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

TV3 Videos: Key's Flip-Flop Over Whale Oil Texts | Slater
Reaction: Greens | More
Dim-Post Link: The Very Odd Slightly Left Of Centre

Gordon Campbell: On Government Arrogance

Right now, National is ramming anti-terrorism measures through Parliament. This legislation will grant the SIS the power to carry out 48 hour bouts of surveillance on anyone without a warrant, and will bestow on government the power to unilaterally revoke anyone’s passports and thus deny them the freedom to travel.

Ludicrously, the public has been given exactly one day to make submissions on these major infringements of their civil liberties. Despite Finlayson’s misleading signals on RNZ that these are only stopgaps until next year’s full review of our security laws, the measures in question will not, in fact, expire until 2018.

Why the insane rush? Good question. More>>

 
 

Parliament Today:

Key Texts With Whale Oil Released: PM Can’t Be Trusted Over Dirty Politics Defence - Greens

John Key’s answers to questions about dirty politics can’t be trusted, after he was forced to admit that he had misled journalists and Parliament about contact with attack blogger Cameron Slater, said the Green Party today.. More>>

ALSO:

Temporary Release Crackdown Continues: Corrections Review Of Phillip Smith Case

“The review by Corrections’ Chief Custodial Officer reveals that the plan for Smith’s series of temporary releases was overly ambitious and misinformed. He’s a highly manipulative and deceptive person who although technically eligible, should not have been considered for temporary release." More>>

ALSO:

White Ribbon Day: Govt Resumes Sexual Violence Trial Proceedings Work

Justice Minister Amy Adams has asked the Law Commission to resume work on proposals for better supporting victims of sexual violence through the criminal process. The Law Commission will revisit its previous work on alternative pre-trial and trial processes to identify options for improving complainants’ experience in court. More>>

ALSO:

"New Faces, Wise Heads": Andrew Little Announces New Labour Line Up

Labour Leader Andrew Little today announced a bold new caucus line up which brings forward new talent and draws on the party’s depth of experience. More>>

ALSO:

Gordon Campbell: On Rick Ellis As Te Papa’s New CEO

The recent appointment of former TVNZ boss Rick Ellis to head Te Papa has copped a fair bit of criticism. Much of it has been inspired by the suspicion that Ellis has been hired to pursue the same purely commercial goals as he did at TVNZ, while similarly neglecting the serious cultural side of his mandate. More>>

Passport Cancellation, Surveillance: Draft 'Foreign Fighters Legislation' Released

The final draft of the Countering Terrorist Fighters Legislation Bill contains proposals previously announced by Mr Key in a major national security speech earlier this month. More>>

ALSO:

Related

Joint Statement: Establishment Of NZ-China Strategic Partnership

At the invitation of Governor-General Lt Gen The Rt Hon Sir Jerry Mateparae and Prime Minister The Rt Hon John Key of New Zealand, President Xi Jinping of the People’s Republic of China made a state visit to New Zealand from 19 to 21 November 2014... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news