Are you actually happy with Labour being a basket case ? If so, why ? I’d love to know.
No, I dispute that they're a basket case. They're still twice the party that the Greens are, even at their absolute worst, in terms of support. The perception of them fucking up the messaging is one I think I'll wait for some polling to judge. That I personally don't like the messaging is no indication of anything at all. I'm not a sample. I don't even vote for them.
As a Green, I’m sick of having “WTF Is Wrong With Labour ?” conversations
Me too. Hence, I end this comment, right here.
Former Reserve Bank economist Michael Reddell points out that overseas investment is part of the cause, but inward migration levels and restricted supply are far more significant.
Would you believe this is a Fran O article, given her NZ-China biz links?
although Joyce was a bit woolly on detail and couldn’t say when that data would be released or in what form.
Maybe already posted here .. but Fran O'Sullivan has taken Joyce to task on that 'wooliness' big time;
No, I dispute that they’re a basket case. They’re still twice the party that the Greens are, even at their absolute worst, in terms of support. The perception of them fucking up the messaging is one I think I’ll wait for some polling to judge. That I personally don’t like the messaging is no indication of anything at all. I’m not a sample. I don’t even vote for them.
My inner Machiavellian predicts this move will reinforce the Greens’ double-digit poll ratings, as it would probably attract Labour’s liberal elements. While Labour itself has concluded the Missing Million is a lost cause, so it focuses on Winstonites and the Waitakere men & women who might have voted for Helen once.
And from a more personal viewpoint on the whole controversy: a long-time family friend who’s a bit of a hunting/fishing/military type moved from Wellington to Auckland (Massey specifically) several years back, because it was the only place where his post-grad science degree would get him work. He once split his votes between Labour & Greens in Helen’s day (while still in Welly), but having lived and breathed the Auckland rat race, he’s become more bitter & cynical enough to swing to NZF. From what he’s told me – including a lot of stuff about the Auckland housing bubble – he sounds very much like the kind of voter Phil Twyford is pitching to.
because left wing politicians are themselves mostly a wealthy class. If not at the start, then certainly by the time they get any real influence.
In this crazy world of shadow banking and off balance sheet accounting, we really, really, really haven't even a handful of New Zealanders who could count themselves as part of the wealthy class in the global scheme of things. And this issue, the topic of this thread, is all about the global scheme of things - a simple concept: sovereignty.
The 'wealthy class' of once sovereign nations become victims of dispossession in the long run as well. Ask any Greek who hasn't yet fled their country.
Globalization, as far as I can tell, works its way from the bottom up in terms of dispossession - but it will get around to all of us one day if we cede/squander our sovereignty.
That is for me what this issue is all about.
Once we get into the 2000s the NZ market is not being influenced by people getting NZ bank loans, it is being governed by capital from elsewhere.
I love your work. I believe it was the pound sterling flying in in the early 2000s. If I recall it was an amazingly favourable exchange rate for Brits and we hadn't had the vast price escalation that Britain got when the Russian oligarchs moved into their market. Many cashed in and came to the colonies - hence our mini boom (in prices) started around 2002. At least then, NZ wages, I believe were also still on the rise. That boom peaked in 2007, and then we had the GFC. Interesting, your graph during that period. If I'm reading it right - says it all.
The sad thing is, I thought all through the Clark/Cullen years the surpluses were mainly due to the influx of overseas capital taking ownership of our farms, forests and houses. Looks like JK hasn't had any new ideas either. We desperately need to force this capital influx in to job creation industries. But then I think Winston Peters has been saying this since Adam was a cowboy.
If I recall, that's pretty much what Labour did say during the last election?
for a few key quarters a bunch of people were buying houses much cheaper than the previous quarter.
Credit was tight - cash was King, hence the cheaper prices.
My inner Machiavellian predicts this move will reinforce the Greens’ double-digit poll ratings, as it would probably attract Labour’s liberal elements. While Labour itself has concluded the Missing Million is a lost cause, so it focuses on Winstonites and the Waitakere men & women who might have voted for Helen once
I've got a similar little guy talking in my inner ear, and I'm thinking the loss of the most liberal elements will be less than the gains from people concerned about Chinese capital flooding property here. Because most of those liberals already left. And in switching to Green, they're not entirely lost - they become backing from a coalition partner.
But where the others come from, I don't know for sure. The missing million is not necessarily homogeneous. There's a never-have-voted disenfranchised group, but there's also there could be a lot who just stopped voting Labour and couldn't quite stomach the alternatives.
I definitely know more than a few that express sympathies to Winston, who formerly would probably have voted Labour or Alliance. I don't think they go so far as to actually vote Winston, though. It's an outlet for those who don't feel a connection to what the Clark Govt was about.
But the never-do-vote group might find some appeal in at least addressing the financial property lock-out that's happening in Auckland. More is needed, actual plans to do something about it. Because while National have fiddled as the chances of affordable housing here burned, it's still something Labour never did anything about either.
Step 1 would be for Labour to replace Williams with someone who can frame arguments in a Labour-positive way.
Accepting your general point about Labour and message, I don't think Labour can control who National Radio chooses. Doubt National have been too happy with Hooton bagging Key and senior ministers lately either.
For sure the people buying investment houses in the Auckland region are wealthier than me. The drop in value of milk solids and the sliding dollar are implicated in foreign investment as well as an under skilled workforce, poor timber quality and by laws tying up land, permit issues and rapacious consent fees.
Of course the bubble may burst one day strangling off millions of dollars of liquidity.
It would be fairly to say I disagree with Michael Reddell et al, because rather than asserting that immigration is primary as a matter of underlying theory (an a priori) if you actually run a correlation New Zealand immigration to house prices, it is an OK relationship. However, you add-in capital flows to the model, they are both a much better correlation and cause the immigration influence to disappear as an important factor (as if you look at them together capital flows explain all of immigration and more beside). Which makes complete sense if among immigrants only those with enough money can buy houses, and the money of immigrants is only a subset of capital flows buying houses.
I think traditional models of "buying houses" are predicated on what has been the case for almost all countries in the world for almost all of history- that you have to be there to buy a houses. Perhaps the demand-side model, rather than being a local one of competition, should be a model of one of the few places in the world where anyone, from anywhere in the world, can buy property even if they cannot buy property where they actually are. The traditional model is like discussing the way demand for bookstores will rise with population growth from data from the 1940s to the 1990s, and completely ignoring the effect of the rise of Amazon, the internet etc on the sector.
Maybe already posted here .. but Fran O'Sullivan has taken Joyce to task on that 'wooliness' big time;
Thanks Katherine. It's good that Fran included the loophole of de facto buyers fronting purchases that I suggested in an earlier post.
The reason why it won't be perfect is that many acquisitions are transacted through 'buyers of convenience', like the 20-year-old foreign students in Auckland apartment blocks who front sales for non-resident family members.
Those students already have local bank accounts and an IRD number... so that's a ready-made get-out-of-jail-free card for wealthy investors.
all through the Clark/Cullen years the surpluses were mainly due to the influx of overseas capital taking ownership of our farms, forests and houses
How does that create a * fiscal * surplus, though? The Clark/Cullen administration stayed in surplus simply because they had an efficient public service and ran taxes at a level that adequately covered costs.
National have cut taxes for their mates, damaged the tax base (it started under Clark, granted) by letting the wealthy convert taxable income into untaxed capital gains and damaged public service efficiency (think consultants replacing salaried staff). Hence they struggle to run a surplus despite lower levels of services.
Regulars will know I'm no great fan of Brian Rudman, but I've got to admit today's column makes a lot of sense -- someone at Te Harold has to.
Of course in gentrifying areas like Ponsonby, the $20,000 villa of the 1970s is now fetching closer to $2 million than $1 million. All without anyone from mainland China in sight.
The only ethnic change in these desirable suburbs is the Polynesian renters who'd made the suburb home were driven out to the fringes by Pakeha baby-boomers like myself.
Now, having enjoyed the ride, the baby-boomers discover their kids can't afford to buy a ticket on to the escalator themselves unless the parents front up with a massive deposit. So the hunt is on for scapegoats.
Doubt National have been too happy with Hooton bagging Key and senior ministers lately either.
Is Matthew Hooton NZ's answer to Boris Johnson in some ways, with the exception of the mayoral chains?
How does that create a * fiscal * surplus, though?
That 'wealth effect' - all residential property rising in value, which increased more local borrowing (lots of commentators refer to using the house as an ATM) and hence, spending to renovate, travel, buy a new car, start-up new businesses, etc. So increased GST returns, increased small business/local merchant returns, more builders employed (at higher margins) hence greater company tax receipts etc. And at the same time, wages were still inflating and Cullen didn't move the tax brackets (he took advantage of 'bracket creep').
And at the same time, wages were still inflating and Cullen didn’t move the tax brackets (he took advantage of ‘bracket creep’).
so did Muldoon during 70s hyper-inflation – in fact I suspect just about every finance minister does this, it’s a situation where you actively have to do something that makes your life worse, inaction is probably easy.
Ideally we should have brackets (and benefits, and the minimum wage, and ….) tied to an inflation index
Regulars will know I’m no great fan of Brian Rudman, but I’ve got to admit today’s column makes a lot of sense
He misrepresents the economic reality of the effects of globalization;
Unfortunately, the finger is being pointed at citizens from our largest trading partner, flush with the cash we and other developed countries have sent them in payment for the appliances and clothes and kitchenware and even the Kiwi tourist souvenirs we can no longer be bothered making for ourselves. Why not? We’re too busy investing all our spare cash in the property merry-go-round.
The answer to ‘why not’ is primarily one of wages – the race-to-the-bottom – or as per a Marxian analysis: profit-seeking enterprises looking to reduce the labour- value content of their production as a means to compete in a capitalist economy.
He really loses all credibility – and hence, his opinion lacks rational argument. Looks more like sarcasm to me.
PS. Also, isn't our largest trading partner still Australia?
we should have tax brackets (and benefits, and the minimum wage...) tied to an inflation index
e.g. tied to ministerial salaries, which would markedly change incentives.
Regulars will know I’m no great fan of Brian Rudman, but I’ve got to admit today’s column makes a lot of sense – someone at Te Harold has to.
I really, really dislike that article.
My reason for that is by saying mainland China migration to Ponsonby is not the cause, and getting your facts wrong (as Brian has if you go to the census data, but I would prefer not to explain in detail why as it will just give fuel to racists) you give fuel to racists arguing "see you are wrong so they are a problem" when immigration is orthogonal.
Yes, and the problem for Key and co. has been that wages are not inflating to any great degree over the term of their incumbency. So they reduced the top rate, rather than move the brackets.
I've been following Steve Keen and went to his seminar a couple of years ago. He's been a long time observer of money in economies (unlike many including some at RBNZ and the Treasury). I've posted a slide he used to show private debt to GDP in both Australia and New Zealand. Tho not specifically mortgage lending, it obviously largely is (covering the large part of bank activity). Debt acceleration and its relationship to unemployment is a very strong part of his work on capitalism as a money economy and his anticipation of GFC as you probably know.
I have little difficulty in accepting his view. This view and the sector balances of Godley & MMT etc.
But not the activity of the Reserve Bank - their financial stability fears very much acknowledge the mortgage-finance->bubble theory of rising housing prices (as it does in general apply to asset prices - look at the impact of borrowing on other asset prices like the U.S. share market.)
Bizarre though it may seem, banks hate public understanding of this and there's alway a spare bank pundit (sorry, economist) hanging around blogs, news etc. who'll try to bat the idea down.
Since the GFC we've moved on (the public, like me) and occupied money-economic territory. Just not enough to go around the territory occupied by money-deniers,
I'm afraid. Think demand & the reasons for demand when looking at house prices, not that old shibboleth of equilibrium economics, supply.