Over the last two months, Jacinda Ardern’s New Zealand Labour Government has launched two major reforms to wean the nation off ponzi-led growth, namely:
- announcing major property tax reforms targeted at investors that:
- extend the term of the Bright Line Test for taxing capital gains on investment property from five years to 10 years; and
- fully remove the tax deductibility of mortgage interest payments on residential investment properties.
- announcing a “once-in-a generation” immigration reset for New Zealand that will shift away from high volume, low skilled migration to a smaller quantity of higher quality migrants.
If implemented properly, these reforms would alter the path of the New Zealand economy away from quantity-based ‘ponzi’ economics centred on population, housing and debt growth to growth focused more on productivity and tradeables.
