Change Tax Policy and Control Banks for Affordable Housing, says New Economics Party

Change Tax Policy and Control Banks for Affordable Housing, says New Economics Party

January 31, 2013

Change Tax Policy and Control Banks for Affordable Housing, says New Economics Party

To get affordable housing we need a tax policy which favours investment in productive enterprises not housing, says the New Economics Party.

“If we don’t control capital coming into New Zealand and then don’t stop it going into housing through our tax policy, it’s no wonder we have a housing bubble in Auckland”, said Deirdre Kent, spokesperson for the New Economics Party. “And if we let the banks lend 100% on housing, we are asking for trouble.”

Freeing up land and changing the Resource Management Act is not working, she said.

“Banks are pushing money onto buyers and we effectively have a bubble which will eventually collapse. Wealthy Chinese are buying here to get their money out of China where they are clamping down on corruption. A lot goes into real estate.

No progress will be made towards affordable housing until land tenure is separated from buildings, according to the New Economics Party. Spokesperson Deirdre Kent said “Until we (move from income tax to imposing a full ground rent) impose a full ground rent – which can replace income tax as a source of revenue for Government – we won’t get any progress. “

She said that when homeowners just have to pay the price of the building, the price of the home is halved. “In Auckland where land is on average 60% of the property price, the price would drop even further if a full ground rent was imposed.”

“When property prices rise, it is almost solely because the price of land rises. Generally, the price of the house doesn’t rise. When the public captures the windfall from rising land prices instead of the banks and the private owners house prices will be finally contained,” she said.

She said some Auckland leasehold land fetched a ground rent of 5% at auction and this money should really be public money because it is the public who has paid for the services to that land in roads, schools, sewers and businesses.

“Others have recently been proposing solutions to affordable housing but they are just tinkering around the edges.”

For further comment phone Deirdre Kent 06 364 7779 or 021 728 852.



Review of Creating Sustainable Societies– The Rebirth of Democracy and Local Economies by John Boik 2012

Review of Creating Sustainable Societies– The Rebirth of Democracy and Local Economies by John Boik 2012

John Boik, a cancer biologist from Los Angeles, is courageous and original. He faces the big issues of our time– financial, environmental, economic, social, and even technological threats – and presents a blueprint to solve them by opt-in grassroots solutions. Boik’s ideas are idealistic and refreshing and some of them have a practical appeal. A who’s who of the complementary currency and democracy movements commend the book and Bernard Lietaer wrote the preface. Boik advocates a token exchange system, a principled business model and collaborative governance and applies democratic principles to each. He envisages a network of principled businesses and a network of policy makers.

His blueprint could have a profound effect on national systems and whole populations. He describes an approach and technology that would allow citizens to voluntarily cooperate at the metro level in demonstrating new, sustainable financial, economic, and governance systems. The proposal for democratic self-governance can be demonstrated in a pilot scheme in a small group in one city. If it is as successful he hopes that the idea spreads quickly to every metro area in the U.S. and to cities in many other countries. He expects that the ideas on which it is based would start to influence state and national politics.

The book contains an excellent section on writing legislation, where he applies decision making processes of open source software development and his knowledge of genetics, with each round being more sophisticated than the last.

Though he advocates pilot schemes he is probably aware that top down solutions are part of the mix and when these solutions are creative and benign they are very powerful. One of the problems with reinventing society is that so few include resource-based taxation in their agenda.

The current political process has a lot going for it and we should retain what is effective. The process by which a new policy comes into being is first by public advocacy, controversy and finally by legislation? While Boik understands the growing role of the Internet in shaping public opinion, he doesn’t mention the role of the media in this matter. Elegant and simple legislative solutions always trump a patch-on solution. Politics at its best can be the most creative enterprise of all. The right policies send signals to businesses and avoids the artificiality of exceptions and of picking winners.

Boik is an American in an American society. While some states have referenda, the US doesn’t have proportional representation. Geoffrey Palmer’s introduction of Select Committees was a huge advance in democracy. This is not yet, I believe, emulated in the US. While New Zealand has much further to go in achieving better democracy, we at least are a small country and can constantly refine and improve what we have.  500 people actively participated in rewriting the constitution of Iceland, a country with only 350,000 people.

His idea of a local currency is the Token and he believes some should be diverted into investment and some into loans. However, the feasibilility of this idea will depend on the scale of the currency and maybe he underestimates its potential size. Of course we should use democratic means to choose which business to invest in. Some publicly owned banks are doing this already to some degree. Here again the role of legislation is underestimated. Good legislation will bring good investment decisions, just as well designed currencies will.

He acknowledges that housing accounts for 42% of consumer spending and that his proposed Tokens won’t help much with this.

Plaudits for his stimulating and original suggestion of how to change the world and rescue us just in time from total environmental and economic collapse. Consistent with his philosophy is publishing the book free as a pdf and allowing anyone to publish a hard copy of the book as long as they give 50% to the Principled Societies Project.)

An excellent short animated video, the first of four is now on the website associated with thisbook at


Review by Deirdre Kent