Photo: Getty Images
Photo: Getty Images

The BulletinMarch 24, 2021

The Bulletin: What effect will big housing policy changes have?

Photo: Getty Images
Photo: Getty Images

Good morning and welcome to The Bulletin. In today’s edition: Analysing the effects of the big housing changes, spending on pokies jumps in 2020, and controversial Rocket Lab payload launches from Māhia.

A lot of detail was announced yesterday around changes to housing policy, as the government looks to get on top of the crisis. Justin Giovannetti, as always, filed an excellent first up report on what is in the package. There’s been a lot of commentary about the politics of it all – but I thought it might be more useful to share some pieces that delve into what the effects of it might be, given we all have to live in the world it addresses.

First of all, will the package get to the roots of the crisis? Quite possibly not. Michael Andrew has been asking around experts, and found many were underwhelmed. The words “tinkering around the edges” were used by Kiwibank economist Jarrod Kerr, who said the money being put towards new development infrastructure (which looks huge on paper – $3.8 billion!) would end up being much less in practice. Housing researcher and advocate Jacqueline Paul was also quoted in the story, saying the package would do little to address housing inequality for those on lower incomes.

Will it result in lower house prices? Opinion here is split, and it’s worth bearing in mind that every prediction of house prices going down over the last decade has turned out to be wrong. Stuff has a story in which economists are sceptical of a fall, and the NZ Herald (paywalled) has a story in which economists say they could in fact fall. Given the importance housing has taken on as a class of investment, it’s hard to see any truly dramatic fall taking place.

What about higher rents? Again, if you look at recent history, it’s pretty clear that rent almost always seems to be going up too. But Treasury believes that is a possibility out of the package of changes, reports Stuff. In fact, quite a bit of their advice does not appear to have been taken on by the government – not that it necessarily has to be, of course, but it is a point worth noting.

Finally, for a detailed and measured look at what this all means for the tax system, I’d encourage you to read this by Interest contributor Terry Baucher. He doesn’t take a position on whether the changes are good or bad as such – he just gets right into the weeds about what the outcomes will likely be, including a potential tax windfall for the government from the removal of mortgage interest expense being tax deductible.

This is potentially the most significant single change of all, in terms of the overall nature of the property market. It was argued for a few months back by commentator Clint Smith, who outlined why the previous arrangement acted as an effective subsidy for large scale landlords. It’s also worth noting that it represents a pretty big shift in thinking on the how the country deals with tax, in that it effectively separates housing out from other sorts of assets or businesses. Property investor lobbyists are apoplectic at this particular change, and while they tend to be an excitable bunch whenever policy changes are made, this could prove to be a death knell for a particular type of highly leveraged property investing. Hayden Donnell has written on that with his inimitable combination of funny and furious.

While overall gambling spend was down last year, spending on pokies jumped sharply, reports Ella Stewart for Radio NZ. It picked up markedly at the end of the year, and came amid economic conditions that were difficult for many. The pokie spend is complex, and often hits poorer communities harder – half of machines are located in those neighbourhoods, and 40% of the revenue generated goes back out in community grants. Pub Charity chief executive Martin Cheer argued that was a far better situation than spending on online platforms, which are often unregulated and return nothing to the community.

A controversial Rocket Lab launch including an experimental satellite for the US military has taken off from Māhia. Radio NZ reports the payload has prompted protest planning among some in the community. For more on the wider story about Rocket Lab’s military ties, I highly encourage you to read the back catalogue of journalist Ollie Neas, and in particular his piece on this specific launch from earlier in the month.

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A family member of the latest case of Covid-19 – a cleaner at the Grand Millennium managed isolation facility – has returned a “weak positive” Covid-19 test. Our live updates reports everyone in the family has been moved into isolation. There is one current location of interest – the Mount Roskill Countdown on Stoddard Road. The Covid-infected individual visited the store for a 10 minute period on March 20.

If you’re reading this at the exact moment it hits your inbox, health minister Andrew Little won’t yet have given an update on health system reforms. Any later than that and you’ll probably be able to find details on our live updates. The press release indicated he will be “setting the scene ahead of upcoming announcements”, and they’re likely to relate to the massive Simpson Report delivered last year.

A prominent businessman has been found guilty of all charges regarding both indecent assault, and attempts to cover it up, reports Sam Hurley for the NZ Herald. The case has been taking place over the last month, and involved other figures either pleading guilty or being found guilty of assisting in the cover-up. The guilty parties continue to have name suppression, with sentencing taking place in May.

As they often do this time of year, warnings are going out about safety amid the Roar – the key season for deer hunting. Grace Prior of the Times-Age has written about how those warnings are being put out, as well as general advice for those taking part. It’s more than gun safety (though that is an obvious concern when firing them) but also includes proper preparation to go out into the bush. Here’s hoping those that go out come home with some venison for the winter.

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McDowall and Lal looking at the panorama exhibition (Alex Braae)

Right now on The Spinoff: Former police officer Tim McKinnel reveals just how much power police have over their image and presentation in Police Ten-7. Jonathan Cotton examines the results from a new report to find out what family life in Aotearoa looks like in the 21st century. I went along to a new exhibition at Auckland Museum that somehow manages to capture the essence of the city, and the vast changes and diversity that are part of it. Jihee Junn writes about the rapid drop – and equally rapid recovery – in Kiwisaver balances last year. And Kate McCarten writes about aphantasia, which is to do with being unable to visualise people and things in your head.

For a feature today, an analysis of vaccine rollouts through the lens of an important historical development in medical science. NZ Geographic has looked at the Covid-19 vaccine, drawing heavily on the lessons from the polio epidemic that crippled countless children in the 20th century. And it looks at why even such a big-picture success story isn’t universally lauded today. Here’s an excerpt:

It took nearly 25 years to develop a safe polio vaccine, but the first COVID-19 vaccine took just under a year, thanks to strong political will, rapid technological advances, and an extremely wide testing pool.

Rather than being celebrated, however, this achievement is approached with suspicion. For some people, trust in pharmaceutical research and the scientists and governments that oversee it remains broken. The fiascos that marred the rollout of the polio shot continue to feed fears about vaccination, even though trials today demonstrate a whole other order of sophistication and safety.

Sometimes in sport it takes failure to illustrate true greatness. So it is with Mahe Drysdale, who as Newshub reports has failed in his bid to make the Tokyo Olympics squad. Drysdale is currently 42, won golds at the last two Olympics, and has a huge portfolio of other achievements to look back on. But this one proved to be just a bridge too far.

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Mad Chapman, Editor
Aotearoa continues to adapt to a new reality and The Spinoff is right there, sorting fact from fiction to bring you the latest updates and biggest stories. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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