The Act Party ends the year on 9.6% in an average of the last public polls, a moderate gain on its 2023 election result of 8.64% but still a strong result considering the poor track record of minor parties in MMP, and a testimony to the high profile enjoyed by its leader David Seymour and his Treaty Principles Bill.
The long neoliberal con: The Regulatory Standards Bill is another attempt by Act leader David Seymour to prioritise corporations over the collective rights and good of the public
I abhor the antics of Act, and all they stand for! I see my country as under serious threat from an unprincipled greedy minority ! The majority of the populace seem unable to discern the threat Act is establishing to our basic way of life, and to the people the taonga, and our mana! Thank you for enlightening us so far….Bryce, we need you!👍🌟
Oh no! Help! If their bills pass and become law, we might just be prosperous, have a society based on solid liberal principles, and be less reliant on the government! Yikes!
Firstly "political science" is an oxymoron. Politics is an art form. Science plays little part in it. Secondly if your PhD is in neo-liberal economics then your comments are understandable. This economic theory is slowly destroying the world's financial systems.
I noticed you said that ACT policies support business and industry. Is that a bad thing ? and are you anti business and anti industry ? We are seeing businesses and industries shutting around the country, and I thought it was the govts job to support that kind of employment. Arent all those people voters Bryce, just like you ?
Andrew Hoggard was the President of Federated Farmers and a farmer. He represented farming interests. If that’s your definition of a lobbyist then we’re in Alice Land. And Act is led by professional politicians? Compared to Labour’s amateurs, is that what you mean?
"The full cost of the policy is estimated at $2.9 billion over a four-year period, and this amount has haunted National all year, as they made cuts to public spending, healthcare and Dunedin hospital, the opposition repeatedly confronted them with the high cost of Act’s interest deductibility policy. Christopher Luxon argued that this change would increase downward pressure on rents, but rental costs have continued to increase this year."
As an economist, there is much more to this than will ever be in the public eye.
The first, and most important thing, is that it was never credible that Labour's policy would last the change of government, and the government was highly likely to change when the policy went in.
Investors are forward looking, so they barely, if at all, changed their behaviour in response to Labour's policy.
Most investors simply ate the losses while waiting patiently for the law to change back. It was getting phased in for existing properties anyway, and is now getting phased out.
It should be clear however, that if Labour had won the election two things would have happened:
1) rents would have risen sharply, to cover the costs of the policy that can no longer be temporarily looked through,
2) construction of new builds would have fallen as investors leave the market*,
3) rental shortages would have increased sharply, as investors left the market,
4) accommodation that tends to be purchased as either FHB or rentals would have experienced a slight fall in price, though not much as owner-occupiers tend to outbid investors.
The net result would have been an absolute catastrophe for renters, and a small win for FHBs. Throw the poor under the bus to help out the YOPROs. Pretty classic 21st century labour policy... Built on vibes for the middle class.
Tbh I think they put it in place knowing it was a terrible policy, knowing it would be removed, and knowing in doing so they would have had 'tax cuts for landlords' ammunition for at least a term. It's pretty genius to be honest, if the market thinks its going to be almost certainly removed, then you don't even suffer the consequences!
*I know the policy didn't apply to new builds directly, but the price you can sell something for in the primary market is directly related to the price the person you sell it to can then onsell it for in the secondary market. That price has fallen with removal of interest deductibility.
"rental shortages would have increased sharply, as investors left the market" - how does that work? If a house is no longer a rental wouldn't it be sold and become a former renter's house?
Yup. In some cases at the margin the house will be bought by former renters. That's the FHB I'm talking about.
In others it will be converted to an AirBnB as that can still be cashflow positive without interest deductibility.
In others converted to commercial use, bought as a second home by an owner-occupier (especially the case for more compact dwellings) etc...
And in the longer run of course the supply of rental stock shrinks for the reasons I discussed above.
But there's a key thing missing here that often gets lost in the commentary - there are at least two distinct groups of renters you need to think about:
1) Those who HAVE to rent as they simply do not have the money. Students, teenagers and other young people, recent immigrants from less developed places etc... These guys are typically miles from buying a house, even if they were 10 - 20% cheaper.
2) YoPros and others who have a decent amount of cash, and are closeish to buying a house.
A policy like removing interest deductibility helps the latter group while crushing the former. That's inequitable.
Standard application of economic and financial theory to the subject at hand. If your perspective on an issue varies heavily from the orthodoxy of experts in that field, you should reflect on why...
I disagree MMP delivered the coalition of chaos rather Luxon’s desire for power, which he has repeatedly shown he cannot handle, led him to sell his soul. Māori are being made to pay the most but the rest of us will too - bar the 1% who will gain yet more - as ACT’s ideology bites and privatisation furthered. More disasters NZ taxpayers will end up paying for. Luxon is out of his depth and will go down as the worst PM ever because he’s unwilling to stop ACT run roughshod and play havoc with constitutional and parliamentary process. It’s increasingly hard to see why Luxon is allowing Seymour to destroy National
I'm reading a book on Hitler and the Nazi Party. ACT's behavior models that of, and the sort of individuals and business interests, attracted to the Nazi Party.
The long neoliberal con: The Regulatory Standards Bill is another attempt by Act leader David Seymour to prioritise corporations over the collective rights and good of the public
https://newsroom.co.nz/2024/12/18/the-long-neoliberal-con/
https://e-tangata.co.nz/comment-and-analysis/the-dangerous-bill-flying-under-the-radar/
https://melanienelson.substack.com/p/regulatory-bill-emeritus-professor
I abhor the antics of Act, and all they stand for! I see my country as under serious threat from an unprincipled greedy minority ! The majority of the populace seem unable to discern the threat Act is establishing to our basic way of life, and to the people the taonga, and our mana! Thank you for enlightening us so far….Bryce, we need you!👍🌟
Oh no! Help! If their bills pass and become law, we might just be prosperous, have a society based on solid liberal principles, and be less reliant on the government! Yikes!
such delusion
Thank you for your insightful and constructive comment /s
Now who's being sarcastic? I despair at the rise of rotten libertarianism.
Firstly "political science" is an oxymoron. Politics is an art form. Science plays little part in it. Secondly if your PhD is in neo-liberal economics then your comments are understandable. This economic theory is slowly destroying the world's financial systems.
You’re blind!!
The unprincipled greedy minority is represented by the Maori Party quite well.
I noticed you said that ACT policies support business and industry. Is that a bad thing ? and are you anti business and anti industry ? We are seeing businesses and industries shutting around the country, and I thought it was the govts job to support that kind of employment. Arent all those people voters Bryce, just like you ?
It is a bad thing when it is supporting businesses to lower wages and conditions and to rape and pillage our resources and natural environment.
Andrew Hoggard was the President of Federated Farmers and a farmer. He represented farming interests. If that’s your definition of a lobbyist then we’re in Alice Land. And Act is led by professional politicians? Compared to Labour’s amateurs, is that what you mean?
"The full cost of the policy is estimated at $2.9 billion over a four-year period, and this amount has haunted National all year, as they made cuts to public spending, healthcare and Dunedin hospital, the opposition repeatedly confronted them with the high cost of Act’s interest deductibility policy. Christopher Luxon argued that this change would increase downward pressure on rents, but rental costs have continued to increase this year."
As an economist, there is much more to this than will ever be in the public eye.
The first, and most important thing, is that it was never credible that Labour's policy would last the change of government, and the government was highly likely to change when the policy went in.
Investors are forward looking, so they barely, if at all, changed their behaviour in response to Labour's policy.
Most investors simply ate the losses while waiting patiently for the law to change back. It was getting phased in for existing properties anyway, and is now getting phased out.
It should be clear however, that if Labour had won the election two things would have happened:
1) rents would have risen sharply, to cover the costs of the policy that can no longer be temporarily looked through,
2) construction of new builds would have fallen as investors leave the market*,
3) rental shortages would have increased sharply, as investors left the market,
4) accommodation that tends to be purchased as either FHB or rentals would have experienced a slight fall in price, though not much as owner-occupiers tend to outbid investors.
The net result would have been an absolute catastrophe for renters, and a small win for FHBs. Throw the poor under the bus to help out the YOPROs. Pretty classic 21st century labour policy... Built on vibes for the middle class.
Tbh I think they put it in place knowing it was a terrible policy, knowing it would be removed, and knowing in doing so they would have had 'tax cuts for landlords' ammunition for at least a term. It's pretty genius to be honest, if the market thinks its going to be almost certainly removed, then you don't even suffer the consequences!
*I know the policy didn't apply to new builds directly, but the price you can sell something for in the primary market is directly related to the price the person you sell it to can then onsell it for in the secondary market. That price has fallen with removal of interest deductibility.
"rental shortages would have increased sharply, as investors left the market" - how does that work? If a house is no longer a rental wouldn't it be sold and become a former renter's house?
Yup. In some cases at the margin the house will be bought by former renters. That's the FHB I'm talking about.
In others it will be converted to an AirBnB as that can still be cashflow positive without interest deductibility.
In others converted to commercial use, bought as a second home by an owner-occupier (especially the case for more compact dwellings) etc...
And in the longer run of course the supply of rental stock shrinks for the reasons I discussed above.
But there's a key thing missing here that often gets lost in the commentary - there are at least two distinct groups of renters you need to think about:
1) Those who HAVE to rent as they simply do not have the money. Students, teenagers and other young people, recent immigrants from less developed places etc... These guys are typically miles from buying a house, even if they were 10 - 20% cheaper.
2) YoPros and others who have a decent amount of cash, and are closeish to buying a house.
A policy like removing interest deductibility helps the latter group while crushing the former. That's inequitable.
Star gazing presented as fact.
Standard application of economic and financial theory to the subject at hand. If your perspective on an issue varies heavily from the orthodoxy of experts in that field, you should reflect on why...
orthodoxy of 'experts' says it all
No comment on the Regulatory Standards Bill?
Gosh I am excited for this. If it sticks we've got the foundation for a prosperous society.
More delusion. Riches for some does not make for a flourishing society
That's the one to watch. Quietly under the radar!
Bryce, your column seems to have been captured by a bunch of rabid libertarians.
That’s significantly better than rabid socialists. Even the Labour Party is insufficiently left for some.
I disagree MMP delivered the coalition of chaos rather Luxon’s desire for power, which he has repeatedly shown he cannot handle, led him to sell his soul. Māori are being made to pay the most but the rest of us will too - bar the 1% who will gain yet more - as ACT’s ideology bites and privatisation furthered. More disasters NZ taxpayers will end up paying for. Luxon is out of his depth and will go down as the worst PM ever because he’s unwilling to stop ACT run roughshod and play havoc with constitutional and parliamentary process. It’s increasingly hard to see why Luxon is allowing Seymour to destroy National
I'm reading a book on Hitler and the Nazi Party. ACT's behavior models that of, and the sort of individuals and business interests, attracted to the Nazi Party.
That’s a bit far-fetched, even for you Garry. For starters antisemitism is unknown in Act. Can’t say that about the Left.
🤣🤣🤣🤣🤣🤣🤣
"Hitler and the Nazi Party. ACT's behavior models that"
Really? Or is this a case of "everyone I don't like is literally Hitler"?
Not at all. Read the book "Hitler's People" by Richard J Evans and note the similarities.
Perhaps, since you made the assertion, you could elaborate rather fob it off with "read the book".