Welcome to The Spinoff’s live updates for March 12, brought to you by Stewart, Alice and Toby. Get in touch at email@example.com
4.00pm: IMF calls for capital gains tax in NZ as house prices continue to climb
The International Monetary Fund has concluded New Zealand should consider a capital gains tax, or a new tax on investors, to help control the country’s wild housing market.
The fund’s report, released today after its experts looked at New Zealand’s economy, puts it in conflict with Jacinda Ardern who has flatly ruled out a capital gains tax during her prime ministership. She’s also said no to new taxes over the coming three years.
The IMF is one of the key pillars of the global financial system. Based in Washington DC, the fund makes it easy for money to move between economies and has been often criticised during its 75-year existence for providing economic advice that is too conservative and stingy.
While it praised the government’s response to Covid-19, this is a rare case where the international institution is calling for more taxes and spending than a national government is willing to consider.
“Mitigating near-term housing demand, particularly from investors, would help moderate price pressures,” the fund wrote. “Introduction of stamp duties or an expansion of capital gains taxation could reduce the attractiveness of residential property investment.”
The IMF further concluded that the new taxes should only apply to investors and not first home buyers, while the government should continue to provide grants and loan help to first timers. It also called for more funding to help councils build infrastructure for new homes.
Without a fix to the country’s housing prices, the fund warned that a sharp rise in mortgage rates could “trigger an eventual, pronounced correction.”
The IMF’s central purpose is to spot trouble in financial systems and patch them up after they fail. Its warning to New Zealand should be taken seriously.
– Justin Giovannetti
2.30pm: Auckland transport plan criticisms
The $31bn transport plan for Auckland unveiled today (12.10pm) has attracted criticism from the National Party and some lobby groups.
Opposition transport spokesperson Michael Woodhouse said the government had its priorities all wrong, highlighting the specific lack of funding for a second harbour road crossing. “There is little mention of a second crossing in the new ATAP. Auckland’s new transport plan only provides minuscule funding for a harbour crossing business case, with any meaningful action on a second road crossing at least 20 years away.”
Michael Barnett, the chair of the Auckland Business Forum, said the plan will make congestion worse. “Many of the 75 projects confirmed today will address long-term challenges of climate change and housing, but what about action on big, bold projects needed to reduce road congestion where freight and the bulk of general traffic will continue to be?” he asked in a press statement.
Brett O’Riley of the Employers and Manufacturers Association has questioned the balance of transport models, and the project’s focus on public transport. He said, “We need to maintain a balance between public transport initiatives and much-needed rail and road projects that support our economic growth, the movement of critical freight and build on the connections needed across the upper North Island from Taupo through to the Far North.”
David Aitken, CEO of the National Road Carriers Association, questioned the project’s focus on walking, cycling and public transport at the expense of strategic freight routes. “Everything we consume is delivered by multiple truck trips from seaport or airport to distribution centres and then on to retail outlets or direct to homes. The public see the freight industry as heroes as a result of their work during Covid,” he said.
2.10pm: Joseph Parker named as sports star with alleged links to drug syndicate
After a two-year battle to keep his name secret, boxer Joseph Parker has been named as the sports star allegedly connected to an international drug syndicate.
Parker was named during the trial of a trio found guilty of importing methamphetamine from California at the High Court in Auckland in 2019, reports RNZ. Although the boxer was the subject of police interest, authorities did not speak to him, did not execute a search warrant and have never charged him.
He has denied any involvement in the importation of class A drugs, or the purchase, supply or consumption of methamphetamine, and being involved in changing or transporting money for the three men.
Tevita Fangupo, Tevita Kulu and Toni Finau were convicted of importing large amounts of methamphetamine in 2017 and jailed for between eight-and-a-half and 18 years. During the High Court trial, Parker was refused name suppression, but challenged it all the way to the country’s highest court.
In a judgment released yesterday, the Supreme Court said although naming Parker would cause him undue hardship, the principles of open justice outweighed that.
1.00pm: No new community Covid-19 cases; one case in MIQ
As mentioned by the prime minister as she announced Auckland’s move to alert level one, there are no new cases of Covid-19 in the community today, the Ministry of Health has confirmed.
All tests of contacts connected to the February outbreak have returned negative results. Day 12 tests of five remaining close contacts tested in quarantine were carried out today, and results are expected shortly. All contacts of the air crew case have returned negative results from initial testing.
There is one case in MIQ, who arrived from India via the UAE on March 7.
12.10pm: $31bn transport plan for Auckland revealed
The “refreshed” plan for the next decade of transport infrastructure spending in New Zealand’s biggest city has just been announced. It will see half-price fares for Community Services Card holders from next year, a boost for walking and cycling projects, and $1.8 billion in seed funding for the beleaguered light rail plan.
The $31 billion plan broadly reflects the priorities of the $28 billion 2018 version. “The Atap 2021-31 package alone would result of around 13% decrease in emissions per capita when compared with the previous package, and is projected to increase public transport trips by 91%,” said the transport minister, Michael Wood, in a statement. He promised that “the next steps for light rail” would be revealed next month.
“At $31 billion this is the largest capital programme ever allocated for Auckland transport infrastructure and services,” said the Auckland mayor, Phil Goff. “By itself, ATAP does not solve all of Auckland’s transport problems but it will allow us to make inroads into the increasingly serious problems of carbon emissions, traffic congestion and housing shortages.”
Key parts of the plan include:
- New “community connect” initiative to give half-price fares for 200,000 Community Services Card holders to roll out next year.
- $1.5 billion for local boards and walking and cycling initiatives to see cycleways completed through the isthmus.
- $1.3 billion for buses and ferries.
- State Highway 16 bus improvements.
- Walking and cycling programmes including the Te Whau Pathway and completing the Glen Innes to Tāmaki cycleway.
12.00pm: ‘I really reject the implication’
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