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Key handed loaded LVR gun to Reserve Bank

Phil TWYFORD

Spokesperson for Housing

David PARKER

Spokesperson for Finance                        

16 July 2013    MEDIA STATEMENT

Key handed loaded LVR gun to Reserve Bank

John Key’s incompetent handling of the mortgage lending limits tool is set to deny thousands of Kiwis a shot at their first home, Labour’s Housing spokesperson Phil Twyford and Finance spokesperson David Parker said.

Labour understands the Reserve Bank will soon announce limits on high Loan to Value Ratio (LVR) home lending without an exemption for first home buyers.

“John Key has completely mishandled the lending limits plan from the very beginning. His negligence has handed the Reserve Bank a loaded gun of lending limits. He can't now fake surprise that it is about to pull the trigger,” said Phil Twyford.

“National is desperate to dampen the rampant Auckland housing market and at the same time is spooked by Labour’s affordable homes building plan and our tax on speculators – seen by Kiwis as an excellent plan to tame house prices.

“In May National caved in to the pressure, signing a Memorandum of Understanding with the Reserve Bank that would allow it to restrict high value mortgages. As usual John Key took a once-over-lightly approach and didn’t realise the ramifications for first home buyers.

“It wasn’t until a month later that Mr Key realised what he had done. He then tried to negotiate through the media to put pressure on Reserve Bank Governor Graeme Wheeler. But the primary purpose of the Reserve Bank is to be independent and not listen to political pressure.

“John Key’s plan has backfired. The Reserve Bank was given complete decision-making power over how to set LVRs in May. When he realised what had happened in June, Mr Key was left out of ammo and reduced to shouting from the microphone,” said Phil Twyford.

“Labour has a plan for housing. We would protect first home buyers with an interim exemption from LVRs and deal with speculators first. By building 100,000 affordable new homes in 10 years with KiwiBuild and bringing in our tax on speculators we will tame rampant house prices and keep the home ownership dream alive,” said David Parker.

ENDS

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