A leading economic and political commentator has doubts about how “transformational” the Government’s housing announcement will be today.
The Government this morning is expected to unveil its long-awaited plan it said would help first-home buyers onto the property ladder, while increasing housing stock.
“The guts of it is the Government has locked itself into a position where it targets the median voter who is probably a homeowner and has decided to back those homeowners,” Bernard Hickey told Breakfast ahead of the announcement.
Hickey said action was needed now more than ever calling the state of housing in New Zealand “a crisis”.
Hickey, who lives in Wellington said: “I cycled in here today, and again, I saw people lying on a bench underneath the 9th floor of the Beehive asleep under blankets. I’m sick and tired of walking down the street and seeing so much homelessness.”
But the Prime Minister had already ruled out a capital gains tax and assured house prices won’t fall.
“Either you’re governing for the long-term for the people or you’re governing to get re-elected in 18 months. What is it?”
Hickey had some predictions about the Government’s announcement.
One option could be to tax land meant for housing that hadn’t been developed. This would make “some sort of difference” but won’t be “transformative”, Hickey said.
He said the other option would be to make it difficult for landlords to claim all of their interest costs as taxable expenses.
Both options may be a “long shot”, but it was within where the Government would want to operate, he said.
He advocated for a simple, low land tax “which would immediately drop prices 10 to 20 per cent”.
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