Jacinda Ardern says public bears some responsibility for housing crisis after failed taxation attempts

Source: 1News

Prime Minister Jacinda Ardern is putting some onus on the public for the housing crisis, saying the Government had tried taxation to ease the soaring market three times without public support.

It comes after Reserve Bank Governor Adrian Orr last week said the issue with housing wasn't identifying the problem, but rather the appetite for accepting policy recommendations on the part of politicians.

He suggested taxation and resource accesses as two measures that might direct some demand away from housing.

Orr said the ball was in the Government's court.

However, Ardern this morning told TVNZ1's Breakfast that "the appetite for some of these policies also needs to come from the public".

"We've tried three times now to do things that specifically sit in that taxation category and there hasn't been wide support for that," she said.

Then-coalition partner New Zealand First stopped Labour from bringing in a capital gains tax last year.

The policy had been one which Ardern personally wanted to get through and campaigned hard on during the 2017 election.

Ardern this morning added, though, "I would point out again that actually that is not the only lever that exists, and I'd also point out that some of the countries that are experiencing this house price growth at the moment already have some of those levers in place.

"It just demonstrates that low interest rates are having an impact, but so is this Covid environment. In this time of uncertainty people are looking at, it seems, to assets as an area of investment. We need to try and get people investing in the productive economy."

Yesterday, former National and ACT leader Don Brash said it was not the responsibility of the Reserve Bank to stablise house prices, and that the housing crisis was the fault of successive governments.

He told TVNZ1's Q+A the central bank only had limited tools at its disposal and the problem was the Government's responsibility.

"The challenge for any government is to fix the housing market and still get re-elected."

Brash said limited land supply remained the biggest issue for the Government to address.

Ardern admitted today there is more work to do and said the Government is working on potential solutions.

"There are a range of different issues at play that we need to be responding to across the board, so it's not just about planning, it's not just about incomes and deposit and it's not just about lack of supply, but actually we do need to be doing things on all of those fronts," she said.

"The idea that one thing is going to make a difference for everyone is just not the case and that's why we are looking across the board and have been over the last three years."