Out of Touch!

It was not all that long ago that a back bench politician used to be on the same income as a teacher.

One of the down sides of politicians being awarded increasingly high pay scales, is they are now so completely out of touch with the people that they serve. Case and point is Grant Robertson’s comments on the realities of renting this today.

Something that the Labour Government seems to avoid like the plague, is how to solve these issues by making us wealthier. Globally New Zealand house prices are not high in terms of actual value, they are high relative to our income. One of the flaws of Labours more socialist desires is having everyone on a relatively similar income (in the name of equality) and its easier to make everyone a bit poorer rather than wealthier.

If the Government focussed on helping the economy grow and encourage people to earn the nice pay-packets that they themselves are afforded, house prices wouldn’t be so much of an issue. Auckland, let alone all of New Zealand house prices might seem high, but they are no where near the heights of some cities around the world. The difference is that other cities have higher income than NZ and can afford the higher price tag.

If I type in the income of circa $200,000 (once you add up all the perks) of a back bencher politician into a loan calculator, assume they have a partner that doesn’t work and are that they are also supporting a couple of kids. The mortgage calculator comes back at a comfortable $1.3 million that they can borrow.

The average wage for a teacher these days is about $70,000. The same family unit of 2 adults and 2 kids can borrow $343,000.  If they managed to save $100, 000 they cannot even afford a house at half the median price in Auckland which as of December last year was $1,030,000.

The reality is some markets are almost impossible to rein in, housing being one. Attempting to do so usually breeds multitudes of unintended or unforeseen consequences. Trouble is anyone with half a brain in economics knows that the first unintended consequence with these sorts of interventions is rents will go up.

Robbo claims that if a landlord puts the rent up the tenants can just look elsewhere. Right, nice one Grant. Tell that to the 20,000 families staying in emergency accommodation. Easy to say when your remuneration package is heading towards $400,000

Labour made their bed by yelling from the opposition benches that they will fix the problems that National were not addressing. Trouble is they accidentally won the election, did not have any plans and made it up on the fly. All while trying to create equality.

It is always about equality with Labour rather than opportunity. We are a capitalist society with a strong focus on social help. Not a socialist country trying to figure out capitalism. The sooner Ardern and Grant Robertson figure that out the better off the poorer families that vote them in will be.

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