Monday's Top 10 with NZ Mint: Aussie banks need more capital; can a CGT make housing more affordable?; an Audi fad; a deficit denier; Shearer's plan; Dilbert

Here's my Top 10 links from around the Internet at 10:00 am today in association with NZ Mint.

Bernard will be back with his version tomorrow.

As always, we welcome your additions in the comments below or via email to

See all previous Top 10s here.

1. Aussie banks 'need more capital': IMF
The IMF's Financial System Stability Assessment of Australia has said (page 22, para 35) that the four major Australian banks may need as much as 5% of its risk-weighted assets (RWA) in additional capital to pass their toughest stress test.

That is rather a lot to find; by my calculations, those four have at least A$2.5 trillion in RWA, so 5% is about A$125 billion.

That same report sets out their risks and obligations to New Zealand - we represent about 40% of their cross-border exposures.

A more easily digestable summary of the IMF Report can be found in an AFR story:

The International Monetary Fund says Australia’s largest four banks should be forced to raise billions of dollars in extra capital, a move that would hit profits, because of their dominance over the industry. Raising concerns about aspects of the banking system, the Washington-based fund called for tougher stress tests to assess how the banks would manage a financial crisis like the one that hit after the Lehman Brothers collapse.

It proposed an upfront fee paid by banks to insure depositors’ cash, a step designed to avoid expensive government bail-outs. The report is unusually tough – Australia’s banking system was praised around the world for surviving the 2009 financial crisis mostly in good shape. Analysts said tougher protections for the banking system would hurt returns to shareholders and have a knock-on effect across the economy because banks make up a third of the sharemarket and a major source of dividend payments.

2. 'We won't do it': ABA
However, these big banks have rejected the IMF suggestion. More from The Australian:

Australian Bankers Association chief executive Steven Munchenberg said the banks should not be required to hold more capital given the increased regulation facing the sector.

The banks are in discussions with the Australian Prudential Regulation Authority on the framework it will put in place around banks considered "systemically important". "APRA's conservative approach on capital definitions means that Australian banks hold more capital than otherwise would be the case," Mr Munchenberg said.

3. Unintended consequence?
Matt Nolan at TVHE is scratching his head at the Fabian-conducted campaign by Labour+Greens to bring in a capital gains tax on housing, and why they think it will help housing affordability.

So depending on where we define the boundary of the tax we will surely be increasing the tax on investing in the supply of property … and if we are worried we have “too few houses” for some reason then this won’t help.

Now prices are meant to fall because we don’t have a “bubble” from “investors” being “morons” or something, that’s nice – but surely the observed drop in house prices in the first instance will be due to the future tax liability that has now been thrown on property.  This does nothing for “affordability” of housing services for people, as if you buy a house you have to pay the tax, and if you are renting the cost depends on the supply of property (and household income).

I’m all for treating asset classes the same, most definitely.  But I am perplexed that we believe introducing a tax on something will make it more affordable (as that is the thing people seem most concerned about) – so if you would like to tell me in comments that would be much appreciated.

Andrew Coleman looked at the impact a capital gains tax might have in New Zealand (in a 2009 paper well worth re-reading). Might be different to the impacts intended. It seems it will make it tough for renters - but be good for the country.

A capital gains tax will have the following effects: it will lead to an increase in rents; it will lead to a reduction in the number of people renting, and an increase in homeownership rates; it will lead to an increase in the net foreign asset position; and it will lead to a decline in the fraction of large houses in the economy.  It is possible that homeownership rates could rise by several percent if a capital gains tax were introduced, with a similar sized increase in the net foreign asset position.

Rodney Hide is also anti a capital gains tax. Here he is in the Herald on Sunday:

There's a plan about to make houses affordable by taxing capital gains. I am not a supporter. The Government taxes tobacco and alcohol to put up their price. It's hard to see how a new tax will have the opposite effect on houses.

Politicians prove incredibly inventive in arguing for new taxes, but claiming they will make houses affordable takes the biscuit. There are many reasons why Auckland house prices are high. A lack of tax isn't one of them.

One reason is that Auckland councils have for years run a deliberate policy to hike house prices. The council doesn't put it that bluntly, calling it "smart growth" or a "compact Auckland". But the policy works by hiking house prices. The policy's purpose is to get us to live in apartments over train stations. That way we will be more likely to take a train and the mountains of cash that councils have sunk into trains, stations and rail lines over the years won't look such a waste.

4. 'Do the work first, then ask'
Greece's creditors will eventually have to write down the value of the country's debt for a second time, but only after Athens has done the hard work of getting its budget into shape, according to the head of Germany's central bank, Jens Weidmann.

"One might well wonder whether the leap of faith that one grants if a debt haircut is done today sets the right incentives now, or whether it would not make sense to promise a haircut, which will be necessary at the end to regain access to capital markets, for when the reforms - which are the actual goal - will have been implemented," Mr Weidmann said.

"A haircut does not yet solve the problems. I can do a haircut today but if the budget as such is not sustainable then I'll be back in the same situation in 10 years," he added. "That wouldn't make sense."

Mr Weidmann also argued that granting Greece debt relief now would in effect create moral hazard - leading to a situation in which leaders in other bailed-out nations, such as Portugal and Ireland, would no longer be able to push austerity measures and reforms through their parliaments. "This is what is on my mind," Weidmann said. "That is, how can you maintain that pressure to act?"

5. End run
In a rather remarkable achievement, 62 organisations have largely agreed how we should address our water quality issues. But not everyone agrees, and they have taken their campaign international, dissing the efforts in the NY Times.

"There are almost two worlds in New Zealand," said Mike Joy, a senior lecturer in environmental science at Massey University in Palmerston North. "There is the picture-postcard world, and then there is the reality." The clean and green image has long been promoted by the isolated country in its striving to compete in world markets.

But an international study in the journal PLoS One measuring countries’ loss of native vegetation, native habitat, number of endangered species and water quality showed that per capita, New Zealand was 18th worst out of 189 nations when it came to preserving its natural surroundings. Dr. Joy said that for a country purporting to be so pure, New Zealand seemed to be failing by many international environmental benchmarks.

6. A man without a plan
Robert Shiller thinks there is no miracle cure for an economy's ills other than working hard on a myriad of small practical things. And he thinks American voters instictively know that. Here is the guts of his view from Project Syndicate: What Shiller doesn't address is that if Sperling is so influential, and has been there for a decade ... 

Today, the most powerful economic adviser remaining in the White House is Gene Sperling, head of the National Economic Council (NEC), the agency created by President Bill Clinton in 1993 to serve as his main source of economic policy (somewhat shunting aside the Council of Economic Advisers). Because this position does not require Congressional approval, the president may appoint whomever he wants, without having his choice raked over the coals in the US Senate.

That is why Obama could appoint the highly talented but politically unpopular Summers, the former president of Harvard University. Sperling is not nearly so well known as Summers. But his record of influence in government is striking; indeed, he has been at the pinnacle of economic-policymaking power in the US for almost a decade.

He was the NEC’s deputy director from its beginning in 1993 until 1996, and its director from 1996 to 2000. Obama reappointed him as head of the NEC in January 2011.

His 2005 book The Pro-Growth Progressive contains many ideas about how to make the economy perform better. None is grandiose, but together they might help substantially. Some of these ideas found their way into the American Jobs Act, which might have had some real impact had Congress passed it in 2011. The AJA embodied some of what Sperling describes in his book: subsidies for hiring, wage insurance, and job training, as well as support for education and early learning. Moreover, the AJA would have offered some balanced-budget stimulus – the kind of stimulus that would boost the level of economic activity without increasing the volume of government debt. But the public, despite its concern about unemployment, is not very interested in the details of concrete plans to create more jobs. Sperling is just not very visible to the public.

His book was not a best seller: in commercial terms, it might be better described as a dud. Sperling is fundamentally different from the typical academic economist, who tends to concentrate on advancing economic theory and statistics. He concentrates on legislation – that is, practical things that might be accomplished to lift the economy. He listens to academic economists, but is focused differently. At one point in his book, Sperling jokes that maybe the US needs a third political party, called the “Humility Party.” Its members would admit that there are no miraculous solutions to America’s economic problems, and they would focus on the “practical options” that are actually available to make things a little better.

In fact, Americans do not need a new political party: with Obama’s reelection, voters have endorsed precisely that credo of pragmatic idealism.

7. In China 'Audi' means 'Big Shot'
Same as Herne Bay, then. Michael Wines explains: (Revealing pic on this story too.)

As the Chinese have abandoned their bicycles, the black A6 has become the automobile of choice for practically any party official or military officer with enough clout to secure one.

At the least, that is a cast of thousands: Audi sold 313,000 cars in China in 2011, and the research firm LMC Automotive estimated this year that a fifth of sales go to governments, state institutions and state-owned companies. About half of all A6s sold worldwide (229,200 in 2011) are bought in China and Hong Kong, the research firm Dunne & Company reported last year.

More than a perk, the black Audi is a rolling advertisement for its occupant’s importance and impunity in a nation obsessed with status. Black A6s slice through traffic queues and scream down the emergency lanes of Beijing’s traffic-clogged freeways, sometimes with a flashing red light stuck on the roof or implanted in the grille. Ordinary drivers know better than to cut them off or complain, at least publicly.

8. Confessions of a deficit denier
Anatole Kaletsky at Reuters is saying stuff that isn't being said in respectable society these days - the fixation with excess sovereign debt is pointless. Here's a taste:

Why are sophisticated investors unmoved by the deficit panic? Because they know that governments, at least outside the euro zone, are nowhere near bankruptcy. In fact, debt levels are not dangerously high.

The U.S. government net debt is expected to stabilize at 89 percent of gross domestic product from 2014 to 2017, according to the International Monetary Fund, even if all the Bush tax cuts were extended and without any of the spending cuts assumed in the fiscal cliff. Similar stable debt levels are projected for Germany, France, Italy, Britain and even Spain. Assuming debt levels do stabilize in the rage of 85 percent to 100 percent of GDP, these won’t be worryingly high. U.S. national debt peaked at 110 percent of GDP in the late 1940s, and Britain’s was even higher. But nobody worried much about national bankruptcy after World War II – and the confidence proved justified. For the U.S. and Britain both enjoyed their strongest economic performance in the two decades after their deficits peaked at more than 100 percent of GDP.

The U.S. and British fiscal situations today are even less troubling — partly because two-thirds of the government debt issued since the 2008 crisis has been bought by the central banks. Since the Federal Reserve and the Bank of England are part of their respective governments, the bonds they own represent debts the government owes to itself.

9. Build, build, build
Labour leader David Shearer has set himself a goal of 10,000 affordable houses a year for ten years. And he is ready to change (gut?) the RMA (read, council blockages) and free up more land. Time to buy Fletcher Building stock?

Labour get it is a supply problem, one caused by disfunctional councils, especially in Auckland. Will be interesting to see what happens when 100,000 new 'affordable houses' impact resale values of existing stock. I'm all for it, but doubt the electors will be thrilled if their 'investment' stops paying off.

The simple fact is we need more affordable houses. It's time for Government to step up. And we will.

Today I’m announcing that we will put 100,000 Kiwi families into their first home. That’s the sort of big change we need to make a big difference to people’s lives. We’ll oversee and invest in a large scale 10 year building programme of entry-level houses that Kiwis are crying out for. Yes, it’s a big commitment and it’ll take a couple of years to ramp up, but we can do it. I won’t stand by while the dream of home ownership slips away from future generations.

At the peak of last decade, about 30,000 new homes were built a year. Now it’s less than half that.

These are the missing rungs on the housing ladder. And it shows what an active and responsible government can do to help. The start-up cost of the building programme will be financed through issuing government stock called Home Ownership Bonds. The money we make from selling the houses will go back into the pot for building more.

10. It's a wonderful world
One for the doomsters ... to cheer you up.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Add a tax - to make something cheaper.

Make something more expensive - to make it cheaper - so more people want it - so it becomes more expensive.

Re #1 and #2
I am greatly relieved that Steven Munchenberg (HMMM) has the whole issue sorted.
His 'weasel - words mean - the Tax Payer will lake up the slack.
The banks make huge profits - pay out huge dividends - are (IMF words) under capitalised - which is ALL the fault of the taxpayer.

Accepting taxes as inevitable and condoning other people being taxed, is our fault!
In medieval times peasants were tax 5% of their crop, no more!
Today, 50% is common place in many OECD countries, once you add up all the different taxes levied on people. 
We have a choice, we can say no!, but we don't because we're afraid of the "boogie events" the propagandist feed us. 
Peak oil, Terrorism, GFC, Fiscal Cliff, on-anon-anon, ad nauseum! And we slopp it all up!!
When a particular outcome is wanted, engineering a problem whose solution is that particular outcome, is a good way to obtain it. Hitler used it with the Jews by blaming them for the hyper-inflation in the Weimar Republic at the time. Dubbya used it to pass the Patriot Act and Obama used. it to bailout the banksters. He will use it to obtain a third term in office, and maybe a fourth!

You might like this from Marc Faber, not that it goes quite back to the middle ages but:

In order to exercise control over the population, governments throughout history have made people dependent on government largess.

A government can make an increasing number of people dependent on its generosity by providing more and more benefits to a larger and larger share of the population. Because of these "freebies" people will go along with the government’s enlargement as a percent of the economy.

The masses believe in their free lunch and because the business elite knows it can profit from the growth in government. However, there comes a point at which the "nanny state" becomes unviable. Raising taxes to pay for the freebies become problematic. Fortunately for the governments, they have a Treasury and/or a central bank that can print money and monetize the government’s debts.

I follow Marc quite closely. He's a brilliant individual whose honesty when speaking to the public is unmatched, and he's not afraid to challange the government and the status quo.
Very rare indeed!

One of the great things about Marc is that english is his second language and it results a some timeless one liners that combine a keen assessment, honest delivery and odd turn of phrase.  Extremely entertaining.
Only Marc Faber could pull off the line "Basically the vorld economy is stuffed" in his slight germanic twang.

Im my time I will get 12 years of schooling paid for by the government, 4 years at uni heavily subsidised by the government, I'll work for about 40 years paying at the most 33% tax (and that is only on part of my income), then I could live for another 30 years while the government pays me NZ super and my medical bills. I think I am pretty typical of the average NZer - I just can't understand what they are all whining about...

Only 33%...? You're forgetting property tax, GST, fuel tax at the pump, vehicle registration, WOF, RUC if you drive a diesel powered vehicle, excise tax, tobaco tax if you smoke, alcohol tax, etc. Hell, today we pay tax on tax, and some of us believe them when they tell us we are getting a "free luch." Another control mechanism used by the power's to be is to let the people think they have one up on the government, that brings no complaints!
Of course, the 33% tax comes off the top, before you pay all these other charges. To look at  it from another perspective, to pay a dollar for your favorite thingy you must have made $1.33, whilst if you were the Reserve Bank of any country, for every dollar you print and lend out, you will get back a dollar plus interest! And then you'll burn the dollar to reduce the money supply. 
Sterilization, they call it!!
Lastly JJ, all those "benefits" you think you're getting for free from the government teat, will be paid for by your children, or someone else's if you decide to have none, plus a hefty amount of interest. 

Oh right...."I dont like the reality I see or Im told" so I'll claim its make believe...
NB if you mean Obama he can only do 2 terms...
I think you are mis-guided on tax levels of peasants as you are on many things if the above post is any indication.  Bear in mind even if it was "only" 5% when you are on a subsistance survival level 5% is a huge ask.

'Bear in mind even if it was "only" 5% when you are on a subsistance survival level 5% is a huge ask.'
Well lets' see, Steven!
At 5% tax, if one makes a million, one pays $50,000 in tax; at the poverty line income level, which I believe is $10,000, one pays $500. That is $10 a week for 50 weeks, huge...? I say beer money for a non-drinker. I give my kids more as their allowance.
Besides, people on the "dole" pay over 50% of their income in taxes. Now that is a huge ask! And they call it a benefit; another silly euphemism!

"I dont like the reality I see or Im told" so I'll claim its make believe...
You struck me as an intelligent individual when I first read your postings, but I may have been mistaken!
The reality I see it's all good and I like it very much, thank you! However, it has nothing to do with what I am told, and everything I read is done with a healthy dose of sceptisism, the old "grain of salt" if you wish.
As for "make believe," that is what propaganda does!
Believe not everything you read, and much less anything you are told, for whomever is telling you has a reason for doing so, or they would not bother. Find out their reason, and you will have a basis for judgement and belief!

Thoughtful article - from Der Speigel via ZH (who else)

Re 9 ...time to buy Fletchers Stock....
If Labour have any sense they would also require the Commerce Commission break up the building supply monopolies and comfortable duoploies that Fletchers and others have developed over the years.

Not me....their share price is based on an effective monopoly backed up by the dewalt etc...and their debt levels?
Im not so sure we can break up the retail monopolies and indeed maybe we dont need to.  ie Im not sure these front guys are the real problem.  For instance I could buy 4x2 H3.2 SG8 off Placemakers for $8.43 or off Bunningss for $4.79 (and its better quality). Who's the fool for buying off PM?
So there is some competiton in materials.
However when we switch to tools and finishings, I dont think there really is much....want a makita 1/3rd sheet sander? $135 no matter where. 
I could buy crappy irwin chisel set off any of the above for $110~120 or get a really nice imported set from the UK for <$90....Im getting the latter.  Part of that though is the small size we are.....
Also take a look at trademe for things.....there can be decent savings.....saw blades for instance....other times no, brad nails are cheaper in the toolshed.....but trademe is the only place ive seen stainless steel brads "on the shelf".


Niall Ferguson on the rise of China

Not sure whether he's a historian, Economic historian, an economist or an economist of the Austrian school.  He seems to be refered in different an economist he's not well regarded except as a darling of the school of Austrians....not many others think much of him, but that seems mutual between schools.
He has also commented in this piece (?) that he thought that the USA would shine due to its shale oil future.  Lots of ppl (wise and un-wise) seem to think that. If its un-founded and I'm as sure as it can be it is, then lots of opinions and strategies un-ravel and fast.

Don't forget all main stream economist missed the GFC completely, and they could not fathom the sub-prime fiasco that brought it about.
Economist have deluded themselves with their "science." But it is not a science, like physics or engineering, it is a branch of philosophy. Modern Portfolio Theory has been debunked, as has the Theory of Resonable Expectations, much to the chagrin of Markowitz and Fama, et al and many other nobel laureates from the Chicago  School of Economic Thought.
Many of Von Misses disciples were correct about their predictions, and Niall is one of them. The Austrian school of economics is the only one that makes sense. Ron Paul (Texas) belongs to this group, and as many of you have posted here, Houston is booming.
Well, guess what, Houston did not have a housing bubble. As a matter of fact, one could buy property in Texas for tens of thousands of dollars, as opposed to hundreds of thousands, or even millions, elsewhere in the country. Ron Pauls' final address to the House of Representatives is posted on the internet, and it is an enlightening one! I recomend it.

Ummm, Austrian economics is less scientific than all other schools of economic thought. It explicitely rejects the scientific method.

"Home ownership bonds"
Why do I see unintended consequences in this pipe dream!

Apart from those with vested interests everyone has been crying out for action so lets not knock them now there is finally something happening. 

I have seen this work very well in the UK (we bought one)

Don't forget too when you are building this many homes you get amazing economies of scale.  So even horribly slow progress toward resolving the issues you raise when spread over many thousands of homes is efficent.  Even when compared to say a 100 clued up private developers doing their own thing each time.

But then again, most people are clueless about the complexities of development.....May I suggest you go talk what Labour is proposing with an experienced developer  ?
Hugh there is an established principle that the more you lock up information within a profession the worse the outcomes. This is what you are proposing when you suggest that only developers have the ability to undertake property development. If you really want to lower the cost of sections then I suggest you disseminate the information on how development is done. Showing everybody how easy it is might on the face of it appear to ruin a cosy little monopoly, but the counterintuitive outcome is that people would be less tolerant of unacceptable charges that are incorporated into the cost of their land.
So can I respectfully suggest that these statements are rather arrogant. Are you not lining your own nest with this attitude?

Competition getting a bit warm for Hugh I think.

#1.   So banks need greater capital reserves.  Fair enough.  We are also told our big banks need their vast profits to make them stronger.  mmmh ok.  But much of those vast profits are paid out to shareholders - that doesn't make the bank stronger.  Bigger capital reserves mean smaller payouts to shareholders.  Less dividend = smaller shareprice.   Fair enough if that results from the need for increased capital.  Because it's real cost of doing business. 

KH think of who owns the banks and gets the dividends. Also, todays capital does not come from the savings of the banks' depositors, it comes from the central bank's printing policy and the bond auctions they run. It's money churning, no more!

Brilliant takedown of Rodney Hide's pro-sprawl agenda here

Sounds like Rodneys actual views on housing affordability are a bit like Hugh's - add a whole lot of awful suburbs on the edge of the city where no one wants to live and then somehow the places in the central city where everyone does want to live will magically become cheaper.
I note that Rodney lives in Epsom, a nice central suburb. I can't see Rodney living south of Papakura and driving 90 minutes each way to work every day - but as long as someone else has to do it so he can keep his 1/4 acre section in Epsom everyone wins, right?
The real answer to Auckland's problems is high density zoning within a certain radius of the city. People that want their 1/4 acre can move to the suburbs. That is how all good cities work. But of course there are so many rich pricks who don't want a set of apartments next door and are doing their best to make sure it can't happen. 

"Since the Federal Reserve and the Bank of England are part of their respective governments, the bonds they own represent debts the government owes to itself."
My understanding is that the Fed is owned by the 12 regional state Feds which are, in turn, privately owned by the 0.0001% (including the Rothschilds) who do very nicely out of the massive and unnecessary borrowings.
Therein lies the root of half the problems and if only every American understood this they'd also understand what OWS are on about.

#8, AH iscorrect!
The Federal Reserve Bank is not part of the Federal Government, and they have no reserves!
They are a private consortium of bankers that prints money and lends it to the Treasury, who is backed  by the tax payers contributions. I don't know about the Bank of England, but I suspect not! In fact, I belive every country in the world today has the same policy. And guess how it all came obout...

The Bank of England used to be private but was nationalised last century. I believe most central banks are privately owned however.

Ergo, exactly the outcome they want the world over! Then it will only be virtual money, no longer will there be a need for cash, all transactions will be scrutinized using their electronic trail and no one will believe in fiat money anymore.
A  reserve currency is not enough because sovereign banks can still print and devalue their currencies against reserves. They want a world currency which can only be issued by them. Then they'll have us by the short and curlies!
The Euro is a first experiment, and look at the amount of control banksters have over the governments now. They are practically telling them how to live, and how much to borrow.
Why do people accept this? Because they don't know...
Got bullion? If not, get some. I have been a gold bug since 1999, when my property in NZ was a1/4 of it's worth today.Mind you, gold has also quadrupled in that period.

There are a number of factors that have seen house prices get to ridulous heights. Among them is a lack of a capital gains tax, but there are many others as well. Some I can think of are
Low wages
Under supply
Over demand
Compliance costs
Foreign investors
If I was asked what order I would put those things in, foreign investors would be at the top of the list.
I am waiting for the policital party that has the guts to address this and they could start by pointing out to the rest of the country that as wages are rubbish, house prices are stupid and rents are over the top, the public purse tops up the rent. dishes out working for families and if there is no work then pays a benefit. How much of that public money, borrowed from overseas with interest,  goes directly in to the pocket of so many foreign investors.
Get rid of them

If the government really wanted to make housing afordable for first time buyers, they would refund the GST component built into every new home. But they won't, because they are aware of the gap between old prices and new ones is 15%, the GST component that no one has paid to build old houses, yet all new housing requieres it. Also the cost of council approved construction has been excluded from old houses, and we know how well those are built when compared to the new leaky ones. Besides all MP's have real estate in their portfolios, and the last thing they want is the price crashing
Smoke and mirrors, bread and circuses, propaganda.

Are you serious? Think about that. Think about the identity of that grouping of people WHO currently comprise the majority of "first time buyers" in Auckland. Guess who would be the beneficiaries of such munificence and who would be paying for it, or, in other words, who would be subsidising it.

Only young people are true first time buyers, and it does not have to be for Auckland alone, as a matter of fact, it could exclude Auckland! And it should, there is enough wealth in Auckland.
I assume you imply taxpayer subsidies, but I don't follow. If less tax is payed, how is that a subsidy?
I feel paying GST on new construction is subsidizing the governments' largess. One has already payed income tax on the money used to pay GST for consumption. I can live with that because it is impossible to distinguish between necessary consumption and discretionary consumption, at the checkout stand. However a home for a family to raise their children in, who will become the future taxpayers of NZ, and help pay for our retirement, is not discretionary but a necesity. Actually, I would suggest people be educated in school of the need to own a home before having children, or better yet, although a bit draconian, a law should be enacted requiering parents  to own their house and have a full time job, before they get pregnant. 
This way accidental single mothers wil be a thing of the past, not to mention strategic late pregnancies in order to stay on the DPB, plus accomodation supplement, a bit longer.

Hevi: Glad to see you've tightened your definition of a (true) "first time buyer"
New migrants arriving in new zealand and buying their first (nz) house are "first time buyers"
Read this
Damien Grant NZH 15 Jan 2012
Most people do not want to live in high-density housing. The first thing migrants from nations like Taiwan do is rush to Dannemora and buy the largest block of land and build the most ostentatious house their capital will allow. (a new-build by a first-time buyer) (maximum GST)
Any GST concession made to migrants arriving with established families are obtaining that concession from somewhere and it is coming out of the pockets of people who have or will pay GST and are therefore subsidising those who receive the concession.