In this morning's email, we look behind National's plan to double first home buyers' grants, we note Labour's plan to ban foreign buyers of existing homes by Christmas, and we report from Jacinda Ardern's campaign rally in Wellington. We also highlight Sam Sachdeva's profile of the key Christchurch Central electorate.
1. More demand from January 1
With 11 days to go and the polling booths opening today, the two main parties pitched hard for the young home-buyer vote yesterday with policies from both sides of the demand curve.
Bill English announced the Government would double its KiwiSaver HomeStart grant for first home buyers of existing homes to $20,000 per couple from January 1. The grant for first home buyers of newly built homes would rise $10,000 to $30,000.
English announced the change on Sunday with Amy Adams, Jonathan Coleman, Nick Smith and Nikki Kaye at the Hobsonville Point development, where 20 percent of the homes are sold for between $450,000 and $650,000, which is what is deemed as affordable in Auckland.
Hobsonville's affordable brand is known as the Axis series. Hobsonville, which is controlled by Housing NZ Corp, is currently selling five 1.5 bedroom homes for $450,000, with the ballot closing on September 14. Here's my feature from May on the Hobsonville Point model for housing development.
Smith and Adams said the new expanded first home buyers scheme would cost $74 million extra per year and help an extra 80,000 people to buy first homes. The scheme has already been used by 31,000 people since the subsidy was doubled to $10,000 shortly after the 2014 election. That doubling was announced a month before the 2014 election.
That announcement followed a 36 percent rise in Auckland's median house price over the previous three years and after the Reserve Bank restricted lending with loan to value ratios of over 80 percent.
However, the move was one of the factors that pushed up house prices far faster than the rise in the first home buyers' grant. Auckland's median house price rose 39 percent or $253,000 to $905,000 between September 2014 and March this year.
That demand-push effect is one of the problems with these grants, along with the fact most of the benefits go to the wealthier couples able to afford to save the deposit and then service a big mortgage, particularly in Auckland.
The Government knows about the demand-push and regressive nature of these grants.
Treasury warned the Government in 2013 that increasing first home buyer subsidies would undermine the Reserve Bank's efforts to slow down the housing market, force an early Official Cash Rate hike and push up house prices.
Treasury said in cabinet papers the expansion of the Welcome Home Loan and KiwiSaver withdrawal schemes "may undermine the power and credibility of the Reserve Bank's proposed use of restrictions on high Loan to Value Ratio mortgages, depending on up-take."
"Experience with homeowner grants in Australia suggests that such programmes tend to push prices up in a supply constrained environment by supporting greater demand, rather than improving affordability," Treasury said.
"The Kiwi Saver Home Deposit Scheme increases the cash available to homebuyers for deposits. Increasing eligibility may encourage buyers to take on more debt/seek more expensive houses. This could exacerbate house price pressures," it wrote in July 2014.
It also noted the case for big increases in the price caps was weak because it would shift the focus of the scheme onto those on higher incomes.
A separate aide-memoir from Treasury to Finance Minister Bill English and then Prime Minister John Key from July 2013 said:
"Government subsidies for home ownership are low value for money and tend to be regressive."
That means they are overwhelmingly used by the richest home buyers. See more here in this Newsroom Pro article from August 2014.
2. Or less demand by Christmas
On the other side of politics, Jacinda Ardern got one of the biggest cheers of yesterday afternoon from an overwhelmingly young audience at her Wellington campaign rally for her announcement that she would ban foreign buyers of existing homes by Christmas.
She was detailing Labour's plans for its first 100 days in office at the St James Theatre, which was packed to the rafters and very enthusiastic.
She committed to the following 10 priorities in the first 100 days:
Make the first year of tertiary education or training fees free and increase student allowances and living cost loans by $50 a week from January 1, 2018
Pass the Healthy Homes Guarantee Bill so renters could live in warm, dry homes
Ban overseas speculators from buying existing residential properties
Stop the sale of state houses
Legislate to pass the Families Package, including the Winter Fuel Payment, Best Start and increases to Paid Parental Leave, to take effect from 1 July 2018.
Introduce legislation to set a child poverty reduction target and change the Public Finance Act so the Budget reports progress on reducing child poverty
Resume contributions to the New Zealand Superannuation Fund
Set up ministerial inquiries into mental health and abuse in state care
Hold a Clean Waterways Summit
Increase the minimum wage from the current $15.75/hour by 4.8 percent to $16.50/hour from 1 April 2018.
Ardern also said Labour would begin work to set up an Affordable Housing Authority and begin the Kiwibuild programme, establish the Tax Working Group, establish a Pike River Recovery Agency, set a zero carbon emissions goal and begin setting up the independent Climate Commission.
3. Labour's supporters young and younger
Newsroom's Lynn Grieveson and I attended the St James Theatre rally. It was filled to its 1,550 capacity with many more in the aisles and spilling out into the waiting areas.
Ardern was mobbed for over an hour by mostly young supporters, many wearing 'Let's do this' t-shirts. Her signature 'Let's do this' call at the end of her speech bought the crowd to its feet.
It was the most enthusiastic and spontaneous (and young) political rally I've seen in my time in New Zealand. Political events in New Zealand are usually dominated by older voters.
The youngest in attendance was a one-month baby in a 'Let's do this' bib, who, amazingly, slept through the rowdy event. And we have a picture.
4. Taxing carbon and other emissions
The Greens unveiled their flagship climate change policy yesterday, although they were gazumped Labour's pledge on Friday to set up a climate commission, to target net zero emissions by 2050 and to bring agriculture into the emissions trading scheme -- albeit with phased Government subsidies.
The difference with the Greens' policy is they are planning to remove the Emissions Trading Scheme altogether and replace it with taxes on carbon and other greenhouse gas emissions.
Green (sole) leader James Shaw announced a Green Government would create a "Kiwi Climate Fund", along with passing a Zero Carbon Act and setting up a Climate Commission.
The commission would advise on a charge for emissions, with Shaw expecting the price to be about $40 per tonne by 2020, with $6 and $3 per tonne for nitrous oxide and methane emissions from agriculture.
The money would be used to plant 1.2 billion trees over 1.1 million hectares of erosion-prone land. This would be funded through forestry payments from the fund and through the creation of a $40m grant for native forest planting.
Any money leftover would be returned to New Zealanders aged over 18 through an annual dividend, estimated to be $250 per person in 2020.
Under the Greens' plan farmers would no longer be exempt from reducing climate pollution and would start contributing in 2020. The plan is estimated to reduce the average dairy farm's profitability by less than two percent, or less than six percent when combined with the party's clean rivers nitrate levy.
Farmers who plant trees on their land will receive $40 for each tonne of carbon sequestered. A $210m fund will be created to assist farmers in transitioning to sustainable agriculture and depreciation on dairy farm equipment would be accelerated to ease the transition.
“No farmer I’ve talked to wants their child to inherit a world with longer droughts and drier rivers. Agriculture can no longer be exempt from reducing climate pollution; farmers need to be part of the solution," Shaw said.
“We’ll ensure Government walks the talk by directing the Super Fund and ACC Fund to completely divest from fossil fuel companies, so that pensions are not dependent on economically risky and environmentally toxic investments."
5. 'Cut cow numbers by 30 percent'
Environment issues were also debated on TVNZ's Q+A on Sunday, with seven politicians including Shaw, Winston Peters, David Parker, Scott Simpson, Marama Fox, David Seymour, and Damian Light taking part.
Alongside climate change, issues including mining, a tourist tax, and water ownership were discussed.
Interestingly all parties indicated that New Zealand had reached a peak number of cows, even National's Simpson. Shaw was the only one who put a number on a reduction, however, saying he would like to see numbers fall gradually by 30 percent.
Those taking part were also asked what they did personally to care for the environment. The most surprising answer came from Simpson, the Associate Environment Minister, who said he packed his soft plastic recycling in his luggage when he travelled down to Wellington from Thames so he could recycle it at New World Thorndon.
Shaw said he did not have solar panels on his house because he rented, while Winston said he cared for the environment without actually explaining how.
"I do my best to not pollute at the start, I do my best to make sure the place is clean," he said.
6. 606 pairs of shoes
We also attended a much more sombre election campaign event at Parliament earlier yesterday.
Jacinda Ardern broke down in tears as she began talking at a World Suicide Prevention day commemoration event on the steps of Parliament on a cold and windy day.
Ardern said her best friend's brother had taken his own life when she was 13 and he was 15.
"Those shoes are quite moving. The idea that we have lost 600 New Zealanders in the last year - I find absolutely devastating," she said.
She recommitted Labour to launching an inquiry into mental health and said she would not accept a suicide target any higher than zero.
"You will be heard when we review mental health services," she said to applause from an audience of several hundred people, many of whom were in tears and had experienced suicide in their families.
She was speaking in front of 606 pairs of shoes laid out on the lawn in front of Parliament to represent the number of New Zealanders lost to suicide in the past 12 months.
Part of the "Yes We Care" suicide awareness campaign organised by the Public Service Association, the shoes have travelled from Cape Reinga to Bluff in the last 15 days to illustrate the suicide problem the country is facing. Families affected by suicide were also present at Parliament for the event.
When the collection started the number of shoes totalled 579, but 27 extra pairs were added when new suicide figures were released during the roadshow. In total, 130 pairs belong to Maori and 475 are for men.
Mental health and suicide has received extensive coverage in the past 12 months, with both major parties signalling it as a priority issue as the Government comes under increased criticism.
Labour has committed to an urgent inquiry into mental health if it forms the next government, while National has announced a package at the Budget that will increase funding for the area by $224m over four years.
"I do not believe in setting a target that is anything other than zero. If setting a target is a way of telling the public that it is a focus for a Government I lead, then the commitment I can give you right now. It will be a focus because I believe we shouldn't have one life lost that we can prevent by working together," she said.
"It is time for us to move from grief and loss to love and hope for our next generation."
However, National MP for Tamaki Simon O'Connor chose to mark suicide prevention day by attacking Ardern over her comments at the event, appearing to refer to the current debate over assisted dying.
He posted on his Facebook page last night: "It's strange that Jacinda is so concerned about youth suicide, but is happy to encourage the suicide of the elderly, disabled and sick. Perhaps she just values one group more than the others? Just saying. #consistency #nosubstance #contradiction #worldsuicidepreventionday"
7. The battle for Christchurch
Newsroom's Sam Sachdeva was in Christchurch for the Thursday's leaders debate and over the weekend. He took a closer look at the battle brewing for the Christchurch Central electorate held by National's Nicky Wagner -- although without much confidence on her part.
Here's Sam's feature on the Christchurch Central electorate, including interviews with Labour's Duncan Webb and Wagner. It was published first on Newsroom Pro yesterday.
8. One fun thing
Winston Peters announced an upgraded version of the GoldCard on Friday, which was noticed on twitter.
HunterSimon1979 : "Good god, it's 2017. Surely the Goldcard can be used to project a hologram yelling at kids to get off your lawn by now...."