinda Ardern lipstick on a pig. I’m sorry Gareth but you can’t go around saying things like that. Yes, you were trying to lament Labour’s lack of policy announcements over the weekend. So, why not just say that?
That gave English and Deputy PM Paula Bennett the chance to have a proper go at Morgan. No one’s certain yet where he’s picking his votes up from exactly – Legalise Cannabis for sure, but the remaining 1.5-2 points perhaps mainly ex-Greens, with a smattering of Labour, ACT and National voters? Either way, it’s looking much more likely Winston will hold the balance of power so no harm having a pop at the rather eccentric economist.
“I think they are deliberately appalling comments,” English said. Bennett piped up that Morgan would probably be buoyed by the fact journalists were asking questions about him. He hadn’t had much publicity recently so needed to do something.
Could English work with Morgan? “Look, if you’ve got an attitude like that I don’t think anyone in public life would want to work with him. That’s outside the acceptable boundaries of political criticism and language. But I think he knows what he’s doing. I think he’s designed the comments to stir up attention, because he hasn’t had much lately.”
I threw a question in there about Wednesday’s pre-election fiscal update (Prefu), where Treasury essentially tells everyone what shape the books are in a month out from the election. They haven’t been that exciting in recent years, with the 2008 version while Michael Cullen was in the Finance Minister seat perhaps the most famous – “decade of deficits.”
This year’s one may well point to a decade of surpluses, and larger ones than expected in Budget 2017 back in May. The government’s books for the fiscal year just ended are expected to show perhaps $1.5bn more in the government’s operating balance than expected.
The key consideration for any juicy election promises then will be whether that strength is sustained, or whether it’s just a one-off this year and forecasts remain what they were in May. Tax cuts if sustained, or money for a nice lolly if a one off? I asked English whether a tax move could be on the table:
“That would be getting ahead of ourselves. The Prefu will come out – it comes out shortly – that’s the Treasury’s opening of the books. You’ll just have to wait and see what the numbers are. I think it be getting ahead of ourselves to anticipate them.”
Perhaps don’t read too much into the little smile on his face as he was giving the answer – that’s normal when we ask about anything fiscal. But it wasn’t a no. If National is thinking tax cuts then I’m not sure they’d announce them this early in the campaign. They might need to save a bit of the strong stuff up their sleeves for the final week or two.
Labour meanwhile is waiting with trepidation on what Prefu might show. Will there be enough money to bring forward its three-years free tertiary education policy or will they have to shift spending around and perhaps announce a higher top tax rate to be able to afford such a move? Wednesday will be the biggest Prefu since 2008.
Oh, and one more thing. Winston Peters had a go at the two large parties for promising too many billions of dollars in election year bribes.
The 2017 campaign of promises demonstrates the old parties in Parliament are desperately doing anything to get political power.
New Zealand First accuses them of making promises without regard to the fragile state of the New Zealand economy within a seriously unstable world economy, says New Zealand First Leader and Member of Parliament for Northland Rt Hon Winston Peters.
“New Zealand’s National debt is at record levels as headlined by the New Zealand Herald in June,Kiwis drown in debt (NZ Herald, 20 June 2017, page C1). It said:
‘New Zealand’s debt is past half a trillion dollars and is forecast to continue to rise.’
“Other political parties have no idea how to grow the economy and have had 33 years of their failed policies attempting to do so.
“New Zealand’s GDP per person is flat lining as is productivity.
“In this environment political parties are making consumptive promises that are breath-taking in their naivety.
“In two days alone the National Party has made over $12 billion in promises – $18 GP visits, Dunedin Hospital rebuild and roading.
“Labour’s promises are as bad, and even Gareth Morgan points out they have no substance, and the Greens have joined them.
“Clearly there is only one sane and stable party in this election that has warned time and again of the imminent economic crisis this country faces.
“Policies not based on growing our national wealth by production but by consumption risk New Zealand becoming like some South American economies.
“In the words of Kipling: ‘If you can keep your head when all about you are losing theirs’.”