Finance Minister Grant Robertson risks undoing the positive work the Government has done to address the housing shortage if he seeks to “punish” property owners and investors in the Budget this week, Property Institute chief executive Ashley Church warns.
Mr Church says he has confidence in the approach Housing Minister Phil Twyford has taken, telling OneRoof that the minister has demonstrated an understanding of the housing issues facing the nation and appears to be putting in place the building blocks to get things done.
“This budget needs to establish the economic credentials of the Coalition for the next three years, so it needs to provide a wide-ranging and clear blueprint outlining a vision for the nation and how that vision is going to be funded,” he says.
“Given that the Coalition's priorities differ from those of the previous Government, that blueprint will need to provide legitimacy to the new agenda, something which has been lacking in the program, which in the first six months of the Government has looked more like a lolly scramble for vested interests than a coordinated strategy.”
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Mr Church says he hopes the Budget will offer more clarity around the number of KiwiBuild homes the Government plans to build over the next 3 years.
“I’m anticipating between 10,000 and 12,500 by 2020, and achieving that will be a good effort for the first term,” he says.
Mr Church expect Mr Robertson will announce an increase in the base funding provided for KiwiBuild, so that the program isn’t constrained by the unworkable ‘funds recycling’ policy on which it was established; and to announce one or more new ‘greenfields’ residential development sites within Auckland.
“However, the ‘big picture’ presented by this Budget is far more important than any particular specific initiative because it's the basis upon which confidence will be established or lost for this term of Government.
“My hopes aren’t high, though. I’m expecting a lot of announcements about spending – with few specifics about what that spending will actually achieve, primarily because I don’t think there’s actually a clear plan.
“I also expect most of the spending announcements to continue the theme of political ‘payback’ rather than enhancing social investment.”
Mr Church expects any good news Mr Robertson delivers to the property sector will be tempered by some “extremely silly moves”. He says the Government’s moves on tax show there is confusion over the difference between property investors and property speculators.
“The ring-fencing of tax losses for property investors will almost certainly contribute to a worsening of the shortage of rental properties in our major cities over the next few years.
“Funding to establish The New Zealand Housing Commission, an urban development authority which is unnecessary, will be overly complicated, will ride roughshod over private property rights and will become a monolithic bureaucracy within a few short years.”
