Claire Trevett: PM Jacinda Ardern charms farmers, but is it hampering housing market action?


Some MPs were more excited than others at being back at Parliament, even if their excitement was a tad tongue-in-cheek.

Asked how he was feeling about the first day back yesterday, a cheerful Simon Bridges said “I’m so excited, and I just can’t hide it”.

The next words of that Pointer Sisters’ song are “I’m about to lose control and I think I like it”.

Waiting and watching for Bridges to lose control is one of the joys awaiting us over the next term.

Another of the joys will be watching the battle for the 413,800.

That was the number of voters former Prime Minister Sir John Key said had left National since 2017 and cast their votes for Labour or Act instead.

One of the Key’s warnings to the National Party AGM was that Labour would be hell-bent on holding onto those voters – and it would do so by holding firmly to centre-pleasing policies.

It did not take long for Prime Minister Jacinda Ardern to prove his point.

Ardern was on the charm offensive with some of those newfound supporters just two days later, speaking at a Primary Industries Summit.

She noted Labour had fared well in rural seats and made particular mention of Morrinsville, her own childhood home, which was also the venue of a large farmers’ protest against her in 2017. Labour won the party there this time round.

She said that endorsement carried responsibilities, and she had made it clear to her MPs that the rural sector were critical “partners”.

It is something a National Party leader would not have had to spell out to MPs.

Critically, Ardern also promised Labour would be pragmatic about implementing its water reforms, and look at changing any if they proved impractical.

Those reforms were something of a thorn in the relationship last term.

Ardern was telling that sector that she planned to take a leading role in that relationship and would step in if things went awry.

Those voters might have gone to her for the sake of stability during Covid-19, but she wants them to stay for reasons beyond that.

The farming communities should be easiest for National to get back, but Ardern has no intention of making that easy.

Labour no longer has to compromise for another political party. But it does have to compromise to keep those voters.

It has no plans to resurrect its 2017 policy to levy the commercial use of water.

That was the policy that sparked the Morrinsville protest in 2017 but was dumped in coalition negotiations with NZ First.

Then the capital gains tax fell by the wayside, again by dint of NZ First, but political expediency saw Ardern drop it altogether.

That did resolve Labour’s political problem, but also created a potential monster for itself.

It now has to try to find other things that will do the same jobs and it has to find them quickly as the housing market gets more volatile.

Labour is finding out for itself that trying to control the housing market is akin to riding one of those mechanical bulls at a pub.

It is partly its own fault there is an expectation the Government should and could “do something” about it, because that is what Labour had insisted for nine years when National was in power.

Actually doing that something is a more intractable problem than wooing over the rural sector.

Robertson tried to make it look like the Government is being proactive by pointing his boomsticks at the Reserve Bank.

He sent a letter “asking” the bank to consider how it could help moderate housing market activity.

Reserve Bank Governor Adrian Orr promptly sent a letter back. It was the equivalent of a raspberry, pointing out that the Reserve Bank already did consider that.

In short, Robertson had more levers at his disposal that Orr. He just did not want to use them for the sake of holding onto those 413,800 voters in 2023.

Robertson cannot put in place a capital gains tax or a wealth tax, or any other tax in the next term that might counter low interest rates and dampen investor interest in the market.

He can fiddle with existing taxes, and Robertson has floated extending the bright-line test. The issue he will come up against it is that, if extended much further beyond its current five years, that bright-line test effectively becomes a capital gains tax.

There is also the risk it will not be the rise in property prices that hurts Labour – but the subsequent fall if predictions of a correction come through.

Little wonder that National’s leader Judith Collins is enjoying a moment of schadenfreude as she watches Labour wrestle with the balancing act it accused National of failing on.

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