ACT slips the knife into National’s back over potential new land tax

The contrast of dogmatic policy versus pragmatic politics couldn’t be more obvious.

ACT says imposing a land tax on foreign buyers would break a National election promise, but John Key believes the Government’s respond to changing circumstances.

The Prime Minister has said it may be considered if there’s evidence foreign speculators are having an impact on Auckland’s overheated market.

If the tax is imposed, it could also apply to New Zealanders living abroad after an exemption period.

ACT leader David Seymour, who has a support agreement with the Government, says National promised during the 2014 election campaign there would be no new taxes.

“The introduction of a land tax would be a broken promise,” he says.

“Property rights are meant to be protected by centre-right governments, but it looks like National is too busy trying to put Labour out of a job.”

John Key is just looking to steal another Labour policy so people no longer have a reason to change votes.

It’s an idea unpopular with the Property Institute too, which is pleading with the Government to consider other options.

Chief executive Ashley Church says it’s the wrong way to try fix the housing problem.

“Taxing foreign investors might make a few people feel better, but it will do little to slow down house price inflation in the Auckland market.

“The only way to slow the growth in Auckland house prices is to build more homes as quickly as possible, so rather than penalising those who want to invest in our real estate market, we should be channelling that investment into getting more homes built, more quickly,” he says.

Mr Church believes the Australian model which means non-resident investors can get into the residential property market but only if they build new homes or buy new property.

The funny thing is Labour and Phil Twyford are botching their response by talking up flip flops. John Key simply doesn’t care about that, he is busy stealing Labour’s policy and giving voters no reason to change.

Labour might get what they want but they won’t get government.

It does show however that John Key has no political philosophy other than retaining power.

-Newshub

 


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  • Second time around

    Key probably has some idea what the proportion of foreign buyers is. There is some strategy in raising the land tax proposal, but I am uncertain what it is. He said it will affect non resident kiwis as well as true foreigners, but that will be difficult to write as good law and to administer. I wonder if he wants to focus Labour’s attention on how you would punish foreigners in an acceptable manner, and then shelve the issue. In my view a land tax would be effective only if it was universal and set at a low rate- otherwise it is just an employment sink for lawyers and bureaucrats.

  • MaryLou

    Ashley Church on the money with this one, looking to solve the problem rather than simply add a tax. More and more disappointed in JK as time goes by – he could have figured this one out and still stolen Labours thunder. Rather he takes the shortcut, which will achieve very Little.

    • kayaker

      I believe JK has no intention of imposing this tax. He’s merely running the flag up the pole in advance of the data. I’m sure he already knows the answer. There’ll be no tax, because the data does not support it. Unlike Labour, who are squealing non-stop and have no substance, JK is pragmatic – he doesn’t do knee-jerk stuff.

      edit: spelling

      • bevanjs

        yes he does, do knee jerk and terribly.

        explain red peak as one example?!

        • Keyser Soze

          Red peak was included to take the wind out of the left debate against change. It was a careully thought through strategy that worked. JK handed the left a ‘win’. A completely meaningless, pointless win that makes him look reasonable and the left look even more ridiculous, especially when Red Peak got trounced in the first referendum. Surely you can see the political brilliance in that?

        • kayaker

          Knee jerk is in the eye of the beholder.

      • MaryLou

        Even were that so, there is merit in what Church suggests. Houses are needed, and that would be a good way to get them happening. All depending on the other issues though, like whether Auckland Council will play ball.

        • kayaker

          I agree the supply side needs urgent addressing. That’s the main issue, but the people braying for a tax of some sort (along the same lines as ‘tax the rich’) is purely to make them feel some kind of satisfaction, driven by envy, but it doesn’t solve anything.

  • Dr Wang

    David Seymour squeaking away in the background will have no effect on the way Key plays his hand over this issue. David has been over-estimating his own relevance since the media got in behind his hilarious “accidental” French-love-their-coq faux-pas, but he has cost ACT as many votes as he thinks he has won over.

    To quote Seymour’s puerile debating response (from the last election) back at him: “whatever”.

  • rua kenana

    A big problem with taxes that are purportedly levied to allegedly help solve some alleged problem is that they quickly turn into revenue-gathering devices. Their original aim becomes very secondary or probably forgotten when, almost certainly, they fail to achieve their originally stated purpose.
    If the unthinkable happens and Green-Labour ever get into power, think of the fun they’ll have with such a tax, particularly if it were introduced by National.
    Is this land tax suggestion just window-dressing by Key. I certainly hope so.

  • jaundiced

    National are risking support by continuing to deny that housing is a problem.
    It is a result of many factors, but my simple understanding of economics says supply and demand has to be at the core.
    One of the key impacts on demand is increasing population through immigration. The government has the ability to adjust this – it is not just immigration policy, it should be thought of as population planning. This means planning and managing population growth in line with provisions for infrastructure – roads, housing, water and sewerage, education, health services – everything.
    Governments should keep out of our lives as much as possible, but planning is a function they should see as their core purpose.

  • localnews

    John Key doesnt need to chase new voters, he should just look after the ones he already has. A land tax will be a nightmare to administer and a boon for the lawyers. How will they tackle property in a trust or a company? There will be a myriad of ways around it, and as the lawyers add fees prices will probably go up

    • Zanyzane

      The first problem is how to even get the address correctly identifying a non resident? Horror administration indeed.

  • Muzman349

    This is a most cunning manoeuvre from JK to keep the left on the hop.
    He knows they will have to twist themselves in knots to come up with an anti stance on a tax, so he will at least be having a big laugh at that.

    • Wheninrome

      We could name these policies the “flag” policy, the policy that labour wants, but cannot bear the thought that National will introduce it, so therefore votes against.

  • kayaker

    “Taxing foreign investors might make a few people feel better,…” -Ashley Church. He’s hit the nail on the head. This is what it’s all about, envy

  • Ruahine

    Yep. I feel better already. Off for a coffee with my new best friend Phil T.

  • Keyser Soze

    Like it or not there are a big minority of NZers with a left/socialist bent and with MMP they are but one change in the breeze of political fortunes from being in Goverment. JK knows this. Although he is clearly not ideologically driven, he also knows that he can do a better job of running this country and representing us on the world stage than anyone else. I agree with him.

    If that means he leads us down the middle path with the Right attitude and a few leftist policies thrown in that don’t do too much damage (WFF, interest free student loans, land tax etc…) then so be it. That’s what we need – Leadership! Anyway you look at it, NZ is booming and has been for years now. The growth and activity around the place is and has been phenomenal given international conditions. Is it not coincidence that JK has led us through this.

    Will a land tax solve the housing ‘crisis’? No, it won’t. Will it generate a bit more tax revenue? Sounds like it. Will it draw a few more voters from the centre-left? Yes, it will. Fine, it’s the end goal which is important: Keeping a fruitcake, ideologically crazed, leaderless, multi-headed hydra coalition from Government! I for one hope that JK does what ever needs to be done to ‘cling to power’ a long time yet.

    • PersonOfColor:WHITE

      Agreed. But continually shifting to the left gets you….left. I don’t want us to get there any time soon.

  • kayaker

    The MSM is beating this ‘housing crisis’ up big time, just like they did with leaky buildings – which Ruined It For Everyone with a plaster-clad house. Now they’re onto ruining it for everyone who owns property and who is getting great joy out of watching their asset appreciate.

    Dear old Annette on ZB this morning said the ‘housing crisis has been going on for five years!’ Stephen Joyce was quick to scoff, and rightly so – a five year crisis…. oh dear.

    • M C Chinaman

      I would have thought 15 years was more accurate. I don’t remember the Labour Govt doing much about escalating prices and foreign buyers.

  • George Carter

    The biggest way to resolve the housing shortage is to give the Auckland Council a major kicking and tell them to get their act together Anything else is just tinkering!

  • R&BAvenger

    Is Seymour thick – there are no new taxes for New Zealanders, New Zealand citizens – those who vote. Supply is the issue and ACT should focus on that and solutions.

    • Bert Piepoint

      He is starting to carry on like his doppelgänger – Second Technician Arnold J Rimmer!

  • zotaccore

    Again Seymour dribbles forth with skewing the issue to gain a headline. He hasn’t put much thought into his comments on the issue and that it’s not kiwis who pay the land tax its the foreigners. ACT is a nothing party – 1 MP in parliament only on the good graces of the Nats. He’s an embarrassment to the right and the party has become a joke.

  • Richard McGrath

    This exactly why parties like ACT and Libz set up in the first place – National get voted in, break their promises and steal Labour’s socialist policies in a desperate attempt to cling to power. At least ACT and Libz are more “dogmatic” (read: principled). What they promise is what voters would get. Key has broken, or is seen to have broken, a major election promise of no new taxes. He has just lost what remaining support he had from me, and I will harangue his local representative about this between now and the next election. Peter Cresswell has commented on this already:
    http://pc.blogspot.com.au/2016/04/john-key-finds-another-new-tax-landtax.html
    Edit: Added the link to Cresswell’s blog

    • R&BAvenger

      Are you a foreign resident and property owner? If not, you will not be affected by this new tax, assuming it comes in at all. National have done a good job at steering the country through difficult times and getting the economy growing. Where is ACT? Nowhere.

      • Richard McGrath

        My partner and I may become non-tax residents due to working abroad more than 183 days a year and we do own properties in NZ, so yes it’s possible we will be affected. ACT is doing about as well as could be expected with one MP.

  • M C Chinaman

    Any fiddling with the demand side of the equation is basically worthless tinkering. The fact is that a lot of people want to live in Auckland; the city is trying to grow (much like a number of similar-sized cities in Australia and elsewhere) and the Council won’t allow it. There are houses being built in Pokeno (in the Waikato District but presumably to support Auckland) but not in Auckland. Why? The answer is in more supply not trying to dampen demand. Hopefully the answer will come in November when it’s out with the council and mayor, out with the slow and expensive hoop-jumping consent process and out with the urban limit.

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