Inititally drafted as a comment on the DimPost – which hasn’t shown up, perhaps existing in a state of perpetual quantum flux of both posted and unmoderated.
My thought’s on National’s “big” plans:
National’s in a bind here – Rogernomics-era policies of tax-free capital gains and inflation-only RBA are a big millstone.
If National’s scheme for first home buyers actually does lift a significant number of buyers into the market it will further fuel our insane housing bubble: keeping interest rates higher than the rest of the OECD and as a result further erode the competitiveness of our exporters. This is macro 101 stuff.
The reality is though, this scheme actually does sweet FA to really help first home buyers – an extra $10k for a new build only represents something like 35 days of housing inflation in the Auckland market. This is how fundamentally broken our economy has become – a $10,000 fillup for builders nearly falls within the rounding error.
The take away: even if it works it’ll only serve to make housing less affordable in the long run.
National is actually very weak here. No rational observer can can support our current system of economic management – it simply isn’t sustainable, it’s pure self-inflicted stupidity. And that’s ignoring actual problems we face such as rural waterways on the verge of collapse, an unfunded superannuation timebomb and 4 degrees of global warming.
Even the short term is grim at the moment – the Government’s own figures show growth is set to halve over next couple of years.