By Chris Trotter*
There are all kinds of political rumours, but they don’t get much bigger than: “The PM is about to resign.” When that rumour was relayed to me on Friday morning, my initial reaction was “Bullshit!” Wellington is a very intimate capital city, so the idea that such an important story could somehow be kept from the Parliamentary Press Gallery, struck me as fanciful. Were it not for the fact that my informant was “a usually reliable source”, I would have given the matter no more than a dismissive shake of the head. Instead, I decided to make some calls.
As I suspected, nothing remotely resembling a resignation rumour had been picked up by the Press Gallery. What I did hear, however, were concerns about “Jacinda”. The Prime Minister, I was told, was “out of sorts”, “morose”, “not her usual self”. Among female journalists, I discovered, there was much speculation about whether or not the PM was pregnant. Scuttlebutt, I thought to myself. Although, I had to concede, the PM’s sunny disposition has, of late, given every appearance of having fallen under a cloud. Even to the casual observer, Jacinda seems distracted.
It is doubtful whether her overall mood was uplifted by the latest poll results. Though Labour still hovers around its Election Night 50%, the TV1-Colmar Brunton survey showed Ardern falling a statistically significant 15 percentage points in the Preferred-Prime-Minister stakes.
It is likely that these latest numbers only accentuated the PM’s dissatisfaction with the way she and her government are being represented in the newspaper columns and across social media. This dissatisfaction turned out to be one of the most consistent themes of my Friday-morning soundings. The PM, it is alleged, has been stung by the sharp criticisms of her administration which have been growing in intensity since Labour’s landslide victory last October. At the heart of these critiques lie two inter-related questions: “Why the preternatural caution, Jacinda. What, or who, is stopping you?”
While New Zealanders understood the role played by Winston Peters and NZ First in reining-in the PM’s “transformational” aspirations (and were, accordingly, prepared to forgive Labour’s less-than-stellar record of achievement on the big issues of homelessness and child poverty) after 17 October 2020, that excuse was no longer available. Not when Labour, the Greens and Te Paati Maori between them command 77 seats in New Zealand’s 120-seat House of Representatives.
Labour’s caution and timidity were attributed (often none-too-kindly) to the party’s determination to hold on to the huge swag of former National Party voters who had defected to Labour in recognition of the PM’s outstanding handling of the Covid-19 Pandemic. Commentators mused that “Jacinda” was little more than a brand; and that, for all her talk about “the politics of kindness”, Ardern was just another party leader with one over-riding priority – winning the next election. Perhaps the unkindest cut of all came from one of Ardern’s most reliable supporters on social media. Martyn Bradbury, Editor of The Daily Blog. Playing on the left-wing swearword “Neoliberalism”, Bradbury described the PM as a media-savvy purveyor of “Neo-kindness”.
The message coming back to me throughout Friday was that these accusations had hurt. That the PM was feeling keenly the lack of faith in her bona fides – especially from those who are regarded as being (and who certainly see themselves as being) on the Left. I was told that over the summer Ardern’s determination to keep her promises to the homeless, the poor, and the planet had grown ever-stronger. That she refused to go down in history as an instinctively empathic crisis-manager. That someone who could pull off an electoral rout on the scale of 17 October required an altogether more substantial legacy. The word began to spread through Wellington’s labyrinthine corridors of power that “something big” could be expected on the policy front by the middle of the year.
Hearing this, I wondered how much attention Ardern and her closest advisers had paid to the words of the veteran left-wing trade-union leader, Robert Reid. Barely 48 hours had passed since the Red Tide had ripped the infamous “handbrake” from NZ First’s hands, but Reid was already tweeting out a warning to the new Labour majority government:
“No one mentions that every government is a coalition between the elected governing party(s) and the senior bureaucrats.
“The bureaucracy acts as more of a handbrake than NZ First ever did.
“But most “ruling” parties continue to let it dictate policy.”
What would happen, I asked myself, if the PM made it clear to her Cabinet colleagues that she was no longer willing to play it safe; that, having made promises to the New Zealand people, and been rewarded with an absolute majority, she was now absolutely determined to keep them?
The most obvious starting point for the PM would be the housing crisis. A major initiative here would not only boost the well-being of New Zealanders considerably, it would also make a huge impression on the level of child poverty. Killing two birds with one stone has always been an attractive political proposition. But, to be at all effective, such an effort would have to be on a scale unprecedented since the 1970s – entailing an eye-wateringly large amount of expenditure.
Alternatively, the PM may have decided to give effect to the Welfare Expert Advisory Group’s recommendations on social development – including a massive increase in core benefit levels. This, too, would provoke genuine horror in Treasury. Effectively eliminating child poverty at a stroke does not come cheap.
And, it is here, perhaps, that the rumour about a prime-ministerial resignation may have had its genesis. Faced with ever-higher levels of government borrowing, Treasury officials would undoubtedly have attempted to pressure the Finance Minister, Grant Robertson, into dissuading his friend and ally that what she was proposing was as irresponsible as it was unlikely to succeed.
In normal circumstances, this might have worked. But, from what I have discovered over the past 72 hours, these are not normal circumstances. Only last week, Robertson’s friend and mentor, Michael Cullen, a man stoically succumbing to terminal lung cancer, is reported to have told a select gathering of Labour Party notables that: “It is not enough simply to win – you have to DO something.” Aware of how determined the PM is to “do” as Cullen advises; seized also, as his friend is said to be, by intimations of mortality, Robertson, “the reluctant radical” seems ready, for once, to throw caution to the wind.
From all sides, now, comes word of the imminence of “something big” being announced. The Labour caucus is said to be both “nervous” and “excited”.
Writing in The Daily Blog, Martyn Bradbury (whose connections with the Labour caucus are numerous and strong) sums up the situation like this:
“Jacinda has taken the time over the Summer to decide being kind has to mean something, desperate rumours spread by Wellington bureaucratic elites that there is a split between Jacinda and Grant are designed to create a rift not report on one.”
If Prime Minister Ardern’s big policy gamble fails, then her resignation will, indeed, have to be handed to the Governor-General. But, everything I have learned over the last 72 hours convinces me that “Jacinda” is no longer content merely to win: she means to DO something.
*Chris Trotter has been writing and commenting professionally about New Zealand politics for more than 30 years. He writes a weekly column for interest.co.nz. His work may also be found at http://bowalleyroad.blogspot.com.
244 Comments
This rumour is to protect the queen.
When the so called announcement will be a thud and end in fiasco, the blame could be passed to other to save the Queen.
Otherwise : Having full majority, How could Jacinda Arden be forced not to act and Labour cannot afford to and bureaucrats be damned...If she really wants, she can do it and rise to the occasion.
She asked for votes to control the housing ponzi instead it jumped to a level unheard before ( rise of 10%
in a month and appox 30% to 60% in few months) and now if, trying to hide behind excuses and not able to deliver by containing the speculative demand, having accepted that is the need of the hour should either act decisively or RESIGN.
If she is getting resistance from powerful lobbyist, bureaucrats and people with biased vested interest in high places, should rise above and act - sign of leadership or RESIGN- so be it.
She looks like a deer in the headlights. Keeps going on about ‘they said it might fall 10%’. It should have been allowed to fall 10%, at least! Her saying that prices aren’t allowed to fall has doomed her. You can’t be giving that sort of implicit guarantee. It’s that kind of talk that leads to the buying frenzy we have seen. FOMO such as we have never seen before.
Failure to publicly state she believes prices need to fall. Ruling out a CGT during her time in office. Forcing the RBNZ to target maximum sustainable employment. Failing to temporarily reduce immigration as promised. This labour government has shown no real desire to actually address the problem, and have in many ways made the problem worse in an attempt to keep the status quo going.
They want to reap all the short term illusionary benefits to the domestic economy of rising house prices, while also have people believe they are trying to address the housing issue. Sorry, you can't have your cake and eat it too. If you wish to put long term health and wellbeing of the country, address the growing systemic risks of a housing bubble, massively distorted capital allocation into non-productive assets, you have to make some tough decisions. Decisions that may not help your short term chances of reelection. That's what real leadership is.
Everyone seems to forget the queen is a Communications major and PR person. These guys usually do very well at (mis)representing by making a shambolic or broken group they represent, look like a beautiful benevolent group who are working for their customers. So far, she has done a great job at that, but you can only cover over the s#$t for so long before people start seeing through you. That's what is happening now with latest polling.
It really frustrates me that the RBNZ is so derelict in their responsibilities. It amazes me the GFC wasn't that long ago. Yet we are repeating the same mistakes of low interest rates, government policy and lax lending rules (for us its interest only loans) to feed a speculative bubble. These type of behavior doesn't create real wealth, it just creates a short term illusion of it and in the long run that illusionary wealth has to be repaid.
The question is who pays.
I guess the "What about the children?" get out of jail card had been abused and overused in this country.
No one is responsible for the dismal performance of other people's children but their own.
Consequences. No one should carry on breeding and thinking that everyone else are obliged to pay for their off-springs.
Oh, "won't someone please think of the children" has long since been replaced by "won't someone please think of ma and pa investors!"
Same reason we keep pushing up costs for the young'uns while demanding freebies for the old. E.g. Grey Power asking for the young taxpayers to fund private health insurance for them, while massive wealth gains via transfers to land values should of course be tax-free...
Who is asking for anything free? People are asking for this generation to have a chance at owning their own home if they work hard for it. Instead, we have a situation where prices rise so fast people on decent incomes can't even save fast enough to counteract it.
All the while we have a group (property investors) who actually think they deserve to grab all these capital gains, tax free, paid for by desperate FHB.
Oh that sale price doesn’t necessarily include what is actually transacted for the property and what is transacted separately to the trust or other family identity outside of it. Actual ownership of property and thereby liabilities, can be made as complicated as you might wish, all you need is enough cards to shuffle, the ilk of Trump etc.
There are many misguided people on this website who think CGT is only a revenue gathering exercise thinking that it'll stop house price rises. It doesn't. Take Vancouver as an example. House are being flipped inside a month at a higher price.
Part of the reason for CGT, the main one I believe, is an attempt to level the investment playing field. There are additional measures needed on top of CGT to prevent runaway house prices.
Julian
Current Brightline test applies only to those properties purchased after the date the regulation was introduced - those purchased prior are exempt (2015 and 2018 when amended)
Introduction of taxes is not usually made to apply retrospectively.
Those who have purchased are currently only subject to the brightline test as it currently applies and a CGT would most likely not apply to those currently holding properties.
As John Key once said - “You don’t apply a CGT after a period of considerable CG”
"I hold this urgent press conference to announce that Clarke and I are getting married and we will be on the first Trans tasman flight out of NZ for our honey moon. The Trans tasman bubble will begin in April. I am also pregnant with a wee little Gayford, more on this in the next Woman's Weekly & updates provided on the Covid app. The housing announcement is delayed until I get back. Aroha all."
Maybe a national conversation on optimal population for NZ? And something really radical, policies to achieve it. And why not, it would fix the housing problem in time and make zero carbon easier to achieve.
Added comment: A binding referendum to hold NZs existing population at 5.1 million would stop the housing bubble. If WE got to choose it’s highly likely it would be to hold the population rather than grow. A straw poll here: https://www.interest.co.nz/news/109124/us-jobless-claims-stay-high-us-l… 18th Feb 2021 had 86% voting for a population of 5.1 million rather than 6.16 million. (25 votes against 4). The beauty of a binding referendum is WE make the decision. As far as I can see no political party has specific policy on population number and yet most of us want it limited.
In the melee of this week don’t forget to make a submission to the Climate Commission.
When we were around the 3 to 3.5 million it was said NZ would be good to go at about 5 million. We are there now, so nothing to discuss, other than what we do now to prosper without continued growth, because, let me make this really clear, growthism has no end to it, the only thing it needs is more
Exactly. I can remember in the 90's economics saying we needed 5 million and then our economy and quality of life would be excellent. As you say here we are now, except with far more social problems, environmental degradation and inequality than before.
I'm sure the economics will tell us things will be better when we get to 10 million, 20 million, 100 million.
All of the infrastructure now is being billed as needed to support 'further' growth; when we have congested roads, water networks and poorer access to public facilities like beaches and parks in the here and now. We need it now to support the current population. All we've received are a few token transport projects like the CRL that was already decades overdue.
No party has been elected promoting the levels of immigration we are seeing now. No one campaigned on it. They have just unilaterally decided it was a good policy to meet the needs of vested interests. I'm not against immigration overall - I believe we gain a huge number of talented, motivated people and diversity is a good thing in my eyes.
But the rate of immigration has proven to be totally unsustainable and the negative externalities have been extreme. What is the end goal here? Do we want to continue to improve the quality of living for those living here, or do we just want to generate GDP growth for the sake of it?
What annoys me more than anything is the attempts to shut down a debate that needs to happen, simply by claiming people are racist or xenophobic just for wanting to discuss what our optimal RATE of immigration should be.
And it doesn't even need to be a discussion along the lines of 'we want x many people and no more' : it could even be a discussion along the lines of "if we have this many people, this is what we need in terms of infrastructure etc.'
The main problem with immigration, as I see it, has nothing to do with immigration itself - it's to do with the fact that because we haven't been properly funding the infrastructure needed for a larger population, immigration ends up largely benefitting the already wealthy and hurts those at the bottom, because those at the top have grabbed all the benefits (a cheaper labour pool, increased demand for rentals/housing etc) and have not worn any of the costs (in terms of paying for the infrastructure).
Right now we are sold the myth we can just add people and increase GDP with no associated costs. Businesses want cheap labour and avoid costs of training and retaining staff, and are happy to dump the costs of infrastructure on the wider society. If the Government wants the increased nominal GDP growth from immigration they need to actually cost out and explain how we will fund the required infrastructure, and just as importantly, who will pay for it.
The immigration settings and the housing Ponzi just make for a lazy economy with declining productivity. All the dynamism that could be there from training our own, correctly allocating capital, allowing some creative destruction, and enjoying decent wage & salary growth....it’s all missing. What a lost opportunity.
Exactly, what people and politicians miss is that increasing GDP by immigration adds pressure on infrastructure, health and education systems, so if there isn't a public investment into improving these which has not happened it is a short lived push destined to fail rather soon than later.
Why this drama ?
Understand that people voted her to solve the crisis but instead under her government it went from one peak to another and NOW you got some sort of realisation, which is good as better late than never.
Instead of running away should fight as people gave you mandate to solve the crisis and try to put things rights by not hiding behind supply issue ( Though important but will take ages to cope with it) and immediate need is put laws and policies to contain the speculative demand - possible or not as has become the only economy in NZ but for your conscious you should try and wait for result.
Immediate things that can be done and important - Interest Only Loan to be stopped followed by DTI just like LVR and extension of BLT along with other measures that can add to contain the speculators/flipping - Houses been turned and used as casino chip.
What should definitely avoid as bureaucrats when they see that are not able to stop you is will suggest to use Supply crisis as an excuse or try to delay by advising to form a commitee that will look into crisis, announce measures to be implimented from September or June just like Reintroduction of LVR though announced month before but was to be implimented from March, therby giving window of opportunity to speculators to play havoc and this was done by saying that need time to impliment ( was just an excuse to delay as much as if cannot avoid).
Not let bureaucrats fool her that any price fall will hurt her politically. If the price falls by just 10% it will bring price to January level ( month before) and should not hurt much except speculators who bought to flip as FHB are in on for long term so are safe as long as they can serve the mortage.
Also another harm created by you with perception that house price will never fall or you will not allow it to fall as a result FOMO touched new peak and this FOMO is dangerous as many FHB are borrowing in extreme so the perception supported by you helped in creating bigger FOMO which is more dangerous to FHB as are not thinking logically.
Jacinda Arden has committed the biggest sin by taking away even the dream of average Kiwi to have a home ( John Key played but still was possible to dream of a house but Jacinda took away even the dream).
Real Shame. If Cannot Act Should Resign.
This has turned to be an open letter to Jacinda.
... she cannot handle the tough stuff ... Covid-19 is easy , put the fear of death into the populance , near 100 % compliance from the sheeple ...
Trying to solve child poverty , or rampant house prices ... that's tough ... best run away from the problem ... couldn't handle Mike Hoskings tough questions ... she ran away ...
Jacinda knows there are more virtue points to be found with an ambulance at the bottom of the cliff instead of building a fence at the top.
I expect that my tax dollars will be dished out to her chosen minorities while nothing will be done about fixing the house prices caused by the mass immigration and enormous credit bubble that she enabled them with.
I’ve predicted that Ardern will resign once the full extent of the housing catastrophe becomes clear. She knows it is a total debacle. They’ve foolishly ignored any real fixes in their first term after promising so much, and now it’s come back to bite them like a rabid dog. It’s a fatal bite IMO. She will get out while her overseas reputation is still intact. She needs to protect that reputation to ensure her career prospects remain bright after she finishes up as PM.
Not to forget the smile, which has now turned into smirk.
Eaier she laughed and NOW Laughing at all who trusted and voted her to solve the housing crisis as was major issue that she promised to act that got her to power.
Real failure as John Key did not promised so did not deliver but this lady, did promised and not only did not deliver but acted otherwise to support the ponzi. So if she resjgn is good. May be Karma will be little soft though is a bitch.
John Key campaigned on the urgent need to address the housing crisis and then blithely turned around and for 9 years maintained that no such crisis existed. Ardern is in that regard John Key 2.0
It may be that people's patience for another Key has simply run out and Key's smile-and-wave approach no longer works for Ardern.
Regrettably the true deficiencies in this government have percolated to the top of the cup. Fluffy, flouncy insipid stuff. It is obvious that coming to power in 2017, despite having nine years of anticipation, found them ill prepared and surprised. They are of no substance. They are virtually all academics. Plainly WP & NZF shored them up and now they stutter and shuffle like a dead corn field in the wind. Ironically the Greens have done very well indeed, probably involuntarily, to stay out of this mess. Hells bells if you create shortage by increasing immigration hand over fist, pull interest rates down to pre 1960s and remove LVRs, what can you expect other than a housing price explosion. Bloody elementary you vacillating amateurs!
We have all now a years’s experience of the ineptitude and sheer incompetence that the MOH inflicts daily on DHBs and their frontline staff from Northland to Southland. The shambles allowing rest homes to stay open pre lockdown, mis information freely flowing to the Director of Health. The reason we cannot have a travel bubble with Australia is starkly obvious. The government does not trust the MOH and nor should anyone else.
I think you misattribute a lot to incompetence.
This Labour government has said and done enough to convince me they simply want to continue to reap the short term gains of a rising housing market (or fear the implications of a falling market). You call it pure incompetence, I call it cynical short termism. A belief they can have their cake (bolstering domestic economy) and eat it to (have people believe they are addressing the housing crisis).
Criticising the government for our handling of Covid seems incredibly churlish - given our performance compared to the rest of the world was actually pretty impressive.
I agree Miguel
Ardern was democratically elected on a "no more tax" promise. Period. She's kept the plague at bay. Period.
The Housing problem was started by Key and his National government's unchecked immigration tsunami with the result that we ended up with too many people chasing too few houses. Period.
Besides, if Ardern resigned who do we have left to vote for? My electorate MP is David Seymour, but after seeing his performance at a street corner meeting on the eve of the last election I would never vote for ACTion Mouse; he is a one trick pony (euthanasia). And you'd have to be nuts to vote for the dysfunctional National Party.
You describe quite accurately a playing field of politicians, from all points of the compass, and whatever hue you might favour, who are bereft of character, integrity and any prospect to honestly perform the serious role of government. Can anybody seriously, even for this young century so far, suggest one politician that we have that is dedicated, selfless and trustworthy to the duty for which they have been elected.
Tom I would not be so sure.
Ardern is totally focussed about her image and reputation, which has been cultured carefully throughout the last 4 years. Adoring media, kindness, womens magazine articles, beautiful family stories released when she bullies a south Auckland teenager who had the temerity to disagree. The Labour party PR machine is very very efficient.
She will take action to protect that reputation, but odds on many of us won't like it.....you'll be paying the price.
"In light of the fact I've run out of excuses and you don't like me anymore, I am going hard and early, to the UN. At least there I will be safe from scrutiny and accountability and look forward to continuing to pontificate from a safe distance while doing absolutely nothing. And no, I won't be wearing a mask, nor will I be giving one sh*t about the carbon miles I'll be racking up."
Your comments reveal a lot about you, like being a charmless, immature bore and you devalue this site to the point I hardly read it these days. Would you actually repeat this comment to anyone? Or just on your keyboard sitting god knows where, nowhere nice I'm picking
Who would you rather have, Johnson, Biden, Morrison?? Good old NZ, cannot accept anyone getting ahead, particularly a female.
What do you mean she doesn't have the guts to make a hard decision, she locked down quicker and harder than just about anywhere. Her actions saved countless lives and made NZ the envy of the world. The last 6 months have been misery in the UK, locked down, hospitality destroyed. All the criticisms of her here relate to housing without acknowledging it is just as crazy in Australia at the moment.
https://www.domain.com.au/news/buyers-struggle-to-get-hold-of-accurate-…
In fact, we did measure the impacts of a number of different lobbying measures that were taken just prior to the decision. And I can assure you, scientific experts played a substantial role in changing the response (thankfully). But if you read the timelines, rather than just accept the we went "hard and early PR" mantra, you too will be disappointed that the Government did not act earlier. A Royal Commission is a must.
A Royal Commission is a must. Lead by a Taiwanese expert.
The result ought to be some measured praise (eg very good govt PR) and some 'gee whiz weren't we lucky' and some thanks to those who most deserve it - cleaners working shifts on minimum wages; many of the recent immigrants. Lets give praise where it is due.
Also thanks to the management of most of our retirement villages.
Oh yes indeedy, thanks to Radius, Rymans and Summerset for a start who acted on their own volition, actually contradicting the messaging from the MOH, and enacted isolation procedures. Man o live, that bungling and stupidity by the shiny arse MOH executive needs to be exposed.
There is no point trolling someone, who may be degraded and oppressed by Govt. decision to whom he voted.
It's not about gender discrimination, it's about the way JA have deceived by not taking action after making the promise.
You never condemn her on getting this happen (now don't say she is not responsible) where price increased to 40% in last 3 years.
There is no explanation to it and we cannot do anything other than waiting for her action real shame.
Daughter aged 24, got informed by a smart arse work colleague she would never be able to afford a house ... she soon put him in his place she already had an investment property and planned oneday to be a property developer. Am picking they would never had said this to 'one of the boys'
Being Remorse is good and still not too late to act.
Once again revisit your thoughts and feeling that you had before 2017 election and everything you wanted to do - Now is the time to achieve by putting policies in place like extension of BLT (Make it mandatory to fill form and declare if they own any property either themselves or jointly or as a director in a company or in a trust and the same to be sent to IRD just like buyers gave to fill form for money laundering) and important to remove Interest Only Loan as is mostly used by speculators as they do not want hold for long and interested in flipping and Capital gain (Fast and tax free money) and even if FHB are opting should be discouraged as not in their interest (only in emergency like death of a partner or job, should allow for some time to FHB to support).
Do not be afraid if short term pain for long term gain. Even short term pain will not be a pain really as will only be in paper ( Owner bought house for $800000 and now the value is $1300000 and if from here even if value falls by 10% or even 15%, it will still be $1100000 - any loss is notional).
Important to implement policy asap to avoid the massacre in house price rise of $100000 that happened in just one month.
And if cannot deliver - happy to see you go. Please resign.
" – including a massive increase in core benefit levels. This, too, would provoke genuine horror in Treasury. Effectively eliminating child poverty at a stroke does not come cheap".
Nope. You wrongly assume that increasing benefit payments would see the cash go to the welfare of the child. All I see is more unearned income being spread around those who produce nothing - thereby discouraging even further those that currently produce for often no more reward than current benefit rates offer.
Massive increases in benefit levels are on the way, and it’s all due to this housing fiasco. What is a lazy socialist going to do to ‘fix inequality’? Throw taxpayer money at it of course! 4 years to do something about the housing Ponzi and every day so far has been squandered. The easy option is always to just paper over the cracks with taxpayer dollars and that’s all they know how to do.
If they wanted an increase in WFF to have any positive impact for the immediate recipients rather than simply flowing through to investors, they'd need to accompany it with rent controls. So, yeah, likely just more welfare for property investors, our wealthy beneficiary class.
Not the worst thing in the world. They could increase it by-proxy by slashing the abatement rates to help encourage people back into work. It would be an easy and good enough start. While they're there, they should align the student loan repayment threshold with Australia's.
What middle class is left? Its have and have-nots from hereon in. Poor houses and sadistic overlords. Middle class wealth is being transferred to existing overlords via bank of mum and dad helping out FHB to get into debt to buy landlords least wanted stock (leaky homes, EQ damaged) and push ponzi higher
What I think is happening is this:
- the proportion of the population that is wealthy or is very wealthy is slightly increasing
- the proportion of the population that is 'comfortable' is significantly increasing
- the proportion of the population that are nominally middle income but are really struggling financially is massively increasing
- the proportion of the population at the bottom of the heap and are in poverty is significantly increasing
An article here in the British Guardian newspaper that shows NZs inequality in a bad light.
https://www.theguardian.com/world/2020/aug/31/new-zealands-astounding-w…
Wealth gap? Naki is still cheap as chips.
Excellent banking opportunities with some risks of course.
This is from last weekend.
I'd prefer not to be called lazy or socialist but we could and should fix child poverty by throwing money at it. It is called universal child benefits. It is means tested benefits that reward the lazy bastards for not working. Pardon language but we have one in our family. Suitably generous Universal Child Benefits would cost a fortune - maybe one or two percent on income tax but would save many other means tested benefits such as accommodation allowance.
There is no such thing as taxpayer dollars. Taxpayers are not currency issuers they are currency users and counterfeiting money is illegal. The government is a sovereign currency issuer with a fiat currency and a central bank and this is where our money comes from. It has to spend money into the economy first before it can tax money back out again.
The Levy Economics Institute has this to say.
Can Taxes and Bonds Finance Government Spending?
This paper investigates the commonly held belief that government spending is normally financed through a combination of taxes and bond sales. The argument is a technical one and requires a detailed analysis of reserve accounting at the central bank. After carefully considering the complexities of reserve accounting, it is argued that the proceeds from taxation and bond sales are technically incapable of financing government spending and that modern governments actually finance all of their spending through the direct creation of high-powered money. The analysis carries significant implications for fiscal as well as monetary policy.
http://www.levyinstitute.org/publications/can-taxes-and-bonds-finance-g…
If you want money to save then that must come from government budget deficits. Only the government can create net financial assets for the private sector to save as government deficits create a financial surplus in the private sector. (Sectoral Balances). https://gimms.org.uk/fact-sheets/sectoral-balances/
Lets not forget that the banks are also creating new money every time that they lend us money as The Bank of England explains here. https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creati…
Given that we have the highest levels of rental stress for lower income earners in the OECD, the biggest boost to the wellbeing of lower income earners will be to reduce housing costs.
Massive increase of social housing is a must. But recognition of the complete failure of leaving social housing to the free market (via the accommodation supplement) would be the second step.
Plenty of anomalies to the free market. First and foremost social housing. From there you get accom supp to balance housing costs for those in private rentals as successive govts could not decide the best course of action. Brand new social houses are in many cases far better quality than the private alternatives. SH simply entrenches poverty as why apply oneself when you get it 'free'
For Jacinda Arden and all the experts : for the housing ponzi to stop it is exfremely important for house prices to fall even if after rising by 40% it falls by as low as 5% will help as is important to change the perception and also to kill FOMO, which too is as important to help FHB to make rational decession along with controlling speculative demand.
If a price rise from$100 to $140, does a little fall make much difference except if speculators. So anyonewho advisex Jacinda Arden tbat even a slight fall will be a disaster succeed as knowswhereto hurt the politician tbe most.
All right then, lets see what she does about ridiculous property prices which are destroying people's hopes and putting their finances at risk. Oh, but why has she nothing about it already? She is no courageous decision maker when it comes to this fundamental thorn in the side of the New Zealand people.
Speculators need to be reigned in and so does the RBNZ.
Show us what you are made of Jacinda and, more importantly, who you work for!
I wonder if people can zoom out to see the bigger picture. This is global. We have a “fake” POTUS who isn’t capable of reading the autocue or walking up the steps of a plane. A comparison has been made to Boris Yeltskin who was wheeled out occasionally to remind people he was president. We have the Australian PM who seems intent on trying to ban cash and sell a publicly owned asset cheaply (Australia Post) until a very small political party points this out and there is rebellion. We have the UK that was constantly fed news about the EU that led a tiny majority to vote to leave without being told of the severe consequences that are now becoming a reality. We have the Central bankers who have failed to meet their targets for years. We have a fiat financial system that is based on massive debt levels that must continue to expand at ever increasing levels at any cost. Money printing to oblivion. We have the repo market that in Sept 2019 got into trouble forcing the Fed to take action. That has now done a complete reversal and has turned negative. The Fed wants the treasury bills that the financial institutions hold so are offering negative rates in exchange. George Gammon explained this in a video last week. There is a massive game of Jenga going on. The FED has it’s toolbox which is basically money printing in the trillions which it and all the other central bankers will continue for the foreseeable future. At some point someone somewhere will pull out the wrong piece in the Jenga game. I suspect Ms Ardern, Mr Robertson and Mr Orr know that point is near.
Allowing short term pain seems to have been ruled out too. Very few bankruptcies, the bankers preferring to hold out and not force the issue. Reluctance to pursue personal bankruptcies too, again the preference being to either reschedule debts to repay over a longer period or offering more debt to see them through. We did not have a real recession after the GFC and in-fact debt levels have grown to astronomical levels. Traditionally a hood recession would deflate the balloon and let the people and businesses go bust. Instead, debt has been allowed to balloon out of control and that debt has to keep growing at ever increasing levels. If the rate of debt increasing slows down then that would spell real trouble. That could be the peice of the jenga game that causes the whole thing to fall down. That’s why politicians hands are tied and they can do very little. It’s the result of central bank policy over the last 50-60 years. They must keep debt expansion growing. Classic Ponzi scheme. Shame is, too many people around the world can’t/won’t see it. People keep going out and loading up on debt because they truly believe they cannot lose.
If nothing comes this week which help not only FBH but middle class kiwis having kids (who look for shelter today or tomorrow), then definitely the Queen should resign (if have some respect left as a human being not politician), otherwise dethrone (may be next election) if possible.
Headline : Something Big
Is it Big News to Speculators ( No meaningful action / announcement by Jacinda's knight Mr Robertson)
OR
Is it Big News for FHB ( Jacinda finally decides to go after speculator and accepts that price fall in housing pyramid is a must to stop the ponzi and will not be bad as made to understand by ...)
Wait and Watch.
Will she be able to rise or succumb.......interesting time ahead.
Total tax policy re-write and introduce a UBI.
They don't have the resources to magic up houses, we've already seen that. Increasing benefit levels is hardly going to placate the National voters they woo-ed over.
It has to be something that reaches the majority of the electorate. UBI is a prime candidate. Anything else?
In keeping with that vein the “wage gap” has to be addressed. When I first worked for a corporate ,the CEO was on about twice as much as the executive level who were on about half as much again as middle management. Since the 80s the top level(s) have simply been strapped to a rocket, obscenely so often, and undeserved and unearned too often. Trouble is while lifestyle in the penthouse might be lavish someone still has to work in the cellar, attend the boiler and keep the elevator going and they as such are hardly above subsistence. Bit like Czars and serfs, which ended up with the aristocracy one day trying to trade jewels for bread.
This spectacle is all so unnecessary.
If, and it's a big if, anything of substance happens any time soon it could, and should, have been done immediately after the landslide election.
They knew; we knew, it was coming, and so being unprepared to implement "Change!"on Day One is inexcusable.
I wrote over the weekend that Leadership, real leadership is about overcoming fear.
Change is always a frightening concept, otherwise the changes needed would already be in place.
I further wrote that "I doubted any of the current 'leaders' had it in them"
As an optimist; one who is continuously looking for a good outcome in any situation, I hope, yet again, that my weekend writings were wrong. (I know, again!)
Someone should ask Jacinda, if this is her idea of affordibality :
https://i.stuff.co.nz/life-style/homed/housing-affordability/124581254/…
Next will be advise that FHB should not be choosy and should buy a Studio apartment if that is all that they can afford in their million dollar.
There could be a dozen unknown reasons for the PM's state of mind, but this is one possibility that has been on my mind.
That is, that some of the critically important levers of control are kept out of her grasp. This is because control of those levers (the consequences of which are felt on home base) are in fact located in other parts of the world. This could be incredibly frustrating for any leader whose populous have the impression that the "buck stops" on her desk.
Especially if the consquences were to be extremely unpopular and even devastating.
However, we do all know from personal experience which particular lever she and the sickly-looking Ashley Bloomfield are allowed to play with at will.
No need to impose costs. Tax and spend is also too obvious. Dump your preconceptions and really think about what is possible.
Lateral thinking is not a strength of the left, and is almost being beaten out of the NZ population by poor leadership. Corporate, small business, local and national govt are all self reinforcing each other and running us into the ground.
But that is precisely what will save them if they are bold enough. I think they are now desperate enough to actually consider it.
I'm no fan of Ardern, and rate her lowly on her actions, she is all about spin and optics. In truth, I don't think they even know what to do to turn the economy around.
Any actions she takes are likely to be taxes, or 'investment' i.e. massive spending that doesn't create a meaningful improvement in output for NZ, blowing out the government deficit in the name of COVID.
I expect to be carrying the can for Arderns reputation protection for a long time
Why do Government / Jacinda gets away with housing ponzi :
https://www.nzherald.co.nz/nz/tv-presenter-renee-wright-sells-north-sho…
Opposition is silent as they and their supporters believe in ponzi
Media too as is evident, enjoying the benefit of housing pyramid, so why raise.
When in a country opposistion as well as media / journalist have biased vested interest to support the ponzi that is been promoted by Jacinda led independent government ( with no questions asked), How does one expect accountability.
Just like trump Jacinta did not expect to win let alone become the PM. She is well meaning but lacks any clear leadership traits like vision. She has not had a strong Government although a number of MP's are growing into their roles such as Hopkins and Nash.
To me NZ was sold a new face with little or no skills or experience and the country is fast becoming aware of the failures and can kicking that is endlessly happening.
It seems to me there is room for a new political party that takes the best and smartest polices from all the current parties and gets on making NZ a better place for everyone.
I have gained Capital gain from the booming house market. I don't sell but hold and enjoy the rental income so it of no particular benefit to me, but I think what has happened under Labour is truly sad.
Elected to help FHB through their incompetence ( and Orr ) life has just become harder for lot's of people.
I don't no what the answer is but these guys certainly don't have any and make the Bill English Government especially with Joyce in the finance role look very good.
Given how property investors have proven themselves to be the mothers of all cry babies I can see why these changes were announced in the way they were, if there had been a months warning or something like that, by the end of the month all hell would have been threatened on the government.
I remember when Bill English made a few noises about he was going to sort out the property investors, and for a very little while it actually looked like he might have been serious, but the vitriol was so unbelievably over the top that he completely backed off and just did a little bit of tinkering around that edges like banning laqc's that made almost no difference at all, and then National never ever made a squeak again about reining in property investors.
Property investors in NZ are like NRA are in the states, they have become a big ugly monster, with an over inflated opinion of how important they are.
Any government that decides to tackle property investors in NZ is guaranteed my vote, just on principle.
If this has any truth and she does resign...opens the door for a far reaching capital gains or land tax etc. Lets face it its the only remaining untaxed area in NZ to fund any sort of big policy anouncement. If she has the spine to do this it will be the greatest demonstration of selfless political action seen in NZ for some time.
Anyone checked if the labour MPs who own rentals have been quietly selling off their houses or not...?
Well Chris Trotter has certainly given the usual partisan misogynists a real opportunity to vent their mindless hostility towards the Prime Minister. All these future captains of industry who are so certain about what the country needs have not bothered to come up with practical solutions to these needs but have preferred to take shallow and personal pot shots while urging each other on to do the same. The business of government is endlessly complex and the problems governments face are not amenable to the simplistic suggestions offered by some commentators here. Must do better.
However the "future captain's of industry" didn't get themselves elected into government by over promising things they could never deliver on such as Kiwibuild, child poverty, affordable housing but to name a few.
You stand for public office, make promises you fail to keep, then you are fair game for public criticism.
Skypath was first mooted under the National government, under JK’s national cycleway warm fuzzies I believe. Was never going to happen though, under Key or Ardern, as it just doesn’t stack up as anything other than a vanity project. Be cheaper to rent out clip-on jet packs to the MM/WILs.
It has been a clunker for a long time. Why is it so hard to say "great idea but it doesn't work financially". I expect that is a pseudo engineering report about adding metal to the piers - just a techo excuse to kill a financially dumb idea. Now use that $360 to provide Ebikes to goldcard owners - that would reduce the number of slow wobbly drivers on our roads.
Many of us have tendered our suggestions over many years now (to both Partys and their respective "Leaders") and nothing has been done. ** Correction: The problems have been exacerbated!
(I, for one, can't be bothered running through the list of obvious solutions for the 1000th time, but here's an easy one for starters - Change the Banks' Risk Weighted Lending Ratios.)
If frustration at the situation we now collectively find ourselves in tends towards the personal, is it any wonder!?
(NB: "The business of government is endlessly complex and the problems governments face are not amenable to the simplistic suggestions offered"
That sentence has to have been written by a politician or, worse, bureaucrat! It's just that kind of mealy-mouthed wording that symbolises the torpor of our Governments' past actions)
Torpor? That's too clever, you're one of them!
Actually it was written by someone who has never been a bureaucrat but someone who has studied history for decades, and represents an informed insight into the process. Your comment reflects an ad hominem bias rather than an understanding of the nature of any form of government.
And what was your input at the last Central Banking advisory group meeting that you attended?
But of course, that's not Government, is it?!
And tell me, as a student of history, what has happened on every occasion across the millennia that fiat currency has replaced productive enterprise?
Answer: What we are staring in the face, today. Unpayable Debt.
And as history will also tell us, how did Germany resolve that issue in the 1920's'30'?
Actually it was written by someone who has never been a politician nor bureaucrat but someone who has studied history for decades, and represents an informed insight into the process. Your comment reflects an ad hominem bias rather than an understanding of the nature of any form of government.
“Trees that are slow to grow bear the best fruit.” - Moliere
Ms Arden is wise to take her time to digest the enormous information presented to her, sifting through what is important and formulating a strategy.
People shouldn't be too hard on her; expecting a knee jerk policy to be dished according to their fantasies.
Expecting a politician to do the very specific thing they promised in order to get elected over a term ago is expecting "knee-jerk policy"? After years spent slamming the incumbents for not having such an amazing and definitely-executable plan that was definitely realistic?
They were in opposition for 9 years. And have been in Government for roughly 4 years. How much more time does she need? She could have just gone ahead with two policies they already had: CGT and abolishing rural-urban boundary. Sure, these policies weren't perfect, but they would possibly address parts of the issue. Instead we've had some minor tweaks that sound nice in theory but don't address any of the real problems.
106 comments so far and no one has considered the current inconvenience with China? Stuff's article on the Uighurs seems to have dragged the crosshairs slightly across the Tasman, maybe Jacinda's waking up to the fact global politics are very complicated indeed. I'd struggle to sleep too.
slight suspicion that he may have been sold journalistically so to speak, a hospital pass, hook line and sinker. CT must now justify the drama and innuendo of this headline of his. Otherwise it can only be surmised that the young blades, the new wave media sharks, are taking the mickey out of the old lefty.
Such a hype has been created around the announcement by Mr Robertson to control the speculation demand that will have to go all out in sincerity as any shortfall will have adverse affect and perhaps is the only way to reedem themselves for future.
Will be interesting, now to see how badly will he falter.
The housing ‘ponzi’ is not restricted to New Zealand. Is it a global consequence of ultra low interest rates. The implied wealth of rising house prices in a major driver of household spending. Rock and a hard place springs to mind. Bright line extension and capping mortgage interest deductions for residential property investment are my pick for the ‘big announcement’. Easy way to boost the tax take and slow house price inflation.
Pietro - Bright line extension and capping mortgage interest deductions for residential property investment are my pick for the ‘big announcement’
Something along those lines probably but the unintended consequences of such certainly would make the current housing/rental market worse. The longer the Brightline test the longer a large percentage of the market never comes up for sale. Removing interest deductions would reduce the number of investors that provide rental accommodation so a well thought out response is needed !
The very fact they've taken this long to announce something, I believe suggests it'll be more than just a bright line extension. They surely realize there is a huge expectation to fix this. As economists will freely admit, judging the impact of policies on the housing market and therefore entire NZ economy is almost impossible.
It will be a fine balancing act between knocking a few percent of house prices and bringing the whole thing crashing down.
Well the possible resignation doesn't come as a surprise to a number of people on this site, a few of us called it a couple of weeks ago when the heat started coming on Labour. Still I personally didn't see it a possibility for year or so yet and the bailout would come before the next election when Labour are looking like they are going to get thumped.
She will resign but not now... It will be sometime before next election.
This rumour is with a purpose, only will know when the time comes, why they spread this rumors.
Currently she is live on TV with Australia bubble and taking easy questions.
Someone just asked her about BLT, will she be exapnding and her answere was that will not be taking any question on housing u till tomorrow.
So timorrow is the day when they goof up again
You're getting a bit cracked-record-ish.
They have no answers, neither do any political Party, here or globally. Biden, after all, has gone for an eye-watering debt-injection, and a lot of sabre-rattling (which tells us he cannot 'fix' the US economy, and expects to go to war (as per 1929/1940) over 'what's left.
This time it is different (the Limits to Growth are applying pressure) and just addressing single issues (housing) or projecting single attitudes (blah Jacinda blah) is an invalid response. Did you read the link I suggested? Why not?
I think it's getting ridiculous, all the moaning, they are doing a good job I think, National spent 9 years doing nothing but sitting on their hands allowing problems to get worse, and denying they existed, Labour actually take steps to sort problems out, they 1000% better than National were.
The best thing Labour could do is get those clowns off TVNZ's breakfast show, that are on it every morning.
Someone must have thought getting some liberals on primetime in the morning might help, but Campbell and Jenny May are doing them much more harm than good, constant complaining that the government isn't woke enough, get rid of them.
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