Dr. Russel Norman
Green Party Co-Leader
Spokesperson on trade, economics and electoral matters

Green Media Release
17th June 2007

Reserve Bank deserves support but renters need options too

The Green Party supports the call by the Reserve Bank for the Government to consider measures to stabilise the housing market such as a capital gains tax excluding the primary family home and for changes to the tax system to ringfence the losses from investment properties.

"We need to look at ways of stabilising the housing asset boom beyond the use of interest rates, which are crippling homeowners on mortgages, driving up the dollar and making life easier for importers and harder for exporters," says Dr. Russel Norman, Greens' Economics Spokesperson.

"It is becoming increasingly difficult for people to buy their first home and that's why we need to stabilise the housing market as a matter of urgent public policy."

"A capital gains tax excluding the primary family home, and ringfencing the losses from investment properties, can be important components of stabilising the housing market and should be considered by government.

But the Greens believe that renting must be affordable too.

"We need to be alert to the potential impact of such measures on the rental market and make sure that there is sufficient affordable rental accommodation by building a lot more public housing with income-related rents, as is common overseas.

"The reality is that a large proportion of New Zealanders will rent in the future and we need to make sure that long-term affordable rental options are there for people. Enabling long-term private rental is an important part of this also.

"We need to take a long-term view of the housing market. The National Party has said that now is not the right time to introduce measures such as a capital gains tax on investment properties because we are near the top of the housing boom. But I think they are mistaken - we need measures in place now to moderate future housing booms.

"A capital gains tax on investment property would only apply to future increases in value. Therefore if National is correct, and we are at the top of the boom, then the negative impacts of a capital gains tax on current owners would be marginal while the moderating influences on the market would be beneficial for everyone in the future. We need to think long term, that is, well beyond the 2008 election.

"Housing is more than a market, it is a basic human need. The government has a responsibility to make sure that everyone can afford a decent, healthy house without having to work 24/7 just to pay the rent or the mortgage."

ENDS

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