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The BulletinAugust 18, 2023

Petrol taxes fuel war of words over roads

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While National attacks the government for hiking fuel taxes, a plan for better busways is attracting praise from an unlikely quarter, writes Catherine McGregor in this excerpt from The Bulletin, The Spinoff’s morning news round-up. To receive The Bulletin in full each weekday, sign up here.

Government promises ‘minor’ but ‘necessary’ fuel tax rises

For years, regular fuel tax increases were an unfortunate fact of life. Then came Covid, and a fuel tax freeze, and then afterwards a government subsidy introduced to help address the spiralling cost of living. But for drivers, those halcyon days are now over. As petrol prices continue to rise thanks to the end of the fuel tax subsidy on June 30, the government says it plans to increase taxes by 12 cents a litre by mid-2027. The first fuel tax rise, 2 cents, would take place midway through next year. Transport minister David Parker says the hikes are “minor” but “necessary”, with prime minister Chris Hipkins adding that they’ll cost most families no more than $1 a week.

We need to pay for better roads somehow, says PM

The increases are all in service of the government’s new land transport plan, which includes 14 projects it wants Waka Kotahi to prioritise. As previewed in yesterday’s Bulletin, a number of them currently fall under the Let’s Get Wellington Moving umbrella – such as “upgrades to the Basin Reserve and Arras Tunnel, a second Mt Victoria tunnel and mass rapid transit from the CBD to Island Bay”, reports Newsroom’s Emma Hatton – while the Herald’s Thomas Coughlan lists improvements to SH1 from Cambridge to Piarere, the Christchurch Northern link, Napier to Hastings along SH2, the Hope Bypass on SH6 and Tauranga to Tauriko on SH29 as other projects in the government’s sights. “You have to fund the roads somehow,” said Hipkins yesterday. “Other parties are saying you can have all of these new transport projects and not have to pay for them.” That’s a reference to the $24 billion transport plan that National launched without apparently adjusting for inflation, leaving a $2.5b hole in its budget, according to Marc Daalder of Newsroom.

Bouquets from Brown, brickbats from everyone else

Act and National are critical of Labour’s plan to raise fuel taxes in July 2024 (National says it wouldn’t do the same until inflation is back below 3% – which, as Labour has pointed out, may well happen around the same time anyway); the Greens are unhappy with the focus on roads. But the announcement has at least one fan: Auckland mayor Wayne Brown. He’s delighted that the government plans to do more work on developing Auckland’s Northwestern Busway, a project that, when complete, promises a bus every seven to eight minutes from Westgate to the city centre during peak hours. Brown is glad the government is “finally listening” to the council on what’s best for Auckland, and says it’s obvious the busway should take precedence over “mega dream projects” like the additional harbour crossing. “You only need to look at the success of the Northern Busway,” he said, referring to the busway linking the North Shore with downtown. “If something works well like that, do it more. We don’t need to reinvent things with new pipe dreams.”

Relief for bus riders, more pain for long-suffering ferry users

There was yet more news for public transport users yesterday, both good and very, very bad. For many Auckland ferry passengers, the outlook is exceedingly grim. Fullers360 is pulling out of operating the Birkenhead, Te Onewa Northcote Point and Bayswater routes from October 1, and will reduce services on the Gulf Harbour and Half Moon Bay routes for the next 14 to 18 months while an “accelerated ferry crew training programme” gets underway, RNZ reports. Auckland Transport admits it’s “scrambling” to come up with alternative services, but says a chronic lack of ferry staff made the cuts inevitable. Now for the good news: the bus driver shortage appears to be over. “The buses are fixed” proclaims Greater Auckland blogger Matt Lowrie, who has a heap of data showing that Auckland services are improving in leaps and bounds. Meanwhile Wellington, which has suffered through a blizzard of bus cancellations over the past few years, should be back to a full timetable by the end of 2023.

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The BulletinAugust 17, 2023

National facing pressure on foreign buyer ban policy

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While voters have been told they can expect an announcement on the party’s position “very, very shortly”, New Zealand First has wasted no time making its position known, writes Anna Rawhiti-Connell in this excerpt from The Bulletin, The Spinoff’s morning news round-up. To receive The Bulletin in full each weekday, sign up here.

Expect an announcement on foreign buyer ban from National “very, very shortly”

As we reported in our Live Updates yesterday morning, a redacted document shared to Twitter allegedly included details of National’s policy on New Zealand’s foreign buyer ban. On Tuesday night Newshub’s Amelia Wade reported that it looked as though the party was set to announce a U-turn on the ban after Christopher Luxon said “we will have more to say” in the next few weeks. When asked if he would scrap the ban on TVNZ’s Breakfast yesterday morning, he said National would have more to say on that subject soon and voters could expect an announcement on the party’s actual position “very, very shortly”.

Reversal could be permanently locked in by recent trade agreements

Labour has criticised the possible future announcement and warned any reversal could be permanently locked in by recent trade agreements. Labour passed the ban before the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade deal came into effect. As interest.co.nz’s Dan Brunskill notes recent trade agreements and the “most-favoured-nation” clause in those mean other signatory countries would have the right to buy on the same terms as New Zealanders if the law was now overturned. David Parker says “Labour believes New Zealanders should not be outbid by wealthy foreign buyers… National needs to come clean on their plans to sell out New Zealand again.”

 

The housing market then and now

Obviously, the housing market has changed somewhat since the ban was introduced in August 2018. The national median house price then was $550k. It’s now $770k, down from the great heights of $925k in November 2021. Quite obviously, there are myriad factors impacting affordability. While headlines persist about tough markets and sales volumes at the moment, yesterday’s monetary policy statement from the Reserve Bank revealed the bank thinks house prices are now likely to rise much faster over the coming years than previously forecast. Infometrics chief executive Brad Olsen says “from an affordability point of view, if you’ve got no change in mortgage rates, and prices are hockey sticking up a bit, affordability will be even more cooked. It’s a bit difficult to stomach.” On the foreign buyer ban, Olsen says the impact of the policy has been negligible. “Everyone needs to commit to building more and more housing and increasing housing supply instead of tinkering with demand again,” he said.

House price projections: RBNZ monetary policy statement, August 2023

Prime territory for New Zealand First

As Newshub’s Jenna Lynch notes, protectionist sentiment is prime territory for Winston Peters and New Zealand First. Peters has long railed against foreign buyers. This makes any moves to undo the ban a particularly awkward talking point should the National party need New Zealand First’s support to form a government after the election. Peters said yesterday that during a housing crisis New Zealanders should not be competing with foreign buyers who don’t live here. Referring to the National party, Peters said “I would have thought they’d have enough sense not to go down that track.” As it currently stands, Christopher Luxon has not ruled out working with New Zealand First.