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Productivity Commission’s solutions will cost NZers

16 December 2011
Productivity Commission’s solutions will cost NZers

The Productivity Commission’s failure to advocate for a capital gains tax on property excluding the family home in its draft report on housing affordability is a missed opportunity, Green Party Co-leader Dr Russel Norman said today.

The recently set up Productivity Commission today released a draft report into housing affordability in New Zealand. The Productivity Commission is an independent Crown Entity that began operating on 1 April 2011.

“A capital gains tax will help make houses more affordable for buyers currently priced out of the market,” said Dr Norman.

“The Productivity Commission seems ideologically opposed to a capital gains tax.
“Their claim that a capital gains tax would fail to put downward pressure on housing prices is in contrast to the Savings Working Group that concluded part of the increase in house prices was due to preferential tax treatment of investment properties.

“The Productivity Commission’s solutions of loosening housing regulations and planning criteria are actually a recipe for increasing the cost of living,” said Dr Norman.

“Advocating for removing the metropolitan urban limits will result in increased transport costs for those working in town that are forced to live on the margins of our cities.

“Proposing to weaken regulation of building standards will mean homeowners end up paying increased costs down the line for substandard work.

“It is a false economy to save money in building costs by reducing standards, as was demonstrated with the leaky homes fiasco.
“Given the inclusion of Graham Scott on the Productivity Commission, the man behind much of Treasury’s neoliberal policies of the 80s, it is hardly surprising that the housing affordability report has stressed deregulation and urban sprawl as a quick fix.”
Green Party housing spokesperson Holly Walker considers the Productivity Commission has failed to address the urgent problems of rental accommodation and social housing.

“Around one third of all New Zealanders live in rental accommodation, including 375,000 children. A large portion of this housing stock is poor quality, with those on the lowest incomes spending more than 30 percent of their income on rent,” said Ms Walker.

“We urgently need to set minimum standards for rental accommodation so that tenants aren’t living in substandard accommodation that contributes to ill health.

“An organisation labelled the Productivity Commission should be concerned about the productivity losses caused by time taken off through sickness.

“Given the growing number of people entering the rental market, we need to start looking for solutions to enable more stability for renters.

“It needs to be easier to secure long-term, stable rental accommodation, especially for families,” said Ms Walker.

“And we need to start building high quality state housing again, not demolishing existing state housing stock or selling it off.”

Link to the Productivity Commission’s report:
http://www.productivity.govt.nz/draft-report/949

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