There's nothing wrong with National's proposed 15% tax on foreigners buying houses in this country selling for over $2 million. But Labour's propaganda machine & our media's quoting of so-called "top economists" & "leading academic tax experts" to discredit National has gone into overdrive.
It turns out the critics are swimming in a comedy of errors. Where to start? Labour's Housing Minister Megan Woods said last week that before the foreign buyer ban in 2018, only 4,120 homes a year were sold to foreigners, meaning that National's tax proposals did not add up since foreigners only represented a few percentage points of the market.
Well, that number is wrong. When the former Governor of the Reserve Bank spoke to my class when John Key was PM, he said the government had no accurate figures on the number of houses sold to foreigners. One reason (out of many) is that such deals, particularly for higher value houses, use corporate vehicles, like trusts, where trustees, who may be Kiwi lawyers, put their names on the title, even though the beneficiary is overseas. The former Governor's view is backed up by Attorney General David Parker who also acknowledged at the time that many such transactions had not been picked up by Statistics NZ. “The statistics we have are incomplete", he stated.
To make matters worse for Woods, Labour's own former housing Minister stirred up the following controversy about the number of foreign buyers in 2015: "Labour was criticized after its housing spokesman, Phil Twyford, released figures from an unnamed real estate firm at the weekend showing 40% of houses sold in Auckland between February and April went to people with surnames it identified as Chinese". (Former Labour Leader) Andrew Little told TV3’s Paul Henry show he was satisfied the data was accurate. “I think [you can] conclude that a large chunk of that 40% is coming from non-resident buyers,” he said.
So Woods says the percentage of foreigners who bought Kiwi property prior to Labour's ban was about 4%, whereas her own former leader says the number was about 40%. And although Parker claims National's tax on foreigners would breach NZ's international agreements, the Otago Daily Times had this to say about his own ban when first proposed in 2013: "Labour's policy of restricting non-residents from buying property would have serious legal, economic & political ramifications because of NZ's free-trade agreement with China, lawyer Stephen Franks said yesterday .. Article 139 (of our Free Trade Agreement) requires investors of China be treated no less favourably than investors of any third country, such as Australia ... Labour has said Australians would still be allowed to buy residential property under their policy ... "This would breach Article 139, in treating Australian investors more favorably than Chinese investors.'
Seems David Parker, Megan Woods and Andrew Little have their knickers in a twist. Labour's (and our mainstream media's) characterization of National's plan as "bullshit", to quote Newshub's Shamubeel Eaqub, leaves me wondering whether the "bullshit" word is more an apt description of our mainstream media's reporting of this issue.
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