News Worthy

10 August 2007 - No. 120

The affordability of housing

The Commerce Select Committee is conducting an inquiry into the affordability of housing against the background of the real challenge for young people to buy a first home.

International surveys rank New Zealand as having the second worst housing affordability problem in the world. Auckland is one of the 25 least affordable cities. But it's not just a problem in Auckland. You can buy a condo on the Miami waterfront for less than the price of the latest beachfront apartment on the Kapiti Coast.

With out pre-empting what view the Committee might take, there are clearly four initiatives which would substantially improve the position. They are:

1. Make sure people can better afford to purchase and pay their mortgage on a home. Lowering personal income taxes will ease the burden of mortgage repayments, and will also help people who are saving for a house deposit.

Interest rates can be kept down by growing the productivity of the New Zealand economy. That will make a huge difference to people's ability to service a mortgage.

2. Ensure there is an increased supply of suitable land available to build houses on. Difficulties with the Resource Management Act, and disagreements between various arms of local government, too often slow the release of land. This drives up its price and the cost of its development.

Any changes to streamline and speed up the process of zoning or land release will require developers to build on that land within a reasonable timeframe. This will prevent the land-banking that is currently choking off the supply of land.

3. Amend the Building Act to pull back the red tape and instead drive quality through greater commercial accountability.

The Building Act has added enormous costs and delays for builders and councils. Development and building levies have tripled under the present Labour Government. Quite simply, these costs are making houses unnecessarily expensive for the average family.

4. Allow Housing New Zealand tenants who want to purchase the house they live in, to do so. The sale proceeds can be reinvested straight back into replacement houses for those desperately needy families on the waiting list.

It is a win-win for everyone. The state housing stock is maintained, some families get to experience home ownership for the first time, and the most vulnerable in our communities get to move off the waiting list into affordable housing.

Child Abuse

The death of 3 year old Nia Glassie after allegations of barbaric abuse has outraged New Zealanders. There is much hand wringing and blame-casting. The reality is that any political response will never be a sufficient response for those who commit these egregious offences.

What politicians can do however, is change the Sentencing Act as it relates crimes against children.

The age of the victim should be more than just an aggravating factor at sentencing.

Gold versus paper currency

There is repeated media reference to the value of the US dollar. Now come calls for change including the call to the Islamic world to embrace the use of a gold dinar for international trade and as an alternative to US dollar reserves in central banks.

Paper currency has a long history which Marco Polo described when he travelled to China in the 13th Century. He was so impressed by paper money that he described how it was made, used and valued. Paper money was not used in Europe until the 17th century.

Paper money began with the "flying cash" of the Tang (618-907) dynasty around 800. The Tang government considering the inconvenience of shipping cash to distant areas where government purchases were made, paid local merchants with money certificates called "flying cash", because of its tendency to blow away.

These certificates bearing different amounts of money could be converted into hard cash on demand at the capital. Since they were transferable, they were exchanged among merchants almost like currency.

A test of intuitive judgment

A bat and ball cost $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost? An answer that maybe obvious to many is not the correct one.

Political Quote of the Week

"Circus dogs jump when the trainer cracks the whip, but the really well-trained dog is the one that turns somersaults when there is no whip." George Orwell - English author and journalist.

Dr Richard Worth
National Party MP

ENDS

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