Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Home buyer subsidy discredited in Oz

Phil
TWYFORD

Housing Spokesperson


25 August 2014 MEDIA STATEMENT
Home buyer subsidy discredited in Oz

Treasury advised against National’s policy of ramping up home buyer subsidies after it was discredited in Australia because it pushed house prices even higher, Labour’s Housing spokesperson Phil Twyford says.

“Documents released under the OIA (attached) show Treasury advised the Government that ‘Experience with homeownership grants in Australia suggests that such programmes tend to push prices up in a supply constrained environment by supporting greater demand, rather than improving affordability. There is a risk that by significantly expanding eligibility for the KiwiSaver Deposit Subsidy and Welcome Home Loan schemes, the Government will end up undermining affordability for first-home buyers’.

“A 2012 Australian Federal Government report found that subsidies for first home buyers in the face of constrained supply of houses had the effect of increasing prices. Because of that, plus the risk that first home buyers would be too heavily mortgaged and at risk of defaulting if interest rates went up, it recommended the grant scheme be changed or phased out altogether. As a result the grant schemes were scaled back.

“The report said the grant scheme ‘may not be the most cost-effective way of improving housing supply and affordability in the longer term.’

“It is Economics 101. You are mad if you stimulate demand in an already overheated market where supply is not keeping up with demand. As the Australian experience shows and as Treasury knows, the Government is trying to put out a fire with petrol.

“National is trying to argue a larger subsidy for new builds will stimulate construction of new homes. But Auckland house prices rose $75,000 in the last year. An extra $10,000 subsidy is not going to make up for even a month of Auckland house price growth. In contrast Labour’s KiwiBuild will be delivering homes over $200,000 below the median house price in Auckland.

A report on homeowner subsidy schemes by the independent Australian think tank, The Grattan Institute said: ‘Because supply has been constrained, first home buyer assistance has not only failed to increase ownership levels but may have pushed up prices, benefitting sellers and making it harder for many households to own their first home.”

“Instead of building large numbers of new affordable houses as Labour will do through KiwiBuild, and taxing speculators as Labour will do through its capital gains tax that excludes the family home, National has thrown $218 million on the bonfire of the Auckland housing market.

“It is not only a waste of taxpayers’ money, but as the Australian experience shows, it will actually make things worse. Cash hand outs to first home buyers will push house prices up, enriching vendors, and actually make things harder for first home buyers. After six years in office, this poorly thought through and ineffective response to the housing crisis is pathetic.”

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Two Years With New Methods: Crime Stats Show Increase Led By Burglary

The two years of data show an increase in the total victimisation rate of 3.1 per cent, with 12,060 more victimisations in the 2015/16 year when compared to 2014/15 year. From this increase, 72 per cent is attributable to burglaries. More>>

ALSO:

Auckland Relocation Grants: 12 Grants Paid So Far

Since the policy took effect one month ago, 12 applicants have received the non-recoverable grant, supporting 32 people. $54,508 has been paid out, covering things like moving costs, bond, rent in advance and letting fees. More>>

ALSO:

Vaccine Funding Change: HPV Vaccines For All Children

PHARMAC has today announced changes to funded vaccines, which will benefit an extra 100,000 people... The human papillomavirus (HPV) vaccine will be available for all children and adults up to the age of 26 years, and boys will now be included in the HPV school vaccination programme. More>>

ALSO:

Gordon Campbell: On Why The Opinion Polls For Key And Trump Defy Gravity

What is going on? Donald Trump got confirmed as the Republican presidential candidate at a bizarrely chaotic political convention… and promptly received an upwards bump in the polls to where he’s now rating ahead of Hillary Clinton, for only the second time this year. More>>

Sugar: Auckland Leisure Centres Axe Unhealthy Drinks

Auckland Council is to stop selling drinks that are sweetened by sugar from vending machines at its leisure centres in a bid to try to reduce obesity and type 2 diabetes... More>>

ALSO:

Gordon Campbell: On Todd McClay’s Faulty Memory

Time and again, whenever an issue arises the initial response by government is to deny or diminish the problem – nothing to worry about here, everything’s OK, move on. Then, hang on. In line with the usual pattern, as embarrassing details emerged into daylight, the story changed. More>>

ALSO:

Labour's 'Future Of Work': Major Reform Of Careers And Apprenticeships

The next Labour Government will transform careers advice in high schools to ensure every student has a personalised career plan, Leader of the Opposition Andrew Little says. More>>

ALSO:

State Investments Management: Treasury Likes IRD, Not Education Or Corrections

The Inland Revenue Department has scored an 'A' in the first tranche of the Treasury's investor confidence rating for state agencies that manage significant Crown investments and assets, gaining greater autonomy as a result, while the Corrections and Education ministries gained a 'C' rating. More>>

ALSO:

Govt Goal: NZ To Be "Predator Free" By 2050

Prime Minister John Key has today announced the Government has adopted the goal of New Zealand becoming Predator Free by 2050... “That’s why we have adopted this goal. Our ambition is that by 2050 every single part of New Zealand will be completely free of rats, stoats and possums." More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news