New Zealand Finance Minister, Bill English, gave an interesting interview to ABC’s The Business last night, which provided a welcome contrast to the political imbeciles running Australia.
Some key points from the interview include:
- The New Zealand Dollar is too high, particularly relative to Australia.
- The RBNZ’s macro-prudential controls on high LVR mortgage lending have been “worthwhile” and “worked for a while”, but is now running up against record high immigration and solid income growth.
- Auckland, in particular, is dealing “with the legacy of planning processes that were designed to prevent Auckland growing, going back starting in the late-’90s”. The Government’s top priority, therefore, is to “get [the] supply of land for new houses on the ground faster” although “it’s proving to be a long, complex job, but we’re making progress… Everyone realises this market’s out of balance and they want to see action on it”.
- Nevertheless, English still recommends that Australia [RBA/APRA] look to macro-prudential controls, because “the market needs to see that an institution like – a reputable institution like the RBA – taking the issue seriously [and] that a fast-rising housing market is not an unmitigated good. It’s a potential risk to the macro economy and also for householders who pay too much. So, I think it’s – in our experience, it’s worthwhile, we’ve set up a framework that enables the RBNZ to – to exercise – use those tools and Australia’ll make its own decisions”.
As I keep saying, New Zealand’s Government recognises the issues around its unaffordable housing and is taking action to mitigate risks, including by supporting the RBNZ.
Compare that to Australia, where few in the political system even acknowledge that problems exist.