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Jenée Tibshraeny's take on the revelation Treasury and the RBNZ a year ago warned Robertson he may need to act to prevent money printing increasing inequality

Jenée Tibshraeny's take on the revelation Treasury and the RBNZ a year ago warned Robertson he may need to act to prevent money printing increasing inequality

By Jenée Tibshraeny

Finance Minister Grant Robertson will on Tuesday unveil the 2021 Budget Policy Statement - the Government’s over-arching goals that will guide the Budget - having fallen short of meeting a commitment made ahead of Budget 2020.

Robertson, in a speech to BusinessNZ members on April 15, said he saw the COVID-19 recovery as an “opportunity to reset our economy”.

“We must also not allow inequality to take hold in our recovery,” he said.

“We need to take this opportunity to improve the prospects of all New Zealanders and tackle those long-standing divisions.”

Labour accordingly took the vaguer, “build back better” slogan to the October election.

While the Government should be credited for playing an instrumental role in keeping many of us healthy and employed (two vital things), Robertson has not tackled New Zealand’s “long-standing division”.

In fact, the split between the ‘haves’ and ‘have nots’ is worse than it was a year ago.

This failure, in my view, stems from the fact the Government didn't consider the repercussions of the Reserve Bank (RBNZ) putting its foot on the gas, lowering interest rates by cutting the Official Cash Rate (OCR), digitally printing money and making cheap funding available to banks to boost inflation and employment.

‘Significant’ trade-offs

A document released under the Official Information Act shows Treasury and the RBNZ in late-January 2020 explicitly warned Robertson “unconventional monetary policy” (which hadn't yet been used at this point) could increase inequality, so a response by the Government was warranted.   

They said the impact of quantitative easing (QE) or large-scale asset purchases “may increase wealth inequality by more than conventional monetary policy [like changing the OCR] by raising asset prices more directly”.

Treasury and the RBNZ categorised this as a “significant” trade-off, even though they noted “a stable macroeconomy supports those at the edge of the labour market”.

They were also clear the RBNZ isn't required to directly consider the distributional impacts of monetary policy. In other words, its job isn't to make sure the benefits of it lowering interest rates are evenly spread across society from a fairness perspective.

Treasury and the RBNZ told Robertson: “The Bank for International Settlements (BIS) notes that some externalities can only be addressed by other policy areas, particularly fiscal [government] policy.

“The BIS recommends central banks have a clear mandate, and communicate clearly and transparently about the use of UMP [unconventional monetary policy] tools and their expected benefits, so that other policy-makers can effectively respond to externalities.”

The Government hasn't responded to those side-effects.

High living costs hitting the poor the hardest

The RBNZ has lowered property owners’ weekly mortgage repayments and inflated the values of their properties. It’s also bolstered the portfolios of those who own shares.

But it hasn’t done anything to put more money in renters’ pockets. Nor has it (yet) taken other regulatory action to support this group. 

Sure, it did the wage subsidy, but that helped asset owners as well as non-asset owners. It also increased benefits by $25/week to $251/week for an adult - below what was recommended by the Welfare Expert Advisory Group.

Statistics New Zealand’s Household Living-Costs Price Index shows annual inflation was almost three times higher for beneficiaries than it was for all households in the year to December, partly due to higher rents.

This graph shows the index's annual percentage change. 

The below graph adds other groups to the mix. Note how wide the spread has become:

Remit change idea floated

Treasury and the RBNZ in January 2020 said Robertson could consider tweaking the Monetary Policy Committee’s (MPC) remit to broaden what it needs to have regard for, second to inflation and employment.

Coming under pressure over sky-rocketing house prices, Robertson in November proposed doing this.

The RBNZ hit back, saying it would rather be made to consider house prices through the way it regulates banks, than through the way it conducts monetary policy.

RBNZ Governor Adrian Orr reiterated what Treasury and the RBNZ said in their January 2020 briefing - “Broadening the focus of the MPC risks undermining the effectiveness of monetary policy”.

Robertson will make a call on whether to change any RBNZ remits later this month.

New institutional arrangements required

Coming back to Treasury and the RBNZ’s January 2020 advice, they went even further, saying there were “gaps” in the institutional arrangements for unconventional monetary policy”.

They said it was “unclear how the MPC would consider the externalities associated with unconventional monetary policy”.

They said there was scope for “enhanced” coordination between the RBNZ and government as “conventional monetary policy nears its limits”. In other words, as the OCR can’t be cut much more before reaching zero.

“Using new tools, especially tools with externalities that may not be well understood, creates reputational risks for the Reserve Bank,” Treasury and the RBNZ warned.

They said they would report back to Robertson on “institutional arrangements” by July 2020.

The RBNZ on Friday told this work was “still underway”. It said it would address some of the issues outlined in the paper on “having fit-for-purpose institutional arrangements to ensure suitable operational independence for monetary policy”.

Wilful ignorance

Coming back to Robertson, he in June 2020 told the impact of QE on asset prices was “still to be told”.

Asked how he was factoring the RBNZ’s monetary response into his policymaking, he said: “It’s not really the way that I am thinking about it. Our fiscal response has been designed to respond to the crisis and its effects.

“The monetary policy response: I think if you put those questions to Mr Orr, he wouldn’t necessarily argue that’s what the effect of the form of QE he’s been using would be. But all of those issues, particularly in terms of how it will roll out in the housing market, are still to come.” has repeatedly been raising the issue of the distributional impacts of loose monetary policy with politicians, as per the video at the top of the story. Also, see analysis here, here, here and here.

Where does all of this leave us?

The situation is complex. Robertson spent much of 2020 making seismic decisions in an uncertain environment. Instilling confidence in people was key. Providing stability was a safer way of doing so than being “transformational”.

Once the pandemic was better understood and controlled, along came the election. In an era of 'governance by opinion poll', Labour didn’t see this as the time to rock the boat.

In September, I shared my opinion: “If it’s too difficult politically to pivot the economy in a more sustainable direction now, it’ll be near impossible once people settle into the new norm and the stimulus being provided further entrenches wealth created from assets.”

A lot of entrenching has been done. With people simply doing what they're incentivised to do - flock to property and leverage up - setting the economy on a more sustainable and productive path now is more difficult.

The Government continues to choose to create this environment. It also continues to be rewarded by voters. 

But life for the ‘have nots’ is grim.

Life for the ‘haves’ could get grim if the ‘have nots’ - many of whom are educated and can mobilise online - have no disposable income left to stimulate the economy, flock to Australia once they can, or find a home in fringe movements that cause civil unrest.  

It would take nerve for Robertson to tell the business audience he’s due to address on Tuesday what he told a similar crowd in April: that we can't allow inequality to take hold in our recovery.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


But it hasn’t done anything to put more money in renters’ pockets.

Additional regulatory control versus ever-growing market subsidy

These are their only two choices. I hope they go for the former as the market subsidy already costs us $2 billion pa. And it's growing;

Rents are rising quickly in many parts of the country, meaning the bill is likely to get bigger in the coming year. Average rents rose 11 per cent between when rents were unfrozen on September 25 and the end of 2020. The average rent rose 3 per cent in the month immediately after restrictions were lifted, according to Ministry of Business Innovation and Employment (MBIE) rental bond data.

The supplement is so widespread that it’s impossible to unpick it.

We can unpick it through #rentcontrolnow

Fair comment. That part was a bit simplistic. I've added this: "Nor has it (yet) taken other regulatory action to support this group."



I just don't think home-owning New Zealanders have any idea what it would be like for their single largest expense/outgoing (i.e., the cost of their mortgage) to have risen 11% (and that's 11% paid from their take-home pay) in the latter quarter of 2020. No concept just how bad (and hopeless feeling) it is out there for renters.

Many home owning NZers suffer from survivorship bias.

cost of mortgages has fallen and that of rent risen. the former is due to the OCR being slashed. even the good Dr Cullen exclaimed last year, and he based this on overseas examples, once the rate drops to 2% or thereabouts little further stimulus can be expected. So that has played its part in the mix of all this surely. But the OCR is the independent responsibility of the RBNZ, nothing to do with the government. Or is it?


Also retirees have had their interest incomes slashed. Retirees are
the new poor many unable to return to work.

Yes extraordinary. When I worked in the 1960s in a trading bank, term deposits, then called IBDs, were in the 2.5 - 3% range. Sixty years later, now even lower. May have this wrong but think retirement was compulsory at 55? Mind you then, many of those that were on the cusp of that were ex WW2 and sadly some looked and acted much older.

Yep, I'm one of those and believe me, it's not good being a retiree these days.

Political tradeoff: Retirees still hold assets, so they benefit in that respect from the settings, and suffer from the income drop of the same settings. So I think the major parties are counting on retirees not suddenly voting in numbers for parties that offer things like wealth taxes, ie. they can afford to keep somewhat flogging retirees to prop up the Ponzi, and can take their support mostly for granted.

Not all hold assets. Many still rent. Even so consider property rates as a % of a pension. No wonder so many live in motorhomes.

It is all very sad Kate. Unfortunately ,certain groups have become so entrenched, large and vocal , that any modest or potential downturn in the value of a New Zealand property has been quickly countered by continuing government and RBNZ support.
I note that the share price of the big four banks, at least ANZ, CBA and NBA are all reaching year highs.

To be fair, most commonly traded equitues are trading at all time highs.

Banks are companies setup to make profit for their shareholders. They are not there to ensure that the rest of the world gets cheap housing.

If there is a policy or regulation responsibility (rent control, lvrs etc) they don't (and rightly so) set the rules.

Look to your elected officials. Buck stops with them.


Don't think there is much doubt that the landlord welfare system (AS) also pushes up rents AND house prices.


Great article. It's frustrating the timing that these documents gets released, the first night of a long convenient!


Thank you. But I should say, the doc was released earlier under the OIA to someone else. Stuff reporter, Thomas Coughlan, got to it first, reporting on it late this afternoon.


Great article...this government MIA again!


Just missing. No action evident.

Yes it could be like Ceausescu on the balcony. Comrades....


Time for some resignations, starting at the top. Labour, on purpose, created more inequality.
Orr told him and he made the decision to increase inequality.

Election year mate I'm sure it had something to do with their decision making ... went for the soft option, to stay in power


Grant: If we use QE the wealth gap will widen (through asset price inflation), our country will be less inclusive and many Maori will be further disadvantaged.
Jacinda: No worries Grant, let's just do this. I will just announce a new Maori holiday and make waka paddling the national sport and the very people whose future we are destroying will love and support us anyway. Don't sweat the big things Grant. It is all about creating a (false) image.


Yeah. Lol. I mean just enough BS to throw off the masses. But seriously, they are not even trying. My wife is French, if this happened there, truck drivers would be blocking up the CBD and students would be out en mass.

Like what a new holiday? Don't we already have some Maori waitangi thing? Just what I needed! One less billable day of work to help pay my increased mortgage expenses..

*en masse.


Too bad we weren't more like Italy, we would at least have a different PM or Govt, a couple of times over by now. Given what is not happening, it makes you wonder if that would be a better option.

The whole Netherlands Govt. resigned (took responsibility) a couple of weeks ago over a Child Welfare Fraud Scheme with their PM saying:

"Innocent people have been criminalized and their lives ruined," he then told reporters, adding that responsibility for what had gone wrong lay with the cabinet. "The buck stops here."

Can you ever imagine a NZ politician, PM, or whole Govt. admitting a wrong, let alone taking responsibility for it, and then resigning?

Really??!! Are you that removed from NZ history that you call Waitangi Day "some Maori waitangi thing".. Disgraceful. If you think the French way is how it's done - buy a ticket. If your business can't handle one more day off - it's already struggling and probably unsustainable. No doubt you'll be flipping out about the extra mandated sick leave too

Saying his business is "already struggling and probably unsustainable" shows me you are out of touch. Sling yer _ _ _ _

Wrong!! I already provide 10 days sick leave ( although I do expect a Med Cert for 2 or more days) If his business can't sustain an extra 5 days.. he'll go under anyway. Better to have an employee at home on sick leave than force them to come in and infect the entire workplace. If a business can't sustain that.. they are struggling

How did we ever cope with 3 weeks annual hols and 5 days sick leave anzac and waitangi days falling on the weekend. Best to use contractors .. much keener and you can get rid of bad ones. Youre a hero giving your people extra days off voluntarily.... awesome

OK... So try not to take satire too literally. The Intent is debate stimulation and thought provocation (job done).

Randoms on the Internet are not the ones to whom your outrage should be directed.

And yes creating some fluffy photo opp Maori thing cultural based holiday right now is pc bs design to throw you off the scent (job done again evidentally).

But be in no two minds. This is no different in base purpose than trump promising a wall. Just a different audience.


Well, the French are always revolting aren't they? "my increased mortgage expenses" How come? Everybody else's mortgages are coming down.

See comments above...

At this stage in the debt cycle, govts always choose to destroy the currency rather than deleverage. It would take an astonishing group of leaders to stop can-kicking - we just don't have them.


So much hope when they first came to power. I really believed they could make meaningful change. They’ve done well keeping covid out but overall they haven’t achieved anything substantial and they refuse to make real leadership calls and are no where near transformational. It won’t be lost on how the world views Jacinda either.


Slowly getting sick of how she communicates. Nows her chance to make or break!

The number of people I talk to who see through the yet others lap up the govt kool-aid


Slowly? Cue frowny concern face big hand gestures noddy tilting head.

Talks to the public like they're preschoolers.


The world is in love with the Jacinda cult, and I think very few know how flawed her and her government are.
It's a bit like how much of the world thinks NZ is a clean, green environmental marvel...


I'm sure those drinking leaded up water concur.

While those responsible for it's quality sail off for a month or two, geepers.


I thought the same, however, this Govt appears to be catering to those National swing voters (myself included) and to heck with the working poor. I'll be swinging away next time around, but National need to sharpen up if they want us back.

Ditto. No need to sharpen any more. 6 years for labour to prove the hype is real is enough. Time to change.


Great to see the big Waitangi sausage sizzle and Labour setting a leading example. 4 cooks double lpg bottle Bbq. No climate emergency here.

Bbqs for me but not for thee.

Yep NZr’s lifestyle, the family bbq, picnics, community gatherings, sausage sizzles etc,etc all gone and we fiddle while the rest of the world burns happily along. Goody goody two shoes. Oh, that law will have to include prohibition of hangis too otherwise the enforcement would be racist surely?

I think your getting an independent report confused with Labour Party policy. I highly doubt that they will implement everything in that report. Remember when National asked for a report on property prices and it recommended a CGT?

Technically can’t argue with you but I was rather persuaded by the gush and gesticulating enthusiasm from our PM that the report had been digested in full, as good fare and with appetite, and would be on the table for all of us before too long. Have little time for National myself but hardly see how they performed on another issue as being relevant. Counterproductive to excuse the antics of one party by comparison to those of another that might be considered to be worse. Bit like saying an apple less rotten than the other, is more edible.

Foxglove you are so far off the mark it's scary. LPG will still be available for your sausage sizzle etc. Hangi's (at least an authentic one) use hardwood-ideally Manuka or Kanuka so won't be affected, even when LPG is used they won't fall under the "proposed" restrictions any more than your BBQ.

But what about carbon emitting smoke?

Or will Labour have handed out $100M for r&d or to an Iwi and bureaucrat appointed panel to advise on how to develop non- smoke emitting wood for hangi?

Hook this is where it strikes. Our elderly neighbours, one recently had a fall, they modified their bathroom for a shower cubicle rather than over the bath. That meant losing the hot water cylinder & going to gas. And while about it they installed gas heating in their lounge because the heat pump was too drying for a problem with eczema. They actually believed this was going to be beneficial to the cause of the great global warming calamity, bless them. And it wasn’t cheap, and now they are in a panic about the future. So if LPG and bottles thereof are not to disappear by 2025 it would be bloody handy for the government to say so rather than self acclaiming do gooding of the most gratuitous form.


Still we can vote them out easy enough.

Also. Don't give them too much credit for the cv response. In reality we are surrounded by a moat and have an abundance of natural resources (food). They more or less implemented the same measures as most of the normal world. Kiwis are just better at dealing with big disasters.

But that's not special for this govt, we have repeat experience in disaster mgmt and are by in large community focused people.


Haha.. you voted on HOPE?? Top marks for that. Good to see here how many Jacindamania acolytes have finally woken up - bit late though, as the horse goes full speed out of the stable. Suck it up people - you voted for them. The pixie dust isn't quite cutting it is it??

Actually, pretty much the only reason I voted this year was to legalise weed.

Though a much stronger response on fossil fuel and Debt based growth dependancy wouldn't be bad either.


They are hopeless. Robertson is especially gormless.


Good article Jenee. Much of the MSM is asleep at the wheel.


I don't think that is fair Fritz. Jenee is an absolute treasure but she is not alone. Thomas Coughlan at Stuff did the OIA groundwork this article is based on and Bernard Hickey who has access to quite many media platforms has been providing similar analysis.



I enjoyed this article Jenée, great work. New Zealand Governments aren't typically transformational, at best they are gradual incrementalist by nature and voters have tended to reward them for that. The acquiescent political environment in New Zealand has not been conducive to ideological growth or change, for the most part we've come to see political branding as a façade. In short the buck must stop with voters for this crisis within our political system.

A bit confused. Mike Kirk has recently provided more cherry picked numbers on articles to demonstrate the property market is slowing down and now is not a good time to buy. On that basis, shouldn't we be looking to drop interest rates further and promote investment in housing?

I hope so. In the far future I want to be able to tell anyone who will listen that I was there in the biggest, most awesome bubble there ever was.

Interest rates are used to control a lot of things, but specifically targeting house price increases is not in their mandate.

There is data out there that suggests we could be at the back end of a short term mania cycle. And There are significant global risk factors.

Research your own data.

Google specific suburb medians over the last 5 years.

Google global money supply. Usd m1 2 etc.

Google nz household debt and credit acceleration trends.

Make your own conclusions of course.

GR: being asked about it? - No, it's a fake news/assumptions. False reporting.
CPI-OCR? all under control asked the RBNZ (albeit housing inflation cost is not included)
Unemployment? all under control asked the RBNZ (hence, that forever 'subsidies by govt')
Affordability issues? nope, it's a matter of supply & demand.
Demand can be tweaked, can we tweaked the supply? - we working hard on supply.
Next questions?..err, about the runaway prices to control.. - JA interrupted: ..this is what NZ voters wanted (firm frowned).
JA: Look if NZ voted for gun control, we do it. Majority voters clearly don't want housing price control then we should go for that, not much differ than if majority voters chooses A, B or C - But, but if majority voters can be thwarted like that of Maori ward new law...aa next question?

Good analysis that strikes all the right points


This what we are seeing from the levers of power. Say one thing, do the opposite. Toss the ball about here & there. Questions from the media?? Just mouth some hollowed-out phrases in a roundabout way. Long on rhetoric, short on substance.


Informed late January of the outcome for QE, went ahead anyway. This info should be saved for the next election when they mouth more insincere and false platitudes.


I am far from a National Party fanboy but at least they are far less hypocritical.
I have said it before and will say it again - Ardern and Labour are phoneys


JK's now-infamous pre-2007 election speech about how he accurately outlines the housing issue, saying what they could do once in power to solve it, and then once in power does nothing, is still (in my opinion) the biggest betrayal, as he knew at the time it was a lie, and yet due to the GFC that followed, had the ideal conditions to make the reforms needed.

Labours first term was just enthusiastic incompetence. They knew what the problem was, ie what they question was, but did not know what the answer looked like.

But now as you say, it's all about Bread and Circus's policy to keep their voting base happy.

That's true. I had personal correspondence with him on housing before he was elected.
Although *generally* I would say his government were less hypocritical than the current one.


I believe that the Govt think we are all stupid
They attempt to distract, manipulate the media, smile and distract again. Meanwhile they are doing nothing about this crisis.


How do you hold this government to account apart from show it in the polls next election? How are people so blinded by the pearly whites and head slants and nods? Seriously who is even this new Jacinda? I’m so ashamed that I trusted her and her empty promises feel like a complete fool. Absolute John Key 2.0. So glad she has a nice home in Sandringham with a decent section for Neve to have a play and be a child . She’s sorted, screw the rest.


Good question Passerby. I'll be voting for anything but Labour next election (shame on me for being taken in on the idea of a transformational Govt). I may be an old fool, but I've come to realise that TVNZ, Stuff, etc are just as responsible as they don't ask the hard questions. I no longer watch or read main stream media and from speaking with my friends, believe that there are more of us heading in this direction.

Aye our journalism is poor. Some imo, for instance Tame, are more focused on their own fame than the essence of the story itself. Mind you columnists on site here and such as the referred Thomas Coughlan offer both hope and substance. Always remember an old boss advising “if you don’t know what you are talking about, don’t put it in writing.” Which is why of course, our fancy pants array of supposed journalists prefer to be simpering at us on camera.

Stuff has improved markedly.


I hope the fat controller and princess tooth tooth get rinsed over this. Their incompetence has buggered the entire country.

Plenty of criticism, but what do you think they could have done?

Let's start with not ruling out any tax changes as long as princess tooth tooth is on her throne.

Along with dozens of other things.

Not interfere with natural selection!
Not give away billions of dollars with out telling all the consequences of doing so...
Problem is most want to be ‘looked after and would subconsciously sell their freedom for it’

Put in a land tax and lower income tax. Disincent debt speculation and promote working.

Stacking debt to take advantage of renters is not working, it's exploitation that primarily serves the interest of global finance.

We don't want housing stock you get to with rent control practices. If you want to curb house prices make lending harder and focus on supply.

A 6 month rent freeze means you get a bunch of rent rises happening at once, hence these "fastest growth" statistics. At the same time, landlords are looking at the new rules and thinking they might as well up to market rent if they won't be able to pull the pin on a bad tenant. I own student flats and with the changes to fixed term tenancies I upped my rents because I now have to factor in the potential for empty houses over the summer months.

A couple of questions for you then.
Why is there more potential for empty houses over the summer months post the new rules, than prior?
Even with the interest rate falls, assuming you have some mortgage, have your total costs increased or not?

Yes costs increase. Rates and insurance up lots. Maintenance up. Building materials up. Cost of labour up. I'm about to remodel a place and cost will be 30% higher than a similar one I did in 2018. Had to replace 3 heat pumps with ones 10-15% bigger because under the new rules my fully insulated and renovated homes are death traps. Mortgage costs are down for now but I think they will go up soon and mortgages are bigger now of course. The other stuff will never come down. Next there will be infrastructure levies for our cities to catch up on water etc.

With fixed term rentals there was a 12-month cycle, Feb to Feb. Now they are moving to periodic students can leave at any time, say after exams. Nobody else is moving in until Jan/Feb. So I need to assume 4-8 weeks vacancy per year until this has run for 3-4 years and I can see otherwise.

But I keep my rents are market level anyway because I do property for a living, rigorously upkeep my rentals and have for years.

The reason I asked, that it wasn't clear the justification for your increases. Your answer helps explain further but not fully.

So for students wanting fixed term, or periodic with renewal then the annual rent is identical for them and you, so there is no annual increase needed because of term change. Any student expecting to return would take the fixed term so they don't have to move their furnishing out.

Also if you have kept your rentals for years, then your mortgage is not getting bigger, unless you are making withdrawals for other things.

Your depreciation on Chattels like heat pumps covers those replacement costs.

Yes you have increased costs and there is some of that to be claimed back by rental increases but the majority is more than compensated by capital growth to give you an acceptable annualized rate of return.

"Nobody else is moving in til Jan/Feb' - I don't know where you are, but in most University cities this isn't how things work. Students secure - and pay for - accommodation from December (when the last lot of students move out) til the next December, even if they don't move in til Feb. Given shortage of rentals, there seems to be no reason why this would change, even with the tenancy changes. Your tenants either move out in Dec, in which case you advertise the rental, or they stay, which means it's very likely they will be staying til the following December.

Surely the big question is what could Roberstson have done with responsive fiscal policy to negate the inequalilty-raising effects of the RB's QE? And there are no easy answers to that.


Precisely Keith there are no "easy" answers. Isnt that why we employ these politicians to run the country to make hard decisions and deliver creative clever results instead of doing something a primary school kid could equally do. For heavens sake Miss Ardern is the seventh highest paid world leader running a tiny island nation population 5 million. You cant tell me she does more than grin and spin

Flying high
The point I was trying to make is that QE is the territory of the RB and not the Minister of Finance, who manages fiscal matters. I don't think there is any fiscal policy that would have negated the current house price inflation. The one thing the Minister of Finance could have done was to tweak the RB mandate - for example move the mid-point of the inflation target to 1% instead of 2%. I have argued for that in a previous article. [ That would have reduced the extent of the QE that the RB would have needed to undertake and this in turn would have influenced market interest rates.

"The one thing the Minister of Finance could have done was to tweak the RB mandate "
Are you kidding KW it requires more than "tweak". You foresaw and called this event a black swan early last year in jan/feb surely that would have needed big robust response from Robertson... having already previously made full sustainable employment the responsibility of the rbnz a rewrite of the mandate was needed. And house prices were also not the RBNZ responsibility.. how dumb is that Result was that the rbnz could prime the pumps and pour fuel on the fire as much as it wanted Keith. Pretty obvious where your bias lies kieth. The govt even now has not adjusted or event "tweaked" the mandate despite threatening. Robertson is a soft and cuddly pussycat!!

Flying high,
Once the argument descends into accusations of bias, rather than continuing as an analytical debate, I turn off.

Okay.. edited below and look forward to your view thanks. I gave you credit Keith for the visionary outlook you had this time last year... dont tell me that your vision ends there with a "little else they could do" shrug of the shoulders... sad.

"The one thing the Minister of Finance could have done was to tweak the RB mandate "
Are you kidding KW it requires more than "tweak". You foresaw and called this event a black swan early last year in jan/feb surely that would have needed big robust response from Robertson... having already previously made full sustainable employment the responsibility of the rbnz a rewrite of the mandate was needed. And house prices were also not the RBNZ responsibility.. how dumb is that Result was that the rbnz could prime the pumps and pour fuel on the fire as much as it wanted Keith. The govt even now has not adjusted or even "tweaked" the mandate despite threatening. Robertson is a soft and cuddly pussycat!!

Flying high,
Yes, I did foresee that COVID-19 would be serious from very early on and I wrote in mid Feb that it would be more serious than was being recognised. I also was concerned by around April/May as to what would happen with housing prices, although I had thought there might first be a mid winter dip - which did not occur. It was mid June before my concerns about the extent of QE were sufficient that I penned an article on that. My perspective both then and thereafter is that the RB has been fixated on stimulating the economy through reducing interest rates and increasing inflation, but that it was unduly leading deposit holders to try and find an alternative haven. Because of the way money creation works, although individual deposit holders are trying to move their money elsewhere, the system-wide level of deposits does not necessarily drop and hence the bubble can continue to grow. In my view, the fundamental problems relate to monetary policy which is the responsibility of the RB . The only way the Minister of Finance can influence RB policy is via the mandate, with all the operational decisions including OCR, QE and LV ratios flowing from that as determined independently by the RB. In my opinion, asking the RB to take house inflation as an integral part of its mandate would create a situation where there are three non-complementary objectives. The RB then has an excuse as to why it does not meet any of them. Having three competing objectives means having no objectives! Accordingly, I come back to the fundamental issue of interest rates and the attempt to stimulate inflation. Hence the need to reduce the target rate of inflation, with the current target being counter-productive. I used the term 'tweak' but could have worded that as 'reduce'. What I was trying to indicate is that the Minister of Finance can make that change with the stroke of an electronic pen, albeit signed off presumably by Cabinet. Anything else the Minister of Finance might choose to do in relation to fiscal policy cannot solve the fundamental problem which relates to flawed monetary policy. The Minister is not an economist himself -in contrast Bill English when he was the relevant minister had started his own career in Treasury and understood how the Treasury system of advising the minister using filtered information worked. Treasury cannot abdicate itself of all responsibility for the situation we are in.

Keith I am not convinced by your reckons. If you could show me some evidence where your policy prescription works - overseas, in the past...

There are no historical examples of QE at the level currently employed in NZ (and elsewhere) although other forms of money printing at even higher levels are on record in Zimbabwe, Argentina and Germany in the 1920s. NZ itself ran with an RB mandate of inflation targetting of zero to two percent for a long time, but then we upped it one to three percent. There are no examples in history for some hundreds of years ( some would say back to Babylonian times) with interest rates as low as currently. The effect on capitalisation rates ( and hence asset prices) is inevitable.

Lesson is to not interfere then... issue is planners trying to sustain wealth and status quo instead of letting market forces reset.

That is the simple truth. They need to let the business cycle do what it does...clean out the unproductive and make way for the new. A free market not an interest manipulated qe pumped up mess favouring the asset classes.

Keith I believe the most similar period to now was the Great Depression. The choice countries like NZ, France and the UK faced was sticking with the Gold Standard or following Keynes economic advice and moving to Fiat Money to allow greater monetary stimulus. Most countries left the Gold Standard during the 1930s and the countries that moved earlier recovered from the Depression faster. In NZ the newly independent Reserve Bank was directed to lend directly to the government which invested in capital works, social welfare, free education and state housing.
A key problem was ensuring the monetary stimulus could work on the real economy. Public spending on infrastructure and house building was the method used to escape the liquidity trap.

What Grant Robertson could do about the housing crisis is use the lower cost of borrowing to fund fiscal policy to stimulate more house building and public infrastructure provision. Especially public works and house building that will benefit the lower quintile income groups that Jenee has so diligently shown have missed out on the Covid recovery.
In November the IMF issued an unusually blunt warning that the world was in a “global liquidity trap” where monetary policy was having limited effect. In this situation the advice from the IMF is further interest rate cuts will do little to stimulate growth and the way forward is a coordinated global effort focusing on large government spending programmes rather than monetary stimulus.

I think the 'economics community' took on board the key learnings from the depression and these are captured within 'Keynesian economic theory'. When I was first learning economics we were taught there would never be another depression like the 1930s. But the world is now a very different place. I think Keynes himself - who did change his perspectives as situations changed - would view things somewhat differently today. My own assessment is that a decade or so of high population growth but limited infrastructure development has greatly contributed to the current situation. The RB has now compounded that problem with excessive QE. There are no longer any easy solutions, but the first step is to stop compounding the problem.

Yes I learnt about Keynesian economic theory at University too. Keynes would have assessed the evidence of NZ's infrastructure deficit, global climate change commitments, rising inequality caused primarily because of high housing costs. All of which require greater capital expenditure to change the status quo. Yet the current monetary policy settings - QE for the privately owned financial and property investment sector is not doing its function of providing this capital. Keynes would have advocated for a Keynesian fiscal stimulus of increased government spending to provide the needed capital financed by government borrowing. I am fairly sure Keynes would not advocate the removal of QE like you are suggesting Keith (unless there was clear evidence the economy was fully employed and it was inflationary) but have redirected it towards a Keynesian stimulus package. I would like to think that Keynes would have learnt about the spatial economics of cities in the past 70 years - experts like Alain Bertaud and Edward Glaeser - so there was a firm understanding of where his fiscal stimulus addressing infrastructure deficits would be best applied.

"Keynes would have learnt about the spatial economics of cities in the past 70 years"

Very good. But what would he have concluded

I think he would have agreed with Alain Bertaud that "cities are labour markets" and Edward Glaeser that "cities are the absence of space between people" and that is very attractive - the entire world is approximately half-way through a multi-century urbanisation project.


If they haven't been spending on infrastructire, what has all the money gone into?

Keith I agree with Brisket's below comment. In the first half of 2020 no one was expecting (except perhaps Jenee) housing to take off. But once it became apparent the housing crisis was impervious to Covid the government needed to respond with something better than Jacinda and Grant's morally hazardous 'sustained moderation' statements.
The government has options to counter property investors mania for capital gains and first home buyers fear of missing out (FOMO). I think a Housing Commissioner with tight targets and tools could do it.

Demand also fuelled through relentless FOMO reporting by the media hasnt helped. Neither have reduced interest rates with many retirees struggling to live on much lower incomes.

Keith I agree with Brisket's below comment. In the first half of 2020 no one was expecting (except perhaps Jenee) housing to take off. But once it became apparent the housing crisis was impervious to Covid the government needed to respond with something better than Jacinda and Grant's morally hazardous 'sustained moderation' statements.

by Audaxes | 10th Mar 20, 3:21pm

All the proposed tool aims are embedded in current interest rate levels - further reductions in concert with Japanese and European policies have had absolutely no impact on their respective productive GDP growth. In fact the Bundesbank has noted residential real estate accounts for 80% of total fixed asset valuations in Germany - a country once noted for it's prodigious industrial output.


I am beginning to believe from the evidence of the past few years that the “science is accepted”, if economics was ever considered a science. QE boosts asset prices and lower OCR rates do not lead to inflation. So the RBNZ policies have failed and the problems have got bigger. The Govt is blinded by GDP statistics and needs to fix the population problem. Fewer people may result in lower GDP but will assist in achieving climate change goals and could lead to a more sustainable future.


Easy, they should have given everyone $5k or so, little less for youngsters (Helicopter money, like in US). Would have been fair across the board, would have created the spending they desired. But instead they chose to lift asset prices to create a wealth effect....for some. How do these people get into positions of leadership with such little intelligence.

If the government gives money out, who’s paying for it?

Your children Jimbo..not you..its called can kicking and invented by boomers

Pretty standard policy in most developed countries over the past year, and the lesser of two evils. Free income for speculators via untaxed capital gain AND tax relief on the debt used to facilitate that is the issue. Mind you, bringing house prices down could actually worsen inequality by tanking the economy. The horse has bolted. Rising interest rates will help.

Mind you in the face of falling deposit rates and uncertain share markets investors by default moved to property for safety and better returns thus driving the bubble.

Share markets collapsed in early 2020 and I guess bank depositors were worried their funds might get a haircut if left.


Much as I’m loath to give the Govt any credit, because their inaction on inequality and ineffectiveness in housing has been horrific; in April, all and sundry thought COVID would smash the housing market. The warning about asset price inflation may well have been relevant only to share market, in Robertson’s eyes, which would not cause the same social problems. Who among us thought at that point that a pandemic would lead to house-buying frenzy, both here and overseas? Problem is that the frenzy was overlaid on an existing bubble, in our case, to cause FOMO and the ultimate self-licking ice-cream.
Their slowness to act at this point, though, in inexcusable.

The only red flag I noted, what that the QE was just free money, and in fact the Govt. openly acknowledged and encouraged us to get out there and support the economy.

They didn't care what the money was spent on, whether it was in restaurants, pubs, food, housing, etc.

The questions I would like them to answer, is, "where did they think this money would end up?' What was the plan?

Looking ahead, another red flag for me is the amount of 'off the plan' sales with titles still 12 to 18/24 months away, especially in sections, and 'investment' type apartments/townhouses.

The positive aspect of those 'of the plans' sales is that they will lead to an increase in the supply of housing.

Off the plan sales mostly take a sale that would not have happened until that future title date and dump it on today's already short supply, hence another reason for the price peak. It's not actually increasing supply over that time frame.

And come to that future date, then those sales are not there as they normally would be. Of course Govt. can always pull the immigration rabbit out of the hat to fill the whole. All that does is lock in the present price increase and prevent the future fall that would have happened.

You cannot have a stable market with peaks and troughs, ie boom and busts. If the FOMO was not there and the market was stable, then those purchasers could have quite happily waited until closer to that future date to purchase and the developer could have confidently developed for that market. This helps with costs as it spreads the pressure on labour and materials.

There is nothing positive about an 'increase' in supply when it also causes an increase in price and in fact is an oxymoron as relatively the demand must still be greater as the prices would have fallen otherwise, or at least stayed the same if supply equaled demand.

Taking Christchurch as an example, sections available on the market are at a level similar to the availability of the proverbial hens' teeth. The fact that almost all sections are getting sold many months prior to title availability, and with building plans in place ready to go on the date of title delivery, is leading to further land development. Of course everything takes time, but whereas a couple of years back the banks would not finance land development in Christchurch, that has now changed. So supply is ramping up. Time will tell what that does to prices.

Certainly there has been an upsurge in new housing in the Christchurch and surrounds. What dismays me though is observing on the north east approaches to Rangiora a new sub division of grey look alike houses rammed and jammed together. Doubt that there is on each section, much room for a veggie garden let alone a decent play area for children. Ok NZ needs new housing and fast but what are the long term social consequences of living crammed up like this. Obviously the developer has bought up the old farm land and then been allowed to extract as many sections as possible for maximum profit. Don’t think this can be right, there is plenty of semi-rural land like this, and little need to suck needy homeowners into such a limited and counterproductive environment.

Yes, great example, Most of the sections have been bought in bulk by large building companies. The land developers find it easier to do this, and leave it up to the builder to then onsell the house and land package to individual homeowners/investors.

Banks have tightened up on lending, 'hence the off the plan,' ie they are already covering their arse in anticipation. It is the banks that are requiring 100% pre-sales. This off the plan suits the banks as it removes the liability from one developer to more builders to many homebuyers, with the home buyer being the most naive partner in the line. Homeowners cannot ensure end finance until approx. three months from the settlement, so most end purchasers are flying blind lending wisely. unless anyone can say with certainty whether they can borrow that money at the same low rate, and their circumstances haven't changed.

And that is without factoring cost increases over that time, with some naive builders being locked in for a price and will have to absorb all cost increases, and visa versa many homeowners being locked into any cost increase and therefore their end purchase price will be much higher.

In a stable market, which some other jurisdictions have, you can see the trend line and prepare developments accordingly. In these stable markets, the supply line sits on top or runs a very close parallel to the demand line.

But with cyclic boom and bust cycles, it is very hard for supply to keep on top of the demand cycle, and in fact can get into a countercyclical oscillation, which is where we are now. When these counter cyclic lines cross, at that moment in time they look like they balance, but are no more accurate than the 'stopped clock is right twice a day.'

And we already know what the prices have done, they have gone up. We don't have to wait to see this. Land developers, even those sitting on plenty of forward stock have been able to increase prices up to 50% or more, all because people think they will miss out if they don't, and which the Govt. a la JC confirming that is what people expect, and so they will oblige.

As soon as you see the first input costs increase, then there are no way prices can come down unless some pays for it, ie loses money.

Plus Waimak and Selwyn CC thought it was great to get one over CCC after the earthquakes and grab their fleeing ratepayers and hence opened up land to take advantage of that, but now have their fill they have formed the Greater Christchurch Partnership and are starting to act like a Super City with all the problems that go with that, and in doing so are subverting the NPS.

tks comment & good info. a bit of a money go round isn’t it. your penultimate para in particular struck a chord. we have known over many years a, let’s say, entrepreneurial type who would count “developer”; in his portfolio. Over this time he has been up and he has been down. Another friend explained it rather succinctly by explaining, when *****. is making money, it just means someone somewhere is losing money.

There are some very short memories on this site. Almost all thought it was the end of the world, house prices were definitely going to fall, etc. now they say this was all obvious.


ChiLd poVerTy IS tHe rEasOn I GoT iNtO pOlitiCs.

#Aroha #BeKind

Kia Kaha

CaNt HaPpEN they would be out of a job if indeed they were to eradicate poverty


Again we need to explain how asset prices doubled between 2002 and 2007 with rates at 8 percent? Credit creation by banks is the reason. How much they create and to where? Rates are only a portion of the reason.


Large immigration then too, and it was a higher wealth profile than now too.
Lots of English people or returning kiwis after 9/11, with pounds in hand (at that time one pound = $3)

Yes, a tradie from the UK could come to NZ, outbid and buy a house freehold with UK pounds, boat, etc. ie the NZ lifstyle, while the NZ tradie was sitting in a similar house next door with a large mortgage working 24/7 and no time for the NZ lifestyle.


Well you cant argue Labour hasnt been transformational. I dont think voters got the vision they were expecting.


Shocking! This clearly shows the government is to blame, not the RBNZ. Yet again, all talk "We must also not allow inequality to take hold in our recovery" but no action.
Well done Jenée for exposing this

The RBNZ has a role in this, but the government is to blame for doing absolutely nothing.

Yeah this is all just posturing. They have weekly conference calls..

The level of personal and partisan nastiness in some of these comments is unpleasant and adds nothing to understanding what is an extremely complex issue. While it is unsurprising that many immersed in the business world might not be government supporters, one might expect a considered attempt to address the issue rather than childish knee jerk insults. It might be instructive for some commenters to read some history, and realise that governments are often responding to rather than being in control of social and economic forces. I think most politicians do the best they can in the circumstances (some dishonourable exceptions aside) but the cost of their public service is to be assailed by insults and reckons from people who don’t have access to information policy makers do.


A lot of the time they have themselves to blame. And it's a bit hard to have much sympathy when they have, on many if not all fronts, failed to live up to their rhetoric and election promises.

Having said that, I do have some sympathy for your views. Many of us, myself included, over simplify.

For example - we are berating Robertson's calls, arguing that they have exacerbated inequality. But that's only partly true.

By doing QE and slashing the OCR, a large section of the population have more money in their hands. Combined with the lack of ability to travel overseas, it has no doubt supported the tourism and hospitality sectors significantly. This, in turn, has supported employment.

If unemployment had soared, and unduly impacting on lower paid workers, then that would have had a huge impact on inequality.

I think this illustrates the complex conundrums that can be faced.

When Govt merely respond "rather than being in control" we can label it reactive and sub optimal. Is it too much to expect for them to be more proactive and forward thinking? Since they are worthless public servants of the worst possible type (politicians), it probably is.


Actually, on the whole, comments on this site are very polite. If you really want to hear thoughts unfiltered then go to either the further right or left sites.

And the thoughts are written not with redrafting that happens via committees or deep within Govt. policy departments, but how people really feel about things, which does not automatically make the evidential side of what they say invalid.

And the much of the criticism is starting to come from 'partisan' Labour voters.

Also as the problems of inequity have gotten worse, then the language will naturally change. Most people will always start off asking nicely for a wrong to be corrected, especially in NZ with our typical understatement and reluctance to complain, but after more than a decade for issues like housing, and into the second term of a Govt. that as a majority, all the excuses the Govt. have come up with for not solving these have run out, especially given the fact you don't have to look that far afield to other jurisdictions that have the answers.

And that policy information that we don't have access to you, that is deliberately withheld in many cases as all the OIA requests show.

And as for some of those dishonourable exceptions you speak of, the very point of this article is that the Govt. did not go into this blind as to the consequences. And as this policy information 'leaks' out, we can see the spin.

Saying any failure is 'they are doing the best they can in the circumstances,' makes it sound like a report card for a 2nd-year primary school student, plus if this is the best they can do, then they need to step down and let others they can do better, do better.

They are quick to claim any victory as their own, never we are making wrong choices even with the right choices also on the table.

Well said. They were elected to govern, not to make excuses. That they have a clear mandate makes it even worse. Power for powers sake.

Ageed. This time there is no 'hand-brake' to blame. There is no excuse for the Govt's inaction.

QE has no effect on the quantity of money that the banks have available to lend. Banks have to maintain a capital ratio of 10% and QE does not give banks any more capital.
QE does alter a banks type of primary liquidity from government bonds and into exchange settlement account reserves and so their levels of liquidity are not actually altered but it does cause interest rates to fall.
The Bank of England tells us that the banks actually create all off the money that they lend out.
"This article explains how the majority of money in the modern economy is created by commercial banks making loans. Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits. The amount of money created in the economy ultimately depends on the monetary policy of the central bank. In normal times, this is carried out by setting interest rates".

'In normal times'...

A Tui billboard.

Economist Prof Bill Mitchell explains here how banking operates.


You are 100 percent correct.

But nobody here agrees with your statement despite you being correct. Dave Chaston disagrees.. Stuff media and NZME disagree as do tvnz and newshub as well as all politicians.

So why??? Despite stuff publishing hourly articles on racism and bigotry and inequality.

It's almost as if they are compensating for not being allowed to address what you say...

The RBNZ actually has a link on its website to the BoE bulletin somewhere.

here is the RBNZ link here to the BoE for anyone interested.

The Bank of England tells us that the banks actually create all off the money that they lend out.

Yes TL. This is true of NZ. It's the least discussed aspect of the bubble by the ruling elite, the media, and the general public. It's what we call an inconvenient truth and sits at the foundations of monetary debasement. The MMT crowd is kind of mixed about the morality of it. The Austrians think its bad as it's at the root cause of monetary debasement.

Yes, but the rules under which they can do this are determined by the Central Banks.

Yes Keith. But it has gone on since the liberalization of banking in the early 90s. The reality is that monetary debasement, particularly in the Anglosphere, is driven by expansion of the money supply through mortgage lending. The real winners have been those running the game and the losers are those not born into the 'connected' classes. To be honest, I thought the whole charade would have fallen on its face by now. I was wrong. They're doubling down on it.

I've said it before, If the Government was warned about the inequity effect of unconventional monetary policy and failed to act ie shoulder shrugging. Then a civil law suit is on the cards. You can't give to one sector of society and hope the others won't notice. Talk about favoritism. Where are the lawyers when you need them?

I’m sure they are warned about all kinds of things. What would have been the effects of tight monetary policy at that time: potentially an unemployment rate twice what it is now? How many people would be better off? Sometimes it feels like you can’t win; Labour has seen NZ through a potential crisis both in terms of health and economy so well I doubt anyone thought it was possible 8 months ago, yet supposedly they deserve lots of negativity.

Excellent penetrating article

Great piece. My guess is their unofficial position is that a widening wealth gap is an unavoidable side effect in avoiding a big recession. While once recessions were a part of the self leveling of an economy, we now seem to think they are avoidable. Let's see how they deal with inflation

Best Way to describe the housing market

The government sat there and "fiddled whilst NZ Burned

“In this present crisis, government is not the solution to our problem; government is the problem.” - Ronald Reagan

Leave it to the private sectors and the problems will be fixed, stop meddling with the market. And while you are at it, sack all the Green psychos in the beehive- they can eat their EVs, write their RMAs for their bush shacks and ban mining and exploration on their little private bush.

The housing problem is a symptom not the cause, it's the lack of quality jobs.

Stop meddling with the market and fix the root cause.

But from what I see, nothing is going to change. Let the utopian ideologies be food for your table and we will sing The Warehouse jingle.

In my opinion you have over-confidence in the private sector.

You’d chose to follow ‘the road to serfdom’ then

Yes, the government has a significant role in this.
Numerous big issues in the US such as healthcare costs are expensive largely due to government intervention, it never used to be that way. Google image search "Growth of physicians and administrators" to see what I mean. In the private sector that would never happen.

How do you reconcile usa health care costs with nz health care costs and the private vs public argument?


When it comes to such problems as rising house prices and poverty Jacinda and Grant will conveniently put their socialist ideals aside. Like all politicians they are there because they love power. They will not rock the boat as they fear losing the power they both crave and enjoy. All those who voted for them last year should be disgusted by their lack of action in the aforementioned areas of concern. The word hypocrites comes to mind.


Well they certainly have made a complete balls up. We all do that from time to time. The most charitable thing that you can say that in the depths of panic regarding Covid, they over reacted. Unknown territory which was hard to navigate. What is unforgivable however is that it has been obvious for quite a few months now is that things are no where near as bad as they were painting it.
When you make a mistake, the most critically important thing to do, is face that fact, do as much as possible to reverse it and mitigate the consequences. The longer you leave things the worse they become. Sometimes almost exponentially so. The fact that they have sat on their backsides and done nothing is unforgivable. They appear to be more worried about spin to try and save face. A totally stupid strategy that will always backfire and have the opposite effect.
Ardern has been a skilled debater since her teenage years and went on to study communications at university. The latter I view as professional manipulation of the story or truth, to convince people of something against their own better judgement. It does look as if she has a very high view of herself when it comes to convincing or shall we say manipulating the general public; to the point of supreme arrogance. Here is the thing though. Running the country with good intentions and sincerity should not be about winning all the arguments and the PR battles.
There is another interpretation however. This situation was created deliberately. What sort of people are they if that is true? Far worse than anything that we saw from John Keys pack of villains.

Three months or so prior the 2017 election JA hardly thought of leading Labour into the election let alone being PM. Three days after the election that still probably held true and not her alone. Labour had had nine years to create policy and accordingly generate clear distinction from the previous National government. That they didn’t is plain to see as is too the lack of any depth of ministerial calibre amongst their ranks. Let’s not talk about the alternative lot though. Far too depressing on a long weekend.

Before the 2017 elections she seemed to have a clear understanding of what needed to happen:

tks for that of which previously unaware. unadulterated claptrap. actually rather disquieting, just plain BS given the actual performance by this PM & government as opposed the posturing and promises pre election.


One of the best pieces on this site in a long time regarding this issue. Fantastic Jenée Tibshraeny!

"A lot of entrenching has been done. With people simply doing what they're incentivised to do - flock to property and leverage up - setting the economy on a more sustainable and productive path now is more difficult."

Preeeeecisely. GR has so much to answer for here, it's not funny. He was warned about what would happen, pretended he wasn't told, then came out saying they were going to use it as an "inequality reset" while doing precisely the opposite. I suspect he made that statement to try and keep the wolves from the door and it worked! The dumb masses ate it up and put him in power again despite him CAUSING inequality to boom.

Halo is slipping isn’t it. How does a saint resign, timing, timing that is the burning question. Lest not to be burned at the stake, politically speaking that is.

Further border restrictions (longer quarantine time) to hold people off from wanting to come to NZ and take off some pressure off population growth. Covid is a very useful tool.

So much whinging from people who frankly were probably never in a position to buy a house anyway.

Did any of you ever stop to think that without the stimulus you probably wouldn’t have had a job to go to anyway?

I think they have done a fine job in saving our economy that has come at a cost of increasing ownership entry for some, yes some, people so what. The vast majority of people are not FHB and as such policies should not be and never will be implemented for their sole benefit.

Talking about home ownership as somehow your right is utterly ridiculous. Get a grip.

It is impossible to reconcile opinionated flippancy with the name and stature of a great man whose efforts and brilliance were one of the saviours of WW2. Have no idea why you would choose such an inappropriate moniker, but whatever the reason, you do the man and history great disservice.

You are right... there is no right to a house, just like there is no right to a job; or anything for that matter.
Point being there are choices available and options the government can (could have made) make to settle the rate of hyperbole in market.
There are far bigger ramifications to play out from the lockdown. All because of over the top overreaction to an event that polys like to frame to masses they’ve got it all under control.

P.s. what is the point of a job when having one leads to further impoverishment and servitude when all one has to do is plead minority status and the money tree will shake and provide


If there is no right to housing then there must be no right to food, air, etc. to say so is a strawman argument to either justify the present status quo or just an excuse not to think about what the price of housing should be and could be in the most cost-effective and sustainable way possible, covid 19 or not.

No one is arguing that a stimulus was not needed to shore up the breach, but it didn't need to and wasn't supposed to go into housing.


Of course there is no "right" to home OWNERSHIP, however, there must be the right to be able to achieve it without having to be earning the topmost of earnings, to have parents with a house they can carve a bit of value off for you, that MUST be a right, otherwise we are screwed and just granting wealth to a few and hardship to most of the rest.
I despise what neoliberalism has done to my country

I totally agree. If I am finding it tough (retiree & home owner), what happens to my children (and their friends) who won"t have a house by the time they retire? This Govt is kicking the can.

It is not unreasonable to think people who have taken on debt, learned a skillset or a trade and have worked 50 hour weeks should be able to afford a first home, at the very minimum, without being asked to go into 30 years of debt at 10x their income. I am in a unique position as I was at uni during the GFC - I see the lives those who graduated before it had vs those who graduated after.

I am far from a Labourite but I too despair at what is suddenly reasonable to expect from young people starting out in the country I grew up in, where the answer to affording a home in the city I was born is to leave it. This is not the New Zealand I grew up, and I am beginning to doubt whether I want my child to grow up here either. I simply won't be able to help them as much as I've needed help to achieve a very modest standard of living, and that's wrong.

Fair point and great post

In the 60s they allowed families to capitalise family benefit to use for a first home... the govt provided low interest loans which at the time was 3 percent. My parents got the assistance but when I bought a first home in the 90s there was nothing available to my knowledge

In the interests of accuracy, State Advances 3% loans were means tested. Can't recall, but I think they were only available to FHB's on new-build homes

RBNZ was forecasting -6.9% for house prices in the year to December 2020... not prices going to the moon. Does the public RBNZ MPS differ wildly from the statements given to the Treasury behind the scenes?

Yep Labours printing has hurt its core voting block the most. Either complete incompetence, or sell out to protect bank debt and misrepresentation of intentions. Not sure which is worse.

How many rentals does Robertson have again...

Big Business is not what it used to be.......So watch out....Please note.

Can someone please write an article on how many houses each politician owns? If this seriously creates a bias that is widening the wealth gap it needs to be looked into

This is available for all to see here:

Robertson just owns a family home. However search for the term "rental proper" and you get 28 hits, many of these are multiples. For instance Raymond Huo (Labour list MP) owns 9.

Limit the number of houses any one person can own. Maybe at 3. Anyway which an individual 'owns' a house (trust/part ownership etc) is limited to three titles. People who currently own >5 houses should be forced to sell off some to reduce the number down to under 5. Someones full time job would be to ID any loop holes that people get round so people can't do things like buy houses in their 80 yr old mothers name. Other people not playing fair is one of the biggest reasons people resent rules like this, but if you put the work into getting everyone of a level playing field I can;t see how this would not result in higher home ownership levels for those highly educated, motivated young people who are struggling. Could the stats be looked at? how many people own >3 residential properties.

Could be feasible but hard to control... we know a guy who owned two dozen units, all on one title. That would not be possible to reduce the level without bringing in part ownership or a body corporate structure and that requires council consents

Australian States have had the solution for years
Each state has a SRO (State Revenue Office) responsible for collecting Land Tax
Land Tax only applies when the aggregate value of land held exceeds $500,000
All land holdings are aggregated together
The SRO has sophisticated software that drills down to identify the "real person" owner of land
Family Trusts and Business Trusts are penetrated and apportioned to the individual beneficiaries
Trusts within Trusts are disgorged for the purposes of the Land Tax Act
Individual Holdings are then aggregated according to their individual Tax Number
The higher the holdings, the higher the tax
Rental properties holdings are levied at twice the individual rate
Been operating for years
Without too much trouble NZ could rent the sysyem off them

While seems to show keen interest, I am frowning reading this;.. NZ dirty little secret..

Just the sort of person I would want to stop with the 3 -house rule!!I think society is less impressed with this sort of human now days and see them as greedy rather than clever. Big assumption the government can prevent house price falls... if we learnt anything this last yr it's that we can't control a lot of things, nor are we (even the experts) very good at predicting things

I think its much simpler than this? It's a "thank you" to middle NZ that voted for the Labour party ... they've just 'spent' some of her 'Political Capital' that everyone has been telling her too!

The NZ workers age young qualified professionals are better off to contribute their young productive career, in the country outside NZ, which clearly gave all reasonable points for future meaningful life. By most of comparative livelihood measures. This understood very well by the Healthcare professionals.