LATEST: Finance Minister Bill English's fifth Budget carries a kick with sweeping reforms targeting soaring house prices. [...]
English has this afternoon unveiled the Budget which promised the Government would make a $75 million surplus in 2014/15.
He named Meridian Energy as the next state-owned company to be sold.
Meanwhile, reducing the housing bubble and curbing rising poverty were key focuses of the Budget.
New legislation will be introduced to tackle housing affordability by giving central government more control over the consenting process.
The bill was expected to be rushed into Parliament this week and have a shortened select committee hearing.
Government also agreed to a memorandum of understanding which allows the Reserve Bank Governor to put pressure on banks to crack down on excessive lending in the housing market.
A number of initiatives to help low-income families were announced including extending income-related rents to non-government housing and consideration of zero or no-interest loans.
A reduction in ACC levies was the only sweetener offered for middle New Zealand.
Highlights so far: Nick Smith was apoplectic at Labour over the ACC levies and blamed them when he hiked them up. Now they are coming down shouldn't we blame him for having over-reacted in the same way he said that Labour had under-reacted?
The use of urgency to ram through bills is going to apply to housing:
"This legislation is an immediate and short-term response to housing pressures in areas facing severe housing affordability problems," Smith said, adding that the first area should be designated in Auckland later this year. Once passed, the legislation would see a streamlined consenting process in special housing areas agreed between councils and Government.
While it would prefer "to partner with councils", Smith made it clear that where agreement cannot be reached, the Government could take over.
"If an accord cannot be reached in an area of severe housing unaffordability, the Government can intervene by establishing special housing areas and issuing consents for developments."
The new legislation was designed to "free up land and speed up provision of housing in areas where housing is least affordable" English told reporters today.
The Ministry of Business, Innovation and Employment (MOBIE) has been given $7.2 million over four years to fund the initiative.
Smith said the emergency measure would allow time for broader changes to the Resource Management Act to take effect.
Immigration demand is the cause of the housing shortage so stemming that would be a better answer than chucking out the resource consent process when they think it is inconvenient. The property developers will be celebrating. $7.2m needed by Wellington to make houses get built in Auckland? Sounds like the bureacracy is clipping the ticket. And with private developers having the red tape cut for them it wouldn't be a National budget if there wasn't also red tape being wrapped around the social sector:
The Government is also trialling a housing "warrant of fitness" (WOF), although it will initially apply only to Housing New Zealand properties and later social housing providers, with no commitment to applying it to rental accommodation generally.
The positive aspect in the housing announcement - possibly the only one:
Other changes announced today include the introduction of the Social Housing Reform Bill which will extend income-related rents to community house providers such as the Salvation Army.
This is consistent - so that's good to put these social housing tenants on the same wicket as state houses. Good for the tenants anyway. However the huge gap between a beneficiary in a state house paying only a quarter of their income in rent and the typical beneficiary in the big cities as private rental tenants paying half or more of their income in rent is severely unequal. Beneficiaries certainly are not being treated fairly in this situation - the state house ones are the lucky few, everyone else is up shit creek sans paddle. Labour didn't fix it, the Nats sure won't. The Nats version of fairness is to lower the plane, though, not raise it. They want to review all state house tenancies, predicting there will be 3000 evictions! Unlucky bastards. Reality land and is going to be a hell of a lot tougher than La-la land. Also sounding positive, if vague, on the housing front:
* A memorandum of understanding with Reserve Bank for measures to curb accelerating house prices and avoid fuelling boom-bust cycles in wider economy.
Send a memo. Solve house price inflation and the boom-bust economic cycle by sending a memo? If it is this easy you wonder why some other government at an earlier point hadn't sent off a memo to the Reserve Bank.
And this struck me as slightly ironic:
Government to use bulk purchasing power to buy cheaper whiteware for beneficiaries.
Isn't this another rung on the ladder of dependency? Are they going to offer cheap cars too on the same rationale? This is not what I would expect from the anti-nanny Nats. Here the Nats were in hysterics claiming the Labour-Green policy of a government buyer of electricity on the consumers' behalf was communism, and now: a government buyer of electrical appliances. Confusing. Hopefully a good deal for everyone, but confusing coming from National. Being the Nats, I wonder if this is really just a bit of corporate welfare for one of their mates (retailers or manufacturers).
The budget is just too much to digest in one post. More later.
UPDATE 3:50PM: Where is that money from the sale of public assets going again? It's not to pay off debt. The government can't pay off debt as to their mind that independence from money-lenders may destroy capitalism. No, the funds from selling off the electricity companies goes to private projects to enrich the already wealthy establishment classes... like this:
Budget 2013 has confirmed $80 million in funding for regional irrigation projects, Primary Industries Minister Nathan Guy says.
The $80 million funding was announced in January and comes from the Government’s Future Investment Fund, using proceeds from the share offer programme. In total, the Government has signalled plans to invest up to $400 million in regional irrigation schemes to encourage third-party capital investment.
A new Crown company will be established on 1 July to act as a bridging investor for irrigation projects. This will involve short-term, minority investments to help kick-start these regional projects.
Crony capitalism is another term for it.