PHOTO: Housing Crisis. FILE
The housing crisis right now in New Zealand is one of our biggest contributors to income and wealth inequality. With the explosive increase in sales and prices going on right now, those with houses or able to buy them for whatever reason, have their income and or wealth rapidly increasing, and those who are not on the property ladder are falling further and further behind, says Peter Malcolm spokesperson for “Closing the Gap” the “Income Equality” organisation. If allowed to continue it will further the damage now being done to the fabric of our society.
So it is pleasing to see Grant Robertson the Minister of Finance asking the Adrian Orr the Reserve Bank Governor if he can help find a solution. So Robertson is at least recognising there is a problem.
As to solutions, there are many as the problem is multi facetted. Solutions include: building more houses—some are being built but not enough; shifting investment in houses to much more productive industries—this can be done in many ways but the most obvious are changes to the tax regimes like strengthening and widening the capital gains tax, bringing in wealth and or asset taxes on housing; freeing up more land for housing—time to do this seriously; risk free rate of return taxes on housing; bringing in land taxes to stop land-banking; encouraging the building and importing of kitset houses; improving the processing and reducing the costs of resource consents for building accommodation: ensuring that local bodies have appropriate district plans for build more accommodation and there are others.
The problem with many of the solutions is that the Government has ruled them out particularly changes to the tax regime.
After months of denial from both Ardern and Robertson about the problem and possible solutions we desperately hope that the Reserve Bank Governor will tell them that the remedy is in their hands. We desperately hope that the Government will identify the best solutions and recognise the political capital which they have in plenty and quickly make the changes required. We cannot this crisis to continue any longer because of the damage it is doing to our society says Malcolm