Bernard Hickey says it all…
Bernard Hickey’s view, worth highlighting this quote…
My view: The Reserve Bank is just a third of the way through its programme and mortgage rates could fall to just 1.5% next year, unleashing another 20-30% rise in house prices. That is politically unsustainable at a time when property owners just got $100b richer through the value of their homes and Jacinda Ardern is refusing to spend $5.2b more to raise benefits more because she says the Government is short of money.
The Reserve Bank should be directly funding a $100b programme of Government infrastructure spending over 10 years to massively improve housing affordability and address climate change by flooding the housing market with 100,000 new homes and building the public transport and water infrastructure needed to reach carbon net zero by 2050.
The post-1989 era of focusing the Government on having an independent inflation-targeting central bank and limiting the size of Government (to around 30% of GDP in NZ) by targeting net debt of 20% of GDP is politically unsustainable when the fallout of Covid-19 is hitting young renters, Māori, Pacifica and women hardest, while property and share owners celebrate hundreds of billions of unearned and untaxed wealth.
These should be bi-partisan targets where independent authorities (RBNZ, Kāinga Ora, NZTA and the Climate Commission) pull the infrastructure, tax and spending levers to achieve that.
We should be targeting just a 10th of poor families spending more than 30% of their income on housing (it trebled to 55% over the last 30 years) and getting on track for net carbon zero by 2050.
As a home owner it makes no difference to me what my house is worth unless I am planning on selling up and downgrading. Great my shares are worth more but the dividends, the bit I live on are the same or down and I get no interest on my secure kiwisaver or term deposits.
The main people I see benefiting from low interest rates are speculators and realestate agents.
I agree, a 100 billion spent on social housing will drop rents and hence all the speculating.
My landlord came to us with a $80 a week increase and we responded we would challenge that. Apart from the out and out greed being constantly pushed on TV3 and TV1 news what drives a landlord to think people can magic up extra $80 a week?
Avarice has got truly out of hand.
Our whole society will crumble to feed the greed of a few. The awful irony being that greed can never be satisfied, it is just a destructive force.
The Reserve Bank has set off an orgy of spending on the safest investment in town, housing! As a country and a political and economic system NZ really encourages spending on housing, it does everything in its power to encourage debt and there are few downsides for those in the market with houses -so far.
Enter the PM, trying to blend into the background. Now being rightly called out for doing nothing she is quoting Neo Lib mantra of leaving the RB alone, which may soothe the few purists left out there but it is doing absolutely nothing for first home buyers and renters. It’s like God set in place the Reserve Bank Act and only God can repeal or amend it. It’s impossible to her it seems. She also seems oblivious to the fact people are taking on phenomenal debt just to get a roof over their heads if buying or blowing a substantial part of their incomes on rent just to put a roof over their heads.
It is hopeless to suggest they tinker with first home grants, actually, it’s beyond useless. All that is, is fuel to the housing price fire as if it needed anything else incendiary. In fact, the moment they make adjustments another 5% growth will have inflated the market back out of reach.
It is abundantly obvious by the Reserve Bank’s 1980’s legislation that its interests do not lie in the less well off in this country and by its very actions, its create more on a daily basis.
Jacinda wants to go away so badly. She has no plans to deal with this growing problem. Her musings are not cutting it. But unless she does something real and looks at amending the RB legislation so it delivers to most and not the few, it’s going to carry on spinning out of control.
Tight spots like this one for the PM illustrate why she has an unfinished copy of a book by mild critic of capital, French Academic Thomas Pikkety, on her shelf! Her and Robbo are welded to Roger’n‘Ruth’s toxic legacy. “Blairism NZ style” will continue until the paid working class and unpaid workers get organised and take the Labour Caucus on in creative ways. The prime issues are WINZ/MSDs punishment model, raising benefits, and housing and building a shitload more houses and apartments, and dental care for kids in agony, and…you get my drift.
If the Māori Caucus and Māori Party join in, all the better. But this Labour Govt. is in for a shock sooner rather than later if capitalist economists like Bernard are more onto it than the country’s Prime Minister.
Wit a toss, breath, humanity, called breath all us socialists
Capitalisms exploit for its god profit, is the truth, and is not capitalism a cancer on our living breathing.