Category: David Cunliffe

Housing crises are great for Brownlee’s net worth

10041146Graph from The Press

A quick recap on the NZ and Christchurch housing affordability crises:
– 80s-present: NZ housing affordability worsens throughout the neo-liberal era (p. 13-14, 68-70).
– 24/1/2011: Auckland, Christchurch, Wellington and Tauranga house prices assessed as “severely unaffordable.”
– 2010-2012: Canterbury earthquakes reduce housing supply and increase rental housing demand.
– 20/3/2012: National and Gerry Brownlee decide to leave the market to sort out the Christchurch housing crisis.
– 18/6/2012: Brownlee suggests rent rises in Christchurch aren’t “astronomical” compared to other cities.
– 29/6/2012: Brownlee and John Key deny there’s a housing crisis in Christchurch.
– 7/7/2012: Brownlee says he can only see positives in Christchurch’s skyrocketing rents.
– 29/10/2012: John Key rules out a capital gains tax like most countries have, simultaneously showing just how out of touch he is.
– 27/8/2013: Housing is now less affordable in Christchurch than Wellington.
– 14/5/2014: Christchurch rents projected to hit Auckland levels in January 2015. Housing Minister Nick Smith suggests “the real problem” is not enough rental accommodation for tourists.
– 15/5/2014: The Budget offers a pittance and cuts for housing, and worse for Chch.
– 19/5/2014: An OECD report finds New Zealand has the most over-valued houses in the developed world. Key, true to form, disagrees with the OECD, and tries to spin the news as a positive as more people are entering the “housing market.”

A consistent theme emerges in the current government’s attitude to these developments: (a) there’s no crisis – if anything it’s a good thing, (b) if there is a crisis, the market will sort it out by itself (because dog-eat-dog individual selfishness systems are great for the vulnerable, eh).

It’s tempting to say they’re simply idiots, but it’s better to ask which groups in society are they representing, and which aren’t they?

For most groups in society, the above information amounts to a housing crisis nationwide, and particularly in Christchurch. But for one group, rapidly rising rent and house prices doesn’t amount to a crisis, but an opportunity for increased profit. This is the group that treats housing as an investment, not somewhere to live: rental property investors.

Gerry Brownlee and many other National MPs are in this group of people. Most of Brownlee’s rental properties are in his own Ilam electorate, where rents in one suburb (Aorangi) rose by 51% in a year. I think this is a pretty important conflict of interest at the best of times, but even more so amid the housing crisis Brownlee and his party are determined to ignore.

I recently wrote to Brownlee, essentially asking him to clarify the question I asked in an earlier blog:

How much passive income does Brownlee get for his properties, and how much has it gone up since 2010 and him subsequently “letting the market sort out” the housing crisis?

If you’re interested, here’s Brownlee’s response. My attempt to name-drop the Official Information Act backfired – it turns out this info isn’t available under the OIA because it’s not government info. So the public don’t get any more detail than what’s listed on the register of pecuniary interests. I asked if he’d answer my questions anyway, as a goodwill gesture to one of his constituents… I’ll let you know if he replies.

If National win this year’s election, it will be because of personality and PR. If they lose, it will be because of housing. It’s the biggest issue in Brownlee’s electorate and the country. While National are denying, blaming and doing nothing, Labour are making supply-side and demand-side action on the housing crisis the centre of their campaign.

I am so sick of this obvious lie

Debt as percentage of GDP

Debt raw figures

I am so sick of hearing the blatantly untrue mantra that Labour are the party of debt and deficits, and the Wolf of Wall Street party are more responsible with money.

You only have to look at the figures to realise this is a lie. But it’s a very successful lie, because apparently hardly anyone actually looks at the figures.

Frank Macskasy does, and has been powerfully refuting this bollocks from National MPs and leaders for years now.

And yesterday, Mickysavage from The Standard responded to the latest idiot millionaire (good at making money, not so good at fact-checking National spin) to whom the corporate media has given uncritical voice to trumpet this propaganda. He says it better than I can:

Rod Drury: “What I’d like to see is the Government have another term because they’ve had two terms where they got the debt sorted …”

Mickysavage: “Such economic illiteracy coming from such a senior businessman is a worry.  It obviously needs to be repeated that in June 2008 Labour had paid off all crown debt and the crowns accounts showed a slight surplus.  By September 2013 net Crown debt had reached $60 billion and increases in debt are predicted for years to come.

Of course many will then trot out Key’s mantra that Labour had left the country with a decade of deficits but this statement is essentially a lie. The Global Financial Crisis was the cause of the sudden change in the country’s finances but instead of Helen Clark and Michael Cullen being blamed I can suggest many other names of those who should take responsibility.  Names such as Wall Street, Morgan Stanley, Bear Stern and my personal favourite Merryl Lynch.  Because it was a bunch of robber merchant bankers that brought the world’s economy to its knees.”

~~~~~

UPDATE 30/08/2014:

Here’s a couple more graphs and a couple more quotes, to help illustrate the various impacts of the GFC (for which Key was partly responsible), the 2010 tax changes (which made tax regressive for the majority of incomes), and the Canterbury earthquakes.

However, please note that the main point of this blog was never to say National have been irresponsible with their deficits and debt (I tend to think they have been, but it’s a complicated question). The main point was to show that the right-wing suggestion that Labour are irresponsible with deficits and debt is completely unfounded.

Nominal GDP

Herald 2013:

“The estimated cost of the Canterbury rebuild has been increased … Mr Key said the budget would also show the estimated net cost of the earthquakes to the Crown would rise from about $13 billion to about $15 billion.”

befu13-27

Treasury 2011:

“Tax as a proportion of GDP is slightly below OECD averages and has declined markedly over the last few years … New Zealand has, like other countries, faced a cyclical decline in tax revenue as a result of the global financial crisis but there were also important policy steps which reduced tax revenue between 2004–05 and 2009–10.”

P.S. 16/09/2014:

I’ve written a sequel blog on the equally pernicious lie that National are better for employment than Labour, because (it’s assumed) beating up beneficiaries and keeping wages low are good for unemployment.

Let’s get one thing clear

NZ’s political parties at the 2011 election now updated for the 2014 election, according to PoliticalCompass.org

“It’s actually a very clear decision for New Zealanders. It’s sort of centre-right versus the far left.” – John Key today

Coming from the most right-wing prime minister in NZ’s history, this is the height of dishonesty and hypocrisy.

At most, Cunliffe et al will take NZ as far left as the Kirk government (1972-1975), which was the last government that didn’t make a total mockery of our claims to be an egalitarian country.

More likely, the next Labour government will be centrist or centre-left… still considerably to the right of traditional Labour values yet hopefully a genuine alternative to the neo-liberal inequality consensus of the last four Labour/National governments. Cunliffe has gone on record acknowledging that this neo-liberal inequality experiment has failed our economies and our people.

Meanwhile, Key, a long-time architect of this failure, is still drinking the neo-liberal Kool-Aid… dogmatically pushing National’s far-right, anti-democratic, economically idiotic, ultra-capitalist inequality ideology as far as we let him get away with.

Key, with his loyal servants in the corporate media, will attempt to claim the ‘centrist high ground’ and whip up McCarthy-esque hysteria about Cunliffe. For the second time in Cut Your Hair history, I’m advising: set your bullshit detectors to maximum.

Cunliffe new Labour leader: the numbers

David Cunliffe is the new Labour leader and hopefully the next prime minister.

Cunliffe won with 51.15% per cent of first preferences across caucus, members and affiliates. Robertson got 32.97% and Jones 15.88%.

Since Cunliffe already had a majority in the first round, run-off voting wasn’t triggered (if it had been, about 2/3 of Jones’ votes would have gone to Cunliffe – see below).

The Standard and The Daily Blog are stoked.

The numbers

(These numbers from Labour’s press release. The Herald and Martyn Bradbury have it wrong for the breakdown – they’ve misread the admittedly confusing press release, so they’re incorrectly reporting the second round instead of the first for the breakdown.  UPDATE 16/09/2013 – They’ve both corrected it).

David Cunliffe
11 MPs
60.14% of members
70.77% of affiliates
Total vote 51.15%

Grant Robertson
16 MPs
26.71% of members
17.30% of affiliates
Total vote 32.97%

Shane Jones
7 MPs
“13 per cent” of members
11.92% of affiliates
Total vote 15.88%

(IF A SECOND ROUND HAD BEEN TRIGGERED:

Cunliffe: 16 MPs, 67.79% of members, 78.01% of affiliates. Total vote 61.53%
Robertson: 18 MPs, 32.21% of members, 21.99% of affiliates. Total vote 38.47%)

Where to now?

The next job will be reshuffling the shadow cabinet – not sure if this is still entirely the leader’s decision? I think Robertson and Jones should be given high-ranking positions, and the rest of the top 20 should mostly be filled with people from the third and second factions listed here.

My thoughts

For my opinions on all this see my last blog.

Three thoughts on the Labour leadership

My preferred candidate…

1. I’m hearing a narrative from a few friends about Shearer being a nice guy betrayed by his MPs. I think this has it partly right but is largely missing the point. Shearer was betrayed first and foremost by the faction in caucus who put him in power – commonly known as the ABC (Anyone But Cunliffe) clique. They knew the wider party membership and affiliated unions wanted to move the party back to the left, and overwhelmingly supported Cunliffe. But they rallied behind the obscure and inexperienced Shearer instead.

It would take a charismatic political genius with a compelling vision to win over a party when you’ve been made their leader as a big fat F-you to its members. And it would take the same qualities to be a real match for Key. Shearer may be a nice guy but he’s certainly not a charismatic political genius with a compelling vision. Whatever truth there is to media speculations about Cunliffe and/or Robertson undermining Shearer, I don’t blame Labour MPs for being frustrated as Shearer mumbled and stumbled and bumbled for the last 20 months.

Fortunately, at last year’s party conference the grassroots members party successfully voted in a more democratic method of electing the leader – 40% current MPs, 40% party members, 20% affiliated union members (the ABC clique, not surprisingly, opposed this). It’s currently being implemented for the first time. So whoever the next leader is, he (they’re all hes) will have one major advantage over Shearer – the perception that he was chosen by the whole party. (This is also why Shearer should have called for an election on the new system directly after the conference… coming off his successful housing speech and showing courage and respect for the members, he just might have won his job back and a proper mandate to go with it).

2. The other narrative about Labour being crippled by infighting and struggling desperately in the polls is also quite misleading I think. Gordon Campbell and Frank Macskasy point out that division is normal for a major party in opposition and National’s in no position to judge. It’s worth comparing Labour now to National’s last era in opposition – note also election results and methods of changing leaders…

National Labour

3. I support Cunliffe for the leadership. If Labour et al want to defeat Key in 2014, they’ll need to do exactly what Shearer couldn’t do: Articulate a coherent and attractive vision, clearly point out how the Key government is failing New Zealand, and offer a genuine and compelling alternative. While Robertson, Jones and Cunliffe are all more charismatic and articulate than Shearer (and probably have better music taste), Cunliffe has the edge on coherent vision and genuine alternative. Of the three, Cunliffe has been the most clear about returning the party to its Labour roots, and opposing the shameful slide to inequality that all our governments since the 80s have tolerated (Clark) or actively promoted (Lange, Bolger, Key).

But I’m not getting my hopes too high. Cunliffe’s not the messiah, and sometimes he’s a naughty boy. He’s still only centre-left (if that) while Key is hard right. Plus, if he’s leader he still has to deal with a caucus full of dead wood, many of whom seem happy with the neo-liberal consensus, even though it’s crippling NZ’s health and their party’s credibility. And he’d have to find a finance minister who’s competent and on the same page (preferably Russell Norman).

I’ll still probably vote Mana as I want to support more radical critiques of the capitalist status quo. But if the next Labour government can end this National one, shift the centre slightly back towards equality, and do something about our horrendous child poverty problem, I think that’s a good thing.

PS: Best source of info and the range of opinion about all of this: Bryce Edwards’ political round-ups.