National finance spokesman Steven Joyce says he's keen to look at savings tax rates next term; Alex Tarrant spoke to him about productivity, capital gains vs income, immigration, that export goal and house prices

By Alex Tarrant

Steven Joyce hasn’t been Finance Minister all that long. But he has already managed to announce a series of tax cuts, and promise a second package in a few years’ time if all goes to plan.

He’s also now the man in the hot seat when it comes to questions on the National-led government’s economic track record over the past nine years. Flat-lining productivity during the second half of that term, wages growing slower than the broader economy, house prices rising 67% when the CPI is up only 15%. There’s quite a bit to be critical of.

But Joyce offers up positive responses to everything put to him. Yes, productivity has been flat, but that’s a phenomenon across the Western world, we’re still doing better than most and immigration gains the past few years will feed through soon. Low inflation has meant purchasing power has increased. And asset prices in general have been inflated by central bank money printing – another global occurrence. We’re focussed on getting on with building more houses.

I sat down with Joyce last week to put these issues to him, and ask a few questions that others aren’t likely to. For instance – what are his thoughts on New Zealand’s taxes on savings? He’d like to review those settings next term, he says. Compulsory KiwiSaver? Not a fan. And just why does he view waged income as different from realised capital gains from the sale of a family home?

Tax thresholds

I begin by asking Joyce about National’s plan to bring in a second “families package” around 2020. Had he got any further with the details and what exactly would it look like? It’ll look much like the first one, he says.

“Yep, you want to look at tax thresholds, and as you know I’m quite concerned about that middle-income threshold – that it doesn’t get too far behind the median income. It’s still going to be behind the median income once we make the adjustment we’re making 1 April next year.”

At the lower and lower-middle income end, successive governments had added in more transfers rather than adjusting tax rates, he says. “I think the trouble with that is, you end up with people getting very confused as to what their entitlements are, and what happens to their entitlements if they make changes in their lives.

“That can get people stuck in the same place. So, if somebody goes out and does another five hours a week work, or somebody gets a second job, or somebody changes their job – if they’re in a lower income area what does that mean in terms of their Accommodation Supplement, their Working for Families, their Independent Earner Tax Credit?”

So, are we talking about abatement rates, or a tax-free threshold at the bottom of the income tax scale?

“I’m not sure about the idea of a tax-free threshold. I just think that we’re going to be looking at potentially just driving more of the positive changes through the tax system and less of it through the transfer system,” he says.

It hasn’t been designed yet, and Joyce says he’s not yet in a position to do so. “But you saw this time, we took out the Independent Earner Tax Credit from 1 April next year, and we said, ‘let’s put that through the tax system instead, so that everybody gets it’. That’s a ridiculous situation where a whole bunch of people don’t even get it because they don’t even know they’re entitled to it,” he says.

The system would be designed to show people more the value of their work. “Potentially, lowering the effective marginal tax rate of peoples’ wages at the lower end, rather than doing more in the transfer space.”

I put to Joyce that there’d been a lot of discussion recently about tax thresholds. Is this the time where we might see legislation to alter them every year…or three…?

He hasn’t really thought that through. “I think that it’s an interesting idea, but it’s no more than that. I think the difficulty is, that assumes the economy is constantly moving in the right direction.” The alternative argument is that governments regularly update those thresholds, he says. If they weren’t shifted then sooner or later everyone would end up paying tax of 30 cents in the dollar.

Joyce is talking a lot about low-to-middle income earners. So, I ask, if this is going to be the focus of his second package, then will there be measures so that higher earners miss out? I put to him Bill Rosenberg’s figures that 36% of the value of Budget 2017’s families package went the highest earning 20%.

Expectedly, he disputes the figures. Top earners would of course get something from the lower threshold changes, but there wouldn’t be a focus on the top tax threshold, he says. “And I think we need to keep doing that to ensure there’s that opportunity for low and middle-income earners.”

Is cutting taxes and shifting thresholds really the best way to get more money in people’s pockets?

“I think, ideally, yes, Joyce replies. “Because actually you want to link their income more directly to their work.”

“If people can see the benefit of an extra hour’s work, or changing jobs to a higher income, more easily than they can in lower and middle-income jobs at the moment – where you’ve got to get your tax table out, and your Working for Families table, and your Accommodation Supplement table and think about what it all means, and then decide, ‘should I actually do something or should I just stay where I am because I’m worried about losing all this stuff?’”

It would be better for New Zealand economically for people to see the “true fruits of their work rather than having it all completely de-linked,” he says.

Productivity

We shift onto productivity. Wouldn’t improving productivity also provide for a base for paying workers more if employers were able to increase their margins through productivity gains and feed this through to wages? A lot has been written about labour productivity under National’s nine years. What are Joyce’s thoughts on how that has tracked?

“It’s actually tracked better than most other developed countries,” he says. “If you look at GDP per hour worked, it’s got better. Nobody’s arguing it’s stellar. New Zealand has had a long-term productivity problem, and since the GFC the world has had a productivity growth problem.”

Out of a bunch of countries having problems, New Zealand is still one of the better ones, he argues. The seeds of productivity growth were obvious – it’s mainly driven by companies, not governments and Ministers.

“So, let’s deal with it at a company level. How do I improve my productivity?” he says. Investment in capital equipment, accessing new markets and improving company organisation – such as through use of ultra-fast broadband and internet connectivity to cut down on travel – are all important. For National, it has been investing in broadband and other infrastructure, and sought to grow market access.

I put to him that Gross Capital Formation and Business Investment measures, as a percentage of GDP, haven’t shifted since 2008. The second half of National’s term has coincided with productivity not doing as well as in the first half.

“Well I think that’s true, but that’s also true for most countries, actually,” Joyce says. “Productivity has been a struggle everywhere. If you look across the eight years – and let’s be clear, these people that talk about productivity measures over a year, they’re really…”

I cut in: former Reserve Bank economist, and Croaking Cassandra blogger Michael Reddell’s talking about the last five years, when productivity growth has been negative by most measures.

“Five years is getting more like it,” he accepts. “The thing about measuring productivity is it’s generally measured more effectively a couple of years after the fact, which is very frustrating for those us who are focussed on it,” he said.

Immigration

He raised the OECD’s latest report on New Zealand. Its chief economist, Catharine Mann, said we were in a situation where the capacity of the labour market was growing quickly, we were bringing in more people, which over time would build extra capacity. “It’s hard to build your capacity and your productivity at exactly the same time – once you’ve built your capacity, you’ll go through a stage of improving the productivity as businesses invest in more capital.

“She was not remotely worried from an OECD point of view, that, say the last two or three years, because of the significant labour market growth, [that] was not necessarily leading to fast productivity growth. Her sense was, that would come,” Joyce says.

How about cutting off some of that Labour market inflow? Joyce says that wouldn’t work. Capital and skills were portable, meaning they would just shift offshore, he argues. “I just don’t think that that’s possible to do…you do need to lift the capacity of your economy as well.”

Productivity has been a 30 to 40-year issue for New Zealand, and it is just starting to improve, he says. Consistency of economic policy would encourage investment…

Wages

On to wage growth. I put to Joyce that in the last two terms of the National government, wages had not grown as fast as GDP – indicating waged workers were not receiving the relative benefit for working harder to achieve greater economic output.

He replies that the key measure is how people’s purchasing power is growing. “On that measure, we’ve been growing at roughly twice the rate of inflation.” Over the longer term, wages had kept pace with growth, he argues.

“It’s not like some parts of the world where you’ve seen an income redistribution to a particular part of society – that’s definitely not occurred here – and Perry has made that clear,” he says. (I put to him that Perry did however say things were a bit rough when it comes to factoring in housing costs: “Well, again it depends on the measure you use.”)

House values and building

Which brought us nicely to housing. The Consumers Price Index – a measure of the general level of prices across the economy (but not existing housing) since 2008 has gone up by about 14.5%. House values, however, were up about 67%. What are his thoughts when presented with those two numbers?

“Well it’s asset prices right around, actually,” he says. “The problem we’ve all got, which we’re all grappling with, is that we had the GFC, then we had Reserve Banks/central banks around the world effectively getting themselves into a deep hole and then they’ve ended up printing a lot of money – quantitative easing – zero real interest rates.”

And, New Zealand’s part of the world.

“That’s led to big asset price inflation. Low returns, high asset price inflation. That’s been reflected everywhere, and New Zealand’s been caught up in that. So, right around the world, we’ve got high asset prices and low interest rates,” Joyce says.

“That’s fine for people that have already got to the stage of life where they own their assets; it’s fine for those people, in some ways, that have perhaps borrowed against assets because – including houses – because they got low interest rates. But then the hard part is for people starting out, because their deposit – particularly to purchase a house – is higher compared to incomes. I think that’s where the real pressure comes.”

This was why the government had boosted KiwiSaver HomeStart and introduced other measures that, “you wouldn’t normally do…”

I jump in: Is it disappointing that government was needing to turn to subsidies to help people get a deposit together for a first home? (This was recorded before Sunday’s announcement of doubling HomeStart grants.)

“Yes, it is,” Joyce says. “Of course, that’s the case. But the reason for that is…this whole international phenomenon that we’re dealing with. We’re part of the world – we don’t get a choice.”

Global cash is flowing in and pushing up our asset prices?

“Well, not just so much that, as…right around the world, you’ve got very low interest rates. And New Zealand’s interest rates are driven as much by international inflation, or lack of it, [just] as they are by domestic inflation. Our tradables inflation has been flat to negative for a long time,” he says.

“So, we have that transmitted into us, and if people are getting – depositors and so on – are getting low interest rates, people go looking for yield, and asset prices get pushed up.”

He continues that the other problem re rising housing values has been house construction. The two issues had worked together in a way that hadn’t been good for first home buyers. “We just haven’t built enough houses, historically,” Joyce says, pointing to Auckland numbers between 2003 and 2009 dropping to 2,500 a year.

Although we’re back at 10,000 for Auckland, it looks like we’re heading back down, I say. He argues it’s at least back up to a level which looks like it’s going to continue for some time, according to the latest BRANZ construction report.

Except the last one of those saw builds come in below expectations, I put to him. The response: “Well, it did a little bit.” He continues: “But, assuming that they’ve got it broadly right, and we can debate a little bit where the margin is, but then actually we’re going to see that [housing shortage] fixed over time.”

I had spent the morning reading through the last ten years’ worth of Monetary Policy Statements. In 2009, the Reserve Bank had started to warn about the impact of growing immigration on the housing market. Then in 2013 after a couple of quiet years, there were warnings on supply and demand imbalances coming through. Did the National-led government move fast enough on the warnings?

“I think what everybody would say is that, it’s been harder to push some of the regulatory levers in terms of getting the impact, than we would like,” Joyce says, pointing to the Auckland Unitary Plan. “I think that’s been frustrating for everybody…”

But: “If you look at the growth that’s occurred, over that period, actually we have the fastest compound growth in the New Zealand construction sector for some years.”

Was it fast enough? I ask. We still had house values rise 67% over the past nine years. “Well you can debate that, but…you are growing faster than we’ve ever grown before off a low base.”

Waged income vs realised capital gains

While we’re on the subject of house prices, I put to Joyce that since the 2014 election, house values are up about 27%. That means an average someone who owned a house valued at $600,000 then and is selling now, will be receiving a gain of over $150,000, tax free. How was this fair when a waged worker earning $50,000 each year over that same time frame was paying an effective tax rate of 16%?

“They’ll have to go and buy another one…in that current market,” he says. “So, yes, it sounds good, but actually, they’re going to have to move back into that market. Unless they’re completely cashing out, that’s what they’re going to have to do. So, there’s a limit to that comparison.”

“Most people, who move out of a house, buy another one. And they’re dealing in the market that you have there today. I’m not arguing for that sort of ongoing price increases; I’m arguing that, actually, if we have enough growth in the housing market around the country in terms of supply, as we’ve seen in Christchurch, then actually house price growth stops.”

In Auckland now, house price growth is falling, he says. I reply that this may be welcomed, but we’d still need 20-30 years of flat house prices there before we get back to proper affordability levels.

“I’m not sure that that’s right” – the typical response. “And the other affordability measure that’s the elephant in the room, is interest rates. Which is why I always say to people, be careful. Because interest rates at some point will go up again.”

“One of the biggest drivers of, say, the house price to income ratio is interest rates. And when people talk about, ‘I’d love to get the house price to income ratio back to four’, well, the last time it was at four, interest rates were at 18%. So, there’s no free lunch in all of this,” he says.

“I actually want us to just keep building more houses, and allowing more onto the market, which will ensure in places like Auckland, that house prices stay at a fairly steady level for an extended period of time. And then we can get that balance. And the idea is that happens at a time when interest rates remain low, otherwise people will get caught with higher mortgages.”

Savings taxes & KiwiSaver

I ask about the ‘Andrew Coleman idea’ – that, instead of apply a CGT or imputed rents to try and level the playing field, how about changing the way we tax to just once during their life-time. This is one that I’m putting to all the financial guys before the election. Is it something that appeals to Joyce?

While not commenting on that proposal particularly, Joyce says he is interested in looking at the taxation on savings at some point. Next term? “Yes, I’d like to have a chance to have a look at it in the next term. I think that’s an area of work that New Zealand needs to do if we want to encourage more savings.”

“Are we putting anything in the way of encouraging people to save, by, for example, the effective tax rates and so on?” he says.

How about compulsory KiwiSaver, then? Joyce isn’t a fan. “I’m keen to encourage everybody into it, or into a similar scheme. But what I’m not interested in is making it compulsory. Because there’s plenty of people at different stages of their lives. It’s not necessarily the best thing for them to do.

“If they’ve just started a business, and it’s going to be a successful business, then they could make a strong argument their money should go into their business at that time – why should it go into a KiwiSaver scheme?” he says.

“Similarly, you can make the argument that for some people it would be more preferable to pay off their mortgage – or some of their mortgage – and allowing sufficient flexibility for people to do that I think is actually just treating everybody like grown-ups.”

Exports and imports

I ended by putting a couple of numbers to Joyce – one was on the goal to increase exports as a proportion of GDP from 30% to 40% by 2025. It hasn’t shifted from 29% since 2008. Is he disappointed?

“I’d like to see more growth in that.” He couldn’t really have said much else. “But you have to go and look at what’s been happening under the hood. And under the hood, world trade intensity has dropped.

“So, if you look at New Zealand relative to say, your Singapores, your Denmarks or so on, which are the big traders, they’ve gone back a bit, because we’ve had an extended period of a decline in world trade,” he says.

“We’ve held our own. Again, it’s nothing to write home about necessarily, except that we haven’t slipped back the way other countries have.”

Another thing New Zealand had been dealing with was our biggest export had been “down a bit of a hole over the last two or three years,” Joyce said (about dairy).

“What I think’s exciting is that, we had all these doomsayers coming out and saying, ‘oh my goodness, the dairy price has dropped, that’ll be the end of New Zealand for three years’. And what we’ve shown is that we’ve diversified sufficiently into other industries at this point – more to do…but – tourism, education, ICT, the other food sectors – [and] that actually we were able to maintain and grow our value of exports compared to when dairy was 23-34% at one stage, of the export pie.

“I think that’s been good to see that maturity grow, and I think as dairy comes back on stream, we’ll see that proportion lift as well as the overall number lift. But yeah, we’ve got a job on to get to 40%,” he says.

Imports as a percentage of GDP, meanwhile, have risen – from 30% in 2008 to 33%. Are we buying too much from the rest of the world while our means for paying for it isn’t budging in relative terms?

“I’m not too worried about that,” Joyce says. “The key thing in the New Zealand context – in fact any country – is how much debt you’re creating – what’s your liabilities to the rest of the world? And New Zealand has come down from 80-something – 84% of GDP I think to about 58.5% - I’d like to see that keep going.”

Will he set a target for our net international liabilities, then?

“Well no, I’m not going to put a target on it – it’s worked better without one.” He’s still got a sense of humour as the polls turn. Apparently, he’s got a regular side bet with Treasury that our net international liabilities will keep falling, verses their predictions of them rising again. The current account deficit too.

“They’ve given up now - I’ve won a couple of bottles of nice orange juice or the equivalent on that. And I actually think New Zealand’s external sector is growing pretty good resilience,” he says.

“What we’ve proven to Treasury is, it’s not necessarily the case that we always revert to type, provided you run the economy well and you encourage these export-facing businesses to get out there and trade.”

The next three years

Finally, what can we expect over the next three years if National gets back in?

“Firstly, we’re very, very keen on encouraging the opening up of markets, and this whole facing the world, making sure New Zealand [has] its best foot forward on the world stage. We’d love to get TPP 11 over the line – that’s not just totally dependent on us – but I just see this massive opportunity for New Zealand, which I’m excited about for New Zealand companies,” Joyce says.

“We can get out there and give them a platform which makes them hugely competitive on the world stage. That’s what we’re doing and I think we can double-down on all of that – the innovation side, the trade side, and so on. And that will actually ensure that New Zealand really gets the benefits out of growing Asia-Pacific region and particularly the Asian economies.

“That’s our vision. The alternative is, I have to say, one that doesn’t understand businesses. Because it’s proposing to put on a whole lot more taxes and reduce the competitiveness of New Zealand in the world economy. And I think that would be very negative for this country over the next three years.”


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81 Comments

I thought we had seen the last of Joyce for at least ever.

Guys got a hide like a rhinoceros to poke his head up again with his trusty abacus in hand.

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Dispute the figures; deny the reality; blame it on the rest of the world; or explain you haven't thought about that.

ok ill vote for you... ha ha ... we can all be wise after the fact...prehaps you could put forward a solution...are you productive? how your R&D going... where can check out your lastest products?

In fact, this policy is one of the reasons that business lobby groups are relaxed about support for Labour;

https://d3n8a8pro7vhmx.cloudfront.net/nzlabour/pages/4112/attachments/or...

Fear of a Labour/Green government gone
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1192...

Yes i read that this morning before the market opened and ..... myself laughing!!!

not they are supporting which ever government is coming into power and the CEO of a gambling company does not want to say anything that attracts the attention of people who want to stop gambling..

CEO's are not CFO's and boards will say in private something quite different to public!!! Wake up !!! HA HA

Hes being nice and friendly because that what CEO are paid for....

SKY CITY is scared of the greens and labour!!! and whinney bear..

Every listed company in NZX wants lower taxes and less regulation and labours new laws on employment contracts are scaring the death out of them ......

pants are being w.t left right and center.....

dont be fooled into believing that EBITDA is not something business want to INCREASE!!!

If new labour relations results in improved productivity then great!!!! But if it leads to strikes and the 1970's... well

NOT SO RELAXED!!!!

Well if you think this one person is an outlier and we can't take what he says seriously, fair enough.

You'll be pleased to know that tomorrow the full Mood of the Boardroom Election Survey will be out.

So much depends on the truth don't you find.

But in an election year, sounds bites and windy promises reign.

Do not blame either parties.

I think the Anglo-Saxon economic model is now having a problem.

Id say no model in perfect and i think the CHINA model is a mess as well...thats where the next big crash could come from as debt increases...everyone knows they have a big problem...

If you believed everything you read, China should have spiralled out of control and crashed and burned 5 years ago

if you had read carefully you would have seen that china reserves have stopped this crash happening and the trade balance has limited the debt effect from there state funded companies they need to shut dfown.. get your facts sorted!!

The constant flow of in-depth articles in the New York Times, Bloomberg and Wall St Journal predicted the implosion of China every month for the last 8 years - I kept waiting and watching and reading but it never happened so I gave up reading the articles and checking the facts and data because obviously they were wrong - which facts should I watch now

No wonder why you are disappointed if you only follow these MSM with huge biased interests .... have you ever read good news about any market in these outlets? , ever...?

Some times there are predictions of good things. Like a stock pick. But all these predictions are people out to make names for themselves. As though they alone are at the cutting edge. They have the unique ability to see what others do not.
Personally I do cast my eye over them but I doubt that I learn anything.
In reading some of this stuff I recognise that I have a bit of a compulsion. Maybe I should curb it.
Who knows what may affect the markets in a big way. At the moment everyone seems to think it will be a nuclear war. But in reality it may be a disease outbreak. Who knows!

Don't be coy - tell us where we should be getting accurate unbiased data from - and - I never put too much store in any one article or any single publication - I listen to the chatter that builds up over time - what I do watch for in these publications is a change in tone

well you would need to run the numbers .... its not hard.. i did not see the CRASH they were talking about.. Often these articles says there there is a chance of a crash...

but if you run the numbers every month you will see that the reserves and the trade balance has kept them afloat...

I must have missed these articles..

as long as they are on the current path and speed, they will soon just return to where it was 200 years ago. then it's fair enough.

Every failure of civilisation is before and ahead of all others issues, a moral failure.

Nonsense. The English system of political economy is highly adaptable and the adaptable survive.

the housing price rises i have outlined before started in the last 4 years.. this graph shows when AUCKLAND house prices started rising sharply - which clearly shows the problem really took off in 2013.

http://www.nzherald.co.nz/economy/news/article.cfm?c_id=34&objectid=1191...

comments from people who are desperate labour party voters please stay in your seats...auckland is an inrternational city where billions of people in the pacific region would like to visit...

the problem could be a lot worse and yes government and LOCAL government have simple not been ready to adjust ahead of time but are ready to react to events as they unfold.

governments and local governments find that they are captured by statistical reports from departments. All this means is that it matters not which government is in power the good Ship HMS new zealand will find direction once the statistics are in after the next 4 years.

I quoted in one comment the Auckland boom was 3 years and another time over 2014 to 2016, I didn't say 2017 because you could hardly call this year a boom. Ok in one comment I said 3 years 2013 to 2016 and another 2014 to 2016. Sorry for the error . And Auckland is a great city but wages haven't changed anywhere enough from 2013 to 2016 to warrant these housing increases over this period. And allowing overseas investors to push up the market over such a short period of time doesn't make it right. Wages and house prices more or less need to go up together. All national did was bring in outside money (high income demand) to push up a market that isn't ready for it. So can wages catch up to housing. Yes but we jumped the gun. Low demand well simply take us back. You can't cheat the market like that. Give then take it away specially over such a unbelievable short time. Incomes mighted hardly move over the next 10 years. The last time house prices were affordable was 2012. Barely affordable to

Steven Joyce is an economic millstone. You got to be careful with confident people - they don't notice when they get it so wrong.

yes i remember hellen clark and cullen being very confident didnt you?

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A Tui moment from Steven Joyce. He says ..."productivity has been flat ......... and immigration gains the past few years will feed through soon."

Productivity has been negative for six months, but he can't say that, can he? The September quarter of GDP per capita figures will be interesting once they're released.

" Productivity has been flat, but that’s a phenomenon across the Western world" or, to put it another way...
"We are borrowing money faster than we are creating wealth"

An article in the SMH
http://www.smh.com.au/business/the-economy/sorry-but-using-migration-to-...
When you read it just substitute NZ for Australia.

This should already be well known by the bulk of New Zealanders. Indeed, it is one of the factors behind the backlash against National.

and yet there were not enough builders and construction people allowed in... then there is the horticultural workers required in the HB...

...a startlingly low proportion - 7 per cent, or 2233 to be precise - were classified as construction trades workers like carpenters, plumbers, plasterers, tilers and painters. If you include scaffolders and builders' labourers, the proportion rises to nearly 10 per cent.

If they are typical of essential skills work visa recipients generally, only 800 were not already in the country.

The 2015-16 year was not an aberration. The proportions were similar in the two previous years.
The conclusion has to be that the impact of net migration flows on the housing market and the construction industry is overwhelmingly on the demand, not the supply, side.

This is pretty disturbing, actually. How on earth is the government going to foster supply if they're not even encouraging workers in the construction trades through immigration? We're getting huge volumes of hospitality workers, but few builders. How is that useful?

Source: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1191...

1. I have been assured on this very site that housing is a demand side problem solely caused by immigration and therefore there are no supply side issues.

2. Labour have no useful supply-side solution for local government so there won't be any affordable land in any event.

Therefore I have no expectation of the incoming government will do anything effective to foster supply.

Really? That's odd...I can't recall anyone believing it's only about demand and not an issue of demand and supply. Basic economics suggests supply and demand. I can recall plenty of clamour that both supply and demand be recognised, and that people are sick of only supply being talked about by the government and its dedicated votaries.

Do you have any quotes to support claim number 1?

Labour at the very least is making a start on number 2, including via the KiwiBuild visa over and above the current visas. That, and a likely return to the approaches used in the 20th century to increase supply of affordable houses (this, I think, will take them some time to get underway) is at least an improvement over the current intransigence and view that soaring house prices are "a good problem to have" and that there's no housing crisis. Lest we forget also that these and the measures that address demand side factors stand to reduce the appeal of housing to speculative investors - thus likely freeing up supply over time that is currently held by speculators.

You might think so, but there is a constant stream of articles in the Herald etc, quoting the likes of the NZ Initiative and saying that high immigration is great and reducing it would crash the economy, and that is what a lot of people believe.

there's simply no other way to go for. it's a matter of how fast this country will finally admit it's losing at every front in 21st century, not if. narrow mind and entitlement mentality has long killed the competitiveness of this nation. there' no cure.

someone built a rocket in auckland from 3D parts and some other group designed a boat to win the A CUP....

seems there a fear bit being done by some people and even if ZERO is not perfect it still a successful public company....

The construction industry did not perform and CAV is not far of being broken up for left over carpet scraps..

So its half time and the score is 10 ALL....

next ten years should see which way HMS new zealand sails across the finish line? ive been waiting a long long time and we havent sunk yet.. but at times its been a close call rounding the heads...

Go easy on the coffee accountingsoftware but i agree we are as capable as any other nation.
No need for links as it is the election campaign.
However our percapita patents are same as any half decent country.
We should make it to the finish line.

ill drink to that...

Sounds like a guy who knows what's going on instead of the emotive (and cynical) claptrap coming out of labour

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His arguments are "Yes, x is bad in NZ but it's worse in y," or "Yes, x is bad in NZ but it's par for the course in the OECD." That sounds like someone who can't even realise the gravity of issues in NZ, let alone do anything to solve them. Labour certainly have their flaws, but at least they recognise there are issues to be addressed and solved.

Yep, if you have been in govt for a while you have to look on the bright side. Otherwise, if you say: "this looks really bad", then people will go, "Well why the f didn't you stop this happening years ago?"

whatch the kiwi aussi getting slammed you been trading that banking share price rise and the SD at over 2% .. of course you have and that confidence of Business in labour... yes yes that while the Kiwi has been sold off... no policy means no idea whats coming so we have mover down over 6% the aussi... US to preoccupied to notice ...and labour just means more the same ... they dont see much difference to NZ long term performance under either government... HOUSING in ONE CITY is meaningless on the international markets ... oh there is only ONE CITY... the rest is cows... that CITY DEBT - LESS COW Debt. + COW INCOME + TOURISTS.. thats the equation so Kiwi - USD still stable!!!

accountingsoftw,

I am sorry to have to be blunt,but you would make your case a great deal more persuasively if you improved your English.For example,the first line is unintelligible.

i agree.. too many keyboards and screens open... my left hand typed that while my right hand traded the banks on the aussi kiwi cross ....my left hand does not handle the qwerty as well as my right....2 phones... 3 keyboards and 5 screens... i really shouldnt be here... code to write ... scripts to write ... compilers to check... market to trade... data to model... ... your right im out of here... gook luck people... im working on GCROOT to win32 from csharp speech API with dot net so i dont have to use these keyboards... cheers people...market trades are very profitable from stardust sprinkled on the aussi kiwi cross rates, pulled the trigger on equities , what a trade!!! Good luck on the markets to all you business people on interest.co.nz!!!

You obviously need two more keyboards and at least one more monitor.

Well, the techno jargon aside, it would be Interesting to know how much you've shorted the NZD....some of us have holidays planned....

If you state a time frame waymad he might have some technical view that is useful ;)

Tongue was firmly in cheek, Ralph. But I have price guarantees on quotes for both airfares and rentals and can lock them in before the 23rd and take the currency risk myself. I am a cynical amateur pessimist about such matters.....

It's entirely possible, for example, that Oz, particularly SA, will foobar its electricity supply over the summer period yet again (black systems, extensive load-shedding, large-industry costs), and thus their currency may decline in much the same ratio as does ours. We can but hope.

Just took a look a the charts and if he took it out back in June then he's been riding a very good thing.

My app says 33% believe it will go further on the weekly chart and 24% say down from here. Fast stochastic is about to cross so it can go either way.

accountingsoftw please take a breather and rest a bit. It has been funny but I feel sorry that it is funny at your expense. At best the jargon you use impresses no one. At worse it looks like you have little understanding (some very clear technical mistakes). Prob best to keep it simple and to your point. If you are judging multiple languages and tasks in code it is as easy as breathing (the breakdown logic and maths are easily to mentally swap in). If you have many spoken languages however you probably will find getting your point clearly across in one with structural forms you are not familiar with difficult and swapping between a few at a time is much harder. The key is not to try to impress with things that make you less cogent. Try to focus on getting your point in as clear as you can. Given your suggested leanings I would recommend getting 3rd party help with the translation job, just until you can get time to improve. Do not worry we are all juggling jobs, screens and languages, (and for many there is constant learning and battling with input UI across multiple devices). Cross check the results with a couple of sources and try to swap phrases familiar in one country/culture with phrases from the local one. For instance old parables do not always make sense in translation. NZ borrows heavily on British, American and Australian English phrases, (with some extra on top). But stick to those three as a base to translate and "she'll be right" - it will turn out ok in the end. This would probably help later on especially if you intend to do more business trade with other English companies. However when limited to financial markets and basic coding many people can go weeks without a lot of interaction, so it is good to see you on the message board. Please keep posting for practice. Good luck and good fortune to you as well.

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It was only a matter of months ago that John Key came out and said that productivity did not matter. Certainly Nationals last 9 years of governing suggests that this is what they believe, relying instead on a gush of immigrants to suppress wages, relying instead of a low wage, low productivity, population growth ponzie economy. Wage rates, immigration and official productivity figures all bear this out. What's changed? How can anything this guy says be given any credibility at all? They will say anything at all to try and win the election. They have absolutely no principals at all beyond the selfish interests of a select few.

labour has no policy solution yet to lift productivity... productivity is increased by private business enterprise..The government sector is far far to big in new zealand for any private sector performance to lift the country very far...If labour can improve government performance then you will see a rise in incomes.

All you people do is point out the negative....

John keys create the new tourism boom and got no thanks for it...

He did increase productivity in his portfolio....

He knows productivity matters... his government stopped a DEPRESSION!!!!

Your lucky you have a bank account... it almost disappeared... ITS called monetary policy....

Labour doesnt even know how to create a UBI yet...

Central banks knows how to create them but dont want you to know that yet.. Its not time...

LABOUR fail this time like last time and business will condemn them to the dust bin of history...

let hope labour dont fail....

let hope labour can solve the problems they could not even see coming last time...

If they dont solve the problems and create a finland then its all over for labour....

John keys create the new tourism boom and got no thanks for it...

How? If you ask some in the industry they'll say it was the efforts of a conglomerate of them inside the industry, without waiting for government. And that's only to mention local efforts - let alone the massive increase in global travelers as airfares have been getting ever more affordable - surely a factor! Arguably the availability of cheap travel to NZ would have a larger role to play than minor changes inside NZ.

This seems like another area - as in Boatman's post - that is more a case of Key being around to witness some momentous global events. What actions of Keys would you ascribe NZ's massive increase in incoming tourist numbers to? The imposition of a $25 levy at the airport?

Gee Rick. Key opened the immigration floodgate, so that young underpaid immigrants could flood in to work for minimum wage and live in crappy conditions. (Well it's better than where they were.)
The tourist industry loved him for it.

Hey, that's a fair point KH. Met a Californian yesterday who was saying it's remarkable how few Kiwis he met in hospitality during his vacation here (which is now close to an end). Said, "It's weird. Everyone seems to be from somewhere else. Hardly seem to be any Kiwis in the tourism industry."

We can give you a few marks for persistence accountingsoftw but please note you are mostly being ignored.

It's a bit sad everytime we get a National Party shill. Especially when they attack the Labour Party they don't realise they are attacking National. I see no difference between the two large centre parties.

I do recommend looking at the National Party FB page. The supporters are some of the dumbest people I've seen on FB. They are unable to do anything but respond with personal attacks to linked statistics and information.

I think it's good to have differing and diverse opinions and some robust debates, saves the place from becoming just another echo chamber.

I also like different views but the angle of National does no wrong doesn't cut it. All the parties have considerable flaws.

Have you see the Young Nats Facebook page dictator? Now thats a scary site. There's some serious brain-washing going on there from a young age....It reminds me of some type of cult...and not the good type.

There's no rational discussion on the Young Nats page. However in a global context all youth political party groups are that horrible. However they could benefit from an education that allows them to think, come up with conclusions but that's most likely asking the impossible.

Off topic as the NZ First youth camp are under the radar a lot but I was reminded of this pic by your comment: http://punchdrunkpolity.tumblr.com/image/19981897493 (please excuse the tumbler source, it was a Facebook pic but it is harder to find there).

he did so by promoting private enterprise and supporting business... its simple....OK shut down business and nationalize everything.. Government and local government as a percentage of GDP is huge in new zealand.. far to BIG!!!

You want productivity ... increase business!!!!!

I meet local government politicians and some havnt got a clue...and dont even understand the balance sheets and wonder why they have a LGFC...

OK shut down business and nationalize everything

Wow, there's a party suggesting this? Who's that?

National are proposing it as they are running out of things to sell.

are you in business?

Are you in the bathroom?

Are we just asking questions now instead of answering them?

I run my own company. Local Government is completely useless at the top tier, much the same as Central Government. It's a pity that National are inhibiting business through excessive regulations.

well done !

@accountingsoftwaremodels you may want to consider how slack National are reducing regulations after they have added them. Nick Smith is not dealing with an email almost 3 months old now. He would rather have poison rubbed on his jacket than take action to deal with the issues.

busy making money off stardust on the market. Aussi up kiwi down loaded up on the banks...have fun guys . This labour government could be very profitable for market traders... Time for me to depart for a while... markets to trade...

"Government and local government as a percentage of GDP is huge in new zealand.. far to BIG!!!"

hmmm....

http://www.treasury.govt.nz/publications/research-policy/tp/govtsize/13.htm

My hunch is if you were to normalise for various idiosyncratic features, NZ would be one of the lowest of all the OECD in terms of public spending v GDP.

yes your right but i still consider these to be higher then they need to be ...and did these include local government and related off balance sheet entities...

accountingsoftw.. “You keep using that word, I do not think it means what you think it means” It probably would help to know which language you would feel more familiar if you have difficulty getting assistance. That way some of the responses can be better tailored to you. The community can perhaps even take your comments in original form and do translation on our ends so it can be easier and your thoughts can flow better. If you are more familiar with English then perhaps even passing the text though small online tasks, (any freelance translators etc), to get it done once or twice to learn from might be a start.

Government who has been in power should talk about what they have done for a decade to address Health, Education, Housing Crisis, Mental Health, Homelessness...........

Current government was in denial till now that any problem existed in NZ and now suddenly ...................................Anything for power.

Opposition should come out with what they want to do, if elected for everyone has seen what the current national government has done uptill now and what they promise out now - holds no good.

there policy is to reduce government over the long run.. notice the size of government and local government as part of GDP....its like business doesnt exist for you people...

By you people do you mean Maori or Muslims?

Business has been massively underinvested in, over National's 3 terms, because everyone has been investing in housing rather than business. This has been caused by uneven tax treatment and this is likely a causal factor for NZ-s current low productivity.

Also business, like everything else, ultimately depends on stability, good infrastructure and a steady economy. The old , tired rhetoric of right=goodforbusiness vz left=taxes is simply inaccurate. Both National and Labour are fairly centrist parties anyway.

The socio-ecnomic issues NZ is facing are hugely connected to financialisation and globalisation and those issues belong on neither left or right of the political spectrum. Indeed, the left right spectrum existed well before our contemporary issues.

Take Trump for example... supposedly a right wing politician but promising huge government spending to stimulate growth (a traditionally left behaviour). Whatever you think about Trump, it's a strategy that has worked many times to spur economic stability and recovery. FDR did exactly the same thing. I get so tired of the lazy use of tribal political rhetoric, which simply isn't useful or accurate in today's political landscape.

National raised and introduced taxes to address certain problems, and Labour might choose to do the same. It has zippity squat to do with socialism and everything to do with a massive housing crisis and future economic disaster if unaddressed.

The average cost of homes in Houston is reportedly around $300,000. Just as a guess, many of the affected homeowners probably have mortgages in the $200,000 range.

Ok. Different to Auckland, but....

In the judgment of many observers, housing in much of the nation is overvalued, i.e. in a bubble driven by cheap, abundant credit. The timing of sinking serious sums into housing for repairs might be unfortunate...

http://charleshughsmith.blogspot.co.nz/

"Our" banks look fragile?

'Liar loans' hit $500 billion: UBS. The amount of home loans that have been extended based on "factually inaccurate" information is estimated to have reached $500 billion, according to an updated study by investment bank UBS.....While household debt levels, elevated house prices and subdued income growth are well known, these finding suggest mortgagors are more stretched than the banks believe, implying losses in a downturn could be larger than the banks anticipate.

http://www.afr.com/business/banking-and-finance/liar-loans-hit-500b-mort...

The big banks are doing their part. I still remember the retiree from one documentary where bank asked her how she got into default when she had $750,000 in shares when she applied for the mortgage. She was surprised to hear about those shares and told the bank they could have half if they could find them. The mortgage broker had entered fraudulent information to get the mortgage approved.