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Government’s Response To Current Housing Crisis In NZ: A Good Start But Nowhere Near Enough

I don’t think there is anybody in NZ who doesn’t agree that there is a serious housing crisis in New Zealand right now. The present Government has made some good moves in the right direction but mostly not enough. There are more things they could have done which would have made a real difference says Peter Malcolm spokesperson for the “Income Equality Aotearoa NZ Inc” –“Closing the Gap”

There are some over-riding principles that should underpin this whole issue Malcolm goes on to say.

  1. Adequate “accommodation” for all should be a right for all and this is a Government’s responsibility.
  2. Housing should not be the major form of investment for our people. People with money should be encouraged to invest in productive industries and so take housing out of the “market place”.
  3. It should be recognised that all investments, unless backed by Governments, carry an element of risk, and conditions changing for investments should not be seen as a cause for complaint.
  4. Any tax system must be fair, ie if you get money regardless of source you should pay tax..
  5. Politicians and Governments do not always get things right and they should be able to admits this, change their minds and put things right.

In terms of government providing adequate “accommodation for all”, Governments in NZ for the last nearly 50 years have let us down badly. Although this present Government has done a little, it is nowhere near enough. We are currently around 80,000 homes short for the “ general population” and about 30,000 short of “social” housing. 

The $3.8 billion for infrastructure ie for roads and services is a good start and $2.8 billion for land for social housing is great as is the increase in funding for more apprentices, but this really only a “drop in the bucket”. 

Although it is difficult to get accurate costs of building accommodation, if you include all cost ie construction, land, infrastructure, council etc a modest figure would be in the region of $1.6 million per accommodation unit (infrastructure $!million, house and land $600,000.) 

The figures above would provide approximately 4000 sections for general housing and 3000 for social housing. This is pathetically small in terms 80,000 general housing shortage and 30,000 for social housing shortage.

Then there is the question of unoccupied housing. Some have suggested there are as many as 40,000 in Auckland alone. A decent tax on these dwelling would be a great start.

Then there is the question of who pays for this accommodation. The changes to the “prices thresholds” are a good start but again not enough in terms of the numbers that this would benefit.

There are many other things the Government could do here. A return to something like the old “State Advances Corporation” for control of the finances of the “housing market”and the “Ministry of Works” for construction would be a great start. “Housing” should not be left to the market as the current situation has shown.

As for housing being a major form of investment for New Zealanders this is patently wrong on many counts. We need to control the housing market to keep prices under control. We need to shift investment away from housing into productive industry for a start. Here the Government has made a start by shifting the “bright -line test”. 

If they were really serious about this they would remove it completely for all but the family home. As to the argument that this change by Government is just CGT in another form let us again be realistic. It is a capital gain tax change and it is exactly what is needed. See 4 above

As to items 3 and 5 above I believe these should be self-evident.

Let us give credit to the Government for making a start but let them know that it is only a very small start. The crisis is now and like the pandemic needs urgent action now says Malcolm.

© Scoop Media

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