PM’s shared equity scheme

As report after report has shown NZ is one of the worst countries in the world for housing affordability, the Government has announced.  Or in fact the Herald has announced for them via a leaked copy of the speech.

There are no details yet, apart from the fact some people will be able to qualify for interest-free loans. It is hard to say how much of an impact it will have until you know how much one can borrow from the state, and who will be eligible.

It doesn’t really address any of the core underlying issues of housing affordability such as NZ incomes or supply of land or high inflation causing high interest rates or even tax treatment of property.  It is just a targeted form of welfare – having people on higher incomes pay the interest on behalf of those on lower incomes.  Now that may be popular with some, and be of assistance to some, but I don’t think it will change any of the fundamentals.

Looking further on in the speech, there is a promise to look at the supply of land issues. This is a positive step, after months of decrying calls to do exactly that from Don Brash and Owen McShane etc. Having said that, I am sceptical the reviews will lead to policy changes.

And in the real big news, the Government has devised a brand name of “School Plus” for its January announcement, after the reaction to it wasn’t as positive as hoped.

Maybe we can refer to Cullen’s fiscal policies as “Tax Plus”!