November 19, 2012
Labour affordable housing scheme a ‘patch-on solution’
A New Economics Party Spokesperson Deirdre Kent said that although Labour had the right goal, their proposed method of doing it doesn’t get to the bottom of the problem and is an artificial patch-on solution. “While land remains as an asset class to speculate on, property prices will keep rising. It is private landowners and banks who reap the unearned gains from rising land prices, and this widens the gap between rich and poor.”
“Land now comprises an average of 60% of the value of a property in Auckland,” she said. “These 100,000 affordable homes will be bought cheaply and flicked over for a profit, so at least Labour should put a caveat on each title to prevent that.”
“Only by addressing the rising land price problem at its roots can we wrench power from the overseas owned banks, which took $3.5 billion in profits last year out of the country. Other solutions are artificial and only work for a while.
“Until we wake up and see that the property bubble in Auckland concentrates wealth with landowners and banks, we will not make much progress in bridging the wealth gap,” she said. “Land should be treated as quite a different asset class to buildings. We need a method to take land out of the market place,” she said.
She said Labour’s weak Capital Gains Tax won’t touch the affordable housing problem, because it leaves the family home untouched and is set far too low anyway.
For further comment phone Deirdre Kent, 06 364 7779
021 728 852
New Economics Party
Yes the “levers are in place” as Minister of Finance announced earlier. In the event of a banking crisis, part of your term deposit could help bail out the bank .
Listen to Radio New Zealand interview by Kathryn Ryan today at http://podcast.radionz.co.nz/ntn/ntn-20121112-0908-banks_making_record_profits-048.mp3. Bernard Hickey says banks ought now to give you a higher interest rate in your term deposit because the Reserve Bank now has in place what is called the Open Bank Resolution. This means that those who hold assets with a bank will be called on to help bail out the bank in a bank crisis. What is so disturbing in this interview is that the size of a banking crisis can be 35% if GDP and an expert being interviewed told us that this figure is common.
Nicole Foss reminded us that Government bonds are much safer. Personally I have moved my term deposits to Government bonds and I know others who have taken Nicole’s advice.
If you don’t want to do this then take Bernard Hickey’s advice. He says that because your term deposit is now at more risk due to the Open Bank Resolution being in place, you should go to your bank and demand a higher interest rate.
All of which reminds me of what Bernard Lietaer has been saying for decades. If banking crises happen that often there must be something systemically wrong with the system itself. Read his website or any of his books, including the Club of Rome book Money and Sustainability, available from Triarchy books. He lists the number of banking crises, sovereign debt crises and currency crises which have happened round the world in the last ten years. It is horrifying.
He says the on-going financial crisis results not from a cyclical or managerial failure, but from a structural one: more than 96 other major banking crises occurred over the past 20 years, and these crashes have happened under very different regulatory systems and at different stages of economic development.
The TPPA, a so-called ‘free trade agreement’, is being negotiated secretly by 11 countries round the Pacific rim and is likely to lead to:
- Loss of sovereignty and ability for the NZ Government to legislate for the well-being of its people. Corporations will be able to overturn our decisions.
- Decreased ability for New Zealand to protect itself from a collapsing global economy. With capital controls it would be impossible to impose a financial transaction tax, demand a minimum stay of capital etc. New Zealand is very vulnerable because the NZD is the 10th most traded currency and our current account deficit is large.
- Loss of New Zealand SME’s ability to genuinely compete for central and local Government tenders. Greater competition for local businesses.
- Increased sale of land and assets to overseas owners
- Further deregulation of the already weakly regulated and increasingly powerful financial industry. Lessened ability to regulate against toxic financial products.
- Possibility for Government being sued if legislation reduces corporate profits e.g. climate change, environmental protection, public health (tobacco, alcohol, food, gambling), financial re-regulation.
- Restricting or requiring payment for access to internet information, thus reducing the ability of SMEs to compete.
- More overseas ownership of banks, telecommunications, insurance companies, media, supermarkets, elderly care facilities and transport firms.
- More unemployment and a lower tax take
- Fewer opportunities for democratic participation by citizens
The 15th (and final?) round of negotiations takes place in Auckland from 3-12 December. Time is really short.
- Go to www.itsourfuture.org.nz or www.fairdeal.net.nz to learn more.
- Write to the Minister of Trade, the Prime Minister and ask the negotiators to insert an opt-out clause for future governments.
- Organise your sector to oppose the secrecy and the trend to give increasing rights to Trans National Corporations.
This brochure prepared by the New Economics Party http://neweconomics.net.nz Contact: email@example.com
Trade has played a major part in our country’s economy for centuries. What we can’t grow or make in this country can be imported and what we can produce here can be exported.
The growth of international trade has been enabled by cheap oil, cheap transport, including shipping and air freight costs. Last year New Zealand spent over $7 billion importing oil, up 22% on the previous year. Our balance of payments or the difference between what we earn from our exports and what we pay for our imports is a matter of great concern.
If we could replace at least some of our imports with goods manufactured in New Zealand it would greatly improve our balance of payments situation. Facing the reality that we have reached the end of cheap easy to extract oil and that life after peak oil is actually going to be more localised, we must plan policies to match.
The Trans Pacific Partership Agreement (TPPA) The best description of this deal being secretly negotiated is at http://itsourfuture.org.nz. Do read this carefully. Jane Kelsey, editor of No Ordinary Deal – unmasking the Trans-Pacific Partnership Free Trade Agreement is a leading world authority on it. Watch for her talking in your town. Round 15 is to be negotiated in Auckland New Zealand in early December. Who knows, this may be the last round and it may be signed. So let’s get working to oppose it in whatever way we can. The New Economics Party will be working over the next few weeks, that is for sure. Will you join us?