National debt on track to approach 100% of GDP by 2028

National debt is currently running at about 77% of Gross Domestic Product, and is on track to reach 100% of GDP in ten years. This, of course, is in the US.

Reuters: Republican tax cuts to fuel historic U.S. deficits

The deficit – the amount that Washington’s spending exceeds its revenues – will expand to $804 billion in fiscal 2018, which ends on Sept. 30, up from $665 billion in fiscal 2017, CBO said.

The national debt is on track to approach 100 percent of gross domestic product (GDP) by 2028, said the nonpartisan CBO, which analyzes legislation for Congress.

“That amount is far greater than the debt in any year since just after World War II,” CBO said, adding that the debt is now about 77 percent of GDP, a measure of the size of the economy.

The Republican tax legislation, passed by Congress without Democratic support, along with a recent bipartisan $1.3 trillion spending package, are expected to drive economic growth faster than initially expected, CBO said.

The analysis “confirms that major damage was done” by the new tax law and the spending bill, said Michael Peterson, head of the nonpartisan Peter G. Peterson Foundation.

“This high and rising debt matters because it harms our economy,” said Peterson, whose group backs fiscal conservatism.

“During a time of low unemployment and economic expansion, we should be taking reasonable steps to put our debt on a sustainable path – but instead we are piling up trillions of bills,” he said.

The debt picture is quite quite different in New Zealand. For last year’s election campaign Labour made a commitment to continue reducing debt as a percentage of GDP to 20%, albeit taking two years longer than National’s promise.

Finance Minister Grant Robertson has just re-confirmed this commitment.


Question No. 3—Finance

3. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Is he committed to reducing core Crown net debt to 20 percent of GDP by 30 June 2022?

Hon GRANT ROBERTSON (Minister of Finance): This Government is committed to reducing core Crown net debt to 20 percent of GDP within five years of taking office, as indicated in the Speech from the Throne. In the Half Year Economic and Fiscal Update (HYEFU), core Crown net debt is forecast to reach 19.3 percent of GDP by 30 June 2022.

This is despite he and Jacinda Ardern sounding alarm at a number of apparently sudden crises claiming underfunding of ‘core services’. Instead of borrowing at near record low interest rates to fund urgent infrastructure repairs and rebuilding Labour will steadfastly lower New Zealand

Hon Amy Adams: So to maintain his debt-to-GDP anchor, why won’t he tell New Zealand which of the Government’s stated commitments and expectations he has raised around teachers’ and nurses’ pay will now have to be dialled back because he’s now simply realised that he’s already run out of money?

Hon GRANT ROBERTSON: The member will just have to wait until 17 May, but what I can be absolutely clear about is that this Government understands the importance of a balance between a prudent fiscal approach and making the investments we need to undo the social and infrastructure deficits left to us by the previous Government.

Hon Amy Adams: Can he confirm that the additional Government revenue available to him for the current year alone, tracked from the Pre-election Economic and Fiscal Update projections to the Crown accounts to the end of February, is in fact an additional $700 million?

Hon GRANT ROBERTSON: The member has been paying attention to the monthly statements from Treasury. The final forecasts are still to be done. What’s important to remember, though, is it’s not so much about how much extra revenue might be available to this Government; it’s about what the last Government didn’t do with the revenue that it had.

Hon Amy Adams: Can he also confirm that the HYEFU shows additional tax revenue over the next four years from that which was predicted in the pre-election update is $6.6 billion more?

Hon GRANT ROBERTSON: There is indeed money available to be spent, and this Government will invest that wisely in making sure that we invest in health and education and housing, not the priorities of the previous Government, which were tax cuts slanted towards the most wealthy.


So debt levels are relatively low, interest rates are very low, Ardern and Robertson have started claiming there are a number of suddenly discovered crises due to lack of funding of core services and infrastructure, but the need is not urgent enough to relax their debt lowering targets at all.

There seems to be confusing signals here.

Newsroom: Labour’s budget rules are holding it back

It’s a very strange political alignment when the trade union movement and Matthew Hooton are in agreement. But that’s what has happened over the past week, with both the Council of Trade Unions and the right-wing political commentator speaking out against the government’s continued insistence on adhering to its Budget Responsibility Rules.

These rules are a self-imposed agreement between Labour and the Greens – signed before the election – to reduce core government expenditure to below 30 per cent of GDP, and to reduce government debt to 20 per cent of GDP by 2022. The upshot of this is the Labour-led government has largely adopted the National Party’s fiscal policies, embracing an austerity-style approach to spending. It means they can’t afford to fund adequately housing, healthcare, workers in the state sector, and public infrastructure in general.

The CTU has been unusually outspoken in criticising Labour’s continued adherence to these austerity rules. President Richard Wagstaff questioned whether the government would be able to deal with the crumbling state of public assets, and whether state servants’ need for pay increases would be properly met.

Although some will write off such criticism simply because it comes from the union movement, it’s worth noting that Matthew Hooton also thinks adherence to the conservative fiscal policy is unnecessary and will cause Labour problems. He’s written a column in the NZ Herald suggesting the Prime Minister and her Finance Minister should “more confidently own Labour’s commitment to higher spending and begin the process of gently stretching out the debt reduction target.”

Labour are being questioned quite widely on their current stance.

Stronger leadership required from Ardern as Government wobbles

It has been a wobbly few weeks for the Government, with problems and embarrassments involving all parties, Labour, NZ First and the Greens. A common factor is what looks like weak leadership from Prime Minister Jacinda Ardern, who has supported her own faltering MPs and dismissed problems from her support party ministers, saying mistakes will be made and they just need to be learnt from.

RNZ: Govt ‘will try to weed out mistakes’ – Ardern

Jacinda Ardern said mistakes will happen from time to time.

“With all of these cases they are, within context, issues that easily occur when you have an extraordinary amount of workflow coming through”.

“We will try to weed out mistakes wherever they may occur and prevent them from happening.”

“Ministers of all stripes make mistakes we’ve just got to make sure we correct them quickly.”

To an extent she is right, mistakes will happen and they need to be corrected – but too many mistakes are surfacing in a short period of time. The Government (and Ardern) risk an air of incompetence taking hold.

The most prominent mistake maker recently has been Clare Curran, who has featured in a lot of news for two weeks now. And it may not be the end of it yet, if RNZ’s Richard Griffin is forced to hand over a phone call recording.

ODT editorial: Fuller explanation needed from Curran

Ms Curran had nine years of Opposition in which to formulate her strategy in her much-beloved broadcasting and communications roles. Her role in open government and transparency was expected to pave the way for easier access to official information.

However, this has not been the case.

Ms Curran has survived in her job, despite at first not owning up to what was a planned, rather than casual, meeting.

Prime Minister Jacinda Ardern accepted Ms Curran’s explanation she was not seeking to undermine the RNZ chairman Richard Griffin, a National Party appointee, or chief executive Paul Thompson.

New Zealanders are still in the dark about exactly what Ms Curran was planning.

It behoves Ms Curran to  set the full record straight. She seems to be hiding details, and a senior RNZ executive has resigned. Ms Ardern has been tolerant and could well have made an example of Ms Curran.

Unless she takes some firm action before she takes maternity leave, the situation may become even worse when NZ First leader Winston Peters takes over as prime minister in her absence.

The ODT also points out other problems:

Ms Ardern is being badly let down by those around her. Apart from Ms Curran, New Zealand First ministers Shane Jones and Ron Mark have been called to account for their comments or actions. The Green Party Minister for Women, Julie Ann Genter called for old white men to make way in boardrooms. And the head of the Environmental Protection Agency Dr Alan Freeth was called before a select committee to talk about his interactions with Associate Environment Minister Eugenie Sage.

More from Stuff’s Below the beltway: The week in politics

Down

Clare Curran

The Prime Minister is maintaining she is still confident in Curran, and to Curran’s credit she’s continued to front the media to discuss the ongoing RNZ saga. But calling board chair Richard Griffin – even if the call was as innocent as she claims – about his select committee appearance smacks of political interference. It was also a great way to give legs to a story that was beginning to die out.

Phil Twyford

Twyford is one of the more reliable ministers to deliver wins, but his big transport re-alignment was badly signalled and badly managed. By announcing the excise tax increase as “10c over three years” – instead of “3c a year for three years, just continuing what the last guys were doing” – he handed the opposition an easy attack line. Combining this news with the ambitious transport plan just meant the actual transport plan got lost in the conversation.

Eugenie Sage

Sage is another minister one doesn’t expect to see in trouble very often. But emailing the head of the crown entity a critical opinion piece about their chief scientist with the subject line “great article” is a good way to get yourself into trouble, especially if the opposition found out. Giving Nick Smith a chance to look good attacking you is quite an achievement.

Add to that the Young Labour camp sexual harassment allegations – any inquiry into that may be reported on while Ardern is off-duty, with it being likely the Party management will try to handle outside of the parliamentary wing.

So there are a lot of mistakes to be corrected – and there is no clear sign that that is happening. Ardern is increasingly looking like more talk than action.

As has been mentioned, she is planning on stepping aside in June for six weeks when she has her baby. That’s just two months away, with her government’s first budget due out in later May. A lot will be riding on how that is presented and how their spending plans shape up.

And there is no guarantee that the baby will wait until June. Ardern has a busy life, which raises risks of stress, pregnancy complications and possibly an early birth.

One would hope that a Prime Minister could step aside for any reason and the Government would keep functioning without any problems, but it’s hard to have confidence this will be the case.

Winston Peters will take over as Acting Prime Minister. He has been a problem for Ardern over his odd motives over Russia. Three of his MPs have featured in the wobbles – Ron Mark, Jenny Marcroft and especially Shane Jones, plus an unnamed Minister (alleged to be involved in the Marcroft incident). Peters has been just trivialising these problems.

There are more weaknesses in Labour below Ardern. Kelvin Davis has been virtually anonymous as deputy since he made a mess of supporting Ardern during the campaign last year. He also has to make what is likely to be an unpopular decision soon on a new prison to cope with growing numbers locked up.

Robertson will be busy before and after his first budget, and is yet to prove himself.

The only Labour MP I can think of with sufficient experience and credibility to step up is David Parker, and as Minister of Trade he spends a lot of his time travelling around the world.

So Labour and the Government are looking weak, almost out of their depth in turbulent water, and especially given the ongoing revelations of mistakes they are vulnerable to falling from favour.

Ardern needs to show some stronger leadership, and hope that in her absence not too many mistakes are made.

We may get through this ok, but at the moment the Government wobbles are looking worrying, with a real risk wheels may fall off.

 

Ardern: “the effect of any (tax) changes will not occur until after the next election”

Suggestions that the Government may raise fuel excise taxes to pay for things like rail, public transport, and cycleways and walkways, has raised questions about commitments made by Labour during last year’s election campaign on certainty over possible tax changes.

NZH (14 September 2017): Labour tidies up tax policy, will delay new changes until 2020

Labour has decided to delay any implementation of changes from its tax working group until after the 2020 election in a bid to stop any further political damage from its tax policy.

Finance spokesman Grant Robertson’s announcement…

…is a reversal of the previous position of leader Jacinda Ardern.

“We will involve the public at every stage of the Working Group, as well as Cabinet and Parliament’s consideration of any changes that arise from it.

“We know it is important to get this right, so we will balance the need for certainty and urgency by ensuring that any potential changes will not come into effect until the 2021 tax year.

“This gives multiple opportunities for public input, and a general election before any new tax would come into effect.

“To avoid any doubt, no one will be affected by any tax changes arising from the outcomes of the Working Group until 2021.

“There will be no new taxes or levies introduced in our first term of government beyond those we have already announced.”

Ardern said…

… it was her “captain’s call” to back down from introducing new taxes in a first term of a Labour Government because it was clear the public were concerned.

“I have been driving our campaign and I have taken political risks but I’ve done that because I feel so strongly around the urgency there is around tackling the housing crisis. But I needed to also balance that against certainty for voters.”

Ardern:

“This is about making sure that we are providing certainty to voters, but also there is still real urgency around tackling the housing crisis. So yes I will continue to undertake this work in government, but we have balanced that against the need for people to be certain when they vote around exactly what they will be doing.”

“We will still act on what comes from the Working Group, and that may be legislation or it may not. We’ll still act on the findings of the Working Group, we’ll go through a big process with both the public and in Parliament…

…but the effect of any changes will not occur until after the next election.”

Katie Bradford: “If you essentially delay taxes now, will you be able to afford your promises?”

Ardern:

“I want to make really clear, our fiscal plan was never built around any potential revenue down the track from a tax working group, because we had not settled on what we would do in the future. So there is no requirement for any revenue off the back of that tax working group.

“Everything that we have announced in public is already able to be fully funded from the re-prioritisation that we have set out, and it’s all in our fiscal plan.

“I believe I can do the work, get it ready to go, and still provide voters a chance to vote on it before it’s implemented.”

This was in part referring to tax related to housing (Capital Gains tax), and to recommendations coming out of the Tax Working Group.

But Ardern went on to refer to Labour’s whole Fiscal Plan, and to “”everything that we have announced in public”, so i think that voters would consider it disingenuous if Ardern now claims that tax changes like fuel tax done outside the Tax Working Group don’t apply.

Ardern already sounded disingenuous yesterday saying the an increase in fuel ‘excise’ was not a tax increase – see Ardern: fuel increase not a tax, it’s an excise.

Previous Governments have increased taxes after promising not to – the National led Government increased GST after saying they wouldn’t. But that was a measure taken in reaction to a serious Global Financial Crisis they were landed with, and was more or less balanced by decreases in income tax rates.

I’m sure there are more examples going back further, but regardless of what past politicians have twisted and changed, that doesn’t give Ardern or the current Government a free pass for going back on their word.

Similar to ‘it’s not a tax, it’s an excise’, perhaps Ardern thinks it wasn’t a promise, it was an exercise in campaign rhetoric.

Or perhaps she will make another ‘captain’s call’ and defer any changes to tax, including fuel tax, until after the 2020 election.

However she could have an out in the fine print:

“Alcohol, Petrol and Tobacco Levies – will be adjusted as per normal government practice and as set out in Budget documents.” – http://www.labour.org.nz/tax

Will people be happy with that and paying more for their petrol to finance Auckland transport?

And – Labour’s Fiscal Plan, which Ardern clearly referred to, makes no mention of increasing fuel tax, and does not specify or mention at all the fuel levy in their costings.

Historical homosexual convictions able to be wiped

Last night the Criminal Records (expungement of convictions for historical homosexual offences) Bill passed its third reading with Parliament voting unanimously for a Bill that will allow men convicted of homosexual ‘crimes’ up until the offences were scrapped in 1986 to have their convictions wiped from their records.

This bill was started by the previous National-led Government and continued by the current Labour-NZ First-Green Government.

RNZ: MPs vote for historical homosexual convictions to be wiped

Parliament has voted unanimously to support legislation allowing men convicted of historical homosexual offences to have them wiped from their records.

Consensual sex between men aged 16 and over was decriminalised in 1986, but convictions for offences before that time remained on record and can appear in criminal history checks.

The scheme will allow people to apply to the Secretary of Justice to have their convictions expunged, without formal court hearings or needing to appear in person.

 

It was terrible law that was scrapped in more enlightened times, but sadly failed to address the damage done for a further thirty two years. At least sorting things out belatedly has the full support of all parties and MPs.

Last July Men convicted for homosexual activity receive apology from govt

The Justice Minister has formally apologised to New Zealand men who were convicted in the past for consensual homosexual activity.

Parliament decriminalised consensual sex between men aged 16 and over in 1986, but convictions for offences before that time remained on record and can appear in criminal history checks.

Advocates for the men say the stigma of the convictions has been devastating for many, but the apology is a step in the right direction.

Amy Adams delivered the apology in Parliament this afternoon, during the first reading of a bill that expunges those historic convictions.

“Today we are putting on the record that this house deeply regrets the hurt and stigma suffered by the many hundreds of New Zealand men who were turned into criminals by a law that was profoundly wrong, and for that, we are sorry.”

Ms Adams said it was unimaginable today that New Zealand would criminalise consensual sexual activity between adults.

“Almost four years ago, this Parliament passed [the marriage equality law] to allow same-sex couples to legally marry, and I was proud to vote in favour of it.

“Today is another historic day for the New Zealand gay community and their families, as Parliament formally apologises for the hurt cause by the convictions and takes the first reading of a bill to expunge those convictions.”

During the debate of the bill, Labour’s Grant Robertson told the house that the imprisonments, the arrests and the fear did not just ruin lives, it killed people.

“Hundreds, possibly thousands of lives have been lost because men could not bear the shame, the stigma and the hurt caused by this Parliament and the way that society viewed them as criminals.

“It is for all of that, that we must apologise.”

So now the apology has been followed by legislation that allows men to set their records straight. It won’t undo all the damage done to people’s lives – some of which have been lost – but it will help those who have been burdened by convictions.

Q&A today

On NZ Q&A today – Grant Robertson on Finance.

Quite a lot of vague ‘wait and see’ waffle – it was always going to take the first Robertson budget, due in May, to see what he was actually going to do and change.

He indicates a changing Labour stance on immigration compared to what they campaigned on.

Ex National MP (1975-1984) Marilyn Waring:

Waring is well worth listening too – very well informed and a very good speaker.

Possible property ‘value capture’ tax to fund infrastructure

Finance Minister Grant Robertson is thinking about a tax targeting people who will get an advantage from improved infrastructure to help fund projects like rail links.

Rather than ‘user pays’ this is ‘benefactor pays’ – but it could become contentious deciding who benefits and by how much and how much extra tax they should pay.

Would property owners who are adversely affected by new rail lines and roads get tax reductions? Property values may go up close to new railway stations, but values may go down if a property suddenly has trains whistling past them.

The very fact that property values are changed by infrastructure projects will already affect the level of rates they pay, which is already a local body tax on property.

Stuff: Finance Minister Grant Robertson considering property ‘value capture’ tax to fund rail

Speaking at the Auckland Chamber of Commerce/Massey University annual finance lunch at the Pullman Hotel in Auckland, Robertson said the Government was investigating “innovative” ways to bridge the funding gap to pay for the rail and roading infrastructure the country needs, especially in Auckland.

“Between the balance sheets of the Auckland Council and the Government, we still don’t have enough,” Robertson said.

“Minister Phil Twyford and I are actively looking at opportunities for how to do that.”

“If we are going to make big investments in things like [Auckland’s City] Rail Link, and a series of different rail links, people will benefit from that. How do we capture the value of that, and use that to fund the development?” Robertson said.

In March last year, the Productivity Commission gave an example of how that might work.

If the land value of a property benefiting from a new rail link increased in value from $100,000 to $250,000 over five years – a 150 per cent increase compared with a rise of 120 per cent in land values in the wider area – a tax could be levied on the $30,000 gain attributable to the infrastructure improvements.

The tax could be levied alongside of rates, the commission suggested.

This would amount to double taxing – increased property values mean higher rates, but this proposes slapping another tax on top of that.

Sounds very complicated, and it would be very contentious.

People who don’t use rail and don’t sell their properties will end up paying more for nothing. This is likely to particularly affect retired property owners who don’t commute and who are unlikely to move except to the cemetery – perhaps old people living close to cemeteries should be taxed higher.

Shift from targeting Maori to targeting the poverty

Bryce Edwards looks at a shift in Government shifting from race-based (Maori) targeting to a more universal approach to dealing with poverty, but they say that as Maori feature in the deprivation statistics they should benefit the most.

Is this related to Winston Peters’ past attacks on Whanau Ora, with Labour now quietly accommodating his preference away from targeting Maori? Where do the Greens stand? Quietly on the sideline?

NZ Herald: The real political controversy of Waitangi 2018

Lost amongst the focus on BBQs, relentless positivity, and eloquent speeches at Waitangi, a fascinating and important shift in Government-Maori relations appeared to be underway. Labour and Prime Minister Jacinda Ardern have been signalling that this Government is departing from the traditional culturalist and “race-based” approach to dealing with Maori deprivation and economic inequality.

Instead, a more universal, economic-focused method will be used. The conventional approach of advancing Maori aspirations was epitomised by the Maori Party’s focus on culture, race, and sovereignty issues, and it appears to be on the way out.

Heralding what may be a highly controversial approach to “closing the gaps” in terms of Maori inequality, Jacinda Ardern made her most important speech at Waitangi by stating that the new Government would take a universalistic approach to inequality – by targeting everyone at the bottom, rather than specifically targeting Maori.

Jacinda Ardern strongly emphasised the need to deal with the long list of social ills that have a disproportionate impact on Maori, but signalled that race-based methods were not the best way of moving forward.

Since then, the Finance Minister has confirmed this shift in approach to dealing with inequality. In an interview with Morning Report’s Guyon Espiner on Wednesday, Grant Robertson responded to questions about whether the Government would specifically target Maori in its programmes, saying: “Our focus is on reducing inequality overall” – you can listen to the six-minute interview here: Global market dive: Grant Robertson optimistic.

Espiner sought clarification: “So there won’t be a specific Closing the Gaps type programme that we saw under Helen Clark? We’re not looking at heading off down that path?” Robertson replied: “That’s not the approach that we are taking. But we believe that we will be able to lift a significant number of Maori out of poverty, and increase employment outcomes, because of the approach we are taking.”

Robertson went on to explain that the Government would keep some targeted funding for Maori, but stressed that a more universal approach would dominate:

“Maori will benefit disproportionally from the families package – from those payments, because at the moment, unfortunately, Maori appear in those negative statistics. We’ve got a range of programmes coming down the line that will support Maori and the wider population as well. Where it’s appropriate, where there are programmes – particularly in an area like Corrections – where we know that we can have a real impact on that Maori prison population, then we’ll have a look at them.

“Similarly, with employment programmes. But in the end, Guyon, this is about reducing inequality overall. It’s about providing opportunities for all young people – and we know that Maori will benefit more from that, because unfortunately they are in those negative statistics.”

Essentially, this new approach means directing resources and solutions to poor Maori “because they are poor” rather than “because they are Maori”.

This isn’t popular with some Labour Maori:

In RNZ interviews following on from Robertson’s, both Willie Jackson and John Tamihere reacted negatively against the notion that the Government was shifting in this direction – you can listen to the interviews with Jackson and Tamihere.

Jackson is a Labour MP.

Nor with the Maori ‘elite’:

The Government’s shift away from focusing on iwi property rights has also been signaled by Regional Development Minister Shane Jones. Sam Sachdeva reports: “Whereas English and his predecessor John Key seemed to focus on Article Two of the Treaty of Waitangi and property rights, Jones says the new government will have a greater emphasis on Article Three and the entitlements, rights and obligations of citizenship” – see: A fresh start at Waitangi?.

This might all end up in legal fights. 1News has obtained the letter from iwi leaders to the prime minister complaining about their change in direction, and threatening Supreme Court action if iwi rights to freshwater were not addressed – see TVNZ: Iwi leaders unhappy issues like water ownership aren’t on new Government’s radar.

An interesting observation:

There was nothing about this in the Labour-NZ First coalition agreement.

I wonder what the Greens think. And I wonder how much they have been consulted.

From Green policy: “We would continue to support and strengthen Whānau Ora”

Robertson u-turn on public debt

From a comment from High Flying Duck:

The sky is falling! The sky is falling!…oh no, as you were. All good.

“Out of nowhere, Finance Minister Grant Robertson has made a significant U-turn, reversing what seemed to be a core Labour position.

After years of criticising National for a significant growth in Crown debt to more than $60 billion over the last decade, Robertson now seems to think the state of public debt is the best thing about the New Zealand economy.

As sharemarket turmoil in the United States spread around the world, Robertson said in an interview that he had real confidence in New Zealand’s economic fundamentals.

“Essentially the low level of public debt is a really important part of it.”

This from a man who said that under National debt had “skyrocketed”. Barely two months ago he told Parliament he “will not be lectured” by his predecessor Steven Joyce about debt levels.

“If there is anyone in this House who needs to take responsibility for debt levels, it’s that member,” Robertson said of Joyce, which presumably now means he is in awe of his arch-rival.

As comical as it is for Robertson to now say public debt is low, it was a curious thing to name as a key economic fundamental.

Finance Minister Grant Robertson has repeatedly mocked National on its record of public debt, but now says debt levels are one of New Zealand’s key economic strengths.”

https://www.stuff.co.nz/business/101238392/grant-robertsons-uturn-on-public-debt-hints-at-deeper-concerns-about-debt

Illegally raising rents?

Grant Robertson says he will ‘make an example of any landlords found to be illegally raising their rents to exploit students’.

RNZ:  Robertson asks students to dob in dodgy landlords

From 1 January, the cap on student allowance and living cost loans rose by $50, a Labour election campaign promise.

Since then some students have complained of landlords raising rents to an unreasonable level in response.

Rental prices in Wellington for December were up $30 on October’s figures, according to Trade Me numbers.

Its Property Rental Index showed the median price had risen from $450 to $480 since October, peaking back up to match the record set last January.

If the Wellingtom flat market is anything like Dunedin’s then calendar year leases will be common, and it is common for flats to be cleaned, done up and re let. Annual increases in rental are also likely to be common.

Mr Robertson invited students to get in touch if they believed a landlord was raising rents illegally, and within 10 hours, he said, he had received dozens of reports.

“There are rules in the residential tenancies act about not putting rent up above the market rate, and we are looking very closely at some of the examples that have been put to us today to see if they would breach that act.”

I don’t know what the rules are, but in a normal market prices are set by supply and demand. if prices are too high the market will reject them. I’m not sure how rents can be put above ‘market prices’ if they are being accepted by tenants.

Property prices have been rising, that will put pressure on rental rates.

The government that Robertson is a part of may be deterring people from remaining as landlords or becoming landlords, this will put pressure on rental rates.

Are there rules in the residential tenancies act against government policies pushing up rental prices?

Tax Working Group members announced

From the Beehive:


Finance Minister Grant Robertson and Revenue Minister Stuart Nash today announced the members being appointed to the Government’s Tax Working Group.

“The Tax Working Group has been established to look at the structure, fairness and balance of New Zealand’s tax system. The wide range of expertise and experience among the membership means the Working Group is well placed to consider changes to make our tax system fairer,” Grant Robertson says.

Along with chair Sir Michael Cullen, the Working Group members being appointed are:

  • Professor Craig Elliffe, University of Auckland
  • Joanne Hodge, former tax partner at Bell Gully
  • Kirk Hope, Chief Executive of Business New Zealand
  • Nick Malarao, senior partner at Meredith Connell
  • Geof Nightingale, partner at PwC New Zealand
  • Robin Oliver, former Deputy Commissioner at Inland Revenue
  • Hinerangi Raumati, Chair of Parininihi ki Waitotara Inc
  • Michelle Redington, Head of Group Taxation and Insurance at Air New Zealand
  • Bill Rosenberg, Economist and Director of Policy at the CTU
  • Marjan Van Den Belt, Assistant Vice Chancellor (Sustainability) at Victoria University of Wellington

“We’ve got a good mix of people on the Working Group – from tax experts and academics, to people with private sector, union and Maori community expertise. The Working Group is tasked with looking at how we can make our tax system fairer for all and the diversity in this team makes it well placed to do that,” Stuart Nash says.

The Tax Working Group will also look at how the tax system can promote the long-term sustainability and productivity of the economy.

“New Zealand faces significant opportunities and challenges in the future of our economy. It is prudent to start thinking now about how we respond,” Grant Robertson and Stuart Nash say.

Updates on the Group’s work will be available through its website – taxworkinggroup.govt.nz. Its first meeting is set to be held towards the end of January 2018.