John Key is a “political genius”

Prime Minister John Key outside the State House he grew up in.

Prime Minister John Key outside the State House he grew up in.

ACT is full of admiration for the Prime Minister as he walks the fine line of seeming to be doing something while solving only the problem of not being seen to be doing something.

Political Genius
You have to hand it to John Key.  He knows the housing market is a major issue driving voters’ choices, and that he needs to be seen to be doing something about it.  The offer to lend $1 billion to councils does not change anybody’s net position, but gives the impression that something big is being done.
The Underlying Problem
Councils are unwilling to free up land and provide infrastructure because they carry the costs while the central government gets the revenue from new development (and cost savings on the $2 billion of housing supplements if supply was to loosen up).
One Idea
ACT favours the New Zealand Initiative’s suggestion of sharing GST from new home construction costs with the council where the construction occurs.  Eric Crampton of the Initiative has an excellent and very readable analysis of the market here.
Political Menace
Nick Smith’s suggestion that the Government start confiscating land bankers’ property is Venezuelan.  How do you decide which land is being ‘land banked?’  How much does it have to be worth, and how long does it have to be held before it can be confiscated?  Who would make these decisions?  This is not the kind of policy one elects a centre-right government for.

Judging by some of our own readers’ feedback, ‘doing whatever it takes to keep Labour out’ is sufficient for National to get a pass mark.

 

– Free Press, ACT


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