The Opportunities Party leader Geoff Simmons says Nelson is the ‘canary in New Zealand’s coal mine’ when it comes to low wage growth, the high cost of living and low productivity. He was recently in Nelson to talk about his plans and spoke to Jonty Dine.
What is the biggest issue facing Nelson?
Housing is the key driver of poverty in this country. We have restricted inner city building under RMA and central government has constrained councils’ ability to invest in infrastructure which is why they tend to sprawl, which just adds cost.
The problem with sprawl is you have cheaper housing but pay more on the transport side. You have already seen the pressure the expansion to Stoke and Richmond has on the roading network.
Our policies are designed to keep the cost of housing stable for 10-15 years, so we have time for incomes to catch up.
How do we address this issue?
By making sure local authorities really have the ability to build up. With the kind of future we are facing with climate change, going dense in the city centre is the way to go for sure.
Nelson is constrained in this valley and there is only so much space. The current RMA system makes it difficult for people to build upwards. We need to allow that to happen, but to build upwards you need better investment in infrastructure which is a challenge as the government only allow council to raise funds through rates.
Affordability is two things. It’s not just high house prices, it’s low wage growth as well.
House price growth is driven by Nelson being a nice place to have a holiday home. That pushes up the cost of housing here. If you’re a rich individual why would you not want to buy a house in this region?
There’s no disincentive to buy a house and let it sit empty for most of the year. On the flip side there is no incentive to invest in anything else.
The New Zealand tax system is structured so it makes a lot of sense to buy another house. Compared to the rest of the world we have some of the highest taxes on business and some of the lowest on housing. It’s no surprise we put more of our money into housing than any other country.
We don’t invest in business, to the detriment of our incomes.
How did we get here?
New Zealand is obsessed with owning houses. Renting is not an option in New Zealand. There is no security of tenure. For our own long-term prosperity, we shouldn’t all be buying houses.
In Germany, 60 per cent of people rent because it’s a long-term affordable option, they have much stronger renting rights and their tax system doesn’t favour housing over business.
Owning a home is not economically or socially good for us. New Zealand isn’t seen as a place to do business, it’s seen as a place to have a nice lifestyle.
Foreigners buy property here to have a nice lifestyle and tax benefits. What the rest of the world is doing to New Zealand is what Kiwis do to Nelson.
What’s the endgame of all this investment in housing?
There isn’t one. We will eventually turn into a country we don’t want to be where it’s so inequitable we are putting up fences and hiring security guards.
If you are given $100,000 you have three options. Put it in the bank, invest in shares or buy a property. From a tax point of view, it makes sense to buy property, but we need to be supporting our business sector.