Gareth Morgan's new political party

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#1665804 8-Nov-2016 15:43

"Melenkurion abatha, Duroc minas mil. Harad khabaal." - Quote from the Chronicles of Thomas Covenant; invokes the power of Earth, the actual meaning of the invocation is the subject of some debate. The use of these words may call Fire Lions and decimate the enemy. Rather useful in a sticky situation!

What do I win?

dafman

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#1665893 8-Nov-2016 17:08

MikeB4:

What do people expect the Government to do about the Housing?

Four off the top of my head for starters ...

Limit foreign/non-resident buyers to newly constructed houses and apartments, with those who buy vacant residential land required to build on it within two years. (Australia has this)
Introduce a surcharge (tax) for foreign buyers (Hong Kong has this)
Capital gains tax for property investors (Every developed country other than NZ has this!)
Tougher LVR

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#1665899 8-Nov-2016 17:13

dafman:

MikeB4:

What do people expect the Government to do about the Housing?

Four off the top of my head for starters ...

Limit foreign/non-resident buyers to newly constructed houses and apartments, with those who buy vacant residential land required to build on it within two years. (Australia has this)
Introduce a surcharge (tax) for foreign buyers (Hong Kong has this)
Capital gains tax for property investors (Every developed country other than NZ has this!)
Tougher LVR

Most of that will make it harder for those who don't already own homes to buy or to find affordable rental. Investment in rentals will drop, demand will go up and as a result rentals will sky rocket.

Here is a crazy notion, lets give peace a chance.

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#1665929 8-Nov-2016 18:03

tstone:

"Melenkurion abatha, Duroc minas mil. Harad khabaal." - Quote from the Chronicles of Thomas Covenant; invokes the power of Earth, the actual meaning of the invocation is the subject of some debate. The use of these words may call Fire Lions and decimate the enemy. Rather useful in a sticky situation!

What do I win?

Technically the First Chronicles of Thomas Covenant The Unbeliever but I'll allow it!

You win the right to be known as Lord Kevin for the day.

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#1665930 8-Nov-2016 18:04

dafman:

MikeB4:

What do people expect the Government to do about the Housing?

Four off the top of my head for starters ...

Limit foreign/non-resident buyers to newly constructed houses and apartments, with those who buy vacant residential land required to build on it within two years. (Australia has this)
Introduce a surcharge (tax) for foreign buyers (Hong Kong has this)
Capital gains tax for property investors (Every developed country other than NZ has this!)
Tougher LVR

Many countries do have CGT but you'll be hard pushed to find one where it does more than make money for the gubmint rather than affect prices in a positive way.

dafman

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#1665968 8-Nov-2016 19:11

MikeB4:

dafman:

MikeB4:

What do people expect the Government to do about the Housing?

Four off the top of my head for starters ...

Limit foreign/non-resident buyers to newly constructed houses and apartments, with those who buy vacant residential land required to build on it within two years. (Australia has this)
Introduce a surcharge (tax) for foreign buyers (Hong Kong has this)
Capital gains tax for property investors (Every developed country other than NZ has this!)
Tougher LVR

Most of that will make it harder for those who don't already own homes to buy or to find affordable rental. Investment in rentals will drop, demand will go up and as a result rentals will sky rocket.

You can't help both first home buyers and investors as it is the surge in investor speculation in recent years that has screwed the first home buyers aspirations.

So when you ask about housing, I'm looking after the home buyers, not the investors.

1. Limiting foreign buyers will reduce non-resident demand, thus assisting resident first home buyers.

2. Introducing a non-resident surcharge will reduce non-resident demand, thus assisting resident first home buyers.

3. A capital gains tax for investors will reduce demand from investors, thus assisting first home buyers.

4. Tougher LVR for investors will reduce demand from investors, thus assisting first home buyers.

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#1665980 8-Nov-2016 19:25

dafman:

MikeB4:

What do people expect the Government to do about the Housing?

Four off the top of my head for starters ...

Limit foreign/non-resident buyers to newly constructed houses and apartments, with those who buy vacant residential land required to build on it within two years. (Australia has this)
Introduce a surcharge (tax) for foreign buyers (Hong Kong has this)
Capital gains tax for property investors (Every developed country other than NZ has this!)
Tougher LVR

I'm not in favour of a CGT, it doesn't work for various reasons (see Aus) yet has potential to be unfair.

LVR is unrelated to "housing crisis" - despite claims it was evidence of "doing something". It was put in place for prudential reasons - to limit exposure of the banking system to the consequences of a correction in property prices.

There are all kinds of other govt interventions into the free market which need to change, IMO.

Accommodation supplement needs to end - it's a completely crazy waste of taxpayer billions. Supermarkets don't expect govt to "top up" a shopper's wallet so that they can pay any price. Landlords should be treated no differently. If they can't turn a profit because they're unaffordable, then they need to sell up and exit the business.

Govt needs to end the monopoly held by Councils for building consent and inspections. That should all go to private certified firms working in a competitive market, with central govt acting in a governance role only.

Rules relating to body corporates need to be changed/tightened up, so that risk of rogues doesn't act as deterrent to apartments for home ownership.

I'll finish - unfinished. The list of needed changes is huge. It's going to upset "mum and dad" investors in the rental market who tend to be National voters, so would take some guts to implement.

I'm not an economist. Morgan is - and he's very astute. We need him to give govt a good boot up the backside - get them from sitting on their hands pretending everything smells of roses.

Owning your own home is an important and stabilising aspect to life - it was one thing which "made NZ great", that it was possible for every NZer.

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#1666106 8-Nov-2016 22:22

MikeB4:

What do people expect the Government to do about the Housing?

For starters not having a tiff with the Reserve Bank about the matter. (The reserve bank is politically independent, having the Prime minister tell it what to do publicly somewhat undermines that independence). Furthermore the government has far greater tools than the Reserve Bank. (The reserve bank has a narrow mandate, including monitoring the banking industry, controlling inflation and maintaining NZ's financial stability. Things like looking after first home buyers are well outside its mandate) Link 1, Link 2

For some idea of the Morgan Foundations ideas on property related matter here: http://morganfoundation.org.nz/category/property/, Particually this: http://morganfoundation.org.nz/gareths-five-point-affordable-housing-plan-for-new-zealand/

Idea's I would consider: (Not to be done all at once. Stopping rampant house inflation is needed, but pull too many leavers, and property prices will crash, leaving many with negitive equity, and possibly causing our banks to fail, or/and putting us into recession)

Reverse the "Land Tax Abolition Act 1990". This act is one of the reasons property prices have boomed for almost my entire life. This is my preference over a more comprehensive Capital gaines tax for a number of reasons. For political palatability, any land tax should come with the option of lodging the tax against the title of the property, to be settled at time of sale (with a guarantee of no foreclosure while owner occupiers are still alive).
Remove current tax advantages of property investment compared to say sharemarket investment.
Vancouver style 15% stamp duty for non-resident buyers.
Tonga & Philippines style complete ban on sale of land to foreigners.
Policy to discourage "land banking"
Recommendation to councils to remove requirements for easily buyer evaluated items such as minimum floor area, and minimum car-parking requirements (hence reducing the cost of developments where buyers don't require these amenities). Construction standard for difficult to view items like acoustics to be kept high. Take steps so consumers have confidence we won't have another leaky building crisis.
Change the law to allow (at its discretion) the NZTA to allocate part of the land transport fund to Rail & Ferry development. Clogged roads are a lot of the reason for reluctance to allow more greenfields development in auckland. High capacity transit would alleviate some of this pressure.
Reform laws around body corporates, current legal environment is putting some off apartment living.
Investigate building supplies industry for cause of high construction material prices (i.e. monopolistic behaviour)
Commision construction more social housing
Reduce immigration
Change immigration schemes to encourage (i.e. more points under the skilled migrant scheme) migrants to settle outside of the main centers.
Try and move some government jobs from locations with housing shortages to (still nice) places like Dunedin where housing is much more readily available.
Put into place regulations around the "P" testing & cleanup industry to avoid the deadweight on the industry of cleaning up chemicals many times below the level that is harmful.
Encourage big companies to put headquarters (or some jobs) places other than Auckland and Wellington.
Advertising & Educational push to encourage New Zealanders to invest in productive assets, rather than housing.

frankv

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#1666334 9-Nov-2016 10:54

MikeB4:

Most of that will make it harder for those who don't already own homes to buy or to find affordable rental. Investment in rentals will drop, demand will go up and as a result rentals will sky rocket.

I disagree. The whole point is to recreate a viable alternative to renting... buying.

Investment in rentals will drop, so the prices of houses will drop, so it will be *easier* for people to buy their own. Consequently, demand for rentals will drop, so rental prices will drop, or stay about the same.

itxtme

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#1666780 9-Nov-2016 18:44

itxtme:

Mark my words - he will resonate with under 35 year olds, and like said above will 'steal' from both partys, not just the left. How many who have commented about him own there own home? How many own more than one home?

Anyone want to change their point of view in regards to the US election?

Dratsab

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#1667641 10-Nov-2016 21:38

Scott3:

Tonga & Philippines style complete ban on sale of land to foreigners.

I quite like the system in Thailand where non-Thai (farang) can't buy land and houses. They can buy apartments though.

itxtme:

itxtme: Mark my words - he will resonate with under 35 year olds, and like said above will 'steal' from both partys, not just the left. How many who have commented about him own there own home? How many own more than one home?

Anyone want to change their point of view in regards to the US election?

An easy idea to jump to, and it does have a certain appeal - however, they don't have MMP in the US. That said, I would be looking carefully at Gareth Morgan if I were John Key and very cautiously if I were Andrew Little.

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#1667701 10-Nov-2016 22:41

Scott3:

MikeB4:

What do people expect the Government to do about the Housing?

For starters not having a tiff with the Reserve Bank about the matter. (The reserve bank is politically independent, having the Prime minister tell it what to do publicly somewhat undermines that independence). Furthermore the government has far greater tools than the Reserve Bank. (The reserve bank has a narrow mandate, including monitoring the banking industry, controlling inflation and maintaining NZ's financial stability. Things like looking after first home buyers are well outside its mandate) Link 1, Link 2

For some idea of the Morgan Foundations ideas on property related matter here: http://morganfoundation.org.nz/category/property/, Particually this: http://morganfoundation.org.nz/gareths-five-point-affordable-housing-plan-for-new-zealand/

Idea's I would consider: (Not to be done all at once. Stopping rampant house inflation is needed, but pull too many leavers, and property prices will crash, leaving many with negitive equity, and possibly causing our banks to fail, or/and putting us into recession)

Reverse the "Land Tax Abolition Act 1990". This act is one of the reasons property prices have boomed for almost my entire life. This is my preference over a more comprehensive Capital gaines tax for a number of reasons. For political palatability, any land tax should come with the option of lodging the tax against the title of the property, to be settled at time of sale (with a guarantee of no foreclosure while owner occupiers are still alive).
Remove current tax advantages of property investment compared to say sharemarket investment.
Vancouver style 15% stamp duty for non-resident buyers.
Tonga & Philippines style complete ban on sale of land to foreigners.
Policy to discourage "land banking"
Recommendation to councils to remove requirements for easily buyer evaluated items such as minimum floor area, and minimum car-parking requirements (hence reducing the cost of developments where buyers don't require these amenities). Construction standard for difficult to view items like acoustics to be kept high. Take steps so consumers have confidence we won't have another leaky building crisis.
Change the law to allow (at its discretion) the NZTA to allocate part of the land transport fund to Rail & Ferry development. Clogged roads are a lot of the reason for reluctance to allow more greenfields development in auckland. High capacity transit would alleviate some of this pressure.
Reform laws around body corporates, current legal environment is putting some off apartment living.
Investigate building supplies industry for cause of high construction material prices (i.e. monopolistic behaviour)
Commision construction more social housing
Reduce immigration
Change immigration schemes to encourage (i.e. more points under the skilled migrant scheme) migrants to settle outside of the main centers.
Try and move some government jobs from locations with housing shortages to (still nice) places like Dunedin where housing is much more readily available.
Put into place regulations around the "P" testing & cleanup industry to avoid the deadweight on the industry of cleaning up chemicals many times below the level that is harmful.
Encourage big companies to put headquarters (or some jobs) places other than Auckland and Wellington.
Advertising & Educational push to encourage New Zealanders to invest in productive assets, rather than housing.

He's very keen to tell everyone what to do and how to do it.

Rather than his second point, why not "Give the sharemarket investments the same tax advantages as property"? Surely people making more money means people spending more, which means more tax in GST and more prosperity all round.

If he really wants to be cautious/illiberal and avant garde (at least in NZ terms), he could restrict the tax free status of share investments (and property if he can think of a way) to an expanded form of Kiwisaver where shares can be placed within the savings restrictions until retirement in return for no taxation on them: increases retirement saving, reduces state dependency and encourages people to save.

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#1667702 10-Nov-2016 22:44

frankv:

MikeB4:

Most of that will make it harder for those who don't already own homes to buy or to find affordable rental. Investment in rentals will drop, demand will go up and as a result rentals will sky rocket.

I disagree. The whole point is to recreate a viable alternative to renting... buying.

Investment in rentals will drop, so the prices of houses will drop, so it will be *easier* for people to buy their own. Consequently, demand for rentals will drop, so rental prices will drop, or stay about the same.

Does he say anything about improving residential lettings?

There is no reason why people should not rent (like Germany, Holland etc) for long periods of time if they so wish as long as they have security of tenure and rent controls. There's plenty of room for both long term and short term lease arrangements and at the moment we have only short term in the residential sphere really.

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#1667713 10-Nov-2016 23:30

Geektastic:

He's very keen to tell everyone what to do and how to do it.

Rather than his second point, why not "Give the sharemarket investments the same tax advantages as property"? Surely people making more money means people spending more, which means more tax in GST and more prosperity all round.

If he really wants to be cautious/illiberal and avant garde (at least in NZ terms), he could restrict the tax free status of share investments (and property if he can think of a way) to an expanded form of Kiwisaver where shares can be placed within the savings restrictions until retirement in return for no taxation on them: increases retirement saving, reduces state dependency and encourages people to save.

To clarify the ideas with bullet points we mine, Garth Morgan's idea's are in the link.

Regarding tax, we have to get it from somewhere (of course, how much we need is up for debate). I understand your argument that less investment income tax will increase consumption tax, but (without specific analysis) I doubt it will come close to fully offsetting the lost income.

The bigger issue is how to most efficiently allocate our tax burden, as to promote economic growth, and give socially desirable outcomes. While you are right that lowering tax on income earned from productive investments would encourage investment which is especially good if it creates a lot of high paying jobs. On the other hand this this reduction of tax take would need to be made up elsewhere (assuming we require the same tax take for our budget). Increasing income tax (on work) would discourage people from working, which isn't ideal. Otherwise we could increase consumption tax (GST), the great thing about this is that it is an easy way to extract tax from tourists, and it has a very wide base. With both of the latter, my concern would be that they are quite regressive.

I don't really think it is fair that money made from investing is taxed less than money made from working. Imagine the (justified in my opinion) outcry from poorer sectors of society if tax on bank deposits and share holdings was slashed, and to cover the lost income, GST was increased to 20% or 5 percentage points was added to income tax across the board.

itxtme:

itxtme:

Mark my words - he will resonate with under 35 year olds, and like said above will 'steal' from both partys, not just the left. How many who have commented about him own there own home? How many own more than one home?

Anyone want to change their point of view in regards to the US election?

Interesting one.

The election of Trump, Duterte (Philippines President) & the BRexit vote all seemed to be due to deep rooted dissatisfaction with the current situation including the political "establishment", and a desire for radical short term change.

To some extend Gareth Morgan could capitalize on this feeling. His comment about lighting a fuse under the Beehive implies this is the plan.

On the other hand what The Opportunities Party's approach "TOP takes a long term, evidence based view. Our policies aim to make most New Zealanders better off in the long term." differs radically from the other votes I listed. All of those vote outcomes seemed to be based on impulse, hatred, and seemed to have been made without regard to evidence.

Winson would probably be our closest match, although given he has been in parliament for decades (including influential positions such as deputy Prime Minister) many would consider him as part of the "Establishment", and not capable of driving radical change.

Geektastic

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#1667719 10-Nov-2016 23:43

Scott3:

Geektastic:

He's very keen to tell everyone what to do and how to do it.

Rather than his second point, why not "Give the sharemarket investments the same tax advantages as property"? Surely people making more money means people spending more, which means more tax in GST and more prosperity all round.

If he really wants to be cautious/illiberal and avant garde (at least in NZ terms), he could restrict the tax free status of share investments (and property if he can think of a way) to an expanded form of Kiwisaver where shares can be placed within the savings restrictions until retirement in return for no taxation on them: increases retirement saving, reduces state dependency and encourages people to save.

To clarify the ideas with bullet points we mine, Garth Morgan's idea's are in the link.

Regarding tax, we have to get it from somewhere (of course, how much we need is up for debate). I understand your argument that less investment income tax will increase consumption tax, but (without specific analysis) I doubt it will come close to fully offsetting the lost income.

The bigger issue is how to most efficiently allocate our tax burden, as to promote economic growth, and give socially desirable outcomes. While you are right that lowering tax on income earned from productive investments would encourage investment which is especially good if it creates a lot of high paying jobs. On the other hand this this reduction of tax take would need to be made up elsewhere (assuming we require the same tax take for our budget). Increasing income tax (on work) would discourage people from working, which isn't ideal. Otherwise we could increase consumption tax (GST), the great thing about this is that it is an easy way to extract tax from tourists, and it has a very wide base. With both of the latter, my concern would be that they are quite regressive.

I don't really think it is fair that money made from investing is taxed less than money made from working. Imagine the (justified in my opinion) outcry from poorer sectors of society if tax on bank deposits and share holdings was slashed, and to cover the lost income, GST was increased to 20% or 5 percentage points was added to income tax across the board.

I see no disbenefit however in giving New Zealanders a method of saving for retirement which rewards that saving by not taxing the money saved or the returns on it. After all, it will be taxed by GST when it is spent eventually and almost every country we would compare ourselves to does not tax retirement saving.

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