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

 

Labour: Healthy Homes Bill Passes First Reading

Some of New Zealand’s most vulnerable children and families are on their way towards safer living conditions with the passing of the first reading of the Healthy Homes Guarantee Bill in Parliament last night, Leader of the Opposition Andrew Little says. More>>

ALSO:

Werewolf Satire: Home, And A Way

The one thing even more popular than an Auckland house is offering advice on how to afford an Auckland house. So, on the grounds it can’t be worse than some of the stuff that’s out there, here’s my three cents* worth. [*Up 50% since 2013!] More>>

ALSO:

Werewolf: The Defence Pretence

Last year, the world began spending more money on weapons again, for the first time since 2011... New Zealand belongs to a region – Asia and Oceania – where military spending rose sharply in 2015, by 5.4 per cent. More>>

ALSO:

Gordon Campbell: On Not Crying Foul, Argentina

So a couple of guys found to be criminally liable of environmental pollution in Argentina lodge an application with the Overseas Investment Office… in order to buy some prime New Zealand rural land. Seems that their factory back home had carelessly and/or intentionally discharged toxic waste into the Lujan river. Bummer... More>>

ALSO:

Urban & Rural: $303m To Merge And Modernise New Zealand’s Fire Services

Internal Affairs Minister Peter Dunne today announced funding of $303 million over five years to combine urban and rural fire services into one organisation from mid-2017. More>>

ALSO:

High Trust Regime: What Did The PM Tell His Lawyer About Foreign Trusts?

The Government stopped the IRD from reviewing New Zealand foreign trusts shortly after the Prime Minister’s lawyer wrote to the Revenue Minister claiming John Key had promised him the regime would not be changed. More>>

ALSO:

Road Crime: Wicked Campers Vans Classified As Objectionable

The definition of publication includes any "thing that has printed or impressed upon it, or otherwise shown upon it, 1 or more (or a combination of 1 or more) images, representations, signs, statements, or words", The Classification Office has previously classified such 'things' as billboards, t-shirts, and even a drink can. This is the first time the Classification Office has classified a vehicle. More>>

ALSO:

'When New' Repairs: Landmark EQC Settlement

The Earthquake Commission has cut a deal with 98 Canterbury homeowners that affirms the government entity's responsibility to repair earthquake-damaged property to a 'when new' state, as well as covering repairs for undamaged parts of a property and clarifying its position on cash settlement calculations. More>>

ALSO:

Gordon Campbell: On Kiwirail’s Latest Stint In The Dogbox

The denigration of Kiwirail continues. The latest review (based on a 2014 assessment) of the options facing the company have enabled Kiwirail to be hung out to dry once again as a liability and burden on the taxpayer. More>>

ALSO:

Royal Society Report: Good Opportunities To Act Now On Climate Change

There are many actions New Zealand can and should take now to reduce the threat of climate change and transition to a low-carbon economy, a report released today by the Royal Society of New Zealand finds... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news