Archive | Politics

National talks new urban planning laws, business & environmental alliance says “Go further”

The National Party has been working steadily towards its latest election policy for most of its 9 years in government: new urban planning laws that would make it easier to build, and faster than the Resource Management Act.

It would incorporate parts of the Local Government Act & the Land Transport Management Act. The Resource Management Act would stay in place for non-urban areas.

Steven Joyce lining up some mud at Manukau in 2009.

But Resource Reform NZ, an alliance of 3 normally National-leaning organisations – the Employers & Manufacturers Association, Infrastructure NZ & the Property Council – plus the Environmental Defence Society, said yesterday the National proposal didn’t go far enough.

They want “an integrated governance, planning, funding & delivery system to guide resource management & national economic development”.

The catchcry: fit for purpose

The ministers releasing the party policy and the Resource Reform alliance used the same term as their base: fit for purpose.

The ministers (now spokespersons for the duration of the election campaign), Steven Joyce on infrastructure & Nick Smith on environment (but apparently not on building & construction) said in their campaign proposal yesterday: “A re-elected National-led government will introduce new fit-for-purpose urban planning laws separate from the Resource Management Act to encourage more responsive planning, faster development & better protection for the environment in our growing cities.

“New Zealand is growing strongly and we want to make it easier to build the housing & infrastructure for that growth while still ensuring our urban environments are some of the most liveable in the world.

“To do that we need to give our cities the ability to adapt & develop faster, while respecting & improving the urban environment – and the current planning system is not allowing that.

“The RMA’s one-size-fits-all approach has restrained the development of our cities, dragged on their economic performance and restricted the supply of much-needed housing & infrastructure.

“So National will establish a fit-for-purpose planning system that allows our cities to evolve in a way that improves the quality of the local environment, and makes them great places to live & work.”

Idea is to separate planning & environmental regulation

Nick Smith, also lining up some mud, in 2015.

Dr Smith said the new planning legislation would have clear & separate objectives for regulating urban & natural environments: “Over the past 9 years we’ve simplified the RMA and made it easier to build, but the RMA is only one part of the planning system, and we have reached the end of what can be done by making incremental changes to the act.

“We agree with a number of stakeholders that it is time to develop fit-for-purpose planning legislation dedicated to urban environments that includes the relevant parts of the Local Government Act & the Land Transport Management Act in one piece of legislation.

“So we will set up separate planning & environmental regulations specifically designed to encourage growth, while tackling the environmental challenges found in cities, such as air pollution & stormwater surges.

“This new legislation will work in parallel with our plan to put in place urban development authorities to redevelop specific brownfields areas in our cities to allow for more housing – the work for which is already underway.”

Dr Smith said National would “keep a close eye” on changes applicable to non-urban & rural areas through the existing Resource Management Act.

“National will start its urban planning reform process by consulting with key stakeholders, local government, iwi, experts & the public to develop fit-for-purpose legislation that works for cities.

“The successful Auckland unitary plan & the independent hearings panel review process shows we can put sensible rules in place that work for everyone. We want to use the same collaborative formula to create an urban planning system that enables growth, gives businesses the confidence to invest and adapts to the changing needs of cities.”

Reformists seek consensus for change, don’t detail their reforms

Resource Reform NZ reform of the resource management system needed to go much further. It recommended that this would be best addressed through cross-party consensus on the issue by a politically independent process, such as a commission.

Infrastructure NZ chief executive Stephen Selwood said: “We know New Zealand’s prosperity is being held back by the current framework the wider planning system operates within. It is no longer fit for purpose, and is why we find ways to work around the current system when we want to deliver the infrastructure that the county so desperately needs.”

Property Council chief executive Connal Townsend said: “The current unco-ordinated planning system is driving increasing housing unaffordability, the high cost of commercial development and reliance on outdated funding mechanisms such as rates & council debt. That means we’re simply not building enough, quickly enough with the quality & innovation needed to develop the cities & standard of living we all expect in the future.”

Environmental Defence Society executive director Gary Taylor said: “The environment is suffering too. The Resource Management Act is our pre-eminent environmental law. Yet the cumulative effects of permitted land use activities over the lifetime of the act have led to a slow but significant deterioration of the quality of our streams, rivers & lakes.”

And the fourth advocate for greater change, Employers & Manufacturers Association chief executive Kim Campbell, said: “For business, these issues are also stifling the ability to grow & expand. Which, in turn, also impacts employees & the families. Looking into the future, we face even bigger challenges in how we manage & respond to demographic changes, advances in technology, rising consumer expectations & climate change.”

Attribution: National & Resource Reform releases.

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Ardern follows well researched overseas thinking on rentals, some responses over-edgy, and 5-year-old Ahuri research is helpful clarification

Jacinda Ardern in her policy broadcast yesterday.

Labour leader Jacinda Ardern announced a set of new terms for residential tenancies yesterday, and was immediately – and predictably – told this would badly affect landlords and would have the opposite effect on New Zealand’s housing crisis to that she intended.

The Labour policy is along the lines of what is the norm in Germany, where tenants enjoy long-term occupancy, and also follows the thinking of AHURI – the Australian Housing & Urban Research Institute – in a paper written 5 years ago, How can secure occupancy in rental housing be improved in Australia?

Below: First the Labour policy, then some adverse comments, followed by the AHURI view.

A quick note: I’d thought of paying more attention than I usually do to election policy announcements, then thought better of it. For starters, I have more than enough to write about already. Second, a high proportion of wishlist & splurge electioneering has been vote-buying which can mostly be dismissed – or, if it does eventuate, watched extra-critically. This one, though, is a policy which will affect a large investor sector. If it follows the AHURI line of thinking it ought to be beneficial all round.

A family constantly on the move

To deliver her policy, Ms Ardern said down with a family who’d moved 4 times in 3 years, whose children had to move schools, and whose attempts to save to buy their own home had been set back.

“About 50% of Kiwis now rent their home, but too often their living situation is precarious,” Ms Ardern said.

Her promise: “A Labour Government will strengthen renters’ rights so everyone can have more stability. Not only will Labour increase the notice period for ending a tenancy, we’ll also end letting fees, limit rent increases to one/year, make all homes warm, dry & safe to live in, and much more.

“And for landlords who need to move on tenants who are breaching their agreement, we’ll make sure the tenancy tribunal is properly resourced, and that issues like anti-social behaviour are much clearer in the law.

“It’s about making renting fairer & more stable for both tenants & landlords – and is part of our comprehensive plan to fix the housing crisis.”

Policy: Making life better for renters

“For most people, renting used to be a short stage of their life before they bought a house and started a family. Now, it is becoming the norm. 3 out of 4 people under 40 years old rent, compared to one in 2 in 1991. Among older New Zealanders, the home ownership rate has fallen from over 90% in 1991 to 75% today. All up, half of New Zealanders now live in rental properties.”

Ms Ardern said renters’ rights were still designed around the assumption renting is a short-term arrangement for people without children and that renters will move frequently, rather than set down roots in their community.

The policy:

  • Increase 42-day notice periods for landlords to 90 days to give tenants more time to find somewhere else to live
  • Abolish “no-cause” terminations of tenancies
  • Retain the ability of landlords to get rid of tenants who are in breach of the tenancy agreement with 90 days’ notice, or more quickly by order of the Tenancy Tribunal
  • Limit rent increases to once/year (the law currently limits it to once every 6 months) and require the formula for rental increases to be specified in the rental agreement
  • Give tenants & landlords the ability to agree tenants on a fixed-term lease of 12 months or more can make minor alterations, like putting up shelves, if they pay double bond and on the basis the property is returned to the state it was in at the start of the tenancy
  • Ban letting fees
  • Require all rentals to be warm, dry & healthy for families to live in by passing the Healthy Homes Bill, introduced as a members’ bill by Ms Ardern’s predecessor as Labour leader, Andrew Little, and in the committee stage when the parliamentary term ended in August, and
  • Give landlords access to grants of up to $2000 for upgrading insulation & heating.

Notice periods

Ms Ardern said notice periods would be used where a landlord required the home to live in or had sold the property, the tenant had breached the agreement such as anti-social behaviour, failure to pay rent or causing damage to the property; or the landlord didn’t want to continue a fixed-term tenancy past its expiry: “This will mean landlords are still able to give notice to evict bad tenants. Landlords will still be able to go to the Tenancy Tribunal to ask for evictions or other remedies in the event of breaches of tenancy agreements.

“Most landlords operate with integrity and seek to provide decent accommodation at a fair price. These reforms will not affect them. What they will do is stop exploitative behaviour by a minority that is blemishing the reputation of landlords as a whole.”

Property Institute: It will worsen housing crisis

Ashley Church.

Property Institute chief executive Ashley Church said: “Labour’s new housing rental policies will scare existing landlords out of the rental market and will make the current housing crisis even worse – particularly in Auckland.

“The timing of these proposals couldn’t be worse. Auckland is currently in the grip of a serious housing shortage which affects both buyers & renters – and anything which deters investors from providing housing can only succeed in compounding that problem.

“If you’re an existing landlord, the deck is already stacked against you. The market has flattened, loan:value ratio (LVR) restrictions mean your equity position is worse, and bank credit rationing means that it’s now much harder for you to borrow money to do renovations & improve your position.

“Now Labour is telling you that, if elected, they’ll take away your right to terminate a tenancy and they’ll regulate the circumstances under which you can increase rents to make them comply with some as-yet-undefined Big Brother formula.”

Mr Church said these moves would come on top of a capital gains tax, pending a report from a yet-to-be-formed tax working group: “It doesn’t take a rocket scientist to recognise that Labour are already committed to a capital gains tax and that their tax working party will be made up of others who share that worldview. So, if you’re a property investor, the very clear message is ‘We’re going to get you’.

“That might make for good politics – but it risks doing long-term damage to the property market by scaring off mum & dad investors who are currently putting a roof over people’s heads.”

Mr Church said private investment was the key to solving the housing crisis and providing incentives to get people building new homes was the way to overcome the supply issue: “But no one is going to do that if they’re worried that they’re going to be regulated & taxed to death. Existing landlords will abandon the market and people who might otherwise have invested will stay away. Which means the State – which is just you & I as taxpayers – will be left holding the bag.”

First National chief also makes lopsided call

Bob Brereton.

First National Real Estate chief executive Bob Brereton said Labour’s proposals to change tenants’ rights “will severely, and negatively, impact on a landlord’s ability to protect their investment and will result in increased rents for tenants.

“The pledge to outlaw letting fees is a good example of a poorly thought-out policy with an unintended consequence: Letting fees are charged by professional property management companies to cover the costs associated with securing the right tenant. They then act as advocates for both the landlord & tenant to ensure comfort, safety & protection of the investment. If you remove letting fees, many management companies will be forced to increase management fees to compensate. This will simply force up rents.”

He was also concerned about the proposal to remove the right to end a tenancy, with 90 days’ notice, without cause: “This is simply ludicrous. There are many reasons why landlords might want vacant possession of a property, and infringing on these is a direct challenge to private property rights.

“A similar proposal to increase the provision to end a tenancy after 42 days, in certain circumstances, to 90 days will have a significant impact on property values. The 42-day provision is used, particularly, when a landlord sells a property and the buyer requires vacant possession or where the landlord needs to move back into it urgently, so this provision could impact on a landlord’s ability to sell.”

Brereton says regulating rent rises a no-no

Mr Brereton said one of the biggest challenge of Labour’s policy was the proposal to regulate market rentals by passing legislation to cap the amount by which rent can be increased. His example:

“A landlord buys a house, putting up say $200,000 of their own cash or equity, to provide a home for someone without one. They borrow $450,000 for the purchase at 5% interest and, paying only interest, it costs them $22,500 in interest, another $2000 for rates and $1500 for insurance ($26,000/year). This means they have to rent the property for $500/week, just to cover costs. Add in a 5% return on their equity and its $692. Anything less than that and you are just providing social housing.”

Overall, he said: “This risks being ‘the straw that breaks the camel’s back’. Landlords are facing negative returns, flat prices & the threat of a capital gains tax. If interest rates go up, as predicted, it would only take a small move in a flat market to convince many landlords to get out of the market.”

Australian research indicates similar issues left to fester

AHURI – the Australian Housing & Urban Research Institute – introduced a paper published in May 2012 this way: “More Australians are renting for longer periods, yet do not enjoy the benefits of secure occupancy. Changes to improve the security of occupancy in the Australian private rental system can be informed by international experiences.”

The paper was based on research conducted by Professor Kath Hulse at the AHURI Swinburne-Monash Research Centre, and Associate Professor Vivienne Milligan & Dr Hazel Easthope at the AHURI UNSW-UWS Research Centre. They examined the provisions for secure occupancy across rental systems in Australia & other similarly developed countries, and considered the potential to adapt these provisions to Australia.

Key points:

  • Secure occupancy is important in creating a home, regardless of tenure, and is a foundation for many aspects of wellbeing
  • The Australian private rental sector is characterised by relatively insecure occupancy compared to either social rental or home ownership
  • International experience demonstrates that it is possible to have a large private rental sector with smallscale investors & higher levels of secure occupancy for tenants. Changes to the regulatory framework and policy settings are required to achieve this.

This study argued that secure occupancy is linked to whether households are able to:

  • participate effectively in rental markets
  • access & remain in adequate, affordable & appropriate housing with protection of their rights as consumers & citizens
  • receive support from governments or other social service agencies if & when necessary to obtain &/or sustain a tenancy
  • exercise a degree of control over their housing circumstances and make a home, to the extent that they wish to do so.

European examples

Provisions for secure occupancy are stronger where rental systems are large, such as in Germany, the Netherlands & Austria, where, respectively, 60%, 43% & 30% of households rent. All of these might be categorised as integrated systems, with more uniform policy & regulatory approaches to rental housing.

While the latter 2 prioritise the social rental sector, the German system relies mainly on a private rental system. In these countries, secure occupancy in rental housing has been supported by supply subsidies. By contrast, other jurisdictions (Scotland, Flanders, Ontario, New Jersey & Australia) tend to have highly differentiated systems with strong security in social housing and relatively insecure occupancy in the private rental sector.

Largescale investment & professional management

Countries with large social renting sectors (the Netherlands, Austria, Scotland & Ireland) or higher corporate/institutional investment (Austria, the Netherlands, New Jersey, Ontario & Germany) also have a stronger tradition of professionalised management than in Australia.

This enables investor risks to be pooled and decisions about occupancy for individual households to be made at arm’s-length from decisions about investment.

Germany provides an interesting example, where, although there is larger-scale investment, most landlords are smallscale but are investing for the longer term, enabling more secure occupancy for tenants.

Legal provisions for secure tenure

There is a range of lease types across the countries studied. The typical practice in Australia of offering short-term fixed leases followed by month-to-month arrangements was only found elsewhere in Scotland & Ontario. New Jersey also has month-to-month arrangements, though these renew automatically unless a notice to terminate is given by either party. Other countries have the practice of longer-term or unlimited lease terms.

Of the jurisdictions studied, only Scotland compares with Australia in terms of having short-term tenancies that can be terminated readily without grounds. Even jurisdictions like Ontario & New Jersey have specified grounds for ending a private sector tenancy.

Supporting lease terms that meet the long-term needs of householders

Some jurisdictions have also been better at assisting people to personalise their dwelling and use the property according to their wishes, and so improve their autonomy. In the German private rental market, the standard lease provides capacity to personalise or even renovate the house and facilitates access to people with disabilities. These are only found in other jurisdictions on a lease-by-lease basis.

Links: Labour policy: renters
Ahuri, 14 May 2012: How can secure occupancy in rental housing be improved in Australia?

Attribution: Labour policy & release, Property Institute & First National releases, AHURI research paper.

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Access matters most

On this website, access is the most important consideration. The real estate catchcry, “Location, location, location,” relies on your ability to get there.

In Auckland, a 30-minute car journey can take 90 minutes, but estimating timeframes is also hazardous at pretty much any time of day.

The Government resolutely opposed rail innovation until the super-city’s first mayor, Len Brown, won the support to proceed with the city rail link and forged ahead, notwithstanding the funding gap as the Government sat on the sidelines. Eventually, this year, the Government signed up.

Cars have quickly filled the extra lanes on a short patch of the Northern Motorway and will quickly fill the Waterview tunnel & North-western Motorway expansions.

As I wrote 6 years ago about travelling on the western, industrial side of the isthmus: “Occasionally I stray into Neilson St, Onehunga, and quickly realise it was a mistake. There’s no need to be quick about the realisation, of course, because it’s going to be a while before you can escape.”

Construction of the East-West Link, the State Highway 1-20 road route through that western area, is before a board of inquiry, Mill Rd between Papakura & the southern edge of Flat Bush at Redoubt Rd & into Murphys Rd is becoming a more significant arterial and is now the subject of upscale talk, but the arrival of still more congestion isn’t being beaten.

Now, it seems, the third track on rail’s main trunk line will be built, and perhaps the fourth track as well.

Labour’s new candidate for prime minister, Jacinda Ardern, upped the ante yesterday when she said Labour would build light rail between the city centre & airport within a decade, extending to West Auckland in the same timeframe and later to the North Shore.

She would introduce a regional fuel tax, infrastructure bonds & targeted rates.

National’s finance minister, Steven Joyce, again ruled out a regional tax, which he’s previously argued is inefficient. So, too, is doing nothing while Auckland’s population grows by about 50,000/year, with 10-year projections from Statistics NZ of 29,000/year (medium) to 35,000/year (high).

A party in power for 9 years has no room for innovative policy without the audience asking why these policies weren’t already in place and, while both National & Labour issued transport policies yesterday, Miss Ardern had to have the front running.

We are set up, then, for a serious battle of wits over primary infrastructure & housing in Auckland – and the skilful politicians will at least appease the rest of the country, if not produce some sound economic offerings, so the election doesn’t just become about Auckland.

For the voter who thinks more about policy than party allegiance – and these voters, I think, are likely to decide who comes to govern – there are questions not just about policies but about strategies, and particularly funding methods.

Among those questions today:

  • Why has it taken so long to introduce new central government funding for extra housing infrastructure support?
  • Why has the Government steadfastly opposed new forms of tax, or a greater sharing of tax to support regional initiatives & infrastructure?
  • Why have key Auckland transport decisions been delayed so long in the face of record immigration?
  • Why is a board of inquiry examining one proposed section of transport infrastructure – the East-West Link – in isolation from other components such as the third & fourth sections of main trunk rail track and the future port location & consequent transport links?

Those are questions which are obviously aimed at the incumbent government. Other parties have released policies on some of these issues.

Labour has a policy to build, or finance the building of, an extra 10,000 houses/year and Miss Ardern talked yesterday of using a regional fuel tax.

The key transport – access – decisions need further input from all claimants for the government benches. The central issue is integrated decision-making, and the absence of such integration has long been a feature of central government (including bureaucrats) versus Auckland.

Attribution: Party speeches & release.

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National promise of 34,000 houses/decade for Auckland may add 2000/year

The headline is what matters in an election campaign, and the headline is that National is promising that, as the government, it will build 34,000 new houses on Crown land in Auckland over the next 10 years.

New Zealand has a record of not electing governments beyond 3 terms and National is ending its third term as the majority in a coalition, which jeopardises the chances of it being in a position to carry out the promise.

Social Housing Minister Amy Adams.

Amy Adams, Social Housing Minister and Minister Responsible for Housing NZ, revealed the figure in a speech at the Property Institute in Auckland yesterday. And then she proceeded to whittle it down.

The 34,000 is made up of 13,500 new social houses & 20,600 affordable & market homes.

Under the Crown Building Project, the Government will take down 8300 old, rundown houses.

Ms Adams said Housing NZ alone had over 50 housing developments under way in Auckland. The forward programme includes other housing projects already announced & underway:

  • Northcote, where 300 state houses will be replaced by 1200 new homes
  • Hobsonville Point, where the Government-owned Hobsonville Land Co Ltd (now HLC (2017) Ltd) is about to deliver the 1000th house in a programme to deliver 4500 homes
  • Tamaki, where the government-council regeneration project has a programme to develop 7500 new homes over the next 15 years, replacing the houses on 2800 Housing NZ properties
  • Other existing projects include 2700 new homes already announced under the Crown land programme, 580 houses under the Ministry of Social Development’s social housing reform programmes, and new homes for emergency & transitional housing.

By Ms Adams’ calculation, the Government would add 24,000 new – not previously announced – houses over a decade, though on the figures above the actual total might be less, perhaps down at 20,000, or an average 2000/year.

Comparing promises

Andrew Little.

That compares with Labour leader Andrew Little’s proposal last year for 100,000 new affordable houses nationally over 10 years, half of them in Auckland, which would include partnerships with private developers.

So, on top of existing projects, Labour has promised 5000 and National 2400 extra houses/year for Auckland.

Labour also promoted a dole for apprenticeships policy which would subsidise employers to take on around 4000 young people for on-the-job training in fields including building & construction.

Phase one of National’s Auckland housing programme, which covers the next 4 years, would cost $2.23 billion and be funded through Housing NZ’s balance sheet and $1.1 billion of new borrowing that the Government has approved as part of the business case.

Phase 2 in the latter years would be funded through the market housing development part of the programme & rental returns.

Ms Adams said ministers had also agreed that Housing NZ would retain dividends & proceeds from state house transfers, to help fund the building programme.

A glance at reality

The promises come after a period of extremely high immigration – a net inflow of 228,000 nationally over the last 4 years, 108,000 of those in Auckland, requiring 40,000 homes at an average 2.7 persons/household.

Building consents in Auckland over those 4 years started low, 6500 for the March 2014 year as the country was still gradually easing out of the global financial crisis, and totalled 34,200 for the 4 years.

Assuming 100% construction of consented homes (which is not normal, but I don’t have the exact figure), Auckland fell short of housing the net migrant inflow by almost 6000 homes over those 4 years. That housing requirement ignores, completely, the net flow of people within the country.

The National proposal might fill the gap if immigration eases, but on the slim information from the minister it would encourage pricing to stay high. On my calculation in February, consents for new homes nationally (excluding land) have risen 34% in value over the last 5 years – after a slow shift from the bottom of the market, between 6-7.7%/year for the last 4 years.

The land price equation in Auckland can be partly met by intensification throughout suburbia, land prices falling because of the freer availability of sites under the new unitary plan, and section sizes being reduced.

That doesn’t require tampering with rural:urban boundaries, which Labour has said it will eliminate. Those boundaries have a role in protecting non-urban land and in directing development into more efficient parcels.

Auckland also needs more infrastructure for housing development, but it needs to be in well devised communities with a supply of jobs nearby, not on the basis of rural carpetlaying. The local job requirement is fundamental but has been ignored as Auckland has spilled out along motorway corridors.

To catch up, New Zealand needs more builders with a longer future in the trade than the typical construction cycle allows. To do that, either the Government or some other industry supporter needs to ensure trade skills are being taught to enough people before a boom gets underway, and it makes sense to reduce booms, and therefore busts, with some smoothing of economic cycles (but not the total smoothing the US tragically & farcically tried in its attempt to avoid what became the global financial crisis).

As a cyclical high recedes, the building force needs attractive alternatives other than leaving for Australia. Some of that can come through infrastructure projects, which ideally should be separated in time from highs in house & commercial construction, thus reducing cost pressures as well.

Link:
Full Adams speech, 16 May 2017: Launch of Crown Building Project

Earlier stories:
16 May 2017: Little calls for end to negative gearing, and Property Institute calls it “cynical ploy”
6 March 2017: Auckland above 10,000 home consents/year again
10 February 2017: Smith exultant about figures that are plainly inflated
19 January 2017: Building consent highs still don’t match migrant demand
11 July 2016: Little sets out 8 planks to remedy housing issues
19 November 2012: Shearer proposes Government scheme to build 100,000 “entry-level” houses over 10 years

Attribution: Ministerial speechnotes & release, Statistics NZ tables, Labour releases, own articles.

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Little calls for end to negative gearing, and Property Institute calls it “cynical ploy”

Labour Party leader Andrew Little renewed the party’s call to eliminate negative gearing on residential property investments yesterday, and was promptly accused by Property Institute chief executive Ashley Church of making “a cynical electoral ploy [that] risks making the country’s housing crisis significantly worse”.

The party campaigned to end negative gearing in 2011. This time, Mr Little proposed reducing negative gearing by 20%/year over 5 years and spending the estimated $150 million saved on $2000 grants to 600,000 homeowners to insulate their homes.

Mr Little’s call was to “crack down on speculators”, which included banning foreign speculators from buying existing homes: “This will remove from the market foreign speculators who are pushing prices out of reach of first-homebuyers.”

He said Labour would tax property speculators who flick houses within 5 years, and end their ability to use tax losses on their rental properties to offset their tax on other income, “which gives them an unfair advantage over people looking to buy their first home”.

Expanding his point, Mr Little said: “Homebuyers are being locked out of the market by speculators. Losses from rental property investments will be ring-fenced. Speculators will no longer be able to use tax losses on their rental properties to offset their tax on other income, a practice called negative gearing. This move has been recommended by the IMF & the Reserve Bank.

“The biggest users of this loophole are largescale speculators who own multiple rentals and use losses on new acquisitions to continually reduce their tax. The speculators’ tax loophole helps them outbid homebuyers for properties because the taxpayer effectively subsidises part of their cost of servicing mortgages.

“Ending this loophole will not affect most people who have bought a single rental as a long-term investment because most of them are not using it. Those [small investors] that do use this loophole generally only do so for a few years after purchase.”

Church calls it envy politics

Mr Church said the suite of housing proposals Labour announced last year was smart, but on this one he accused the party of “resorting to a form of envy politics designed to set one section of New Zealand society off against another. The policy is a direct attack on mums & dads who are trying to provide for themselves in retirement and be less of a burden on the state.

“Mr Little’s use of the word ‘speculators’ to describe property investors is mischievous. Speculators are people who buy & sell property very quickly in the hope of making a quick buck – whereas investors are people who buy for the long haul – providing housing to thousands of New Zealanders in the process.”

Mr Church said the policy, if implemented, would have a dramatic & rapid effect on the supply of private rental accommodation, creating a problem which would ultimately fall back on the Government: “Your typical property investors are average mums & dads – not wealthy cigar-smoking fat cats – and their ability to purchase an investment property is usually leveraged against the equity in their home & their ability to claim losses in the early years, like any other business does. This move would certainly stop them investing – but in the process it would quickly lead to a shortage in rental housing which would fall back on the Government – so it would end up costing the taxpayer a lot more in the long run”.

Mr Church noted that negative gearing is only a factor in the early years of a property investment: “Over time, rents rise and properties become ‘positively geared’ – at which point the additional income becomes taxable. Is Labour suggesting that they will forgo this tax income – or that they’ll make property investors pay tax on profits while removing the ability to claim losses?”

Need is “to harness family investment”, not to discourage it

He said his biggest concern was that Labour was proposing a policy to reduce private investment in property at a time when private investment in new houses “is probably more important than at any other time in the nation’s history – the Government, and parties who want to be in government, should be proposing policies that increase private investment in the construction of new dwellings as quickly as possible – exactly the opposite of what Labour is proposing.

Instead, Mr Church said there was “a need for smart & innovative solutions that harness the power of mum & dad investment to get those houses built quickly. That might include giving preferential tax treatment to investors who build, or buy, new homes – not punishing them for doing so”.

And he questioned Mr Little’s level playing field: “That’s absolute nonsense. Homebuyers & families aren’t being closed out of the market by investors – they’re being closed out by loan:value restrictions that require them to have a 20% deposit at a time when house prices are at historically high levels. The best way to fix that is to remove those restrictions on first-homebuyers – not blame those who are providing rental accommodation to those who choose not to own.”

Labour plan includes big build, training programme & elimination of Auckland urban boundaries

Labour does have a development plan, announced last year, to get 100,000 houses built quickly under its KiwiBuild programme, which would include partnerships with private developers.

Mr Little said Labour would establish an affordable housing authority to work with the private sector to cut through red tape and get new homes built fast. “It will partner with private developers, councils & iwi to undertake major greenfields & revitalisation projects, building affordable homes with KiwiBuild & the private market [but the company names Kiwibuild Ltd & Kiwibuild.nz Ltd have already been registered by private company owners]. These homes will be part of great communities built around parks, shopping centres & transport links.

“Labour’s KiwiBuild programme will build 100,000 high quality, affordable homes over 10 years, with 50% of them in Auckland. Standalone houses in Auckland will cost $5-600,000, with apartments & townhouses under $500,000. Outside Auckland, houses will range from $3-500,000.

“Increased house-building will require a larger workforce. Labour’s dole for apprenticeships policy will subsidise employers to take on around 4000 young people for on-the-job training in fields including building & construction. Labour’s policy of 3 years’ free post-school education will see tens of thousands more people study in all fields, including building & construction. KiwiBuild is projected to create 5000 new jobs at its peak.

“Labour will remove the Auckland urban growth boundary and free up density controls. This will give Auckland more options to grow, as well as stopping landbankers profiteering & holding up development. New developments, both in Auckland & the rest of New Zealand, will be funded through innovative infrastructure bonds.”

Link: Labour policy, Levelling the playing field for first-homebuyers

Attribution: Party & institute releases.

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On joining the 1%

I suppose I ought to have become excessively rich too. “Ought to”, rather than “could have” or “should have”.

“Ought to” because, although this country has always had its share of people born with a silver spoon in their mouth, it’s also been possible to attain great heights from a lowly start. And, to a great degree, it’s been up to you – but the rules have been changing.

I began writing this as I heard Labour Party leader Andrew Little talk of slashing immigration by the thousands, perhaps 10s of thousands, and of building houses for the out-crowd, and after reading a few items online about the Deep State, the 1% and more rewriting of economics.

Slashing the migrant inflow is easily done, and we won’t have to lift a hand, I’ve been telling people. All we need is for the Australian economy to perk up, and 10s of thousands will be gone again. Including the “pass-throughs”, the people who found it easier to get a New Zealand passport than an Australian one, but really wanted to go to the bigger economy.

Soon the pass-throughs won’t be able to get into Australia so easily though, and we’ll lose their short-term input as well.

Having more people here doesn’t hurt us. Failing to provide for their arrival – or for our “collateral damage”, the people left without home or job or hope – does.

And speculation? It moves on when the opportunities dry up. One way is to increase supply and another, as Mr Little is proposing, is to remove tax inequality.

On building homes, prices & markets

This morning I read various pieces on economics & politics to see where Donald Trump might take us next or what alternatives might gather support, and I made my periodic sortie on to Twitter, visiting long enough to leave a comment on a councillor’s (and National Party conference attender’s) page saying we hadn’t reached record house-building yet, but that consents were high and construction was increasing.

One of the misleading statements on housing statistics recently has been that record dollars spent equates to record construction numbers – ignoring the influences of land & construction inflation (Statistics NZ doesn’t count land in the estimated costs of housing, but it matters to everyone who wants to work to a land:building ratio).

Another misleading theory is that foreigners represent only a tiny percentage of home buyers, so their influence can be dismissed. It can take just one successful bid at auction for the right house on the right street to influence a market, up or down, and a bidder not seeming to care about the price can wield undue influence. There’s been plenty of that in Auckland, but it’s mostly stopped.

You’ll have seen that construction hasn’t started on many of Auckland’s special housing areas with the alacrity the ex-minister kept presuming – there were still catches – and that most of that housing was targeted too high for low-earners to buy in. The US’s tactic to take ownership down to that basement market evolved into an extraordinary rash of worthless subprime mortgages and an international collapse called the global financial crisis, but there are more sensible ways of achieving a wider spread of ownership.

An era of inequality as policy

Since that crisis began, it’s been evident that many of the excessively rich have become filthily excessively rich, and you don’t get invited to go out fishing with them in their tinny because it happens to be longer than a very long wharf, with exclusive entry.

You’ll have read plenty about the 1% grabbing all the money, that it’s not trickling down to the rest of us. And in the US, how the Deep State controls all the levers, but you’re never quite sure who this Deep State is or how to belong to it.

From most articles about this mystical beast, ordinary mortals aren’t invited. Right family, right school, right university, right employer, all of those and you’re in.

You can break in, though sometimes you might have to pick the lock.

It would come as no surprise, given my job, that I’ve conversed with a high proportion of New Zealand’s 1% over the years – some there by inheritance, many on their way up – and they come in a range of political hues, partly, I think, because so many have climbed from a low rung and haven’t followed orthodox courses to the upper echelons.

Those upper echelons exist in both the corporate & public sectors, and paths within the 2 have become closely related, starting when the corporate sector crashed & burned in 1987. In the preceding 3 years, as the neoliberal mindset began to dominate, corporate salaries began to be topped up with various extras such as options, warrants & bonus shares.

Come October 1987, many of the leading companies ceased to exist and bonus shares & options were of no value, but the notion that executives deserved far more pay clung on. It had far less to do with performance than with who held the voting power at company meetings. It was an international affair, enabled by majority shareholdings being under the control of institutions which didn’t disagree with the notion.

The public sector, meanwhile, chased higher executive earnings to maintain staff quality.

The inequality which continues to grow can be rearranged through taxes & earnings ratios (for example, relating the cleaner’s pay to the chief executive’s, much as minimum pay could be worked out on a ratio instead of a fixed figure).

Here, the Deep State constitutes political insiders who include senior public sector executives and corporate, bank & finance sector leaders.

Many of our 1% made their money in the 1980s and kept it, some by the skin of their teeth, and through judicious investment since then have become multi-millionaires.

I reflected today, instead of swearing the oath of poverty by choosing a career as a journalist, I might have turned off at one of the many corners that crop up on your way forward in New Zealand. Into one or another aspect of the sharemarket, or an inside instead of outside position in property, for example. But I didn’t, and so ensured I wouldn’t become a 1%er.

Nor did I aspire to become a member of the Deep State (or anyone inside it to even think of hiring me).

So, having failed right from the first paragraph of this article, I bring you some other writers’ insights on how insiders succeed in growing their position at the outsider’s expense, how the art of propaganda has advanced well beyond the understanding of many of us, and – this one is a dark delight – how people in an inconsequential town in Macedonia played a fake-news role in the US election, and what most unlikely reason drove them to it.

Links:
Counterpunch, 15 March 2017: How bankers became the top exploiters of the economy
Quartz, 13 May 2017: 21st-century propaganda: A guide to interpreting and confronting the dark arts of persuasion
Wired, 15 February 2017: Inside the Macedonian fake-news complex

Attribution: Comment.

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English announces super at 67

Prime Minister Bill English said today the Government would progressively lift the age of eligibility for NZ superannuation from 65 to 67, starting in 20 years.

The proposal assumes National will win the election, scheduled for 23 September. Mr English said (assuming he’s still in power), the change would go into legislation next year.

As justification for a measure his predecessor, John Key, wouldn’t take, Mr English said: “New Zealanders are healthier and living longer, so adjusting the long-term settings of NZ super while there is time for people to adapt is the right thing to do….

“Gradually increasing the retirement age from 2037 will more fairly spread the costs & benefits of NZ super between generations, ensure the scheme remains affordable into the future and give people time to adjust. It will also bring New Zealand into line with other countries like Australia, the UK, Denmark, Germany & the US, which are all moving to a retirement age of 67.”

Mr English said universality & indexation wouldn’t change. He said he was announcing the change now so political parties could debate superannuation transparently in the lead-up to the election.

Little says Labour will hold it at 65

Labour Party leader Andrew Little said before the announcement that Mr English was fuelling uncertainty: “On Saturday he talked about a ‘reset’ for super, but wouldn’t be drawn on what that meant. By Monday he was ruling out changes to entitlements. What will tomorrow bring? A rise in the age of entitlement from 65? This drip feed of options is irresponsible.

“It’s just more poor leadership from Bill English, just like his approach to the housing crisis. His dithering is creating unnecessary anxiety over something he needs to be absolutely clear about because it affects the lives of so many. It’s one thing to be uncertain about what’s going to happen. It’s another thing to say let’s have a debate about it without actually putting the case for change….

“Labour’s policy is very clear. There will be no change. A Labour government I lead will keep the age of entitlement at 65 and we will re-start contributions to the NZ Superannuation Fund.”

Attribution: English release.

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The English programme is for steady growth

Bill English, completing his second month as Prime Minister, opened Parliament yesterday with a statement that was long on boring. The word ‘continue’ cropped up throughout his speech.

And that’s neither odd nor bad. A prime minister who’s just finished 8 years as deputy and also as finance minister is hardly going to tell you he’s been doing a bad job and is going to change everything.

Nevertheless, I read through it in case something had moved out of line. One thing I’d hoped might have moved a little closer to action was the Resource Management Act reform programme. It was down the end of the speech and is still a work in progress. That’s perhaps for the best, because it needs work to remove some of the unnecessary turmoil some changes were going to make.

Mr English said economic growth was expected to average about 3%/year over the next 5 years, “supporting more jobs, reducing unemployment and allowing incomes to rise faster than inflation.

“Unemployment is forecast to drop to 4.3% by 2020-21. Over the same period another 140,000 jobs are expected to be created and the average wage is forecast to increase by a further $7000 to $66,000.

“The Government’s overall fiscal strategy remains unchanged – getting on top of spending and paying off debt in the good times so that the Government can support New Zealand communities through future challenges.

“The operating allowance remains at $1.5 billion for each of the next 4 Budgets. The capital allowance has been increased to $3 billion in Budget 2017 and to $2 billion in future budgets to provide for a number of high quality infrastructure & investment projects.

“Treasury’s latest forecasts of the operating balance before gains & losses (OBEGAL) is for a $473 million surplus this year, rising to $8.5 billion in 2020-21.

“Net debt is expected to fall to 18.8% of gdp by 2020-21, with contributions to the NZ Superannuation Fund forecast to restart the same year.”

Among projects for the year (there are others, in case you think the most important one has been omitted – check the link below):

“The Government will continue work on improving the quality of our rivers & lakes, and progress work on a fair & equitable allocation system for water & discharges.

“The Government will encourage petroleum & mineral exploration while adhering to strong environmental & safety provisions. Investment in data acquisition projects such as aeromagnetic surveys will continue, ensuring aeromagnetic data on around 30% of New Zealand’s land surface will be available by mid-2018.

“The Government will continue to promote competition in the electricity market to help keep downward pressure on power prices. It will also continue to promote renewable energy, with a target of reaching 90% renewable energy by 2025, up from 81% in 2015. Work will be progressed on setting renewable energy targets beyond electricity.

“Investment in modern infrastructure is a priority for the Government. Capital spending over the next 5 years is forecast to total $32.1 billion, compared to $18.4 billion over the last 5 years, with major investments in transport, schools, hospitals, defence & housing.

“The Government will continue construction of the remaining 5 roads of national significance, and accelerate a package of regionally important state highway projects under the accelerated regional roading

“Housing will remain a key focus for the Government this year, and work will continue to increase the supply of land for housing.

“Legislation to reform the Resource Management Act will be progressed, to reduce costs & delays for homeowners & businesses, and the Government will also proceed with reform of the Building Act.

“The Productivity Commission will deliver its final report on the urban planning system. This will consider options for the long-term replacement of planning legislation.

“The Government will work with Auckland Council to ensure the successful implementation of the city’s unitary plan. Additional special housing areas will be established, and more underutilised Crown land will be made available to support an increase in residential building.

“The Government is reforming the social housing sector to grow supply and get better outcomes for people & families most in need of housing assistance.

“The Government will build & fund additional social & emergency housing places, having last year provided permanent funding to the emergency housing sector for the first time.

“The social housing reform programme will progress, with the transfer of up to 2500 Housing NZ properties in Christchurch to community housing providers. The reforms aim to drive more diverse ownership of social housing, engaging providers who can support tenants with additional social services, and redevelop social housing to better match tenants’ needs.

“The Government will progress the advanced survey & title services project, which will significantly improve the quality & range of survey & title services provided by Land Information NZ.

Legislation to amend the Local Government Act will be progressed, allowing local authorities to create more shared services across regions, particularly for core infrastructure such as transport, water & sewerage.

“The Government will continue to review New Zealand’s immigration settings to ensure they support economic growth and provide employers with access to the international labour market to fill labour needs that cannot be met domestically. A new global impact visa will be piloted to attract up to 400 young technology entrepreneurs.

“The Government will implement initiatives to contribute to its goal of raising Government investment in research & development to 0.8% of gdp, including the rollout of the $250 million/year strategic science investment fund.

“2 new regional research institutes will be established in Marlborough & Alexandra, and a second round of regional research institute funding applications will be completed, supporting 1-3 additional institutes.

“The Government will continue to resolve historical Treaty of Waitangi claims, and intends for all willing & able iwi to have settled or have an agreement in principle by the end of 2017.”

Link:
Prime Minister’s statement, 7 February 2017

Attribution: Speechnotes.

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English explains his thinking

Prime Minister Bill English used a Rotary Club address in Auckland yesterday for his first election campaign offer, a big lift in police numbers & resources.

The package would amount to $503 million and includes adding 1125 more staff to the police force over 4 years, 880 of them sworn officers; an increase in cash & assets seized from gangs & organised crime, up from $230 million to $400 million over 4 years; and $115 million for rehabilitation & reintegration programmes.

The National proposal, the first promise heading into the 23 September general election, comes 4 months after Labour leader Andrew Little berated the Government for holding police income down to 14% since it was elected in 2008, compared to a 25% rise in costs over that period arising from immigration & inflation. Labour proposed lifting police numbers by 1000 in 3 years.

More interesting to me from Mr English’s address yesterday, though, were some of the pictures he painted from his upbringing on a Southland farm, his time as a young farmer fighting the debt which threatened to overwhelm him and, he said, learning economic reality. Below, I’ve run those parts of his speech:

A successful recipe

Some people believe New Zealand’s location protects us from the most immediate pressures. But in time, the effects of decisions made in Washington, Berlin, Moscow & London will wash up on our shores.

When our values & direction are tested, we should remember that history shows we’ve developed a successful recipe for New Zealand over many years, and we can hold true to our values. That allows us to face international challenges with confidence. Confidence in our resilience, confidence in our ability to adapt and confidence in our place in the world.

We have forged a distinctive place in the global community as a fair-minded people with a successful economy open to trade, investment & migration. That economic success has been hard won by New Zealanders. It should not be taken for granted.

As some of you know, I was brought up in Southland, a place where hard work & farm skills were respected more than profit, and where no one could do it all on their own. I got my politics around our large dining table growing up, and from my mother who ran a farm, raised 12 children and was a serial community activist.

By the early 1980s, I was a new, keen & highly indebted young farmer. Interest rates were around 17%, but farm costs were held down by wage & price freezes.

That wasn’t sustainable and just papered over the economic problems that had built up over a number of years.

The economy had to be restructured. My community was hit hard as farm subsidies were wiped.

I made lots of financial & farm management mistakes. But with the help of family and a lot of hard work, we stayed on our feet.

Many New Zealand families had similar experiences in other industries, as jobs were lost and they struggled to rethink where they fitted in a country that had suddenly changed.

We thought the world owed us a living. It didn’t.

Small steps

I learned then that business & families in a small trading country like ours needs to continuously adapt in small steps – and that government should back Kiwis to do just that, focusing on resilience & aspiration rather than fear & isolation.

Hiding from economic reality eventually requires drastic & damaging change.

This has been the guiding philosophy behind the National-led Government’s approach over the past 8 years. And it has delivered the strong economy we have now.

As a new MP in 1990, I saw the deep-seated resilience of our rural families & communities as they rebuilt their skills & their confidence. I saw the same qualities in the big city when I married into a Samoan Italian family.

I must admit the scruffy unemployed farm worker who turned up on the arm of their eldest daughter wasn’t quite what Mary’s parents had in mind as a son-in-law – busy as they were with several jobs and raising a large family. From them I saw the grit & determination it takes to feed & educate a large family, own a home and win respect when starting afresh in a new country.

Mary and I have raised 6 children of our own. Along with the hundreds of families we’ve met through school, church, relatives & dozens of sports teams, we’ve shared the experience of working multiple jobs, getting everyone everywhere on time, finding time to spend with the children & each other – and for enough sleep – as well as answering the hardest question of all every day: what’s for dinner and who is cooking it?

The people who shaped my life are resilient & capable.

I’m proud that on the other side of the globe from the European capitals I visited a few weeks ago, New Zealanders have built a cohesive & globally competitive country that can provide valuable lessons to the rest of the world.

In recent years, New Zealand has dealt with the biggest financial crisis since the Great Depression, we’ve dealt with devastating earthquakes and we’ve made significant progress on deep-seated social & Treaty issues.

A sound footing

We now have a dynamic & diversified export sector, sound government finances, low unemployment and thousands of new jobs. People are voting with their feet. New Zealanders are staying home, more tourists want to visit us, and more people want to live here. The outlook remains positive and the economy continues to grow, with over 130,000 jobs created in the last year. Average wages are expected to keep rising and reach $66,000 a year by 2021. That means more opportunities for our kids to get jobs and more money in people’s pockets.

The global economy is looking a bit better than last year, with improving prospects in Europe & the US. However, the political instability I mentioned earlier means there is no room for complacency.

In this environment, I believe the biggest threat to New Zealand is disruption of the international system of open trade. Under my leadership, New Zealand will continue to advocate for free trade and aim to execute high quality trade agreements. When we open doors for our exporters, they walk through and create opportunities & jobs for New Zealanders.

Immediate challenges

Our immediate challenges at home are what I call the positive challenges of growth. The Government is building the roads, schools & houses needed to support our growing communities. We’re providing the public services & infrastructure needed by a successful, growing & modern economy – and there’s much more to do.

The whole point of building a strong economy is to improve the lives of all New Zealanders. If we can stay on course and build on the progress we’ve already made, we have the best opportunity in decades to make positive sustainable choices for our country – choices that deliver better incomes for our families, safer communities, and provide better government services for everyone.

As prime minister, I want people to be rewarded for their hard work & enterprise.

Businesses, farms and entrepreneurs across New Zealand are the engines of growth in our country – as are the people who work hard every day in those enterprises.

So we’ll continue to back people who take risks to create new jobs & new businesses.

We’ll back hard-working people who get up early in the morning to milk the cows or to catch the bus to work, so they can raise their families. And we’ll back people who bravely leave behind welfare dependency to move into work or who work hard to manage their health issues or disability so they can live independently. I believe in the capacity of all New Zealanders to improve their lives in some way, large or small. And I believe in the generosity of this country to help them do it.

Here’s what I mean.

Last year, I visited Kaiti School in Gisborne, where many of the children come from low-income families. I saw inspired teachers sign up parents, mostly young mums, to the local iwi savings scheme. I met a 5-year-old who presented me with a business plan for selling toffee apples at the school fair. He told me about his products, his customers & his marketing.

If we accept the normal assumptions, then that young Maori boy hasn’t got much chance. But what I saw in his eyes, and in the teachers supporting him, will change his life.

Finding the bright side

Through my extensive family & many years as a local MP, I have seen hundreds of examples of suffering & loss of hope turned around by quiet heroism in our communities, families, schools & public services. It never happens without the hope of one person for another.

I’ve also seen lives blighted by poor public services, bad decisions, neglect & bureaucratic inertia. A well-intentioned public service on its own is no guarantee of success – we have to help people to fan the small flames of hope. This government is committed to doing that.

We’ve developed a better understanding of the needs of people who rely on us most. Public servants can now see the lifelong benefits of intervening early to help those in need, and the lifelong costs when that doesn’t happen. We know, for example, that a teen parent on welfare will spend an average of 17 years on a benefit, at a cost of just under $300,000.

There is a group of around 1000 5-year-olds each year who, in later life, are far more likely to commit crime, be on a benefit or go to jail, and they’re far less likely to succeed at school. Left alone, each of these children will cost taxpayers on average around $270,000 over the next 30 years, with some costing over $1 million. We will spend time and money now to change the course of their lives.

For too long, governments have serviced misery, rather than investing upfront to help people change their lives for the better. Some New Zealanders need ongoing support to help them lead a decent life – and they should have as much choice as possible in how that happens. But there are many more who will benefit from smart, lighter-handed assistance and will then move on.

A basic: Money isn’t always the answer

It seems pretty basic to me that if you are spending billions of dollars on social programmes like health, education, welfare, housing and law & order then it should work. You should actually be achieving something, otherwise you’re wasting taxpayers’ money and messing with people’s lives. So we now publish results every 6 months showing what has been accomplished.

Spending more public money is not, in itself, an achievement. Real achievement is reducing welfare dependency. Real achievement is getting better results for our kids at school. And real achievement is preventing rheumatic fever, and reducing emergency department waiting times. Real achievement is changing lives. This approach, which we call social investment, is showing promising results.

There are now over 50,000 fewer children living in benefit-dependent households than there were in 2011. And the number of sole parents on a benefit is the lowest since 1988.

My government is willing to take the risk of trying new ways to help those most in need. Some new services might not work. Others might be opposed by existing providers. In election year, some will say the answer is always more money. If that were true, we would have no social problems, as we’ve been increasing funding for decades. The recent rise in the prison population confirms we need to do better.

We’ve made some progress in breaking the cycle of welfare dependency, child abuse, low education levels & escalating criminal offending, a cycle that is often intergenerational. It is a long job.

The people who fall through the cracks

But there remains a small number of people who have a disproportionate impact on the safety of our communities. Too many people in prison and on community sentences are regulars in the government system. So today I want to address that issue.

This Government’s Policing Excellence and Prevention First programmes have focused on reducing crime and preventing reoffending. These programmes contributed to a 20% reduction in crime between 2009-14. They improved public confidence in police, and they drove productivity gains that freed up the equivalent of more than 350 extra frontline officers. More recently, we’ve set challenging targets to reduce violent crime, youth crime & reoffending.

We’ve made it harder for violent offenders to get bail and we’ve sharpened our focus on preventing family violence. And we’re using social investment to better understand the people who most need our intervention and identify what really helps them to lead better lives.

We have driven government agencies to address the drivers of dysfunction, rather than just responding to the symptoms. Because preventing crime often requires intervention from education or housing agencies rather than just the police, for example.

Here is a surprising fact: The most common age of an apprehended burglar last year was 16. That’s right – just 16 years old. We need to push harder to keep every young person on a track that avoids first offending and prevents them moving on to even more serious crime. But the police frontline need more time to dedicate additional resources to crime prevention & working with other agencies, while also meeting higher demand for dealing with serious crime now.

Although recorded crime has fallen since 2009, overall demand for police services has recently increased. That’s down to the complexity & time-consuming nature of cases such as family violence, child abuse & sexual assault, as reporting of these crimes increases. In addition, recorded crime has begun to rise again over the last 2 years – particularly burglaries, robberies & assaults.

As I’ve said, this government is prepared to invest up front in programmes that will tackle these complex issues and make a positive difference to communities.

Warning: examine the promises closely

Delivering better public services for a growing country is all about investing where it’s needed, while working smarter and being more accountable for results.

In weighing up promises by political parties this year, I challenge you to look beyond the dollar-figure soundbites. I want you to ask whether the policy sets out exactly how it will improve people’s lives – or whether it is just taking the easy option of throwing money at a problem.

Attribution: Bill English speechnotes.

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Housing minister no more

Nick Smith has lost the housing portfolio in today’s Cabinet reshuffle by new prime minister Bill English, and nobody’s picked it up, although 2 ministers have social housing & Housing NZ in their titles.

Dr Smith has retained the building & construction (previously building & housing) and environment portfolios.

Ministers with ‘housing’ in their title are:

  • Amy Adams, responsible for social housing, responsible for Housing NZ Corp, also Associate Minister of Finance, Minister of Justice, Minister for Courts, Minister Responsible for Social Investment, and
  • Alfred Ngaro, Associate Minister for Social Housing.

Steven Joyce picks up finance & infrastructure, Gerry Brownlee remains Leader of the House and retains Supporting Greater Christchurch Regeneration, Defence and the Earthquake Commission portfolios. He will also be appointed Minister of Civil Defence.

Simon Bridges continues as Minister of Transport and will pick up the economic development & communications portfolios and associate finance.

Anne Tolley becomes Local Government Minister, replacing Peseta Sam Lotu-Iinga, who is retiring from Parliament.

Link:
Full ministerial list

Attribution: Prime ministerial release.

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