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New Zealand’s new housing policy is really just a new tax package – and it’s a mess | Instant News


The government will allocate nearly $ 4 billion into a scheme to accelerate the pace of new housing construction, which it hopes will help see “tens of thousands” of new properties built.

OPINION:

Economists like to talk about “optimal policy instruments” – in essence, policies that achieve their objectives more effectively or efficiently than alternatives, and have minimal undesirable consequences.

Judging by these criteria, the package of housing policy instruments recently announced by the New Zealand Government is still far from optimal. You might even call it messy.

How? For those who are uninformed, a key element of the package can solve the housing affordability crisis by doing a number of things:

• removing tax deductions on loan interest for residential property investments
• expand bright line test – the period after the sale of the property attracts capital gains tax (CGT) – from five to 10 years
• support new buildings under this tax change
• introducing a “change of use” rule that effectively makes the family home the responsibility of CGT if it is sold within 10 years and leased for more than one year
• increase incomes and limit housing prices to the Government First House Grants scheme.

However, if we examine the package against the three optimal policy requirements, we can see the problem.

Achieve policy objectives

Economists have a policy “rule” that in order to achieve a variety of policy objectives, you need at least as many policy instruments. Housing packages are a mixture of actions that are interrelated, but have several explicit purposes:

• stabilizes house prices
• facilitate home ownership
• discouraging speculative investments (unclear)
• increased the supply of housing with mostly (unspecified) “affordable housing”
• closing what the Government claims is a housing “tax loophole”.

Prime Minister Jacinda Ardern and Deputy PM Grant Robertson.  Photo / Mark Mitchell
Prime Minister Jacinda Ardern and Deputy PM Grant Robertson. Photo / Mark Mitchell

To this, add an implicit goal of addressing the perceived inequality of income and wealth between tenants, landlords and homeowners.

Overall, it is a daunting task, and it would be great if the housing policy suite could achieve such broad objectives.

Arguably, the main target of this policy package is to stop the inevitable increase in house prices (especially in Auckland). Failure to achieve it will only place it among a long line of efforts by the previous government (National and Labor) for at least the last 20 years.

In all cases, the biggest problem is a lack of political commitment to increasing the housing supply.

Unintended consequences

All taxes cause “distortions”, mostly unintentional, that need to be reduced. Moreover, policies that have conflicting goals are “incoherent” and are usually among the most deviant. This applies to the elimination of reduced interest from housing packages.

Previously, in New Zealand and nearly every other country, interest on business loans was treated as a legal expense and therefore tax deductible, regardless of the nature of the business.

With a coherent principle that currently doesn’t apply to housing, then what about other types of business loans that the government thinks should be liked or disliked?

No doubt arguments can be made for such a policy, but the result is an ad-hoc tax system that produces many unwanted distortions and harmful incentives.

It could be argued that the “new building” aspect of the housing package received several incentives by directing rental housing investment to increase housing stock.

But given the existing constraints to new housing construction – such as planning regulations and suitable land availability – the policies are likely to have little impact. This will only divert real estate investors from competing with first-time buyers for existing properties to competing with them for new property.

Over time, the inventory of rental housing becomes a mix of homes that meet or do not qualify for tax exemptions. Taking advantage of these new loopholes and various distortions in property prices will likely provide tax accountants with a lot of jobs.

Back door capital gains tax

It is rare to find transaction-based and time-based obligations among the principles of sound taxation policy. But a bright-line test manages both – it prompts postponement of property sales to evade taxes even when the reverse sale would be in the taxpayer’s best interest.

It was originally introduced in 2010 with a two-year threshold, without supporting evidence, that should stop so-called speculators from flipping properties for quick profits. The 10-year threshold cannot be labeled as an anti-speculation policy, it is simply a back door capital gains tax (CGT).

Like most back door policies, this CGT is bound to be less transparent and coherent than policies designed to deal with problems head-on.

Consider the case of a hypothetical Auckland home owner who moved to Sydney to work for two years. It doesn’t make sense to sell a home in Auckland because of high transaction costs and the risk of slipping on the property ladder when trying to buy back later. It is much better to rent in Sydney while also renting a house in Auckland.

But this will now generate a potentially large tax bill on the family home. Indeed, one calculation suggests such a plausible scenario could result in a CGT obligation of nearly one year of salary – only to move into a house for the same price.

Alternative policy instruments

If a better alternative exists, it does not lie in more ad-hoc tinkering with a coherent tax regime.

Conversely, like the famous real estate mantra of “location, location, location”, the mantra for New Zealand’s housing policy must be “supply, supply, supply”. In particular, supply in Auckland.

Successive governments have adopted national policies at a time when rapid house price inflation is almost exclusively urban and is essentially an Auckland phenomenon.

Without policies reforming construction sector regulations and opening up more land for urban housing, it is unlikely that housing prices in Auckland will stabilize while demand-driven trends remain.

Worse, the Government’s first home buyer scheme would only increase demand without incentivizing supply.

With too many goals and possibly many unintended consequences, the Government’s housing policy risks being grossly incoherent.

Norman Gemmell is chair of public finance at Te Herenga Waka – Victoria University of Wellington.

This article is republished from The Conversation under a Creative Commons license. Read original article.

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Covid 19 coronavirus: Is the vaccine really free? | Instant News


While the authorities are working on the details of the Covid-19 vaccination campaign, general practitioners hope the shots will be free unless consultation is required.

Consultations are usually not required for vaccinations so most people will have them done by a nurse, said Dr Bryan Betty, medical director at New Zealand Royal College of General Practitioners.

He hopes that the time and equipment for nurses will be borne by the government.

“The understanding is that there will be no cost barrier to getting vaccinated, and this will be the hope of doctors across the country,” he told the Herald.

Vaccination for the general public is slated to begin in the second half of 2021, in what is called the largest full-scale vaccination campaign in New Zealand history.

The government has announced that Covid-19 vaccination will be free and voluntary for everyone in the country regardless of visa status.

“We have bought enough vaccines to cover all New Zealanders and are doing it for free,” Prime Minister Jacinda Ardern said Monday.

Border workers and managed isolation and quarantine (MIQ) will be the first to be vaccinated starting Saturday in Auckland, followed by their household contacts.

They include cleaners, nurses performing MIQ health checks, security personnel, customs and border officials, airline staff and hotel workers.

The second group of people to receive the vaccine were health workers and essential workers in the second quarter of this year.

Responding to the Herald’s inquiries, the Ministry of Health said DHB was leading this initial launch, but that common practice will play an important role in the general public phase.

Funding arrangements will be worked out near the date and doctors will be “given the resources to do this (vaccination) in a safe and timely manner”, said a spokesman.

Whether consultation fees will be funded has not been discussed at this time, Betty said, but most vaccinations must be done once without consultation.

“In terms of immunization rollouts, I don’t think so [consultations] will be part of the funding, because that will be the decision of the patient when vaccinating, “said Betty.

The country’s first batch of Covid-19 vaccine arrived on Monday.

Manufactured by Pfizer and BioNTech, it is approved for use in New Zealand for people 16 years and over. Under 16 years of age were not included at this time because they were not part of the clinical trial.

New Zealand has purchase agreements for three other Covid-19 vaccines, which are made by Janssen, Noravax and AstraZeneca.

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Optimist group: The survey revealed what the Kiwis are really upbeat about despite Covid-19 | Instant News


Lifestyle

Research released today shows Kiwis are very optimistic, with living here in New Zealand a major factor behind our optimism.

New Zealand has a fairly good reputation around the world as a beautiful place with great people.

But what do we Kiwis really think about each other and our country?

After the Covid-19 pandemic and the 2020 lockdown, you could be forgiven for thinking people were a little more pessimistic about life.

But research released today shows Kiwis are very optimistic, with living here in New Zealand a major factor behind our optimism.

In a study conducted by Tip Top, 82 percent of respondents described ourselves as optimists, with 9 out of 10 describing New Zealanders as positive.

Regardless of age, gender and wherever you live in the country, the majority are optimistic.

However, those over 60 years of age are the most optimistic and having children also helps you see the bright side of life.

While Covid-19 has caused chaos around the world, 85 percent of Kiwis continue to strive for optimism.

Those surveyed noted three main areas that gave them optimism for 2021.

Eighty-six percent were positive mostly about New Zealand’s natural beauty, 79 percent about our response to Covid-19 and 63 percent about our friendly people.

Three main things have helped us enter 2021 in a positive frame of mind: New Zealand's natural beauty (86 percent), our response to Covid-19 (79 percent), and friendly people (63 percent).  Photos / Files
Three main things have helped us enter 2021 in a positive frame of mind: New Zealand’s natural beauty (86 percent), our response to Covid-19 (79 percent), and friendly people (63 percent). Photos / Files

Only 2 percent said there was nothing to be optimistic about.

Most of those surveyed also believe New Zealand is one of the best countries on Earth.

Associate Professor Chris Krägeloh from the AUT Department of Psychology and Neuroscience said it seemed the Kiwi was ready to tackle the more challenges it faced.

“Research clearly links optimism to well-being and happiness. The results of this survey show that New Zealanders appear ready to face whatever challenges 2021 will present.”

“Of course, the reasons for optimism are mixed, and our predictions for the future are always adjusted depending on what we see in the news.”

Because the Kiwis are feeling more optimistic today than they were six months ago (half said they have improved), the researchers also asked what they were looking forward to this year.

Community, family time, and the Covid-19 vaccine were all named by more than 50 percent of those questioned.

“It appears that New Zealand as a whole is very resilient and may benefit from less disruption to life during the 2020 lockdown than other countries, which will set them well for a positive outlook in 2021,” said Associate Professor Krägeloh.

“Previous international welfare surveys show New Zealand as a relatively quiet country – less socially inclined than people in European countries. This in turn could have a less disruptive effect on last year’s Kiwi social welfare, and a sense of optimism. higher for next year.

“As such, relatively quiet New Zealanders can handle lockdowns better than people in other countries, but of course that doesn’t mean New Zealanders shouldn’t hang out for ice cream, hook up and give each other a boost for the future. “

Other findings include:

• 60 percent of Kiwis are optimistic about New Zealanders working together on things that matter

• 59 percent are optimistic about a Covid-19 vaccine for everyone

• 55 percent are optimistic about spending time with family

• 37 percent said being able to travel to another Covid-19-free country was the thing they were most optimistic about

• 4 out of 10 Kiwis have made New Year’s resolutions – and the more optimistic you are, the more likely you are to make them

• New Zealanders rate their optimism for the next year as 7 out of 10

The survey was conducted between January 7 and 12, with 750 Kiwis over 18 from across the country participating.

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Revealed: McDonald’s reveals what actually goes into the fan-favorite Chicken McNugget | Instant News


Lifestyle

McDonald’s has opened the veil of what’s actually one of the menu’s favorite items: chicken nuggets.

And no, there is no sign of the chicken’s beak, legs, claws, viscera or cartilage interfering with it.

The Herald was invited behind the scenes at the Ingham factory in South Auckland to see how Chicken McNuggets are made – a first in New Zealand.

They are made with 100 percent chicken breast meat, with a little skin, and flavor.

Factory manager Issac Flynn said the manufacturing process begins with delivery of the breasts and is checked to make sure there are no bruises or bloodstains.

These are then chopped together, then combined in a brine mixture, before being formed into one of four shapes – bone, bell, boot and ball.

The nuggets are made at the Golden Arches Place south of Auckland.  Photo / Alex Burton
The nuggets are made at the Golden Arches Place south of Auckland. Photo / Alex Burton

The nuggets that have been printed are then subjected to a beating process, quick fried, frozen quickly, weighed, bagged, and packed before being sent to the restaurant.

Usually they process about 20 tonnes of McNuggets, that means about 1.3 million per day.

The PR attack comes after years of speculation about what got into McNugget, from pieces of chicken and pink slime.

McDonald’s wants to show that when you take a bite of a McNugget, that’s not true.

Stubborn rumors have been circulating on social media for years, including food chains that use worm meat and other burger fillers on their menus.

The pink slime video went viral online, and Celebrity chef Jamie Oliver has even claimed it is the main ingredient.

However, that was not the case. At least, not when the Herald visited the factory on Wednesday morning when only chicken breast was used.

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Flynn is teased and asked time and time again about the beak, legs and claws, but she can assure visitors that nothing bad is hidden in your favorite chicken recipe.

It happened when McDonald’s offered Kiwis one million free McNuggets for just one day.

McDonald’s committed to a pending pledge during the Covid-19 health and safety requirements in August.

Nugget lovers can only get a free six-pack package if they download the McDonald’s app and exchange digital vouchers in-store or on drive-thru.

The McNuggets first appeared in New Zealand in 1985 and McDonald’s managing director Dave Howse said they wanted to give back to the Kiwi after 35 years of supporting sales of chicken nuggets.

Nothing but chicken is used to make nuggets, despite popular belief.  Photos / Files
Nothing but chicken is used to make nuggets, despite popular belief. Photos / Files

“It became clear during the lockdown that Chicken McNuggets were the company’s favorite so we decided to shout out a six-pack Kiwi and celebrate 35 years of love for them.

“We are proud of our longstanding supplier relationship, and offer Kiwi Chicken McNuggets raised in our own backyard.”

More than 140 million Chicken McNuggets were consumed by Kiwis in 2019.

McDonald’s annual chicken orders are the equivalent of more than 3.75 million tonnes, all of which are raised by 30 farmers based in the Waikato region.

Some nuggets about McNuggets:

• Chicken McNuggets were first offered on menus in New Zealand in 1985;

• Chicken McNuggets come in four shapes – bone, bell, boot and ball;

• Rene Arend, McDonald’s first executive chef, created the Chicken McNugget recipe in 1979;

• In America, Chicken McNugget dips are available in seven varieties, including Sweet ‘n Sour and BBQ options available in New Zealand;

• Szechuan Sauce is McDonald’s most sought after limited-edition dipping sauce. Released in New Zealand early 2020, the sauce runs out in multiple restaurants within hours.

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‘They put it on toast’: Americans are telling the ‘truth’, a habit of life in New Zealand | Instant News


“Fish and Chips, mostly delicious … and they put eggs on their hamburgers.”

An American who spends time living in New Zealand has been open about life down below absolutely loves it.

In a video posted online, the man from California details the variety of cuisine between the US and New Zealand, as well as how Māori and Pacific Island food are represented in the nation’s culture.

The tourist vlog also alludes to cultural differences and how friendly the Kiwis are,
Māori and Polynesians compared to people back home.

“There were far better people than the people in California. I was so shocked. I was like this couldn’t be real,” he said.

“They’re very humble. They don’t yell at us. It’s like heaven.”

She said the pace of life while living in New Zealand was slower and was impressed by how much we value the family unit.

He also said the Māori and Polynesian communities were always singing and cheerful compared to Americans.

“They like to sing. They don’t always sing the same note but they sing a lot. They sing loud.

“The culture in New Zealand is slower than the US. They are more family oriented.

“The Samoans and Tongans are very lovely people. They are very friendly. They like to laugh, and they like to eat. If they like you, they like you very much.

“Then the Kiwis, their European Kiwis are good. There are a lot of parents. There are several retired communities.

“You want to get shoes that are easy to take off and take off before you get in. Head to the dining table first.”

When it comes to food, the tourist is fascinated with some items but is somewhat skeptical of some delicious Kiwi food.

He revealed that he was surprised at how good quinine was delicious, but described Marmite as “bad”.

“They put a lot of fat on everything. In America, we love our sugar. In New Zealand, the food will be fatty but not sugary.

“There’s one crazy food I like, the Maori eat it. It’s called kina. It’s like sea urchins and they grill it. Really good!

“Marmite is so disgusting, don’t try it. I once ate raw squid or mussels. Very bad. Strange.

“Fish and Chips, mostly delicious … and they put eggs on their hamburgers.”

One important difference between American and Kiwi diets is the freshness of dairy products.

'They are very humble.  They don't shout at us.  It's like heaven.  '
‘They are very humble. They don’t shout at us. It’s like heaven. ‘

The tourist is fascinated because our dairy farm animals are in the wild. He said the ice cream in New Zealand was the best he had ever seen.

“The ice cream and milk products are so fresh … when you eat ice cream, you’ll say ‘this is the best ice cream I ever had!’

“Milk is better than in America.”

She goes on to detail how she enjoys Weetbix, which she eats with honey or brown sugar, while explaining what shepherd’s pie tastes like.

He described taro as “very tasty” while referring to kumara as a dessert you would eat at dinner.

One quirky treat that took him by surprise was a petrol station meat pie, and said he called soda “fizzy” “interesting.”

One discovery he made while in New Zealand was Milo.

“You put it in boiling water and a teaspoon of sugar. And that’s great. Once you get back to the US, you’ll never want hot chocolate again!”

The big adjustment that tourist has to make is to pick up our Kiwi slang.

He highlighted the use of the terms “sweet as bro”, “heaps”, “hard ace” and “straight away”.

But one of the stumbling blocks was when she was asked to “bring a plate”.

“When they say they bring a plate, that means bringing something to eat, not your plate. I’m confused about that one. It’s so funny.”

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