John Key has ruled out a capital gains tax as a solution to fast rising Auckland house prices. He says if the reserve bank thinks controls are in order they should propose any solutions they can come up with to Finance Minister Bill English.
The Reserve Bank’s deputy governor, Grant Spence, said last Wednesday that Auckland house price rises couldn’t be sustained and a “disruptive correction” could harm the economy.
“The ball is in their court really,” he told reporters on Thursday. “They might want to have discussions, we’re always ready to listen.”
IOW, Key is taking no responsibility for the situation in Auckland and has no ready solutions anyway.
A bit rich when it is the National govt’s mass immigration that is a big factor in the prices, and is making the GDP look so much better.
A capital gains tax is no solution, and its only the loony Watermelons who really want one applied. Andrew Little’s suggests that the Reserve Bank could introduce a system of progressive loan-to-value (LVR) rules in Auckland, with purchasers of multiple properties paying larger deposits, with the amount increasing for each extra house they buy. More socialist interventionist gobbledy gook.
David Seymour of ACT says the answer lies in deregulating the RMA, a song we’ve heard sung for 20 years now, and nothing changes. It won’t happen, not the least because the govt doesn’t have the numbers to do it in any kind of meaningful way.
All that really has to happen is that the govt pulls the plug on immigration, a solution that would be at least as effective as any of the loony tune solutions proposed above and it doesn’t require any legislation at all. Just cease approvals.
But there’s a catch 22. John Key doesn’t want the lunacy in Auckland to stop, because he knows that once it does, there goes his “rock star” economy. And then there’s the debt treadmill too.
What he has to do is cut govt expenditure, and cut taxes and deal with whatever harsh outcomes arise, as leaving it for any time in the future only means the process will be more painful. Simultaneously he has to throw ridiculous environmental regulations such as those that stopped Chatham Rock Phosphate from starting a billion dollar business here.
And he has to do it now before a collapse in Auckland does it for him.