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.
For now, New Zealanders appear to have endorsed Jacinda Ardern’s new economic model, with opinion polls showing strong support in May, according to Roy Morgan.
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As shown in the next chart, New Zealand’s Labor Party’s primary vote was 45.0% in May, way above National’s 28.5%:
One a two-party preferred basis, Labour/Greens lead National/ACT/Maori 56.0% to 39.0%:
As I keep saying, the Australian Labor Party should adopt Jacinda Ardern’s immigration platform. The overwhelming majority of Australians do not want a return to pre-COVID levels of immigration and Labor should capitalise on their discontent. It is the right thing to do politically, economically, socially and environmentally.
The only groups that a lower immigration platform would offend are the business and property lobbies that favour the Coalition anyway and are generally viewed cynically by the public.