I don´t think the country can afford to let the bubble burst.An economic disaster like the one in Spain just cannot be allowed to happen. We would have a civil war.
The only option is to stop prices rising and then let 10-20 years of inflation and wage growth to chip away at the affordability issue.
In the meantime, an entire generation will miss out on home ownership in Auckland. For them, we need reform to give tennants greater rights of tenure, government building programs for affordable apartments and terraced housing in cities with low entry level costs for those wanting to rent to buy or long term lease, and a recognition that this can never be allowed to happen again.
Nowadays though I guess we have to think from the goveernments point of view. Having neglected to do anything about the housing ponzi/bubble, they have got a tiger by the tail. Everyone knows what is required. A ban on foreign buyers of existingg homes, a CGT, a government led crash building program and a way to rapidly free up land for intensification. But doing anything concrete that leads to a substantial (25%+) downwards price correction would completely tank that section of the Auckland economy that complains the loudest, destroy the wealth a significant porportion of the Auckland (and therefore NZ) middle class with all the knock on effects of that (here in my town in Spain unemployment has sat at 40% since the 2008 crash, anything approaching that level would probably lead to a complete breakdown of civic order in NZ) and could even seriously damage the banking system. So the government wants to stop runaway housing inflation, but is terrrified of the consequences if it does. So it is all jaw jaw in the frantic hope that might do something.
In the end, probably the only economically sane solution is policies designed to halt the upward price spiral without an actual downward correction, and some mild inflation combined with a wages policy that encourages actual wage growth. Unfortunately, the political establishment is completely enslaved by the magical thinking of neoliberalism, so intervention to build houses and encourage wage growth is an anathema, and the reserve bank act has removed from the policy toolbox the possibility of mild inflation to eat away at house prices.
So we are fucked, because the government won't do anything until the political cost of doing nothing is higher than the political cost of doing something, by which time the subsequent crash will be a economic disaster.
Build a dam across Manakau heads. Pump out water. Build seven bedroom multi million dollar mcmansions on quarter acre sections. Sell them. Blow up dam.
If Labour's deadwood were just a bunch of has been reactionaries determined to resist any move back to left and determined to keep their overwise miserably unemployable asses off the dole queue, they might not be a problem. But they are also the rotting corpse of Labour's betrayal grining grotesquely down on the public Betrayed. Labour needs to get them underground, for the sake of sanitation and so the stink doesnt keep reminding people not to vote for them. Then start doing something about the low wage economy.
One of the amusing aspects of the middle class left's debate around the missing million voters is none of them seemed to have much idea who they actually are, and it never seemed to occur to them that if you want the missing million to vote, it might be a good idea to have some policies that appealed to them, like protecting their wages and conditions.
Also, I challenge as glib the assertion that tough financial times lead to conservative government. Michael Joseph Savage hardly won at the height of dizzying boom. What people vote for is a coherent solution. The reason in recent times that has translated to "conservative" is because the establishment left is so fucking useless.
And out of left field we suddenly get "the new middle class" who the fuck are they? I guess he means the casualised contract middle class? Well sure I guess. Labour can get to wave something meaningless at them on their way down to, all the time happily signing free trade deals and and letting migration drive wages down.
Whats gone wrong? The collapse of the waged class in the face of globalisation, recession, fraud and corruption. The people who work for an hourly wage (the cleaners, the shop workers, council workmen, you know who I mean) were Labour´s grassroots. The people who will turn out to Jerry Collins funeral, who used to open the halls and provide the tea and biscuits and sweep up afterwards. And when things turned to shit, they discovered Labour´s salaried class professionals preferred clinking champagne flutes with the investment class and kissing the asses of bankers to doing anything to help them.
So they left Labour, leaving it a shrivelled urban rump of screeching identity politics factions, salaried trade unionists and self serving professional politicians. When people who have lost everything support Trump or Le Pen, or people who want an alternative to neoliberalism go for Corbyn and Sanders what they are also saying is that they see the soft as chickenshit social democratic parties of the establishment are as big a part of the problem as wall street bankers. Trump isn´t an irrational vote if you are part of the American wage class, he is the only politician who you can vote for for own self interest.
So what is to be done? Well I would suggest growing some balls and actually having the guts to say what you stand for. Working for Families was a disgrace. Who would have ever thought they would see the day a Labour government would use taxpayers money to subsidise middle class incomes andimpose crushing discrimination against poor beneficiaries while they were at it all because they lacked the balls to take on the boss class? A better policy to define Labour cowardice would be hard to devise.
Labour first needs to convince its one time supporters it isn´t just a shrunken rump of pastel pink Nats by doing things that might be actually socially democratic to convince waged people they are social democratic, and that voting for them might actually be in their interest.
Getting rid of the 1980s and 1990s deadwood parliament collecting an obscene salary to blow smoke out of their asses would a good start.
Oh yes one other thing. We all agree that $211 a week is a hopelessly inadequate amount to live on, but why is there so little questioning of the sky high cost of living in NZ? Food in particular is a compete outlier in NZ. I pay 350 euro a month for rent of a modern three bedroom apartment, including power and water. 15 euro covers the gas. I eat a fairly typical diet and, including alcohol, I pay 100 euro a month for groceries. A beer is 2 euro. A nice apartment can be had for 110,000 euro. Medical care is free. The schools are free and often have a lunch program. On 1600 euro a month (what is that? $2500-3000NZ?) Your standard of living is much higher than in NZ. We kid ourselves about the quality of life in NZ.
But really, I come back to food. Ten dollars for a cauliflower? Are you fucking kidding me? Basic food items in NZ should cost half what it does, especially given our wages.
So now everyone has allowed themselves to be successfully distracted by the ramblings of a dishonest right wing spin doctor who thought it was a lark to try and get Nicky Hagar killed by Chinese gangsters, can I ask a few questions regarding the policy itself?
1/ What is a UBI trying to achieve? It seems to me that if the purpose of a UBI is to guarantee a sufficient income for everyone to participate in society in a future where robots have largely replaced people for doing work then $211 a week is nonsense, unless we invent some sort of Star Trek style replicator. The amount would have to be more like the $792 PW of the living wage. On the other hand, if it is a wage subsidy, how is that supposed to work? Say Mary works five days a week, 8am-6pm a half day Saturday and two late nights for 60 hours at $18 an hour and makes $1080PW. Does a UBI assume she will cut back her hours to 45 per week, freeing up a part time job? Now, that might happen in a society like Spain, where (to put in bluntly) they lack our crass materialism and you can buy a three bedroom apartment for $250,000. But in neoliberal NZ wouldn't Mary just take the $1291 as a bonus? Which leads to the next question. WWF is effectively a giant, taxpayer funded subsidy that Labour put in place because it was to scared to force employers to pay decent wages. Much as rightwingers wail at communism by stealth, no one can get rid of it now because it was keeps a lot of the precariat middle class afloat. What would stop Mary's boss, when it came to her next pay review, saying "Hey! It's been a tough year, no money in the kitty for a pay rise but that's all right the government gave you a huge one anyway!"?
2/ How politically defensible is a UBI when you would have our hostile, reactionary pro-boss class media contrasting at every possible opportunity virtuous, hard working young middle class family trying to get ahead in the face of unfair huge marginal tax rates in a society that exclusively measures success in wealth with meth mums breeding for cash and living the high life?
3/ my last point. The Chicago economic gangsters loved the idea of a UBI because they envisaged that it freed the state from moral responsibility to its citizens. What would stop a right wing government upping the UBI and abolishing free health and public education? Starving in the gutter? Then it is all your own fault. YOU ARE AN INPERFECT IRRATIONAL ACTOR! The state is perfectly in its right to let you die there.
I am puzzled by the politics of the media reaction back home to all this. Audrey Young, Claire Trevitt and (apparently) Paddy Gower wrote immediate pieces that amounted to being apologists for and defenders of Key, an extremely odd first blush anglet for a supposed independent media to do, and which only reinforces in the mind of an external viewer that this was always mainly all about John Key.
Secondly, I cannot believe Key’s basically walking away from his defeat by buggering off on holiday hasn’t attracted a storm of media scorn and unfavourable comment. Again, from a distance it seems an obviously petulant act that no one seems interested in commenting on.
The final peculiar thing that puzzles me is the near universal and undebated acceptance that this won’t damage his popularity. Surely it must? It seems to me that being exposed so comprehensively as egotistical and out of touch must rock voter faith in Key, it would anywhere else. Surely the ambient vibe towards Key must have taken a hit? What is going on?
And Richie McCaw is a commercial pilot...
Who already is struggling to tell the difference between our flag and Australias.
Do I want to come up for a spin Richie? Yeah.... Nah.
There is also the chance they enchased the suspect in carbonite.