Geoff Simmons want to see a Budget that is fair and future proofed to deal with issues like housing and climate change. He has five key ways "to nail the reboot"

Geoff Simmons want to see a Budget that is fair and future proofed to deal with issues like housing and climate change. He has five key ways "to nail the reboot"

By Geoff Simmons*

The Government has already announced a $20 billion stimulus in response to COVID-19 and the Budget could include $20 bln more. So far it looks like this will all be funded by increasing debt. If we are going to burden younger and future generations with more debt, we have to make sure this package is fair and future proofed to deal with issues like housing and climate change.

The goals of the recovery package should be to make housing affordable, improve the environment and protect the vulnerable. Here are five ways to nail the reboot.

1. Kiwibuild - the Sequel

During the Global Financial Crisis, house building dried up. This, plus high levels of immigration led to a housing shortage. Kiwibuild Mark One failed because affordable housing requires affordable land prices. That shouldn’t be a problem now.  The Government should look for bargains to keep house building going, especially townhouses and apartments in our cities near to public and active transport routes. 

This is also a great time to solve the other roadblocks to building affordable houses in the future. The RMA process is being simplified which will help. The building code also needs reform to make building easier and cheaper - such as automatically accepting products from other similar countries. Vocational education could also do with an investment to allow more people to start working in the sector and learn as they go.

2. Infrastructure Funding

When it comes to infrastructure, the political debate is pretty shallow - road vs rail. Infrastructure can be so much more; including water, electricity, internet access, and environmental infrastructure. We need to stop using infrastructure as a political football. Instead we need to find the projects with the best returns for our economy, society and environment. For example investing in natural infrastructure - creating wetlands, trapping pests and planting trees on erosion prone land or waterways - is a great way to provide jobs in hard hit areas.

What we know for sure is that Local Government is the poor cousin when it comes to infrastructure. Councils own 38 percent of the infrastructure in our country but only get 7 percent of the revenue to maintain it. That is why we have water pipes bursting all over the country and sewage on our beaches.

Doing density well in our cities will require reform of local government funding. This coming stimulus package is an opportunity to do that. Investment in water infrastructure, public and active transport in particular is crucial to allow more inner-city housing.

3. Give journalism a hand

Kiwi-owned media is in trouble. Facebook and Google have been eating away at the media’s advertising revenue, trimming the ability for journalists to do their job. Some organisations are responding with paywalls and donations, but this will be unlikely to provide enough money to stem the loss. We can blame Covid-19, but Facebook and Google are the real culprits.

If we want public interest journalism, we are going to have to pay for it. However, the money has to come from somewhere. How about taxing Facebook and Google as the UK are doing? This could net $30–80m: easily enough money to form a public-interest journalism fund.

4. Invest in prevention

While the Government’s pre-Budget health announcement was generous, it is simply funding more ambulances at the bottom of the cliff. Countries around the world have responded to Covid-19 in a variety of ways. Prepared nations have fared the best, ones with epidemic experts leading government action. For example, countries which experienced the SARS outbreak in 2003 were ready for another pandemic.

More pandemics like Covid-19 are inevitable, and with the world brought to its knees by this one, we should take pre-emptive measures. This time we need to learn our lesson and invest heavily in prevention. Currently our health system is focussed on hospital treatment instead, as we saw from the Government’s health announcement. We need greater investment in primary care and to re-establish the Public Health Commission to ensure we are prepared for future events.

5. UBI

Lastly there will continue to be debate about the best way to support those who are struggling as a result of this crisis. With businesses struggling, more minimum wage increases are likely to be off the table.

Wage subsidies can work well if we can quickly reboot the economy. The longer this crisis drags on, the more businesses will close and people will end up cast into our punitive, complex welfare system. Benefits are hard to get and even harder to get off, as people get sucked into a poverty trap.

By contrast a Universal Basic Income (UBI) gives everyone a basic level of support. The real winners from a UBI are the working poor. It encourages people to work, and would boost people on  minimum wage up over the level of the living wage. 

We recently launched our UBI policy which would see an annual $13,000 Universal Basic Income (UBI) given to all kiwis providing a major stimulus response. In addition, TOP would introduce a flat rate of income tax at 33 percent. Coupled with the UBI, this would leave every working Kiwi with at least $3,920 more in their pocket after tax. Full-time minimum wage earners would be $6,285 better off; taking them above the living wage.

A UBI honours unpaid work such as raising kids, caring or environmental volunteering. It also encourages people to work, retrain and start businesses. COVID is a glimpse of the future. As automation and artificial intelligence gain a hold on our society, as we sink deeper into the gig economy, our welfare system will struggle. A UBI provides a basic platform upon which everyone can reach for the stars.


*Geoff Simmons is leader of The Opportunities Party.

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23 Comments

The number one is actually maintain and increase inflows of foreign revenue and capital, given the foreseeable reduction in tourism and education.

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Why? The RBNZ is going to provide all the working capital needed. ("Reserve Bank nearly doubles QE programme to $60 bln")
Besides, foreign revenue and capital invariably means the sale of assets to offshore entities; the very opposite of what we need to be doing to ensure the long term viability of New Zealand. Witness the outflow of revenue to the Australian banks as an example.
We have an OIO in place for a very good reason - that needs to be strengthened in the face of vulture funds scouting the local landscape for distressed assets that need to be retained in New Zealand hands for economic security reasons - Air NZ being a prime candidate.

People are finally waking up to the fact governments have oversold NZ inc, for short term (political and personal gain) stimulus.

Now the tide has gone out, the truth has been exposed. Oversea investment is good, but only if it creates more local competition and employment. Sadly, much of what has happened has resulted in the complete opposite.

One can only hope the broadband network WEL Network & Waipa reportedly sold to overseas interests gets stopped by the Overseas Investment Commission. What possible benefit and/or added value for NZ inc could this have, when we know more profits will disappear offshore. Just how a private company can own fibre is bewildering to me also. Perhaps the shareholders (past and present) have something to answer here? Governments shouldnt allow this to happen. It would be the equivalent of the government selling Transpower to private interests.

Probably too late for WEL etc. OIA is being amended under urgency now by CoL. Probably one of the few things they've got right except the timing. Too late as usual.

The UFF sale has to be stopped no ifs no buts, its critical infrastructure. The ability of WEL Networks to sell off a chunk of istelf is a peculiar vulnerability of the lines company model. I can't see how the current leadership of WEL Networks thinks it has a mandate to act in this manner. Time for a call to the ombudsman.

Revenue yes. Capital no, because it costs us more in the long run..eg our Aussie banks.

Wel Networks here in Hamilton has just announced its intention to sell the entire mid north island ultra fast fibre network to an Australian investment firm. This is a vital peice of infrastructure and must not be sold. Are the board members corrupt? Stop WEL from selling UFF...its an essential asset!

Would this be the UFB network funded through govt. subsidies!?

Was a member of TOP for about six weeks. Thought their economic policy was a breath of fresh air in a stale lets carry on the way we always have and fritter around the edges as NP, Labour NZF and Greens do with current economic policy. Had not read all of their policies and promptly resigned out over UBI and Maori policy which I only discovered later. (didn't do my homework)

Can't really fault you for not doing your homework - It takes time and isn't that easy when parties like TOP hide their more controversial policies. Up until recently they wanted the State to charge people "rent" for all major assets annually, private and commercial. Also, that Maori own all of NZ's fresh water because it wasn't expressly handed over through the Treaty.

Good thing is they are polling at less than 1% and will probably end up with 1.5% and no electorate seat. Most realise that it is a wasted vote.

At least you are proud enough to admit your oversight.

We hear nothing of the sort from the likes of Jonkey, Roger Douglas, Prebble, Caygill, Shipley, Richardson and their elk. Nothing but a bunch of corrupted politicians, who have a high level of self importance and egos to match.

UBI makes sense on so many levels. I do however think Geoff's proposal of a flat 33% tax needs further work. I, like alot of people, can't understand why executives (for example, the last Fonterra one) are paid so much. Boards say they have to meet the market, but the reality is its a boys club that guarantees nothing for the shareholder and even less for the employees at the bottom of the ladder. A high tax of say 50% or more on incomes greater than $1 million would bring about some equilibrium to this twisted carry on. The government would have to legislate that all executives have to be paid employees, to avoid this lot signing themselves up as contractors. .

I agree a more progressive funding system would be good. But when combined with a UBI, it effectively becomes a progressive NIT (Negative Income Tax), so I would still settle for it.

It's fairly easy to justify a UBI. It's simply your share of the natural resource wealth, infrastructural wealth and intellectual property of the nation. All natural resources are divvied up and alotted exclusively before you were even born. You're entitled to a share of that for your participation in the social contract that excludes you from those natural resources.

Who is more worthy of Finance Minister role- Geoff Simmons, Paul Goldsmith or Grant Robertson?

"The Government should look for bargains to keep house building going, especially townhouses and apartments in our cities near to public and active transport routes."

Maybe the state should be focusing on removing the obstacles towards new development instead of using its bloated mass to take 'bargains' off the market and push them out of reach of FHBs.

Exactly, they in effect become another purchaser in the market and can outbid everyone else, and as all Govts. do pay far more for the land than it could be purchased for in a truly competitive market.

The Govts. the very role is to enable legislation to make sure only valued-added costs are encouraged and nonvalue added costs (waste) like speculative behaviour is discouraged.

And, if the Christchurch CBD post earthquakes is anything to go by, they will deliberately artificially hold up the value of the property, to 'protect the value.'

NZ government must incentive's building new houses for first home buyers. This has been a massive policy failure over the past 30 years. I do not understand why NZ government does not even loan the 20% deposit on new houses that meet certain criteria, so young people without saving can buy their homes. But only new houses i repeat.

Why do you and so many others feel that FHBs need to have a brand new home? Its maddness. Only a minority would be able to afford it, and would be saddled with huge debt. FHBs are often competing with "investors". Reduce their ability to "invest" and there are more opportunities to enter the market. What we should really be doing is encouraging "investors" to build new homes so that we actually have them providing some benefit to society by actually increasing stock, rather than forcing up the prices of bottom quartile housing. That would stabilise rent for the renting class and make it easier for FHBs to get on the property ladder.

What everyone needs is a warm, dry, healthy, affordable home. Not a new or old home per se.

The present building code, and land and building regulations do not allow this to happen irrespective of the age of the house you buy, except that a new home is generally not as bad as the older housing stock.

What needs to happen is:

1. Land use and building consenting regulations need to change so land and housing can be developed more affordably. And since the price of new homes sets the price for all homes, then older housing stock will be relatively cheaper.

2. Building code needs updating so some of this money you have saved on land and material costs can be reinvested in better design and other materials that help with energy efficiency, whether it be new homes or renovation of older homes.

Does the UBI count as income? WFF isn't taxed.
Also, does "Kiwi" mean citizen? I certainly hope so.

Why not permanent residents? they can vote and everything.

Permanent residents shouldn't be able to vote. And if we ever do a UBI, it should be for citizens only. Permanent residents can get it for a set timespan on application, such as a year, then reapply. Citizenship must mean something.

I am sick of hearing this term

"The Government must ......................"

Build me a house
Take care of all my healthcare needs , even if a drink or smoke
Pay me a universal income
Give me more welfare
Force the wage payer to pay more taxes
Do for a man what he should be doing for himself
Take savings and investments away from those who have forgone spending to save and invest
Tax the rich.......... whoever they may be
Give to the poor
Release prisoners
Forgive debt
Pay for early childhood education
pay for ALL education
build roads
build railways

Well I have new for you ................... they cant . they either dont have the money , the management ability , the skills or the knowledge to do all these things

Hahaha - please tell me the last time the private sector built a motorway or railway all by themselves, no govt. money involved!?

What NZ unfortunately suffers from is 40 years of neoliberal doctrine. It is very much the business of government to properly plan and fund the necessary infrastructure to support our cities and regions.

We should be very interested in rebuilding the capability of govt. in this area. Local government should deliver train stations, roads, stormwater treatment etc. and sell the SERVICED lots to private sector to deliver the houses. That would be the appropriate co-operation between public and private sector, rather than the private sector dysfunction we currently suffer under.