Kingmaker delivers NZ a new PM on housing and immigration

By Leith van Onselen

Just shy of a month ago, on 23 September, the New Zealand General Election was held.

A deadlock ensued whereby none of the major parties secured the 61 seats necessary to form Government, with the incumbent National Party securing 56 seats, the Labour/Green alliance securing 54 seats, and New Zealand First (NZF) nine seats.

This result gave NZF the balance of power and made its leader, Winston Peters, the ‘kingmaker’ that would decide the next Government.

Late yesterday evening, Winston Peters made his choice – siding with the Labour/Greens alliance and making Labor’s Jacinda Ardern the New Prime Minister, taking over from National’s Bill English (video announcement above).

In his announcement, Peters foreshadowed tough times ahead for the New Zealand economy, which has been powered for too long on the back of unsustainable Ponzi-led growth. In the interview following, Peters made special reference to the housing market, calling for demand and supply side measures, as well as cuts to New Zealand’s mass immigration system, which is running at record levels.

MB supported Labour in this election campaign. This support was based largely on its excellent housing platform that addresses both supply and demand distortions via negative gearing reform, banning foreign buyers of existing homes, tighter capital gains taxes, removal of urban growth boundaries, plus bond financing for infrastructure. We also supported Labour’s plan to reduce immigration by around a third in order to relieve chronic housing and infrastructure pressures.

Listen up, Australian Labor and Greens.

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Unconventional Economist
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  1. Labor is just as beholden to their ponzi-profiting party-propping overlord donors as the Liberals. Greens are too scared their virtue signalling friends will call them racist, and happy for other suburbs population to explode, so long as NIMBY.

    New Zealand is lucky!

    All we have is Sustainable Australia and a handful of independents and minor parties calling for true reforms that benefit the common person over corporations and vapid ideologies.

    • Yep. NZ has Winston Peters, and whatever your view of his policies, he is a canny and able politician.

      We have Pauline Hanson, who is neither.

    • It will be very interesting to watch this play out. Will they put the kohuna’s on the table and attempt to deliver? Or will it be Aussie- style (Trumpanesque ?) with pre-election promises quickly forgotten, misplaced or thrown into the “too hard basket”.

  2. New Zealand to Be Led by Jacinda Ardern, 37, Capping Labour Revival – The New York Times

    … extract …

    … During the campaign, she emphasized issues including child poverty, environmental management and housing affordability. … read more via hyperlink above …

    Access latest news …

    … and background ‘housing affordability’ information …

  3. It will be a brave government to drastically reduce immigration in an economy that is so heavily reliant on rapid population growth. Hopefully NZ were not as stupid as Aus in handing out permanent residency to people who will ultimately cause unemployment and hence welfare dependency to skyrocket when SHTF.

    • Our Julie will produce one death stare and the kiwi will fold.
      BTW – I don’t give a shite who MB supported in the kiwi election but I do want to know who Barrrrnaby voted for..

  4. Labour’s plan to reduce immigration by around a third in order to relieve chronic housing and infrastructure pressures.

    Is not the biggest problem with mass low-wage immigration, the wages that immigrants (who just happen to be males with 3rd world passports) agree to work for? Such as $10/hour?

    If there is any hint of making 457 visas more expensive to get, the richest 3% squeal like pigs. If there is any talk of UBI, the richest 3% squeal like pigs.

    When the richest 3% scream, you know you are doing the right thing!

  5. That was predictable. At 72 years old – Peter’s will want to leave his mark & legacy.

    Let’s hope Winston Peters now makes good his promises.

    1. To slash New Zealand Asian & Indian migrant temporary visa intake & the granting of residency.

    2. To formally apologise to Australia for NZ being a back door for the Chinese & Indians who can’t even get in here.

    Australian 23rd Sept 2017
    “Mr Peters said New Zealand had allowed “backdoor” immigration to Australia through low-doc trans-Tasman travel and it was high time this was acknowledged. Pledging to get the bilateral relationship back on track, he said if those “older parties responsible” wouldn’t apologise, he would.

    Referring to immigrants who had gained access to Australia via New Zealand, he said: “Our easy immigration policy allowed them to use us as a stepping stone to a country that without us they would never have got to — Australia. They came here, stayed a couple of years and moved on. Australia was always their goal. We were used.”

    => That’s right – you think what comes in here is bad – NZ is the default or the churn visa route for what gets kicked out here to come back in via the back for.
    There is a serious issue now.

    Of the 650,000 NZ Special Category Visa holders in Australia – an estimated 330,000 are third world unskilled migrant – who have sneaked into Australia via the NZ residency / back door special category visa racket.
    The actual NZ born are going back – but the constant steam of third world migrants coming in using the SCV hold the NZ numbers up in Australia. (We by contrast only have a tiny number in NZ)

    The problem….
    Another 260,000 Asians, Indians, Arabs & third worlders are now stacked up in New Zealand ‘pending a residency grant’ / these are pre earnings limit & other later controls.
    Allowed in when NZ has no controls or checking – Asian & Indian criminals, vice workers, whole villages of Punjabi & Nepalese rurals, African war criminals – the absolute dregs.

    As soon as they get that NZ residency they will be on the plane coming into Australia to work, pay no tax, be a burden and social impact.
    That’s 100% going to happen.
    We would never have allowed them in – but once they have a NZ SCV they can get in.

    A special appeal to Winston Peters needs to be made to shut down the NZ SCV migrant trafficking racket.

    Only NZ born (and Australia vice versa) should be allowed the special visa access.

    • This is going be be very tricky to manage; if those who are currently here “as a stepping stone to Australia” end up not being allowed in there, and Winston doesn’t want them remaining in NZ. There is also the matter of “immigration” or more correctly, “arrivals”, including a large percentage of actual NZ citizens returning home. It is going to be very difficult to cut the numbers significantly under circumstances where they aren’t people for whom there are easy reasons to disallow.

      Another problem is that getting houses built is actually going to need an expanded workforce of builders; of course there are many Kiwi builders who left the country while the construction sector was “bludgeoned back to the stone age” by Council Planners and the market distortions, so obviously they should be the front of the queue inbound.

      • Careful – U&E is not a fan of free speech – and will delete on a whim… a fault of the Left.

      • Phil. A minuscule proportion of your migrants are construction workers. Also, most are not returning Kiwis but on student and work visas, many from Asia.

        The numbers clearly need to come down. There is no logic economically, socially or environmentally in maintaining such a strong immigration intake.

      • Sorry I didn’t make my point clear; even though returning Kiwis are not a large part of the mix at the moment, there are 1 million Kiwis overseas (I believe Australia has likewise, 1 million overseas, with several times greater population).

        There is scope for a LOT of people to return.

        I don’t disagree that immigration policy needs to be part of the mix for dealing with the current crisis condition in housing and infrastructure, but I am a strong believer in “doing growth properly” and it being a positive-sum thing, like Southern USA is doing with it, and some heartland States.

        It is absurd to end up with massive financing burden for an unaltered existing housing stock, just because we are too stupid to direct the cheap liquidity sloshing around the world, into infrastructure instead! This is the genius of the traditional US approach (which has sadly been abandoned by the “liberal” coastal States).

        People wringing their hands in horror at the finance burden for all that infrastructure for growth, are incoherent given that the result of their intransigence is that we end up with the debt anyway, for NOTHING.

      • You delete UE. You don’t like opinion other than your own, and I am certainly not right wing. Conservative – yes, maybe. You delete on a whim, vindictiveness, folly???. The reasons, I don’t really care.

        The truth is UE, you don’t like free speech. And you certainly don’t like contrasting opinions. H&H has done a couple of deletes in the past couple of weeks too. Disappointing. If I was in your shoes, I wouldn’t be so threatened… Free speech is a great thing.

        Its a fatal flaw of this website. Your intend to be market orientated, to comment on economics, social policy and market failures – yet you espouse the opposite (at times). The problem being, those who are interested in the markets, and its effects, are not probably going to share your opinions. You cannot have one without the other, unfortunately.

        To be fair, you haven’t deleted me for a year or so, but the recent spate of deletions were over comments that were innocuous at best. Quite frankly, not sure what you could have possibly found offensive – or in several instances actually in any disagreement in what you wrote???.

        And thats the whole, point, if you all have the same world view, the constant badgering and personality slights is boring after a while. You read the usual abusive title, and a couple of lines and never click.

        Personally, I would love diversity of opinion. But you are not me, and I don’t reply, in like, your abuse. That is weakness. I am sorry for you…

    • Country of origin not really relevant. At this point, agricultural countries like Aus and NZ shouldn’t be bragging about their amazing scientists & engineers. China is pulling quite far ahead of us in some areas, and there is a reason lots of IT companies now have executives and CEOs with Indian sounding names. (Hint: In Asia you didn’t get called a nerd and harassed for being interested in computers or STEM)

      • Hi – read what I said (and Winston Peters own comments and his offer of an apology).
        New Zealand is the back door.
        Once NZ residency ‘& then citizenship’ is granted then the third world migrants gain acesss to Australia.
        NZ is just a transit stop.
        Currently one third trending to half the intake of NZ SCV are third world origin unskilled let in under previously lax NZ rules. The estimates are nearly half the current NZ SCV in Australia are non NZ born.

        The point again. Over quarter of a million are stacked up in NZ as a transit zone pending access into Australia.
        Why deny what everyone in NZ knows and what Winston Peters himself says explicitly ?

        My original comment & Winston Peters pledge.
        The simple measure required is that the reciprocal SC visa is only granted to NZ or Australian born.
        NZ is just selling residency & then citizenship offers to those who couldn’t get into Australia or got booted out of Australia – so they go via the NZ backdoor.
        2. To formally apologise to Australia for NZ being a back door for the Chinese & Indians who can’t even get in here.

        Australian 23rd Sept 2017
        “Mr Peters said New Zealand had allowed “backdoor” immigration to Australia through low-doc trans-Tasman travel and it was high time this was acknowledged. Pledging to get the bilateral relationship back on track, he said if those “older parties responsible” wouldn’t apologise, he would.

        Referring to immigrants who had gained access to Australia via New Zealand, he said: “Our easy immigration policy allowed them to use us as a stepping stone to a country that without us they would never have got to — Australia. They came here, stayed a couple of years and moved on. Australia was always their goal. We were used.”

      • And 74% are not.
        74% are third world unskilled let in under previously very lax NZ rules – using NZ as a transit stop.
        NZ was well known as the ‘easiest’ country in the OECD to get into plus the benefit of access in Australia.

        Now.,. there is over quarter of a million third world unskilled Asian or Indian etc on visa rackets, fake doc, fake pretext – widely documented- stacked up as gaining NZ residency & then citizenship to then enter Australia via SCV.

        The simple fix is that the NZ / Aust SCV is only for NZ or Aust born. An non NZ born resident or citizen should not get acesss & work rights in Australia.
        That will shut down the trans Tasman migrant trafficking racket.

      • The All black talent pool must be refreshed!
        Kiwis are all done with the island imports now, maybe some front row grunt from the Saffas is the plan! :-).
        That’s tongue in cheek btw….

    • But how do you sustain the lifestyle of boomers who didn’t save but wants to live the good life?

      How come these so called third worlders buying up the best assets of Australia? Think you might need to look in the mirror mate.

    • Are you kudding me ? 650k kiwis in Australia at any given time on 444 visas? That’s almost 15% of the entire population of NZ! :

      • The 650,000 on NZ special category visas in australia increasingly not NZ born.

        The genuine NZ born from 1980-1990 ‘waves’ of NZ born are going now back for NZ welfare & or have taken the option of Australian citizenship.

        Holding up the NZ SCV numbers is third world migrants that use NZ as stepping stone back door into Australia.

        Estimates are over 330,000 of the 560,000 in Austrian on SCV are non NZ born.
        Up to 70% of the intake now is non NZ born.
        Ask yourself the last time you heard or saw a genuine NZ born recent arrival in Australia ? It’s rare.
        It will be a Chinese or Indian / Fiji Indian or African or Arab or South African or Middle East – on a NZ passport.

        NZ is the backdoor & until recently has virtually no quality controls with widespread visa & documentation fraud, family reunion, fake partners, fake family, fake international student, vice prostitution, criminals, money laundering rackets across the board.

        The issue again.
        There are 240,000 third world unskilled migrants in NZ now ‘stacked up’ pending residency & citizenship who will then come in via the NZ SCV migrant trafficking racket.

        They are coming to Australia. 100%. Go there, ask them. That’s why they are in NZ because NZ let them in selling access to Australia.
        We didn’t chose these people but under SCV they can get in.
        Winston Peters has offered to apologise.
        But the urgent action is to immediately restrict the Aust / NZ SCV to only Aust / NZ born.

        Shut down the trans Tasman migrant trafficking racket.

    • Saw a report the other day (think it was via Nine News) that since 2006-2007 the social security bill (in straya) rose from $117bn to $157bn in 2015-2016 and pondered whether this was reason to import even more immigrants to help “lift the load” or whether a good chunk of this up-tick occurred precisely because of the high immigration.

      I suspect it is the latter but in any event, social security is now beginning to spiral out of control and when the inevitable recession arrives the growth rate in that number will accelerate even more.

  6. I am not sure how sharp Peters is on the “urban land supply” economics and reforms (in contrast to Phil Twyford, Labour’s housing minister and his close advisors). Peters is an undead Muldoonist; far more comfortable with statist solutions to everything. I fear he will support a big government direct-involvement program and social housing as “solutions” but not reform of Council planners land-rationing. He is also a big fan of urban rail transport; he epitomises how some so-called “right wing” political movements merely think they can run economies and society better than “socialists”. Peters is inherently anti-business, anti private sector, and it wouldn’t surprise me if he inherently dislikes the freedom that cars provide.

    • HadronCollision

      That all sounds like a pretty Fcking great balance to the schemozzle we find ourselves in today brought by neoliberalism and corporatists, Phil.


      “…And We Thought That Nation-States Were A Bad Idea”

      “Publicly subsidized! Privately profitable!”
      The anthem of the upper-tier, puppeteer untouchable.
      Focus a moment, nod in approval,
      Bury our heads in the bar-codes of these neo-colonials.

      Our former nemesis, the romance of the nation state,
      Now plays fundraiser for a new brand power-concentrate.
      Try again, but now we’re confused; what is “class war”?
      Is this class war? Yes, this is class war.

      And I’m just a kid.
      I can’t believe I gotta worry about this kind of sh//t.
      What a stupid world.

      And it’s beautiful,
      No regard for principle.
      What a stupid world.

      Born, hired, disposed.
      Where that job lands, everybody knows.
      You can tell by the smile on the CEO,
      Environmental restraints are about to go.

      You can bet laws will be set
      To ensure the benefit
      Of unrestricted labour laws,
      Kept in place by displaced government death squads.

      They own us.
      They own us.
      Produce us.
      Consume us.

      They own us.
      They own us.
      Produce us.
      Consume us.

      Can you f//king believe?
      What a stupid world.

      ///ck this bullsh////it display of class-loyalties.
      The media and “our” leaders wrap it all up in a flag, sh///it-rag, hooray.

      • Tell me, were “the good old days” of affordable housing, the outcome of The State building houses, or the outcome of private developers building thousands of homes at a time on greenfields they had bought at true rural values?

        And whose fault is it that that era is no longer? Neo-liberal free-market believers?????

        Absolutely it is a problem that rentier capitalists are out for zero-sum gouges, but the way they work is via well-intentioned useful idiots imposing new regulations for “our protection” eg from things like urban sprawl.

        If you don’t see this, unfortunately many people don’t, and they illustrate the weakness of democracy in decadent conditions. There are NOT only two options: Big Brother Nanny Statism versus crony rentier capitalism. This is all the more stupid in that we did it right for decades. “Whom the gods would destroy, first they make mad”.

    • Yes I’m actually thinking Australian’s will take note of this… But I’m not 100% sure the frogs know the water is boiling yet.

  7. It remains to be seen if this new government brings house prices down with its approach. It has a good chance, even clearly stated intentions to pass effective reforms, can change the psychology that is responsible for the speculative frenzy. National’s “reform” statements were obviously not solutions, to anyone who knows their stuff about property markets, and the results were clear – no-one believed them (especially when John Key started attacking “politicians who want to crash house prices and destroy Kiwis “wealth”).

    If National blames Labour for “crashing house prices”, and promises to “bring back the good times”, then they will have shown just how low and venal the enablers of the racket are. Labour needs to play like Lange did so successfully – all the pain of reforms are the fault of the foregoing 9-year administration that irresponsibly let things get so out of hand in the first place.

      • That’s the big thing.
        If they apply sensible reforms and the economy contracts, as it should, then they wear it. That is unless Arden is better salesperson than Hawke, Howard and that Demtel chap who sold knives on TV when I was a kid. If Australia goes down at the same time, then NZ are in the better position to recover because they have already begun the necessary reforms.

      • Exactly! The alternatives after the crash is going to be to rinse and repeat; or rebuild a REAL economy from ground up. I believe that rinsing and repeating will lead (if not this time, next time) to Ludwig Von Mises’ “collapse of the entire system”.

        The 1930’s were a warning TREND. Property cycles had been getting worse and worse. What saved us from the choice between permanent rentier capitalism versus Marxist nationalisation of land, was automobile based development. Funny thing is this was common knowledge mid 20th century. In fact even back in the late 1800’s, Alfred Marshall predicted it. A pamphlet from the Architect Raymond Unwin titled “No Longer Need for Overcrowding” demonstrated a good understanding between higher-speed transport systems and the end of the urban land rent racket, and that was published in 1905!

        I can’t help thinking we are in some kind of blind decadent “end of the enlightenment” phase of our civilisation.

    • If they can make a dent in housing, I’ll be interested to see how it hits or shared financial intuitions.

    • Things are getting worse in France – they will be in brown town soon – and Le Pen will look like a moderate!

  8. As much as I disliked Winston Peters in the past years, I just loved his move to support labour
    I never trust Bill English of the national party and always labeled him as dodgy and creepy.
    Well done nz
    And quiet right MB: au labour and greens : Listen Up. There are still things you can do

    • The tragedy is that Bill English in 2002, and in 2005, as loyal to then leader Don Brash, fully supported reforms of Council Urban Planning powers so as to restore housing affordability.

      John Key is the really responsible smiling con-man betrayer. I am at a loss to understand how his “team” let it happen. It is not as if politicians of principle in the past haven’t publicly rocked the boat and even resigned, when their leadership was obviously doing the wrong thing. It is not as if there are no precedents, or no standards of integrity to uphold.

      If Bill English stands condemned, it is on this basis. But he was not the architect of the last 9 years of shameless bubble-pumping and cronyism with rentiers. That is the Merrill Lynch man, Key.

  9. lol… We cannot control who enters and exits “our nation” anymore, because such control implies possession of a state. How is that working out? Hope she doesn’t break all your little hearts like Tumbril did.

    • With WP holding the whip perhaps this time the is a good chance.
      Chalk one up to MB for calling NZF as king makers.

  10. Ronin8317MEMBER

    The logic is simple : Bill English will call another election as soon as the poll turns, where as the Labor party will not. That was why the independents picked Gillard over Abbott in Australia, and the same reason why Winston Peters didn’t partner with Bill English. Some people cannot be trusted.

    As someone of Asian heritage, I see the immigration number will only lead to disaster. Auckland is around 25% Asian right now, which is too many too fast, and they will be blamed on every social ill rather than the immigration policy which encouraged them to come.

    • i.e. they’ll blame poor people and immigrants… As someone with a subcontinental heritage, yep, we are well boned. Know so many people with mixed heritage/mixed race couples. This could all get very ugly very quickly.

  11. the_bystanderMEMBER

    I’m unsure whether immigration reductions will be the panacea to all of NZ’s economic and social woes, but the good news is that Australia can sit back and observe how successful Arden and Peters are before committing to any long term, radical action. Slow and steady wins the race…

    • reusachtigeMEMBER

      New Zealand is one of the most boring places going, especially Auckland, but the one thing that was improving its vibrancy was the mass immigration of people who do things better than them. So sadly reducing their immigration will destroy the place and turn it back into a sheep hugging station. Luddites and progress killers abound!

      • Give me boring dull and uncongested with affordable homes and stable jobs anyday over congested, rat race conditions with unaffordable homes.

        Let all those fabulous foreigners improve their own countries.

    • ‘I’m unsure whether immigration reductions will be the panacea to all of NZ’s economic and social woes…’
      Who claimed that?

    • Relevant StakeholderMEMBER

      radical action…are you taking the piss? the current immigration levels are radical!

      • the_bystanderMEMBER

        Whoa, relax – I’m as interested as the rest of us in seeing immigration lowered to sustainable levels. By current standards such a reduction could be considered ‘radical’, or if not runs at least some risk of economic problems if not managed carefully. I’d be extremely happy if NZ pulls it off, as it will provide a strong impetus for Australia to follow suit instead of endlessly asserting that (i) our economy will go to hell in a handbasket without high immigration, and/or (ii) any comment about immigration levels is racist and should be silenced no matter how benign.

  12. Make the first year of tertiary education or training fees free and increase student allowances and living cost loans by $50 a week from January 1, 2018

    * Pass the Healthy Homes Guarantee Bill

    * Ban overseas speculators from buying existing residential properties

    * Stop the sell-off of state houses

    * Legislate to pass the Families Package, including the Winter Fuel Payment, Best Start and increases to Paid Parental Leave, to take effect from 1 July 2018. The families package replaces National’s April1 tax cuts.

    * Introduce legislation to set a child poverty reduction target

    * Resume contributions to the New Zealand Superannuation Fund

    * Set up a ministerial inquiry on mental health

    * Hold a Clean Waterways Summit of all key stakeholders

    * Increase the minimum wage to $16.50/hour, to take effect April 1, 2018, and introduce legislation new industrial relations legislation

  13. Now we can see a live test case (Auckland) as to what happens when you slash immigration and ban foreign buyers.
    Plus a few more RBNZ powers to boot!