Talking Child Poverty in Whangarei

Yesterday I went on my first official trip as an MP, to Whangarei. My colleagues tell me the novelty of the travel will wear off, but I don’t think the buzz from connecting directly with people doing amazing and inspiring work on the issues I care about is going to wear off any time soon.

The main purpose of my trip was to meet with Jazmine Heka, the 16 year old from Whangarei who has started the Children Against Poverty campaign. Jazmine was inspired to take action when she watched Bryan Bruce’s controversial Inside Child Poverty documentary which screened last year in the week before the election (and is available to view on demand for three more days). You might have read about Jazmine and her campaign in the Sunday Star Times a couple of weeks ago.

Photo: Northern Advocate

Jazmine is seeking signatures on three petitions: to introduce warrants of fitness for all rental houses, to provide free healthcare for all children including prescription costs, and to provide free healthy school lunches to all children attending schools. She is hoping to come to Wellington and present the petitions to Parliament in the middle of the year, which leaves plenty of time for collecting signatures: you can download the petitions to print, gather signatures, and mail them back.

It was both exciting and challenging to meet with Jazmine. Exciting to see the issue being taken up by a young person who can speak directly and passionately about it, and who can raise awareness and take the campaign to another level. Challenging because her campaign is confronting all politicians to put their money where their mouths are on the issue of child poverty.

I talked about how the Greens made bringing 100,000 children out of poverty one of our top three priorities during the election campaign, about our Warm Healthy Rentals bill, which would achieve her aim of having a “warrant of fitness” for rental properties, and about our work to establish a cross-party group of MPs working on child poverty and inequality (The Aotearoa Equality Group, which so far has members from the Greens, Labour, and the Maori Party).

I left feeling there is even more we can do. I’m determined that Child Poverty will stay at the top of the political agenda until we get some meaningful action from the Government. As luck, or coincidence, would have it, Social Development Minister Paula Bennett was in Whangarei yesterday too, consulting on her Green Paper for Vulnerable Children. I know she met with Jazmine too, and I hope she takes Jazmine’s challenge seriously.

In the afternoon I took the opportunity  to visit 155 Community Whare. Carol Peters and the team at 155 (named after its address of 155 Kamo Road) know lots about child poverty from their frontline community work. Indeed, researchers for the Inside Child Poverty documentary that inspired Jazmine to take action did much of their research in the area, and spoke to 155 and its affiliated services in preparing the documentary.

Over a cup of tea at the kitchen table (the 155 kaupapa is to build a better world over a cup of tea, a philosophy with which I wholeheartedly concur) I spoke with members of 155’s legal advocacy, whanau support,  youth, and housing teams and was blown away at what they are able to achieve with scarce resources.

Since it was established in the 1990s, 155 whare has established a patient-owned health service, a school for young people at risk of disengagement, an emergency housing service, a community law centre, and even a television channel! Many of these are now fully independent entities but remain affiliated with 155. It’s a truly inspiring place, founded on principles of community ownership, and achieving great results.

155 and other community services are up against it though, with the scale of poverty and disengagement in the North. We talked about increasing demand for food services (both for food parcels and for food in schools), long waiting lists for budgeting services, the harmful effects on children of increasing sanctions against beneficiaries as a result of the Future Focus changes last year, the adult stresses children are exposed to when their parents experience financial hardship, the growing pressures on emergency housing services in Whangarei, and the ever-present dynamic of gangs and the black market economy.

I left Whangarei feeling overwhelmed with the scale of the issues, but buzzing from the connection with people doing great work, and inspired about the task ahead of me as the new Green Party Spokesperson for Children, Housing and Youth. These issues are why I got into politics – now I get to tackle them head on.



37 Comments Posted

  1. Elsie

    ONE of your problems is that you think that the Greens would “go ahead anyway” in such a situation. It proves only that you have no clear notion of the dynamics of the party. However, the real problem is the one DBuckley alluded to… we, here in NZ, have a broken economy and have had a broken economy for much much longer than I have been here.

    One reason it is broken is a too-great reliance on the principle of “comparative advantage” –

    It is a wonderful thing our modern economic system. It uses money backed by debt – which means it cannot even accurately count. It backs globalization, adhering to principles that are advantageous to global corporations that can effectively arbitrage labour, environmental regulations and government policies (effectuating a “race to the bottom” in all those parameters). It uses this principle of “comparative advantage” even when it GUARANTEES that a small isolated nation will be poorer as a result.

    The results of these things include the subservience of governments to bankers in general and an enhanced capacity of people with money to corrupt them, ever increasing inequality and a whole series of other badnesses.

    So when John Key says he “understands this stuff” the reality is that he is claiming the willful ignorance of reality which is what most of modern “economic science” embraces.

    Before we’d spend big on wind turbine manufacture, we’d be a MARKET for wind turbines. Why do we import them from wherever Vesta manufactures them? We’d build our railcars HERE, not overseas.

    We’d pay a bit more. We’d gain in terms of manufacturing… and this is important because in our current political-social environment there is no such thing as a post-industrial economy. That’s right, the notion that we can build an economy ENTIRELY on innovation and R&D and the financial sector, and employ everyone, is lunacy. It may be what we are trying to DO, but it is lunacy. The notion of building a sustainable economy based on flogging off the ground beneath our feet is equally lunacy… and that’s the other thing our “economists” want us to do.


  2. Borrowing Elsie’s example:

    For example, let’s say the Greens were a part of government, and part of the deal was they got $1B to spend on windfarm manufacture.

    The reports all say this will make a loss, and will make ongoing losses that will need to be met by the taxpayer. The Greens go ahead anyway. The losses eventuate. They are worse than imagined, but by now, thousands of people are “employed” in this “industry”.

    Do we let it fall, or continue to bail it out?

    I say we let it fall. It doesn’t work on it’s own merits.

    (Completly ignoring windfarms because the “what” isn’t important)

    You’ve just illustrated the thought process that leads (in particular) governments (of all persuasions) to do the wrong things.

    The trick of being an overarching organisation like a government is to have joined up thinking and look at the full picture.

    You don’t just look at (for example) the windfarm maker and declare it a dead duck beacuse ministry A which poured money into the project isn’t getting a return or value from the invested dosh; you need to look at the overall economic impact to all areas of government, and the value to the country.

    Now it may be that after that full analysis it’s still a dead duck, and the plug is pulled, but it’s in the full knowledge of all the costs and benefits of such a decision.

    But as we know, governments (or, more accurately, individual ministries) think in silos. Good businesses learned the value of having a whole-of-company view a goodly while back, and are less prone to this sort of thinking.

  3. Just to remind everyone, the problem with New Zealand is that (a) we’ve had half a century of going down the pan, and (b) most of our businesses are the wrong kind of business which generate insufficient value add.

    We don’t have the brains or the willpower or (government-managed) economic conditions to do the sorts of things we should be doing (examples Tait, FP Healthcare) that do have great value add, and the one big ugly business that does work and deliver good value add (dairy) is at something like it’s maximum possible size, or there won’t be any New Zealand left to live in.

    Solve the lack of good business problem and at a stroke we’ll have significantly upped the median wage, increased the tax take without raising tax rates or coverage, and thus have funds for the government to tackle the issues that need attention, some of which are noted in this very thread.

    But without fixing the “money in” problem, we can’t fix the health and welfare problems. More taxation on New Zealand’s existing wealth is not going to solve anything of any significance. Neither are unsustainable solutions like digging up or selling off NZ going to work; at best that leads to a boom, followed by a bust.

    This is a structural problem, needing a structured set of solutions and a lot of private sector involvement. Because, at the end of the day, government can’t increase the country’s wealth: only private enterprise can pull off that feat.

  4. Elsie, go ahead demonstrate what level of benefit amount is sufficient to live on without child poverty. Show how the cost of necessities is affordable within such an amount.

    As for having children they cannot afford, what a silly term – most people can afford them when in work or with a working partner (well since WFF at least, before then some working parents had children raised in poverty), it’s being left on a benefit after job loss or a separation from a partner that leads to child poverty.

  5. For example, let’s say the Greens were a part of government, and part of the deal was they got $1B to spend on windfarm manufacture.

    The reports all say this will make a loss, and will make ongoing losses that will need to be met by the taxpayer. The Greens go ahead anyway. The losses eventuate. They are worse than imagined, but by now, thousands of people are “employed” in this “industry”.

    Do we let it fall, or continue to bail it out?

    I say we let it fall. It doesn’t work on it’s own merits.

    If you bail it out, are you much different to Bush? Looking after ‘th mates?

  6. Kerry,

    It seems to me you blame every ill on capitalism.

    Could it be that no child in New Zealand need go hungry now? Could it be that their parents make bad choices with money? How many of their parents smoke? How many have more kids than even wealthy people can afford? Could it be that welfare has created a state of child-like dependence? Could it be that having low expectations of people mean they meet them? Could there be aspects of welfare, like capitalism, that need fixing?

    The market delivered benefits to the wealthy out of all proportion to their contribution to the real economy. Which they then gambled away on speculation in existing assets..

    And that happened because of government intervention enabling Fannie & Freddie, toothless legislation and hopeless watchers. What were the SEC doing?

    I have no love of crony capitalism. It’s just as bad as socialist monopolies. Let them fail. The problem is that politicians do not.

  7. USA fell due to crony capitalism enabled by bought politicians (not something I support). They will also rise quicker than Europe.

    I really really doubt that analysis. They won’t fall as HARD as Europe, nor as far, because they own the reserve currency, but neither of those places is going to actually “rise”.

    I mentioned the currency problem earlier, it remains in force as a problem on both sides of the pond. The purchase of the politicians is enabled by the currency being what it is, and by the Supreme Court ruling that a corporation is a person with the right of “free speech”, and that that right is extended to paid-for advertisements… and a system of FPP voting. In short, it is a product of many errors.

    However, your fundamental argument is about market capitalism. This is something that does actually work in a broad range of circumstances… and which fails dismally and fatally in others. The issues are not simple, but the broad definition of when it will fail is basically related to the public service vs public costs issue. Market capitalism works well to buy eggs. It fails fatally when buying health care. Works to buy petrol, fails when buying education. Overall it is a problem of equal opportunity. If the society has an interest in keeping opportunity and availability of a given thing “equal” and health-care and education are pretty representative of such things… then market capitalism is going to stuff things up.

    Applying it to housing is a mixed bag… on the one hand there is a minimum standard of housing that we aspire to allow everyone to have access to, with adequate insulation and heating. On the other, the choice of where to live has always been completely free for people and a substantial number want to live near the city center. It is a vexed issue because some people buy as an investment, others for a place to live, and yet others are renters by inclination or necessity.

    Simple answers don’t cut it at all. Applying them simply causes misunderstanding and anger.

  8. For the market to deliver a sustainable and fair economy, the Greens are probably not asking for enough intervention.

    We should have democratic control of our economy. One thing that was advocated by such arch socialists as Thomas Jefferson.

    All the failed economies we mentioned have one thing in common. The market delivered benefits to the wealthy out of all proportion to their contribution to the real economy. Which they then gambled away on speculation in existing assets..

    An economic system which relies on constant growth, cannot deliver an environmentally and socially sustainable society.

    We have seen with POAL how over reliance on the market delivers inefficient, short term focused, management, over-capitalisation, duplication and capture by monied interests to the detriment of NZ as a whole. Taxpayers are going to end up subsidising Mearsk’s monopoly profits..

    There is no excuse, in a country as wealthy as NZ, for children to be going hungry. Especially children of working parents. Another market failure!

  9. Straw man. Again. I said I’m happy to have politicians create the conditions for markets to operate, which requires law and regulation, however I disagree with the level of direct intervention the Greens often demand.

    Margaret Thatcher took a very dim view of crony capitalism, bankers and private monopolies, as do I. Lawmakers should not be bought. They should never be in a position to be bought. The more they intervene in markets, the more likely they are to be bought, as monopolistic style favours will flow to someone, often independent of merit, and that someone will want that favour to continue.

    The market is not a miracle worker, but it is miraculous. It is a fascinating thing, as a market is about people. People sending billions of tiny signals, every second, about what they value, what they want, what they need, and what they don’t want.

  10. How are you going to make sure markets are fair without State regulation?

    The State is or should be, all of us.

    Who should set our destiny. All of us, or a few wealthy people who have bought the lawmakers.

    Unregulated Capitalism results in outcomes like the USA and Greece where the owners off money capital make sure the “State” works to make them more powerfull.

    The “market” is not miraculous. It will not result in a socially and environmentally sane society by magic.

    Even Adam Smith said it had its limits.

  11. Yes. I am getting on my high horse.
    I have had it up to here with the ignorant who think we should follow the USA, UK, Ireland, Greece etc down the hole.

    I’m not advocating we do, so that is a straw man. In any case, they are all different. USA fell due to crony capitalism enabled by bought politicians (not something I support). They will also rise quicker than Europe. UK spends far too much on welfare and the state. Ireland politicians stupidly – and needlessly – bailed out property developers. Greece we’ve discussed.

    The way forward is simple in concept, and difficult to do. Spend less than we earn.

    I’m prepared to accept the state does somethings well, and should continue to do them. I’d even go so far as to say basic banking activity (savings/loans) should be nationalised. Left enough for you?

    We often run into trouble when politicians get it into their heads that intervening in markets will make things better. It seldom does. It’s their job to ensure markets operate with stability and fairness.

  12. There is the side which works in the best interests of New Zealanders and the one that steals billions off us, and is happy to have our chidren living in third world conditions.


    I don’t want anyone in New Zealand living in “third world conditions”. I’m interested in *how* we make everyone more prosperous and happier.

    It seems to me you want to wave a magic wand and make it so. By taxing more and more, which clearly doesn’t work, and is unsustainable, as has been shown in various socialist states (Russia, Cuba, North Korea) and now throughout the EEC. Eventually, you run out of other people’s money.

    I feel the answer lies in driving the costs of development down. The way to do this, as BJ and others have suggested, is to abandon smart growth planning and use the wealth of land we have available. link it via trains. Allow medium denisty construction on such land, encouraging terraces and communal parklands.

    Don’t you see that the high cost of accommodation is a direct result of smart growth planning? If we force more and more people into the same sized area, then prices must rise, or expectations drop.

  13. Yes. I am getting on my high horse.
    I have had it up to here with the ignorant who think we should follow the USA, UK, Ireland, Greece etc down the hole.
    National are pursuing the same policies of meanness and stupidity which caused their problems..

    Don’t you people ever consider the evidence.

  14. What sides.

    There is the side which works in the best interests of New Zealanders and the one that steals billions off us, and is happy to have our chidren living in third world conditions. You have made it obvious which “side” you are on.

    Yes. Tax dodging by the rich is a national sport in Greece. It is in NZ to. Except here, it is legal.

  15. Get a bit tired of educating people.

    I’m not sure who you feel you’re educating. Getting up on ones high horse is rather unappealing, and is unlikely to convince anyone of anything.

    Just compare us with Australia

    Mining, you mean? So, you’re saying if we did the same things Australia does, we’ll be much better off? Or just do the things you happen to approve of, but not the rest? I’m not sure why people in NZ are so keen to compare us with Australia. A comparison with Uruguay might be more appropriate given the similarities in resources and economic potential.

    Greece is an example of what happens when a right wing Government drops wages and increases borrowing to cut taxes.

    You’re conveniently forgetting the mass state expenditure, whereby the private sector worker earns a third of what the public sector worker does. The system is corrupt. I’m not advocating no tax, as seems to be the national sport in Greece. Look up “beware of greeks bearing bonds” in Google.

    Norway pumps $93b worth of oil out of the ground. Should we be just liek Norway?

    Supporting thieves and their accessories means you deserve abuse.

    I don’t support thieves and their accessories. Of course, thieves and their accessories occur from one end of the political spectrum to the other, and only a naive child would assume their side is pure as the driven snow in this respect.

  16. Just compare us with Australia, Norway, Finland. Who have not yet bought into voodoo economics.

    Greece is an example of what happens when a right wing Government drops wages and increases borrowing to cut taxes.

    German workers had the money to lend because they are still paid decent wages.

    And still we get people like MS and Elsie defending the indefensible.

    If you think the free market is so great go to Somalia. No Government, regulation or taxes there. Totally user pays. Instead of bludging off and destroying the decent society generations of NZ tax payers and workers have built.

    Supporting thieves and their accessories means you deserve abuse.

  17. Get a bit tired of educating people.

    You really think that Rogernomics and Ruthanasia left us better off than we would otherwise have been. The evidence proves the opposite.
    Just compare us with Australia.

    Greece is an example of what happens when a right wing Government drops wages and increases borrowing to cut taxes.

    German workers had the money to lend because they are still paid decent wages.

  18. … putting better insulation leads to better education and better health?

    Yes it does. And everyone knows this, except, it appears, in New Zealand, where people find it a surprise.

  19. We dont have poverty in Northland, Holly, or anywhere else in NZ. We do have poor people, and people who choose to avoid the huge social network avaialable to them (viz blanket man) but we dont have poverty.

    The Samoan PM summed it up rather well:

    These people in ‘poverty’ that Holly refers to have free medical care, subsidised housing, subsidsed food, free education, and can get grants for consumer electronics. That is not ‘poverty’.

  20. I replied to you Kerry, but my post hasn’t appeared. [frog: For some reason it got caught by the spam filter. Cleared now.]

  21. Again, there is no need for personal abuse. I have been listening and thinking, I simply disagree with some points raised, for the reasons stated.

    The last 30 years have been significantly better than would have otherwise been the case had we not reformed. See Greece. When we lost our golden British market to the EEC, everything changed. You can only have very generous state spending if you first generate significant surplus.

    We give money to the rich? Really? Decreased taxes? Under Labour and National, we’ve been running high taxation levels on the “rich”. Labour appeared to define “rich” as 60K. We have never tried flat, low taxation, as recommended by Douglas.

    So what you’re really saying is our middle left approach hasn’t worked. On that, we may agree.

    The 3 billion must first come from 3 billiuon cut elsewhere.It’s zero sum. If it really did work like you suggest, then unemployment and endless prosperity could start today. It would be so easy.

    Reality isn’t that simple, however.

  22. Obviously you have not been listening or thinking too deeply..

    All of the above are Neo-Liberal economic ideas. The last 30 years has shown how well they work.

    Decreasing taxes, reducing wages and the State sector and giving more money to the already rich has not resulted in an increase in private investment in productive enterprises.

    Have a look at these private sector jobs. Compare, to, say, Teachers.

    You have bought the RWNJ memes without thought.

    You forget that if labour is paid 3 billion for a wind power project they spend it within NZ, pay some back as taxes and grow the internal economy.

    Giving 14 billion a year in overseas exchange to foreign corporate profits and to those who spend it on Hawaii holidays and gambling in derivatives is killing NZ.

  23. Rudeness is not really called for, Kerry. These are my ideas, honestly, held, and I think I can back them up.

    According to the job creation view, if wind farm manufacturers increase employment by 100,000 jobs due to a $3 billion government spending program to finance wind farms, then employment is 100,000 jobs ahead of what it might be in the absence of the program.

    Rarely does the public debate focus on how employment in other sectors is affected when the government seeks the $3 billion necessary to finance its program. These effects are important but, unfortunately, less visible because they are spread among hundreds, if not thousands, of employers.

    Government spending, including spending designed to stimulate employment, may be derived from three sources. The first is taxes. If individual income taxes are raised by $3 billion to fund our wind project, disposable income is reduced by $3 billion. Consequently, individuals will demand less clothing, fewer appliances, and so on. Private sector employers will notice and respond by laying off workers.

    Since some of us will agree that we can spend our income more efficiently than can the government if only for the fact we do not have to pay a bureaucratic overhead charge—lay-offs in the affected companies will exceed the employment added by companies constructing the new windmills.

    If company taxes are raised instead of individual income taxes, they will eventually result in higher prices for consumers, lower real wages for workers, and lower returns for investors. All of these result in a decreased ability to buy clothing and appliances with the net result that unemployment increases, not decreases.

    A second source of funds is government borrowing, but this borrowing increases the price of lendable funds, which reduces the amount of investment in the private sector. Consequently, fewer new factories, machines, and homes will be built. Not only does this decrease in private investment slow economic growth, it results in additional unemployment in these industries.

    A final source of funds is the treasury, which can create new money. However, this monetary inflation results in price inflation by eroding the purchasing power of the dollar. This decrease in purchasing power will eventually increase unemployment as well.

    The public sector works best when it provides value above what the job costs to create.

  24. “Creating jobs” isn’t possible without first destroying a job in the private sector.””

    Another bullshit RWNJ meme. The public sector does not displace the private sector. In reality they feed off each other. State sector jobs both supply infrastructure and customers to the private sector.

    A functioning private sector cannot exist without the protection, regulation and support of a successful State.

    Tax is not a cost, without benefit. It is a payment for services the state supplies.

  25. “Creating jobs” isn’t possible without first destroying a job in the private sector. That’s the problem with making work, else solving unemployment would be very easy. Simply create a job for every person and fund it all out of tax. The problem is finding enough tax revenue to do so.

    A landlord putting better insulation leads to better education and better health? Wow, insulation is powerful stuff! One wonders how anyone remained healthy and educated when I grew up, or when my parents grew up. I recall the house I grew up in had no insulation and, to the best of my knowledge, still doesn’t.

    Not that houses shouldn’t be warm, of course, but I’d be interested to see the cost benefit analysis of having the taxpayer fund it. Consider that when people have insulated houses, the power usage doesn’t necessarily fall, as they quickly get used to the increase in heat i.e. they used to warm it to 17 degrees, now they push to 19 degrees.

    Rentals are influenced by supply and demand, which was my point to Holly in her previous post.

  26. It may be a zero sum game within the housing sector alone, but insulation work creates jobs for people and that has positive societal outcomes.

    Overall the virtuous circle of better housing stock leads to better health (and related educational outcomes for children) and lower energy demand/lower power provider price (and lower energy use and cost for tenants).

    As for the housing market – what does it cost to put insulation in the roof and under the floor anyway? It must be no more than $5000 in many cases. If the landlord increases the mortgage to pay for it the increased mortgage cost is still deductable against rent income. So they face no great cost pressures to increase rents.

    Besides rentals are not a cost plus business, its influenced by market supply and demand for a property compared to alternatives and rents are already rising by more than insulation cost would warrant.

  27. SPC,

    It that example, the landlord didn’t incur the cost – well, not directly – the taxpayer did. If you impose the cost directly on the landlord, it must be reflected in the rent, unless the landlord is making such a significant margin it can be easily absorbed. I’d wager that situation is very rare.

    Upgrade work is unlikely to create tax revenues for the government. On state houses, it comes from tax, so it is a cost. In private dwellings, it will lead to decreased profits posted by the landlord, therefore less tax, or higher rents paid by the tenants, which leads to decreased spending power. It’s a zero sum game.

  28. Richard and Elsie, the governments existing insulation subsidy costs money – was/is that being passed on in increased rents?

    It’s just that those unable to afford the rents of places upgraded get left in the less habitable accomodation – this means they spend less on rent and more on power or face health consequences.

    Making it compulsory for those renting out property would allow government to end the subsidy – this money being available for rent subsidy (which is going up at the moment).

    We save in health costs and reduced power use by insulation, how much is hard to quantify, but its sufficient for government to insulate all state housing.

    Given we are seeing rents rise at the moment because of emerging housing shortages in any case, would prices really be impacted by insulation upgrade costs?

    ps upgrade work creates jobs and tax revenues to government.

  29. The situation is that the population is increasing but the jobs are not. That’s not going to end, as it is a function of automation and greater efficiency as well as population increases and almost totally erroneous basic economics on the part of successive governments… going back (as near as I can tell) over 30 years. Might be longer but I’m not familiar with the New Zealand of the 1970’s and 60’s…

    The factors at work globally though, are such that fewer people are required to produce any given product, so fewer people have jobs that pay a decent wage, and more product is produced and available for less human effort (though often with greater use of energy) across the board.

    What this does, is savagely undermine the basic assumption that if you work hard you WILL get ahead. It has become far more a matter of good fortune than good work ethics, and while it is still hard to get ahead if you don’t work hard, the path to a good outcome is no longer clearly marked by that meme.

    Basically we have to find another model… it is not just Capitalism that has a problem here.

    That however, is not the leading cause of the problems we face, as the ill conceived experiment with debt-backed dollars still takes first place in the contest for worst economic ideas of all time.

    With what we have, debt backed money and central banking, the only shield against an ever widening gap between rich and poor, with the attendant advantages and disadvantages, is a strongly progressive tax system that unashamedly redistributes wealth. Countries (and this is one of them) that have abandoned that particular tool are seeing their GINI coefficients rising like a moon rocket, and the expectation of civil unrest of varying sorts has no choice but to follow along.

    Not smart at all.

    The occupy movement is only an appetizer.

    Housing prices here had no business going as high as they did. Cullen did nothing but suggest a minor tweak to the system and English took the suggestion… but by the time the two of them between them managed to pull their thumbs out of their collective ….s the damage was done. Now there are an awful lot of us in houses that are qualitatively worth half what we paid, paying that extra money and extra interest to Australian bankers who, I strongly suspect, had a lot to do with the inaction of our various finance ministers.

    We forked ourselves and now we’re trying to get out of the trouble we created.

    The only answer I see at this point is high-speed commuter rail connecting bedroom community suburbs to major destinations. The communities have to be far enough away that they can be regarded as separate cities and the rail connections have to be a lot more efficient and cheap than most of NZ is used to seeing. Where the land is less expensive the houses that can be built on it can also be less expensive, and more efficiently designed and constructed. We CAN manage this, and create things that people can afford to buy, and suck some of the demand out from under the prices in the cities.

    It’s not an easy fix. People who paid stupid prices for a house are going to be disappointed with their results. One really should try to recognize the bubbles and not buy into one.


  30. As for rents, a higher rent can only be charged when the rental competes with other stock that is not insulated

    This is wrong, SPC. It increases the total cost of ownership. If the landlord spends $20K bring it up to standard, then the rent must increase to cover that expenditure. If people can’t pay rent at that level, then the landlord exist the rental market.

    A cost is a cost. Someone pays, and that someone is the end-user – the tenant. It is the same for any service. If the return doesn’t match the costs, then the landlord is out of business.

  31. SPC

    The renter will also increasingly be the taxpayer via the Govt as the rents will become out of reach of the poor hence the taxpayer will then be paying the landlord to improve the property – vicious cycle

  32. SPC

    The population is increasing. The population is also more dynamic as far as the rental market is concerned i.e. more divorces, more labour mobility, etc.

    It’s nice for everyone to have a nice house. The flipside is that rent will not stay the same in existing non-compliant rental housing if you impose higher costs on the owner, which is what happens with a warrant of fitness.

    I’m not saying it’s a bad idea, but the renter will face those costs.

  33. What the government should be doing is supporting meals in poor area schools – many groups only need a little government help to do this. This small investment has outcomes we are prepared to spend much more on to achieve.

    This is very cost effective though the Herald reports that the Northland MP thinks such programmes only encourage parents not to feed their children and they should stop (what wonders what he thinks about Fonterra’s plan to suppply milk … ) and the Ministry led by Bennett has directly told social workers not to feed children.

    An alternative to free health care to all children is clinics in poor area schools – these will prevent illness worsening and save money.

    I certainly prefer the Green approach to requiring an upgrade to private rentals to universal warrants of fitness – warrants of fitness could still have a use otherwise at the sale of houses (paid for by the seller as per selling costs), this saves home buyers paying for checks on the building (and reduces the risk of buying a property that has “unknown” problems).

    As for rents, a higher rent can only be charged when the rental competes with other stock that is not insulated, not in scenarios such as when all rental property must be insulated. Though those who upgrade first will be able to charge more for a while.

    PS Elsie when someone sells a rental to a resident homeowner there is one less household renting property, so no increase in demand for rental property.

  34. I trust you told Jazimine there is no such thing as free. What Jazmine really means is she wants someone else to pay.

    Rentals: Well intended, certainly, but a “warrant of fitness” adds cost. The person who pays that cost is the tenant in the form of higher rents, or the house is not viable as a rental, and becomes a private dwelling. Outcome: better conditions, rents rise.

    Free healthcare for all children including prescription costs: heavily subsidised now, so higher taxes.

    Provide free healthy school lunches to all children attending schools: higher taxes.

    Higher taxes can lead to reduced tax takes as economic activity decreases. It can be a vicious circle.

Comments are closed.