National finance spokesperson's extraordinary concession raises more questions about the impact of National’s tax policies on house prices
Analysis: The live audience was as raucous as ever, wine glasses tipped over on the floor repeatedly, and Nicola Willis and Grant Robertson bickered amongst themselves while James Shaw and David Seymour stared blankly out into the audience on Thursday night.
It was the Queenstown ASB Great Debate and the crowd of 400 got the fireworks of insults and one-liners they’d come for.
The biggest revelation of the night came when moderator, TVNZ’s Jack Tame, asked Willis what reversing interest deductibility rules and reducing the brightline test to two years would do to house prices.
“I don’t know what it will do to house prices,” Willis told the crowd, some of whom were startled by the blunt nature of the answer.
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Pressed by media afterwards Willis gave no greater clarity, saying she “didn’t think” it would affect house prices.
Asked repeatedly what evidence or advice she had that it wouldn’t push them up, Willis was unable to say.
“We remain of the view that the key thing that affects house prices is supply of housing in relation to demand for housing, and there have been constraints in New Zealand for a number of years that have stopped the supply of housing we need.”
Both Grant Robertson and James Shaw said it was just another example of National not having done the homework on their policies.
It comes after multiple economists have raised serious question marks over National’s ability to generate $740 million a year from a foreign buyer tax, saying about $500m of that is missing.
Without the foreign buyer tax, revenue collection National’s tax cuts rely on are put in serious jeopardy.
The debate had started off heated with Robertson and Willis throwing fire at each other over costings and the state of the Government books after Treasury laid bare the Crown accounts on Tuesday.
In his opening remarks Robertson got a tad too real with the audience when he settled for, “we’ve actually done okay”.
Willis used that as a launching pad for her opening remarks to say, “okay isn’t good enough”, which garnered a big cheer from the audience.
Seymour pointed to the Government having done “less and less with more and more of taxpayers’ money” while Shaw honed in on taking the opportunity to invest in a new generation of infrastructure that is “clean”.
His call for now not being the “time for incremental half measures” received a big applause.
While Willis got hammered by Robertson for not having any costings or legal advice to prove their tax plan was achievable, the National Party’s finance spokesperson retorted that you could get “six economists in the room and they’ll have seven different views”.
When Willis pressured Robertson over high inflation and a struggling economy, which Seymour joined in on, Robertson shot back that all he could hear was “a lot of professors of hindsight economics, who think we didn’t go through Covid and at the time said we needed to support our people”.
When Seymour got a decent run after Robertson and Willis had finished interrupting each other he quipped, to a lot of laughs, that he was “astonished we’re in a debate where National says they will tax more, and Labour says they won’t”.
The claps and cheers went on so long he checked with Tame that he wouldn’t lose any of his speaking time due to persistent applause.
Asked whether he thought National’s tax plan stacked up, Seymour said he didn’t think it really mattered.
“I haven’t seen their workings, and I’m not here to bag them, that’s Grant’s job – although if he doesn’t improve I might join him,” Seymour chuckled.
When Shaw finally got a question, it was prefaced with a wealth tax, which generated the biggest boo of the night.
Asked afterwards by Newsroom if he anticipated it to be that bad, Shaw said yes, because it’s a certain type of crowd that comes along.
And while he might have got the biggest boo of the night, he also received a fair few cheers for policy points around renewable energy, funding infrastructure builds, and his support for a visitor levy.
The mood for change
Speaking to Newsroom ahead of the debate, Queenstown Chamber of Commerce chief executive Sharon Fifield said there was a real mood for change at this year’s election amongst the business community.
The Chamber’s most recent business confidence survey published in July showed employers were feeling the pinch and while confidence is often down in an election year, Fifield said confidence had declined more than she expected.
“I get the feeling it’s the election people are holding out for in terms of that boost in confidence and ability to invest going forward,” she told Newsroom.
The main concerns from members were supply costs, wage costs, rent costs and the red tape to get things done.
“That sense the Government is getting in the way of them running and doing business. There’s a lot of compliance costs,” Fifield said.
There were other pressures being felt in Queenstown that had contributed to that too.
“That mood for change is also being driven around things like the housing environment, especially the Residential Tenancy Act.
“While the intentions are really good, and people need secure long-term rentals, the fact is it’s changed so much there’s no such thing as a fixed rental anymore.”
Fifield says Queenstown and many other parts of the country are unique and “rely on large numbers of seasonal workers” and more flexible rental options work as a result.
Changes to the Act mean landlords are less likely to rent out their property because the option to do so for short periods is riskier, and as a result there’s 27 percent of Queenstown’s rental stock sitting empty most of the year.
And all the while workers are living out of cars and camping because there’s nowhere to rent.
National’s housing spokesperson Chris Bishop told Fifield the tenancy changes would be repealed by Christmas if his party is in government, and that’s music to the ears of many in Queenstown.
“It would have a big impact on landlords saying, I’ll open my doors, as they’ll once again have some security,” she said.
“When you look at business confidence, and the holding pattern we’re in, there’s a sense a change of government will improve the outcomes for business.”
Queenstown bounces back
Destination Queenstown chief executive Mat Woods is pleased how much the tourism mecca has bounced back faster than anywhere else since the Covid pandemic, but he appreciates it’s put pressure on other infrastructure.
He’s keen for whoever is in government to progress talks around a visitor levy for the town.
“We have high visitation and a low ratepayer base, so we’re looking at how do we fund a lot of our own infrastructure.”
There are 20,000 visitors a day to Queenstown at its peak, but ratepayers total just 24,000.
During the debate the question was asked of all four politicians as to whether they’d support a levy.
Labour and the Greens said they’d support it if that was what Queenstown wanted, Willis said it wasn’t National’s policy and Seymour wasn’t opposed but would prefer a model where some of the GST collected in the region was given back to help with infrastructure.
Woods told Newsroom there needs to be thought put into attracting high-value visitors.
That conversation began when then-Tourism Minister Stuart Nash announced the change of direction in 2021, but Woods says people read into that as being about “wealthy people” and as a result it’s been associated with all sorts of “interesting connotations”.
For Woods, a high-value tourist is often a backpacker given they’re looking for someone who “stays longer, goes further, forges connections with locals and gives back”.
Lots of Queenstown operators had been focussed on the volume of visitors but he hopes that’s starting to change and the local community is very supportive around a regenerative tourism strategy that gives back to the community.
