I am convinced that a necessary requirement of employment at the Reserve Bank of New Zealand is to be a Keynes-worshipping, blathering drip with not an ounce of reason in your body. In their submission to the housing affordability inquiry they said that a capital gains tax on housing and restrictions on immigration! First of all, to attack government policy by promoting more regulation and suffocation of the property market would be entirely the wrong way to go about increasing home affordability. Here’s a simple way to make housing in New Zealand more affordable, without pursuing extra regulation, taxation or government largesse such as first home owner subsidies.

• Remove government intervention from the interest-rate market. Artificially high interest rates in response to what is, in essence, simply a price signal to producers, is primarily responsible for this credit bubble, which has flowed into the property market and our stock market as well.
• Stop making it so bloody hard for anyone to build a house! Scrap the Building Code, scrap the Resource Management Act, scrap zoning laws, building permits and other pieces of legislation that make the approval process longer than the building process.
• Recognise that the laws of supply and demand still exist, they can’t be subdued by the OCR, regulation or no immigration. The Reserve Bank has been trying to ratchet down the DEMAND side of the equation, while the Government’s Fiscal Policy has been to make the SUPPLY side so bloody difficult. For housing to become more affordable you need to first, not fiddle with demand, second, not fiddle with supply and third, leave the bloody property market alone!

And lastly, for the Reserve Bank to call for tighter immigration, smacks of idiocy. New Zealand’s immigration laws are absolutely ridiculous. We need as many migrants as possible – to fill our skills shortage, to increase our productivity and to pay our forced tributes to Helen and Mikhail.