sign uplog in
Want to go ad-free? Find out how, here.

Treasury says the Government's targeted fiscal response to COVID-19 complemented the RBNZ's monetary response; Says the impact of low interest rates on inequality is unknown

Treasury says the Government's targeted fiscal response to COVID-19 complemented the RBNZ's monetary response; Says the impact of low interest rates on inequality is unknown

Treasury is defending the way the Government is supporting New Zealanders, as low interest rates contribute to ballooning house and share prices. 

Chief Executive and Secretary to The Treasury, Caralee McLiesh, told the Government’s response to COVID-19 aligned with advice Treasury and the Reserve Bank (RBNZ) provided Finance Minister Grant Robertson in January 2020.

They advised the Government may need to respond to the side-effects of “unconventional monetary policy”, should these policies be used - which they since have.

They said the impact of quantitative easing or large-scale asset purchases “may increase wealth inequality by more than conventional monetary policy [IE changing the Official Cash Rate] by raising asset prices more directly”.

Treasury and the RBNZ categorised this as a “significant” trade-off, but noted using new monetary policy tools would also support those at the edge of the labour market. In other words, lower debt servicing costs and more liquidity in financial markets support businesses, which keeps people employed. 

Asked by in June 2020 when he was considering the side-effects of low interest rates when designing fiscal policy, Roberton said no. 

Unemployment has since remained relatively low, but house prices have soared and bank lending to businesses has declined. 

Asked whether Treasury repeated its January advice throughout 2020, or changed tack and told Robertson a response to the side-effects of loose monetary policy was no longer warranted, McLiesh said: “What we have seen is that both monetary and fiscal policy have been working in tandem to do some heavy lifting to support the economy - monetary policy working through broad base credit channels and also supporting lower debt costs; fiscal policy working with more targeted mechanisms to make sure that those who are most affected by the pandemic are also provided support.

“So I think that what has happened over the last year is consistent with that advice.”

McLiesh defended the Government’s decision to not act sooner to prevent house prices sky-rocketing. The Government is this week expected to unveil a set of policies to cool the housing market.

“Pretty much all forecasters at the start of the pandemic thought that house prices and other asset prices would be falling - Treasury included,” McLiesh said.

“So we have been surprised by the extent to which interest rates have driven up house prices. But there have been other factors as well.”

McLiesh acknowledged low-skilled workers, youth, women, Maori and Pacifica had been disproportionably affected by the pandemic.

She also recognised low interest rates benefit borrowers, asset owners and those at the edge of the labour market, and disadvantage savers and those trying to buy assets like houses.

But she said the net effect of very loose monetary policy was unclear and complex.

“To understand that question, we need to understand how housing wealth is distributed across households,” McLiesh said.

“We do know New Zealanders have an enormous amount of wealth in housing - around 60%. We know that those who are in the lowest wealth deciles tend to have less housing and assets. But we don’t know the full wealth distribution of housing. And until we really look at that sort of assessment, we can’t tell the impact on overall wealth inequality.”

McLiesh said Treasury was doing work to assess this.

She said a UK study showed a 10% rise in house prices led to less wealth inequality because housing wealth was concentrated among middle-income earners.

She also made the point: “It’s even more complex to understand what the impact would’ve been without alternative monetary policy and without other types of policy as well.”

Part two of this interview will be posted on Monday. 

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.


If not for NZ QE I, the wealth inequality might be even greater.




Correct, it is rubbish. Also, the article isn't wide-enough scoped.

Obviously, QE (debt-injection, in plain language) will distribute proportionately, obviously that widens every stratification, obviously towards the end of the ponzi the widening chasms between cohorts becomes impactive on a societal fabric knitted earlier. It's a little like hooking something round two bike-spokes near the hub, then sliding your hook out towards the rim. Comes a time.....

By the time the article is scoped wide enough, Jenee will have worked out that several of the UN SDG's are invalid. You can't have 'rights' to anything, housing included, with an unlimited population. You CAN have egalitarianism, under a sinking resource-lid; quite a different thing. Treasury are not up to speed for the very simple reason that they're still thinking in 'money' terms. At this stage in the debt trajectory (housing isn't the only place debt is squirting into, there's an RNZ piece this morning re collectibles; in this case cars) measuring anything in the debt-issued proxy is like hiding down behind the bench-seat of an FJ Holden, and trying to ascertain the road ahead from what you see in the rear-view mirror (that may sound trite, but I chose the metaphor carefully; economics at this stage in the global trajectory, is increasingly blind.


Absolute bs. There is a kiwi who has made a life out of screwing other kiwis if ever I have heard one. Now trying to justify it on a message board.


. . no ... the QE has made inequality within our society so much worse ... it has juiced up property prices for the rich ... and drastically priced FHB's out of the market ... more people unable to buy or even afford to rent , more families than ever seeking government help or subsidies ...

QE & this Labour government have been a disaster for anyone less than " rich " ...


Tbh I am confused by all of the BS ... this talking head is simply a mouthpiece apologist for the ardern administrations coxk up

As Croaking Cassandra pointed out when she was appointed, McLeish hasn't go any experience with national monetary management, plus she's only got Aussie experience. She's got state experience in a federal system, but that doesn't count for much. Where were the NZ applicants for her role? Our imported Treasury secretaries have all been disasters

BS when you’re already at the lowest rung of the economic ladder you can’t drop any further. But folks on the upper asset rungs of the ladder have accelerated ahead.

No great fan of Dr Cullen myself but can only applaud his comment not so long ago, something like, in a housing boom it’s bad enough when rungs are being added to the top of the ladder but it is indescribable when those rungs are being taken from the bottom of the ladder.

NZ Dollars are getting pretty worthless. They're only popular amongst those paying mortgage debt and the ignorant.

I imagine most commenters here sell their NZ Dollars pretty quick. The US Dollar is pretty worthless too. The American government just credits their citizen's accounts nowadays.

Pretty sure Chinese goods will just stop arriving in NZ and the US. Has anyone here ordered goods only for them not to arrive? I know I have - don't blame them either.

... my life partner ( AKA the wife ) and best buddy each order screeds of small items from China ... cake decorating nozzles , electronics fittings , micro- drill bits & the like ... they always arrive , quickly , post free , cheap as chips , and frequently with freebies added in ... the Chinese never cease to amaze me ...

And , they still accept our currency , the Pacific Peso ...

It’s just printed up funny money moving back and forth. Getting hard assets outright with funny money is the name of the game, the Chinese have had a ball buying property and business assets in the West with their funny money.

Magic and mystery,
Are part of their history,
Along with the secret,
Of gummiberry juice.
Their legend is growing,
They take pride in knowing,
They'll fight for what's right,
In whatever they do.

Gummi Bears!!

The delivery chain here in NZ is a nightmare. It is cheaper to deliver from Guangzhou China to Auckland airport than the flight cost from Auckland airport to Northshore Auckland, sometimes take longer as well.

I have a different experience than you Gummy Bear, I used to regularly buy stuff from AliExpress than than locally, but the last few Months, some of their items never arrived. Good that they returned the money though, but I have stopped buying for now.

CWBW...congrats, you got exactly the reaction you wanted. LOL.

You've made a statement, but could you please explain how? I am just genuine to hear from another side of view.

coh... if you are asking me I meant he was trolling for exactly the type of responses his post received. CWBW is either a bored troll sitting in his Mums basement or he has vested interests in mass immigration and high house price inflation and doesn't care who it harms. Apparently he is not very good at chess either.


The headline is clickbait. Treasury pointed out what would likely happen if the kitchen sink was thrown and it did. Government should not have eased LVRs, plain and simple.

We have a deeper issue in New Zealand that small business funding seems more and more to be wrapped up in housing assets. There is going to be a real liquidity crunch for young people with great ideas, who want to get something off the ground. Brain drain coming up unless the government becomes the default lender to business.


Even for small business loan, easy to get if have house with equity.

Everything comes down to house in NZ as in reality only economy in NZ is Housing economy ....productive or unproductive God knows but it is as promoted and supported by politicians of all breed.

Role of opposistion : Has National ever raised a voice on multiplying rise in house price SO only God can save FHB as Government = Opposistion.

Now when their is no difference between National and Labour, perfect opportunity for other parties to rise as in next election, national and Labour will have same policies in favour of elite or in today's time, people with house :)


That's why more competition in banking is required or intervention of credit guidance.

In Germany the top 5 banks are responsible for only 13 percent of lending. Germany has 2000 community small banks that lend to local small business and for productive purposes.

Currently in nz only homeowners can get close to business funding. At this rate small companies will disappear and we will all work for mega corps or the govt or collect our UBI in our new govt owned dorm living quarters.

That's why if the central banks take over and issue their own digital currency and the banks go bye bye we all have accounts at the rbnz. They will decide who gets loans and who doesn't. Our fascist future is near. More lockdowns will occur with more printing until the mother of all bubbles takes down the banks and the rbnz takes over.

Yes, I wouldn't be surprised if the banks morph over the next few years into loan application processing services for the RBNZ. There is a big pile of admin work there I can't see the RBNZ wanting to gear up to do (until AI can mostly deliver it).

I think you are right that currency balances will centralise to a CBDC, but surely it's just a switcheroo to another fiat that they won't be able to resist generating more of when they are broke (which will be all the time). It will buy the some years until faith in the new CBDC also fades and even more of us look for ways to store and use wealth out of govt control.

I wonder if we are headed for a split system?
Group 1) Winners from current system (debtors and asset holders) who mostly stick with what the govt gives them (as long as it survives)
Group 2) Losers (savers, young and future tax payers as they arrive) who unhook themselves as much as possible from the govt system

Group 1's problem is; As long as inequality (based on the govt system) grows, Group 1 will increasingly dwindle and be left playing only with each other.
Group 2's problem is; The State has the coercive power and will demand tax paid in the govt monetary system, so they can't completely get away from it unless the State collapses.


'Says the impact of low interest rates on inequality is unknown'

Are they serious.

'She said a UK study showed a 10% rise in house prices led to less wealth inequality because housing wealth was concentrated among middle-income earners.'

Was this 10% rise they were talking was 10% rise in a month and that too after 20% to 30% rise in few months.

Treasury has come out to bat for government inaction and support the inannouncment in next week. Indicate Mr Robertson so called announcement will be without any tooth.


Your last paragraph is exactly what I reckon. They'd need to do a study to figure out if rain makes things wet.


... closeted in their ivory towers , treasury officials have no more real world experience than does Jacinda & her MP's ....

Step outside , team ... feel the rain ... look at the crime , see the gangs , look at the " for lease " signs , see the struggling families & workers , look at the rich real estate agents swanking around in their Corvettes & Maseratis ...

... join some dots !


"Step outside"
Are you mad! That's the last thing any of them will do.
It's theory that matters; theory alone, and practicality is irrelevant.
Have another read of this woman's responses and tell me she has any intention of "stepping outside". She doesn't even know where a door is to do so....because there isn't one on the plan of her economic house.


This is a widespread deeply embedded issue at all levels of our bureaucracy, national and local government. Academics in charge without any actual professional commercial, industrial or social experience of their own. Working from rooms without windows, degenerating into a hardcore bunker mentality. A bureaucracy that is opinionated, self serving and unaccountable, is a very serious threat to society and democracy itself.

GBH is disingenuous; he too should 'step outside' and 'join the dots'.

... I'm a genius ? ... cheers ... thanks , dude ...

You are a dissing genius bro

.. so sweet of you to have noticed ... 100 % correct , of course !

Treasury is hiring music majors these days. Will help when all the violins need to start playing


Agreed. This article is all aboutthe government prepositioning to give the can an almighty hoof down the road. Their popularity is down, instead of doing something transformational and for the long term good of New Zealanders, they will look at their pay packets, the free flights, and do what is good for them at the next election.

And then Ardern's office portrait of Micky Savage - the one she once dreamt of emulating - will be replaced with a portrait of John Key, the one she became (a campaigner on the housing crisis who then did not address it).

Surely those will be just announcements without any impact, we cannot do anything as we have elected these bunch of jokers, who only know to market themselves without any substantial action.. such a shame this Govt. is.. PATHETIC


I think it should be clear to everyone that those holding assets have made out like bandits over the last year. The government was warned, they didn't change tack and now GRs stated goals are far more difficult to achieve. This from his speech last year:

"We must also not allow inequality to take hold in our recovery. In fact we need to take this opportunity to improve the prospects of all New Zealanders and tackle those long-standing divisions."

Well, you royally screwed that up GR, looking at the concentration of housing now going towards investors and the capital gains and increased house prices from the last year. Actually with the amount of failures from this government, I think they should start announcing and working for the opposite of what they actually want. They may be able to achieve what they actually want by screwing up the opposite.


If the august, but unfortunately ailing, Dr Cullen was sufficiently motivated to pass negative comment about the watch under a Labour government then that must be seen as a sharp criticism surely. He said something like that it had been shown from international experiences, that when the OCR got 2% any stimulus thus provided was spent. And if it was necessary to introduce LVRs then why was it necessary to remove them. Cannot deny that these two factors have contributed significantly to the explosion in house prices. More scary than anything else was the astonishing comment from Robertson that all the economists etc etc predicted CV19 and measures would decrease house prices. This is supposedly our Minister of Finance, his government, is his next line of advice each morning the astrological column.


We dont simply want to see new investment action by property magnates curtailed. . We need to see punitive action that sees them release existing holdings The property in the hands of the few and the foreign needs to come back onto the market and the only way you achieve this is to bring prices down. Else the inequality is entrenched...Covid would have achieved this goal but the incompetence of government and the completely ham fisted response let the oppurtunity slip, and now things are far worse.


"We need to see punitive action that sees them release existing holdings The property in the hands of the few and the foreign needs to come back onto the market".
Completely correct, and this could also be achieved by a graduated and progressively heavier taxation on any houses that are not owner-occupied. We could have a particular tax rate on the second home, a bigger one on the third, an even bigger one on the 4th etc., so to create a huge financial disincentive against holding homes for speculative purposes.


Is there any evidence that the lower interest rates have kept businesses afloat?
And how large will the imbalance between lending for business vs housing have to get before it’s officially acknowledged as evidence of poor policy settings?

Maybe not evidence, but our economy has done amazingly well considering lockdowns and no tourism etc. much better than anyone could have predicted. A fairly decent chance that low interest rates helped I’d say.

... amazingly well because our economy is on debt steroids ... winning the race 'cos we're juiced on QE & on ramping up borrowing from banks to buy houses ... the patient is on life support !

The last GDP result was a shocker ... we're on the cusp of a recession .... how much worse will it be when the QE & borrowing slows , or stops ...


"Treasury defends pace of Govt response to soaring house prices..'

Headline should be ' Treasury defends pace of Govt response to support and promote housing ponzi.

So the treasury does confirms that RBNZ was prompt and proactive to support any fall in house price SO why does RBNZ says that we are not concerned with house price. Actually they are very concerned if possibility of a fall arises and not otherwise.

Also government was prompt and proactive in supporting RBNZ to avoid the possibility of any fall but when it was otherwise, Government went into silent mode.

So RBNZ has double standard as are concern and have role to play if house price may fall but if rising being as fast 10% per month than their response is that house price is not our concern (which actually was when falling).

Same applies to Mr Robertson and Jacinda Arden, went hard and fast when had fear of fall but when actually went on rampage with rising on daily basis were silent.

Real shame


The deed has now been done...a new privileged landed gentry class is now set in concrete. The only course now lies in political action not the economic snivelling of keyboard warriors. And it's possibly too late even for political action. Only violent struggle remains. There are plenty of examples in world history which I understand are now forbidden subjects in schools.

For example, there's the killing and imprisonment of millions of Kulaks (the land-owning peasantry) by Stalin in Russia in the 1930s to allow land redistribution to the non-land owning peasantry.

There's Mao Zedong's notorious "killing of (millions of) the Landlords" in China to allow the redistribution of land to the peasantry. This was brutal in that extreme torture was used on the landlords.

There's the French Revolution starting 1789'.

And so on ad infinitum.

Foreget about economic solutions and google and read accounts of these historic 'rightings of class inequalities'.

It really didn't take long for New Zealand to about-face from the use of Land Tax to break up land banks and the efforts of governments post-WW2 to make land and housing affordable to average Kiwis to a self-obsessed Me Generation taking this affordable housing and turning themselves into a new landed gentry by undoing it all. What a legacy.


Nice, I can see Robertson & Adern repeating this all next week if questioned around their inaction. Looks like they're all covering each other's arses...


I believe that there are a lot of people on this site who have been hoping for REAL change.
There have been some excellent ideas to address the housing crisis. Sadly, I agree with you - GR will kick the problem down the road or only make 'token tweeks'.


What he won’t kick the can on is more taxpayer subsidies flowing into keeping the Ponzi afloat. This is a gigantic taxpayer funded heist.


This is a gigantic taxpayer funded Ponzi whose only result is the preservation of a minority class of parasitic housing specuvestors who suck the blood out of the new generations and of the future prospects of the real economy.

Covering each other asses as know are naked....

... ummm .... I dont mind , if you guys are busy chatting amongst yourself ... dont mind helping Jacinda by covering her naked ass ...

Not going near Robbo's , butt ... anything that big should have a moon orbiting it & it's own atmosphere ...


Which UK study is she referring to , as many UK studies could be cited in the alternative. Is there any reason why NZ Treasury needs to rely on a UK study as of 2021. Finally many people have been disadvantaged including males . Have treasury undertaken any research showing that females have been unequally affected by the response thru 2020.


Treasury is now officially part of the propaganda machine

It has always been that - and particularly since 1984.

For a while there, it was a mouthpiece for neoliberalism. As were too many........

Indeed, they've too often been seen to endorse the bankrupt ideology of "Wealth Effect" that's in reality just "these people spending the money instead of these other ones it was transferred from".


I'm finding that really hard to digest on a lazy Sunday morning.
So it seems that firstly, so long as they don't look to hard there's nothing to see, secondly, trickle down is alive and well.


It’s ‘trickle up’, money flowing from hard-pressed renters and savers up into the pockets of borrowers, speculators, and landlords.

Sorry, should have said belief in trickled down is alive and well, only in the minds of those who want to believe solo badly to justify their privileged positions.


Why did Treasury came out just before the announcement by Mr Robertson in support of government ?????

No one wants to change the status quo .....High price rampage and Shameless Jacinda Arden should be ashamed for taking many of her loyal supporters for a rollercoaster ride of their lifetime. How could she justify this double digit growth monthly or 30% to 50% plus in a year when she begged for votes to solve the very crisis.

Mr Robertson should be judged by what he does on Monday :

1 - Interest Only Loan
2 - DTI
3- BLT

They have perfect opportunity and support to act but will they goof up or rise above biased vested interest, free from pressure from any lobbying and not miss an opportunity to act to control speculative demand without any loopholes.

If they miss this opportunity Labour has no right to go back to public for votes on this issue.

Wait and Watch ( Though politicians of all breed flock and act together so not to expect anything from thick skin #@$%).


I find it all so fishy. I bet the foreign land bankers and investors who still own many properties from pre foreign-buyer ban are giving her AAA+ .. and China to continue buying our exports as long as the good work continues by Mr Robertson and co. How long before foreign buyer ban is slowly wound back, I wonder. Would the average kiwi even notice or care

Where do National stand on these three?

If they're serious about the housing crisis they also need to come out and call for action on these. If not, we have Natbour and the only alternatives for younger voters are the likes of TOP and Greens.


The Wellington bureaucracy is a very strange parallel universe.


That is one reason that now Labour is thinking and talking the same language as of National.

Real Shame. Only if Labour had a Leader with vision and got such majority and opportunity could have accomplished lot that they always wanted to but alas is run by incompetent @#$% where any reasonable thinking without being influenced by lobbyist is a question mark.

“A man with a conviction is a hard man to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point.”
― Leon Festinger, A Theory of Cognitive Dissonance

It's not too late to buy now and get on the ladder- be quick!

100% True but unfortunately Jacinda is just the very opposite.

You would have been great at selling tulips in the 1600’s, or at selling tickets for the last flight of the Hindenburg.

LOL. You can certainly have my spot on that ladder!

Buy buy buy. Don't miss out!

1 million median price by Dec 2021.

Where are my diamond hand boomers?

Lets do this.


Bit sick of all the acronyms when the issue is about a good place to live without a lifetime of poverty paying for it.
But lets join in.
WPP - Wise Population Policy.


Oh, but we already had that one, Winston Peters’s Party. Starting to be embarrassingly noticeable for today’s government, just how much experience, direction and spine WP & others provided the last government.


I never thought I would admit it, but I miss WP. :)

... bear in mind , it was WP who gave us Jacinda Ardern , the " accidental PM " , in 2017 ... when it was clear the voters clearly preferred the Gnats ( 44 % vote ) to Labour ( 37 % ) ... the Gnats imploded after that ... and Ardern has gone on to bamboozle us with her endless waffle ever since ... all " gunna " , but no " do " ...


I believe most people who voted for Winston did so because of concerns over levels of immigration. Adern promised to reduce it while English thought it was a golden goose that would keep on giving. So Winnie had to go with Adern. She immediately broke her promise and maintained mass immigration and so we are where we are on a massive housing shortage.


... I'm of the opinion that Steven Joyce's cackhanded attempt to destroy Winston's reputation prior to the 2017 election ramped up Peters usual distain for the Gnats into pure hatred & rage .... WP never forgives nor forgets ... he got his personal revenge .... now , we're all paying for his bruised ego ...

Well the attack via the leak, an inside job undoubtedly, of his pension payments was decidedly unfriendly and fatally unwise. That plus the sudden selection of Ms Adern and Labour’s elevation in the polls sunk National in the final outcome. Prior to the latter National had been riding high, looking unassailable and as they had been for the preceding few years in power, complacent, conceited and careless. So yes they got their comeuppance, and now we have got this sorry looking government.

I do wonder ( and , of course , we'll never know ) how the Gnats would've gone in 2017 if John Key hadn't bailed out a year earlier , if he'd led them into that election ...

... and , if Simon Bridges hadn't been rolled by Toad Muller prior to the 2020 election , if Bridges & Puller Benefit had led them into that election ...

If only . . if only .... the saddest words imaginable , " what might have been !"
Is it media bias that all five experts quoted (academics, economist, actor/writer, politician) were all in favour of further population growth and nobody arguing that 'small is beautiful'. The sociologist arguing that dying areas such as the West Coast where young Kiwis are departing from can be revitalised by more immigrants. If Kiwis don't want it get immigrants do it. However sociologists have known for 100 years that immigrants move on to the big cities which is logical since they have shallower roots in their NZ location.


Yes, Lapun, it was a totally lopsided debate among people in favour of higher immigration (including the segment with Paula Bennett, who is naturally in favour as a real estate agent).
Dr Arthur Grimes' claim that most people opposed to immigration are xenophobic was an extraordinary assertion.


Yes, that assertion By Grimes shows that deep down he is as shallow as the best of them.

When has it been an irrational fear to not allow an open borders policy?

And even asked about what was a target number for NZ pop. policy, said Japan has 130 million and UK 60 million and that they seemed to be doing alright.

Grimes is nowhere near as clever as he thinks he is, and is a big part of the status quo vested interests.

I agree. I know there are a lot smarter people on this site than myself, however, I see NZ as requiring only immigrants who can contribute financially. We are a small country and can't afford to have people entering NZ who are unable to pay their way, ie the requirement to get superannuation needs to be at least 20 years in NZ.


That assertion was absolutely disgraceful by Grimes. The number of people he wants to import each year just staggered me.

Holy smoke - always the usual culprits
Wheel them out ad-nauseum
Not one opposing view

I detest intellectual dishonesty parading itself as fact without challenge
Both Kightly and Grimes quoted Melbourne and Sydney at having populations of 5 million
That is FAKE
The State of Victoria has a population of 5 million, Not Melbourne
The State of New South Wales has a population of 5 million, Not Sydney
Sadly, TVNZ now needs to have a fact-checker over-ride

In 2019 the population of Sydney city ( greater metropolitan area ) passed 5.3 million ... in the same year , Melbourne city reached 5.1 million ... ( the state of Victoria has 6.7 million people , NSW 8.2 million ) ...

... one year later , NZ reached 5.0 million , 2020 ...

I don't think Peters went with Ardern because of immigration. She has inherited the pledge to cut immigration from Andrew Little and was very evasive in endorsing it once she became leader. Rather, she allowed people to believe she would cut it — and never went out of her way to correct anyone who asked.
Peters gave up on immigration in his talks with Labour immediately and their joint agreement reflected this. Neither intended to cut immigration... it was simply a ruse to be elected.

Winston would have had such a blast as Foreign Minister, touring the world as the world class lush he is. He would have said anything to get that job back. His gullible followers swallowed his bunkum. Watched Borgen and the plum job in Denmark was the Foreign Minister role, much better than ‘Statsminister’.

I'm no Winsome fan ... far from it , but ... he was supremely professional as our foreign minister ... the ultimate schmoozer , warm handshakes ... port & cigars with overseas dignitaries ...

... whereas the current FM ....she's so out of her depth... a complete lightweight ... never reads the briefings . ... Lazy !

KK..the Q and A immigration special this morning was par for the course. A panel of virtue signalling, self image focussed, bleeding heart, no life experience academics waffling on about the smaller things with almost no mention of the important ones. Immigration (and the artificial population increase) is widening the inequality gap through house prices, rents and keeping already low wages lower. The most effective way to ensure further marginalization of the poor, in particular Maori and Pacifica, is to continue with our policy of mass, unskilled, "net negative immigration". Immigration is the number one reason for such disturbing inequalities of outcome within these two groups. But this morning, yet again, the strongest voices in the fight for equality for Maori and Pacifica, perversely stated that they supported mass immigration and almost open borders. The biggest leg up they could give to NZ Maori and Pacifica (citizens legally here) who are over represented in the lower economic quartile would be to oppose mass immigration in the strongest manner possible, yet they do exactly the opposite. Even John Tamahere gets it. As with everything, it is hard to help if you refuse to help yourselves.

.the Q and A immigration special this morning was par for the course.

Yes, it was dreadful.

It truly was dreadful and really sad. The panel should have reflected a balanced view of NZ society instead of every person being very pro mass immigration. One of them even came out with the old chestnut "if you are anti-immigration, you are xenophobic". OMG. Why did Jack Tame not jump on that one?

Tame is ‘woke’.

Tom...How would you describe John Campbell and Jenny-may then?

My preferred population for New Zealand is two million. We were that 70 years ago and could get back there by 2100 without great dramas.
I think we could arrange it quite well with high incomes and low costs.

Would be nice - back to the 60s.
As work is steadily automated it would make sense to let the herd thin and focus on quality of life.

I think a Waitangi Tribunal claim regarding non-existent population policy should be in order...

Yes, on the housing crisis many also saw the idea of voting for a National party who had campaigned on the urgent need to address the housing crisis only to lie for 9 years that no such crisis exists was the definition of insanity.

But like Key moved National closer to Labour by appropriating some of their policies, Labour has now moved closer to National by adopting the same "campaign on it then don't address it" approach to house prices.

So we basically have Natbour and a few minor parties, vis-a-vis the housing crisis.

How's about a different WPP : Wise Parliamentarian Policy ...

... whereby you cannot become an MP if you can't prove that you've already had 10 years experience in the private sector as an employee , business owner , farmer , mother at home ....

You sad 'Wise'.

The proof of wisdom is not 10 years experience in the private sector, or any sector.

What you have conflated with wisdom, is a period of conditioning. The two are mutually exclusive.

Fair point ... thinking of Damian O'Connor's latest verbal idiocy : his claim that the tourism industry needs to pull its head in and get over itself ... ummm... beyond stupid , Damian ... and , O'Connor is a guy with real world experience ... recall 2011 when he asked to be off Labour's electoral list because he didn't want to be associated with " self serving unionists and a gaggle of gays "....

... you win this round , Mr PDK !

GB...exactly, worthless career politicians are a global cancer. And NZ, along with Canada have advanced cases of stage 4.

Politicians ruling are cancer particularly in NZ killing dreams of average Kiwi.

Straight from the Justin Trudeau play book.


"Treasury defends pace of Govt response to soaring house prices"



So Treasury is defending because it.......... government funded?

And possibly staffed by a fair few property infestors.

Good OK second time I've seen "infestors" so not a typo - v funny!


Having done a bit of contract work in central government I can confirm:
- group think reigns supreme: little room for challenging
- a neo-liberal worldview still dominates
- it's very much 'Yes Minister'. 'Free and Frank Advice' is empty rhetoric

Which UK paper is Caralee McLiesh referring to? The closest I could find was a 2012 paper that only covered a narrow period from 1995 to 2005 (i.e. pre-GFC) and the author actually indicated that declining home ownership rates, which is the situation in New Zealand, exacerbated inequality:
"Over this period, it is particularly the gap between home owners and non-home
owners which has increased. While some households in the middle of the wealth
distribution increased their share of wealth by becoming home owners over the period,
those without housing wealth at the beginning of the period fell further behind."


Cover up, false prppganda.....lie, manipulation.......started by Jacinda Arden to cover past and future inaction as is aware that some people have some expectation from Mr Robert announcement where he is must going with media byte with no real intent.

False propaganda by Jacinda Arden - All powerfully Queen in NZ with absolute power.

Treasury and the RBNZ categorised this as a “significant” trade-off, but noted using new monetary policy tools would also support those at the edge of the labour market. In other words, lower debt servicing costs and more liquidity in financial markets support businesses, which keeps people employed.

Jobs saved. Saved for what, though? This is not the same thing as GDP recovery and growth or affordable housing.

Government borrowed ~$60 billion over the last year. RBNZ bought ~$48 billion of it in exchange for interest bearing, but nonetheless idle, cash bank reserves and an adjusted ~$40 billion is sitting idle in the Crown settlement account at the RBNZ. This is the financial equivalent of rearranging deck chairs on the Titanic.

In the interim our Aussie owned building societies did what they always do - extend 60 % of their lending to one third of already wealthy households to speculate in the residential property market because the RBNZ offers them an RWA capital reduction incentive, to do so.

Hence bank lending to housing rose from $50,788 million (48.36% of total lending) as of Jun 1998 to $298,830 million (60.22%) of total lending) as of January 2021 - source.

GDP qualifying business lending was down 3.7% annually.

She also made the point: “It’s even more complex to understand what the impact would’ve been without alternative monetary policy and without other types of policy as well.”

It's easy to discern that Australian businesses, and I am guessing our own, see no prospect of consumption recovery to warrant a growth dependent expansion of their balance sheets:

Look at this debacle. Despite the RBA slashing interest rates to record lows, businesses owners want new loans about as much as they want to be coughed on. #auspol #ausecon Link

It's clear low interest only fuel property market, businesses interest does not increase because of low interest.
Even in NZ there are lot of businesses who are not expanding because of increase in hourly rates by Labour & covid situation.

We have given this country to run by fools, you will see the result in couple of decades.

Would you say that this rearranging of deck chairs is becoming a 'borrow from Peter to pay Paul' situation?

Government borrowing monetised by banks on behalf of taxpayers who service and redeem these obligations regardless of the merry go round. Waiting to apply these piled up state liabilities to beneficiaries is a crass dereliction of duty to undertake direct fiscal stimulus and only serves to underwrite QE feedstock demands for the failing monetary policy wants of the RBNZ.

the financial equivalent of rearranging deck chairs on the Titanic.

What, I keep wondering, keeps them from choosing to 'plug the hole' through amendment of risk weightings on residential lending? Do you think it has to do with business loans being secured against housing/residential assets - and the financial sector fears putting their own security (chance of recovery in the face of default) should residential land/asset values collapse?

I just don't get what keeps our regulators from acting in the interests of the many, as opposed to the few.

Freed from the physical constraints of actually holding cash, Basel essentially moved reserve requirements from the asset side of the banking system’s balance sheet to the liability side. Banks were no longer limited to multiplying credit from their reserves of national currency on hand. They could now produce credit and deposits from their store of equity capital. And a large segment of equity capital is retained earnings, meaning banks could multiply their own ability to create credit and leverage through using leverage on their own profitability. The status quo of the banking system has become one in which banks themselves control the levers of money creation – it is the wildest fantasies of the banking system come true.

But in depending so much on leverage, the banking system has become overly dependent on collateral. Collateral provides the lowest cost short-term operational funds while at the same time, depending on the particulars of each class of collateral, affords a reduction in the equity capital charge via regulatory definitions of “safety”. A repo transaction for a bank is a collateralized loan where a bank can fund assets at that lowest cost. In terms of the overall quantity of those assets a bank can ultimately hold and turn into profits, the securities that adhere to regulatory definitions of safety lead to the lowest capital reserve charges, and therefore provide both regulatory and funding leverage.

This accounting trick of regulatory safety meant financial innovation was needed to not only transform risky assets, but to mass-produce them as “safe”. Securitization of mortgage debt was one innovation widely used to create AAA-rated securities that were readily accepted as low haircut repo collateral, while at the same time using up as little equity capital as possible. The interest rate paid by the underlying mortgages and the traditional concept of risk/reward were secondary and tertiary considerations to how much leverage could be obtained and applied. Quality of assets was hardly considered in the pursuit for ultimate quantity. Link

According to the Reserve Bank, the new capital requirements mean banks will need to contribute $12 of their shareholders' money for every $100 of lending up from $8 now, with depositors and creditors providing the rest.

I really struggle with this - so are you saying they (the RBNZ) keep the RWA on residential lending where it is to the benefit of shareholders and the detriment of depositors and creditors?

If I've finally got that right - I'll be so proud of myself :-).

Yes Kate.

Thank you for being so patient and for providing the clarity! Really appreciated.


It’s always the same thing “we don’t know, it’s unclear, it’s not certain”. So when you ‘don’t know’ to this extent, why the rush to embrace unorthodox policies?? The height of recklessness, imo. We are all lab rats in a gigantic central bank experiment.

3for all lying and manipulation - Jacinda Arden downfall has started and now it is up to opposistion parties, How they exploit and take advantage of it.

... eventually , the free ride that our media have given Ardern & her ministers will abruptly end ...

The love fest with her & her huggy " be nice / team of 5 million " utterances will collapse ... they will turn on her ... then , the public will too ... we can only stomach so many lies , manipulations , cock ups , waffle , and indecisiveness ...

Agreed, but not seeing much opposition to date.

. . the opposition seem to be led by David Seymour , and to a lesser extent by Simon Bridges ... " Crusher Collins " has changed her persona to " Cuddles " , sadly ...

GBH , the first thing I thought of on reading that last line was The Robot on Lost in Space, waving its metal arms (semaphore paddles if you like) and yelling danger, danger, danger and on. you rather than me can test whether that new persona you perceive is binding.

.. I'm a huggy guy ... nothing I'd love more than to hold Crusher tightly , and to whisper in her ear ( she's only got the one .. the other is tin ) ...

... " it's a sad day in NZ when my balls are bigger than yours ... regrow the gonads ... head back out into the political fray , and start to kick some Labour arse ! " ...

Problem is, electing National or ACT to address the housing crisis is a non-starter of an idea. They demonstrated for almost a decade that when they're in power no such housing crisis exists.


quote - "We don’t know the full wealth distribution of housing. Until we really look at that sort of assessment, we can’t tell the impact on overall wealth inequality.” McLiesh said Treasury was (currently) doing work to assess this. She said the net effect of very loose monetary policy was unclear and complex

Treasury is a NZD $1 billion annual operation that is paid to know all these things. It is the primary advice to Government mechanism. In February 2020 Grant Robertson ignored Treasury's advice

A good interview that could have gone deeper but possibly constrained by time.
Some Government and RBNZ actions have been positive in supporting employment and businesses and as with any action there are costs including asset price inflation and growing inequality . . . and where housing supply issues have been compounded by low interest rates.
Not unexpectedly, the vast majority of posts are simply blinded by REINZ monthly data, self interest and therefore an inability to see the wider situation and issues. Slagging off Treasury, RBNZ and Government as all being incompetent and imbeciles is shallow, cheap and arrogant and a discredit to this site.


"Slagging off Treasury, RBNZ and Government as all being incompetent and imbeciles is shallow, cheap and arrogant and a discredit to this site."

But slagging off other people on a website like this is morally superior (yeah nah). Government said they were going to fix the housing crisis and prevent inequality in their response to covid. They have done neither - so they deserve everything they get. It is not shallow, cheap, nor arrogant. Its called fair democracy. If you lie and deceive people while in a publicly paid role, you deserve everything that comes at you.

And I also like how it is you who gets to decide what is a credit to this site and what is not - do you think you get to set the rules even though you don't moderate the site? Now that is arrogant (just saying). Perhaps you should start your own website then you could control the content?

My happy little troll.


"My happy little troll"

So your calling me a troll, while trolling me.


Really... Who is arrogant....... People or Government.

Agree somemeasures were reqhired but at the sme time countdr balance was reqhired to avoud a situation where house prices are ramping up 10% oer month and that is on the bacm of 20% to 50% rise.

FHB are really screwed by FOMO. Buy and be damned as borriwing with no margin and life time of debt when borrowing million as nothing available below and if do not buy that too when government is declaring that come what may this housing pyramid will continue with supportfrom Mr Orr so are screwed.

Government shiuld support - just like any antibuitic, required bht overdoing nay do more harm than good. Why is government shying away from debt - just recently when your favourite Mr Ro ertsonwas asked about doubke dip recession, he said no comment abd is a myth and not a reality that when data suggest 1% fall in GDP.

Jacibda Arden has been very lucky and nay be getting expised now as has no supportofWinston Peter and Greens ( good or bad can be argued).


Slagging off is the very least they deserve. There should be protests.. Burning effigies. Its democratic to slag off pollies who lie to and abuse the trust of the public

"Some Government and RBNZ actions have been positive in supporting employment and businesses"tell that to business operators in tourism and hospo who are hanging in there, waiting patiently. Do you not realise how big tourism is to NZs economy.. Clearly no clue

Well there you go.
Direct support through wage subsidies and business loans among other things including grants.
So yes, clearly no clue. So go Google it. :)

No the problem is we can see exactly what politicians, of all stripes, have been doing for a couple of decades. And it is nothing more than an intergenerational ponzi scheme, that will ultimately cripple the entire NZ economy. Politicians have been happy to keep feeding the ponzi, as it provides short term economic benefits, but the long term costs (to future generations, and the financial stability of the whole country) can be deferred into the future.

We are not much more than a decade past the GFC - where government policy, reserve banks and financial institutions, used low interest rates to pump a housing bubble, culminating in the near collapse of the global financial system. That was just a reckless lending in a small subset of the US mortgage market. We are now repeating the same mistakes, but across a much wider cross section of the economy in multiple countries simultaneously.

You claim it's "all self interest". Oh please. This is rank stupidity on a truly colossal scale that's going to negatively impact all of us in the long run. It's like watching the idiotic responses some countries took to covid by prioritising the economy in the short term, consigning them multiple lockdowns and a much bigger hit to the economy long term (not to mention the death toll). Decisive action could have eradicated covid globally several months ago. It's like watching our collective response to climate change, where we will pay a much higher cost in the long term, because powerful vested interests don't want to any change to the status quo in the short term.

Bang on. The future will not look back at this times positively.

So when the government and it's monetary policy arm the RBNZ actively work together to dramatically increase wealth inequality (while saying they will do the opposite), we should not call them out on it? We should not call them imbeciles when their actions do the exact opposite of what they claim to want? When the government fails to address both the supply and demand of the housing issue, we should applaud?

What do you call someone who keeps trying to do something (create inflation) again and again, failing each time, but continuing to try the same thing and getting increasingly worse results? Common phrasing calls that person a fool, but hey, you think they should be admired for it?

So we are arrogant and cheap when we call them out for not doing what they said they would do? My god man.


Ok. So some people told them house prices were going into reverse, so overnight they changed the settings to avoid that, but they still don't really know (how long after the fact??) how that affects wealth inequality (In UK blah blah....)

So if they were a pilot, flying in the dark, they don't bother to check their instrumentation, in fact, they don't have any meaningful instrumentation - just a post it note with an arrow pointing up with the words "that way", and they take advice from a blind man in the passenger seat facing backwards who is listening to an audiobook of Dante's Inferno and randomly shouting out phrases that the pilot is taking verbatim for directions. ("They yearn for what they fear for!" "What? Drop the OCR?? OK!")

You know... even the Aztecs sacrificing humans to the Sun God seem to have more of a clue than these imbeciles.

Reminds me of the old mail pilots, bi planes post WW1 Jennys etc, only tilt and bank instrument they had was a half empty pint flask. At least they had had some spirit you might say. This government and their bureaucrats, with whom they are uncomfortably far too cosy, are little more than flying by the seat of their pants.

Those were the days when elected officials didn't conflate defending the country with defending the financial class. Or maybe war was a bit of that too...

The theory behind her thinking is along the lines of:

"Look. If we created debt now, the amount doesn't matter, because if we inflate the asset value of whatever the debt has been ploughed into, then the ability to repay it with future receipts is diminished"

"Inflate the Debt away" in other words.

But it's a flawed policy and theory.
It's like saying "That house I bought in 1975 for $40k, that I borrowed $30k to do, is easy to repay now because I earn that much a month". But the problem is that the old $30k debt is now rolled up into the $1 million debt that you have today, to live wherever your current home is. The $30k 'got lost' in the new debt and that $30k per month you now earn is swamped by the quantity of your total debt commitments.

In practice. Debt NEVER stops being created (we don't stay in that 1975 house!) and so it consumes our past obligations, and make repaying them impossible.

But it doesn't stop people like the interviewee in this article following the wrong ideology - QE, MMT, whatever.

The end game? Whatever it is, "they" don't have a clue. Just a flawed plan and a lot of hope.

If you earn 30k a month you are not struggling.

It's an example, of course!
(Yes. The average pay packet here is likely to be lucky to have $30k per annum in disposable income after fixed costs, but to someone getting $100k per month; Caralee McLiesh (?) it is hard for them to reconcile their erroneous beliefs with the experiences of the 'man in the street')

And they say world over reserve Bank is indipendent of government

On lighter note Jenee on a reality on your earlier article that govetnment will be going with carrot and stick approach :

Carrot to eat for speculators and for Jacinda Ardens new friends and Stick to be shuffed in FHB and average Kiwi. Both will be using the mouth but at different places.

Hail Queen Jacinda !

Tomorrow's policy announcement if we retain the status quo of the last decade or two: The Human Centipede


Jenée Tibshraeny can interview Government Officials and Heads of Departments till the cows come home. You will continue to get carefully crafted lip-service that doesn't offend their bosses or incumbent political elites

This interview adds nothing to our understanding of what has both happened and is happening. In fact it simply demonstrates how we are being fed a constant diet of vanilla flavoured blancmange
What is required is for the interviewer to go out into the streets and interview a cross-section of people who are members of this society who are components of the groups of haves and the have-not. Ask them


We need a survey on how many people actually understand that central banks have deliberately created these asset bubbles in order to stimulate a ‘wealth effect’.


Saying impact of low intefest rate on inequality isunknown is THE BIGGEST LIE.

How shameless one can be for biased vested interest to manipulate.

This itself reflects the predetermine agenda of treasury to prove and argue accordingly.

But is it really a lie, after all she has no evidence of it happening.
Only evidence I see is that Ignorance really is bliss.
Also appears to result in high paying jobs


Says the impact of low interest rates on inequality is unknown

In March 2017, former Treasury and Federal Reserve (Fed) official, Peter R. Fisher, delivered a speech at the Grant’s Interest Rate Observer Spring Conference entitled Undoing Extraordinary Monetary Policy.

Wealth effect or wealth illusion? The other therapeutic effect of lower-for-longer interest rates is the wealth effect. By driving up the value of future cash flows with lower rates of interest, all manner of assets – stock, bonds, and houses – increase in value and, thereby, can stimulate our marginal propensity to consume. More simply put, the imperative was to make rich people richer so as to encourage their consumption. It is not so hard to imagine negative side effects.

There are the obvious distributional effects between those who have assets and those who do not. Returning house prices in California to their 2005 levels may be good for those who own them, but what of those who don’t?

There are also harder-to-observe distributional consequences that flow from the impact of lower-for-longer interest rates on the value of our liabilities. This is most easily observed in pension funds.

Consider two pension funds, one with a positive funding ratio and one with a negative funding ratio. When we create a wealth effect on the asset side of their balance sheets we also drive up the value of their liabilities. Lower long-term interest rates increase the value of all future cash flows – both positive and negative. Other things being equal, each pension fund will end up approximately where they started, only more so.

The same is true for households but is much more ominous, given the inequality of wealth with which we began the experiment. Consider two households: one with savings and one without savings. Consider also not just their legally-defined liabilities, like mortgages and auto-loans, but also their future consumption expenditures, their liability to feed and clothe themselves in the future.

When the Fed engineered its experiment to promote the wealth effect, the family with savings experienced an increase in the present value of their assets and also an increase in the present value of their liabilities. Because our financial assets are traded in markets and because we receive mutual fund and retirement account statements, we promptly saw the change in the value of our assets. We are much slower to appreciate the change in the present value of our liabilities, particularly the value of our future consumption expenditures.

But just because we don’t trade our future consumption expenditures on the stock exchange does not mean that the conventions of finance do not apply. The family with savings likely ends up where they started, once we consider the necessity of revaluing their liabilities. They may more readily perceive a wealth effect but, ultimately, there is only a wealth illusion.

But what happened to the family without savings? There were no assets to go up in the value, so there is no wealth effect – real or perceived. But the value of their future consumption expenditures did go up in value. The present value of their current and expected standard of living went up but without a corresponding and offsetting increase in assets, because they don’t have any. There was no wealth effect, not even a wealth illusion, just a cruel hoax.

Great post

Great post



What a crock; 12months on and Treasury is still "surprised" that lowering interest rates and revving up the Printer has caused asset prices to balloon.
Also what is this mythical UK study that shows a 10% rise in house prices leads to less wealth inequality? (Presumably they don't mean +10% every other month)
Caralee McLiesh has some brass neck on her....

Yes, and did you ever listen to such convoluted gobbledygook in your life! If that's typical of Treasury employees there is no hope..

Jenee - Your very first question, 'Has the Govt. done enough to respond to the side effects of very loose monetary policy?'

Is a closed-ended question ie the answer is either YES or NO.

If after the answer, you give them time to expand on that, ie Yes - But......, then that is OK.

But you allowed her to not answer the question, and waffle on for 5 minutes.

A better question would have been 'Has the Govt. done enough to respond to the side effects the very loose monetary policy has had on the rise of house prices?'

Although I doubt the answer would have been any better.

Liam Dann in the ‘OneRoof Herald’ today: ‘Is it time for Finance Minister Grant Robertson to take a lead from US President Joe Biden and inject a fresh shot of cash into the economy?’
I absolutely despair at the carry-on from our financial journalists and ‘independent’ economists: always a collective s**rt at the slightest sign of a dip in GDP numbers.

He's just so average. Very little depth - so perhaps he is a good match for the majority of the Herald's readership?
The guy who infamously said there wouldn't be a recession, last March.
Brian Fallow is far superior, but I understand he is semi-retired.

Semi-retired ... . sadly , yes ... Brian is a fine fellow ...

"They" know that what they are doing is corrosive and pointless - that's why they are doing it. In their eyes, there is no other alternative that can possibly work. All they can do is to buy time, literally.
Worse. Although they know that whatever they do is destined to fail, they are frightened to take any alternative actions.
And the worst thing to have in any financial market environment is - fear.
It paralyses the ability to make decisions, and whatever strategy is in place is left to play out.
It's human nature. There is always that faint hope, no matter how dim and far off, that 'something' might come along and wipe out the current losses.

It will take leadership of rare courage to undo this lot, and I'm sorry, I just don't see it, here or anywhere else.

How do I know all of this? Because we are right here. If "it" worked we would not be enduring the lunatic policy regime that we are.

So what should we do? Join in the dancing on the ever sloping Lido deck as the band forlornly plays on.
"You don't take your debts with you!" and all of that.

"Treasury defends pace of Govt response to soaring house prices"
They have taken notes from Govt. even a blind can see Govt. has not done anything, LVR back to 40% was first done by ANZ and govt. follow the Australian bank decision.
Govt. only show how much miserable, handicapped & manipulative it is even with full majority.


We as a country, and most individuals in the lower strata, would be better off with a short brutal recession that halved house prices, even if that involved high unemployment for a period.

I get the feeling most people without a house would rather be on the benefit for a period, if it reset the system to something more sustainable, and gave them a shot at the kiwi dream in the long term.

But we have to suffer these specious arguments that ever lower interest rates are necessary to improve unemployment at the margin. Yeah, you give a few more people a hand to mouth job, but also end their dreams of home ownership...

Apparently theirs' is a sacrifice we're willing to step up and make, if it ensures older investors can keep receiving more free money. But we're very grateful for their sacrifice...if we have some spare cash perhaps we'll even let some of the taxes they pay flow back to them.

Treasury was happy with how things were before, when Auckland was severely unaffordable. The only thing that has happened is now Wellington is even worse than Auckland, which I suspect is driving a lot of this house price angst, given that it is now so ridiculous it is affecting the majority of civil servants even on their relatively generous pay-packets.

The impact of low interest rates on inequality was of no concern to either Treasury or the RBNZ....low interest rates have (to date) done their job....prevented the cascading defaults and saved the banks.....everything else is of secondary import.

"prevented the cascading defaults and saved the banks" - spoken like a true communist.

The banks should save themselves. If they can’t survive a 10% fall in house prices then then we need to have the bank heads up on criminal charges for engaging in criminally irresponsible lending practices.

Theres a lot of things that 'should' happen....and then theres what does happen

And there's what is inevitably going to happen.

Treasury defends pace of Govt response to soaring house prices

Jenee, understood that treasury defends....

BUT what does treasury feels going fututre on governments inaction specially now with $25000 per week rise in house price.

Do they defend government action of inaction going future or ?

How come every man and his dog but not RBNZ can see that the best place to invest would be the housing market after term deposits were taken away as an option. Rubbish. They knew it would happen.

Apart from housing and share market, what else does NZ have left with a closed border? Exports to China?

A genuine question.

.. your lactose intolerant children are drinking our milk powder formulations ... and , we're exporting $ millions of " Kiwi Fruit " to you every year ..

Guess where those Chinese gooseberries originated from .... huh ... give up ???

... NZ is one of the few countries to have a trade surplus with the PRC .... so .... get down off your high horse , my friend! .... Covid-19 has not stopped trade ...

Exports to China which must include property rises it seems. Sheep and cows are not enough, offer up the kiwi youth

Intriguing comment...

Chinese nationals cannot nearly anything due to extremely tight capital control since the beginning of covid. Indians are buying heaps if you talk about returning "kiwis" since they are rushing back to NZ due to the covid situation in India.

NZChinese...One of the changes we need to make is to stop dual citizenship. And as you point out the "bolt hole citizenship" is being terribly abused by a couple of countries in particular. Imagine how many of the cases that have come through our border with Covid have dual citizenship and how much money we have wasted on them when we have NZers in need. We have real kiwis waiting 6 months overseas for MIQ spots that are being taken by bolt hole citizens. For what? So our country has more diversity and more choices of food?

Indian new comers are crammed together in flats and running shops and making a go of it, and I don't see them driving around in range rovers to open homes

You were in the wrong place, I can guarantee you that, my friend.

My point is foreign nationals like the Chinese cannot buy almost anything now (unless you talk about the Ethnic Chinese of Singapore); Indians who can buy are returning Kiwis. Currently, there is no much so-called export in the housing market.

Okay, but am I wrong that half of kiwis chinese or indian, are blissfully unaware of the backroom deals being made by politicians that make the rules they must abide by and which impact on each individual economically> this may be in the form of - let me buy large swathes of your kiwi land in return for buying NZ exports. Ya dig?

But it is a fact many Indians have entered property market and many have put their business on sideline and are buying houses with section to develop.

A friend of mine is in building construction and was mentioning that 70% of his business is comming from people of Indian origin and they too follow herd mentality so everyone is trying to enter as easy and fast money supported by Jacinda - Risk free (they feel).

2016 boom was mostly Chnuesse and this is Chinesse and Indian.

NZChinese...What we have is a country where the bottom quartile do not have to pay 40% of their wages in rent. We have lower house prices so most of the people born here can aspire to buy one. We have businesses that have to pay unskilled workers on low wages a little more money, money that improves their quality of life greatly. We have less traffic congestion and enough water for everyone. We have bigger areas of land and bigger houses and do not have to build everywhere to accommodate people to whom we owe nothing. Call me selfish but I want my kids to be able to have a big house and garden in a big NZ city if they want to, I want most kiwis to be able to afford a home and to be paid a higher wage and preventing all but a select few foreigners from living here is a small price to pay. Migration is not a right.
We have what we had 50 years ago; an overall much better country especially for the poor.

"What we have is a country where the bottom quartile do not have to pay 40% of their wages in rent" - How do you figure that?

More people in NZ equals higher rent. More demand for anything increases the price of it.

KS, I like your view. I am a migrant, and I have spent way more time in NZ than in my hometown. I too want NZ to be a good place for everyone who wants to live in a Kiwi way - that includes myself and my family. Unfortunately, it is not how the real NZ works nowadays, at least to me. I have dealt with wealthy Kiwis (let's use the PC term - Caucasians) who were happily selling to wealth Chinese nationals yet calling them "Ching chong" in private, as they treated me as a "friend". Greed does not discriminate. Who do you think make the rules of this country? immigrants?

Good comment.

Agree as my friend in building business said the same thing, What you have mentioned.

But you haven't been in NZ long enough to get a true perspective on how all immigrants have been treated in the past. For instance, in the 1950s and 60s a lot of British emigrated to NZ. They were sneered at and called by the derogatory expression "a whingeing pomme" (or its shortened version "pom"). "Go back home you whingeing Pomme" was often heard. And yet most 'caucasian' NZers are of British descent. The fact that these immigrants started heading trade unions and calling for more strikes didn't help matters. Indians used to be called "curry munchers" (uncommon now) and Islanders "Coconuts"(uncommon now). Yugoslavs were called "square heads" or "dagos" (disappeared). We have had a huge influx of Chinese immigrants in a small time span so they are extremely visible. Objecting to a little very mildly derogatory name-calling is being a little precious don't you think. I would venture to say that within a decade's time such name-calling of those of Chinese descent will be rare.
I would add that when I was growing up in the 1950s and 60s Protestants of British descent called Catholics of British descent such derogatory names as a"Tyke" in a sneering tone.
Also NZ has a tradition of 'cutting down to size anyone' who takes themselves too seriously or seems too precious.

I have always wondered why Brits are called "Pom" here. Now I can say something to my English friends :). My comment was to reply to KS. Reading thru modern NZ history, I think immigration is for NZ to continue, and it's always part of the economy. Speaking of nicknames (or racial slurs if we talk in the 21st century), it is a change in numbers. People of colour now counts for nearly 40% of the NZ population. Being "precious" or sensitive is becoming part of our cultural norm...

NZChinese...I agree with your post 100%. I do not blame immigrants in any way whatsoever. They are trying to do their best for themselves and their families and at the risk of being racist, I really admire the Chinese work ethic and attitude to saving money and education. And at the risk of being more racist I often remark at the high number of Asians running takeaway bars, a job any family can do with a little effort and yet they are exceptionally under represented amongst a couple of ethnicities in particular. We need to investigate why that is. This is the stuff that matters.

It is NZs fault for allowing this situation. We should have considered the quality of life of our poor instead of being fixated on higher GDP, greedy landlords and business looking for cheap labour. Way back in the 1980s (while purchasing a few houses in Auckland) I was vocal about how our immigration policies would put us in the position we are in now. Ironically, I lived in Asia and have (half) Asian kids. I treat everybody equally but I just wish we could see the catastrophic damage mass immigration is doing to our country. I am only upset with the NZ born citizens who have allowed it.
Mass immigration is actually a net positive to me personally but I hate what it is doing to our poor and especially our young. And for what? To be seen as kind? Who cares. Let's worry about what really matters. And if you can find a Maori or Pacifica family run fish and chip shop in New Plymouth the takeaways are on me.

We should have considered the quality of life of our poor instead of being fixated on higher GDP, greedy landlords and business looking for cheap labour.

Absolutely. Asking the poor to celebrate nominal GDP increases makes as much sense as asking a minimum wage McDonalds worker to celebrate more McDonalds restaurants opening. It does nothing to increase their own quality of life.

Hear hear


To sum up Tibshraeny vs McLiesh

1. Jenee - Asks McLeish perfectly honest, reasonable and easily understood question about effect of unconventional monetary policy on inequality, especially with regard to raising house prices.
2. Treasury's Caralee McLeashed-by-masters response: Caralee speaks in a barely audible tone, refuses to answer Jenee's perfectly reasonable and coherent question, instead changes premise of question to suit narrative ie to ":affects of Covid", waffle, something about tools, more about tools, waffle incoherently, waffle, waffle, waffle enough to make Jacinda blush.
3. Jenee makes another honest attempt to ask a perfectly reasonable question
Repeat x 3

Sounds like McLiesh is a politician in the making!!!

Something about her reminds me of Megan Wood, perhaps she'll be Labour's next bright spark Housing Minister and build 12 houses, or take over from Robertson's demanding job of tweeting about Sports events and answering Question Time with all the patience of a constipated grizzly bear

“Absolute waffle” sums up her responses perfectly.

This is why I want Jenee to get a bit more mongrel in her questioning. These guys need to be really pushed. Extra questions would have been:

So when can we see the analysis of the distributional effects. (followed up by when, who is doing it, why is it taking so long etc if it is being done)
Why is nobody working on such an important piece of research? (if she answers nobody is doing the research)
Why has the Treasury not advised the government to strongly research this, or done it of it's own accord?

Your answers seem like canned responses. Has Treasury been stymied in it's publications or ordered to not talk about an obviously key issue, by the Finance Minister?

Jacinda is taking advantage as Kiwis normally do not do agitation or take to road but things may be changing soon and for any blood on street - Blame should solely be with the Queen - The Jacinda Arden

Agree. Jacinda is testing the patience and is sitting on a ticking time bomb. Just one intitative and it will turn into a movement before Jacinda knows, what happened and how it happened.

If you’re stuck renting you’ll be feeling aggrieved and understandably so but you have to ask yourself the question are you really in a position to buy and did government policy stop you from doing that or is this just shifting responsibility and a means to vent.

Frankly if you are post 30 and not able to buy then you’ve likely made some questionable life decisions or through circumstance has stopped you. If it’s neither of those reasons then you were never able.

Property is a valuable asset like a precious metal and this notion that anyone and everyone should be able to buy it is a an outdated kiwi delusion. No first world country in the world has that kind of fanciful egalitarianism.


No one cares about you and your greedy ilk's opinions. Go away.

Property for speculator but we are talking about home, which Jacinda and her ....making difficult with supporting 10% rise per month.

Anything in extreme is bad and specially from Jacinda who begged vote for power to solve the issue and doing opposite.

"No first world country in the world has that kind of fanciful egalitarianism." And yet our ownership rates are dropping, implying that it was possible in New Zealand, until the speculator-fuel, government-underwritten wealth-grab that is housing got into gear.

I could use your argument to justify all sorts of things: Ending the pension (If you've lived 65 years and haven't saved for your retirement then you've made some questionable decisions or not worked hard enough!) but it's funny how the conversation is always about lazy young people and their bad choices and never about generations that have pocketed more state largesse than any other that followed them, while infrastructure and long-term development of the country took a back seat to tax-free windfalls. That's not 'circumstance, that's borderline treason.

'Property is a valuable asset like a precious metal and this notion that anyone and everyone should be able to buy it is an outdated kiwi delusion.'

Water is a valuable asset like a precious metal and this notion that anyone and everyone should be able to buy it is an outdated kiwi delusion.

Food is a valuable asset like a precious metal and this notion that anyone and everyone should be able to buy it is an outdated kiwi delusion.

Air is a valuable asset like a precious metal and this notion that anyone and everyone should be able to GET IT FOR FREE is an outdated kiwi delusion.

No first world country in the world has that kind of fanciful egalitarianism.

LD... but nobody should have to pay 40% of their income in rent, regardless of their bad decisions.

I own property but have little time for such self-absorbed and self-congratulatory perspectives as this. Today's older generations received the benefit of better post-war generations and their governments who saw affordable home ownership for average Kiwis as a priority and worked to make that happen. Pretending one did it all on one's own two feet without help is unbecoming and ignorant of New Zealand's history.

Th latest political rumour being feverishly spread through the back channels is that Jacinda and Grant are at loggerheads over a secret new policy programme to the point that Jacinda has threatened to resign if Grant doesn’t give it to her.

Now sure, there is a secret new policy programme and sure it is transformative, but the resistance to it isn’t coming from Grant, it’s coming from the Wellington Bureaucratic elites who are terrified that Jacinda intends to actually make them help the people.

I wish they'd name these Wellington Bureucractic elites instead of all this hinting, otherwise I'm calling BS

Ultimately she is the captain of the ship and all bucks stop at her door.

She has an opportunity rise above and be a leader or succumb to vested biased interest. Choice is her, how she wants history to remember her as a politician or as a leader.

Are they being spread because they are true, or are they being spread because someone wants a hobbling horse if it doesn't work out?

If PM Ardern wants to go to war with the Wellington civil service, she has my total support. But don't go lobbing taxes onto the rest of us to fix problems created by a well-paid bureaucracy that gets better pay, more annual leave and better maternity provisions than those trying to get by in the private sector or running their own business. If the fault lies the cardigan-wearers, then make them pay for the fixes out of their own budgets.

All eyes on the fed. Nothing else matters.

“We do know New Zealanders have an enormous amount of wealth in housing - around 60%. We know that those who are in the lowest wealth deciles tend to have less housing and assets. But we don’t know the full wealth distribution of housing. And until we really look at that sort of assessment, we can’t tell the impact on overall wealth inequality.”

Sure but you can say it's definitely been unequal. Unequal asset distribution = unequal effect of policy = increase in inequality. It's that simple no? Why is this woman acting like a politician with this answer?