The Press on Labour’s earthquake policy

The Press has an editorial on Labour’s earthquake recovery policy:

Labour’s proposals are, at this stage, not much more than a fine-sounding wishlist. As one red-zone resident noted, the plans were “about as useful as wallpaper”. This is largely driven by the party’s poor showing in opinion polls.

Wallpaper can be useful, to be fair.

Unless there is more substance that Labour has yet to announce, some of them would raise more problems than they would solve. It is also difficult to see how some of them could be made to work. The gaping hole in the proposals is the lack of any realistic assessment of their longer-term impact on the public finances. And while Labour’s leader, Phil Goff, was scornful of the capacity of a “market solution”, he appeared to be oblivious (or chose to ignore) the potentially huge, unintended consequences of ad-hoc interventionism.

A centrepiece of Labour’s plan is the proposal to spend $230 million on “affordable” sections that would be sold “at cost” to 1500 red-zone homeowners. This would, Labour says, control cost inflation among private developers. Quite how the government buying sections, instead of private interests, would control any inflation in the market is not explained. Also, “at cost” suggests that Labour would subsidise the price of the sections, which means a few fortunate buyers would get sections they could not otherwise afford at the expense of taxpayers.

The most notable flaw in this proposal, however, is that it does not explain how the lucky 1500 would be chosen out of 6000 or so who can no longer remain on their land. Whether they were chosen according to some stated criteria, by a lottery or selected by some other method, a host of inequities would be bound to arise.

Perhaps they would go to those who can prove they voted Labour?