Is PILL a remedy for house crisis?
At least until supply and demand are balanced, the Reserve Bank could cool the housing market by limiting credit for buying existing houses.
One way is to follow the prescription of Australian economist Steve Keen and put the commercial banks on the PILL. Property Income Limited Leverage restricts the size of a mortgage to a multiple of a house’s rental income, say 20 times.
For example, if a house would rent for $500 per week, $26,000 per year, then limit the amount you can borrow to buy the house to 20 * 26,000 or $520,000. Investors who wish to purchase existing houses could have a lower multiple, say, 10 times.
LVRs have the weakness that values rocket up as credit is poured into the market, permitting ever higher loans. But rents go up more slowly, only as incomes rise to pay for them, so the PILL would be more effective in holding prices to a level people can afford.
By using “credit guidance”, which the Reserve Bank has the power to do right now, it can direct money more towards building new houses and towards business which creates jobs, and away from existing houses.
Such a change would be transformational for New Zealand.
Cliff Hall, Blockhouse Bay.
Brine time
So the Treasury is now getting involved with trying to sort out the housing crisis. Which, as is beginning to dawn on people, is not necessarily a shortage of houses but too many houses being owned by too few people.
The banks and economy are now in a pickle because they have chosen to go down this farcical road of preferred lending to anyone who has a property asset to buy another property. The whole economy is now based on property.
If any plan that is dreamed up to help the housing crisis includes a possibility of house prices being reduced, the banks will be in trouble with defaults and their main income slashed.
How on earth can we get the people at the top to do the right thing and discourage investors and ownership of more than one house, if it is against their interests?
The pickle is the conflict.
Mark Hadida, Wanaka.
Cut off 501s
Kiwis are being declined entry into New Zealand daily — even for compassionate reasons. People desperate to come home for Christmas and to see loved ones — kept out from no fault of their own — owing to our grossly inadequate quarantine capacity of 6261 people.
These facilities, paid for by taxpayers at a daily cost of $2.4 million are apparently now being populated by criminals deported under section 501 of the Australian Migration Act.
One article ( NZ Herald, November 23) stated: “More than two dozen criminals were kicked out of Australia last week, barely a fortnight after the deportation of another 28 men including two with outlaw motorcycle gang links.
“One of the new deportees is a paedophile.”
One would have thought in the midst of the Covid crisis that our Prime Minister would have a valid reason to halt this bizarre one-way practice at least temporarily.
I have just read in your paper that a senior Australian Comancheros gang member is about to serve 41⁄ years in a
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New Zealand jail for various nefarious activities.
How come we can’t send him home — perhaps with a container of possums for company?
John Clark, Glen Eden.
Decoding words
Adding to the growing flurry of confusing explanations about why our students are behind in reading, we now hear the Ministry of Education believes computers and tablets could be the problem.
Blaming digital devices for the decline in reading skills diverts attention from the underlying problem.
A plethora of international research shows the importance of explicit teaching of the alphabetic principle, phonemic awareness, and phonics, leading on to spelling and vocabulary.
This gives students effective word decoding skills which enables them to learn and enjoy using digital devices. We are not consistently training our teachers to teach in this way.
Rather than MOE funding evidencebased programmes, we persist with the current Reading Recovery model with some 20 per cent continuing to struggle, particularly Maori and Pasifika students.
If you can’t read or write fluently, it will be extremely difficult to use digital devices and be able to engage in our technological society.
Barbara Stewart-Brown, Remuera.
Virus response
Richard Prebble, SARS-CoV-2 has not become more infectious since mutating in minks ( NZ Herald, November 2). False positives are merely a nuisance; it is false negatives that are the worrying weakness in testing.
Our Covid-free status is due to the government taking advice from our epidemiologists, not “good luck”.
The reason our government has struggled with the pandemic is simple. For years the cry of the neoliberals has been “Low Tax Small State”, and we had no mechanisms in place to respond to a crisis. Incidentally, Trump ended the US earlywarning programme just two months before the epidemic in Wuhan.
And boy the problems of seven billion people have just started.
There are plenty of viruses that will infect us if we don’t stop destroying nature.
Worse, millions will not have a home at all if we stuff the atmosphere with CO2. NZ must look like paradise to them. Dennis N Horne, Howick.
Boom, boom
Newly minted Green MP Ricardo Menendez-March, spokesperson for Seniors, thinks a “conversation is needed on why the term baby boomer has suddenly become a slur for some people”.
It is simply because the term was used as a slur by his colleague Chloe Swarbrick and apparently is considered so “clever” that it has spread far beyond the initial audience.
Try turning that one around Ricardo.
June Kearney, West Harbour.
Drums of war
Further to the letter of John Scott Werry ( NZ Herald, November 25), a matter rarely reported is that D. J. Trump has been steadily reducing American troop involvement in Iraq and Afghanistan notwithstanding howls of outrage from both sides of Congress and the Generals.
Indeed, Trump is the first US President for 40 years who has not started a new war. Credit where credit is due.
On the other hand, I notice that J. Biden has surrounded himself with strong warhawks, often those left over from his and Obama’s regime.
What are the chances of the Trump withdrawals being totally reversed? I think “pretty good” because when Biden stops fracking, America will have to begin importing oil again and so will desire control over the Middle East.
G. N. Kendall, Rothesay Bay.
Without a trace
Over the past 10 days, while I have been out and about, I have taken particular note of how many people use the Covid tracing app.
In all this time, I have seen one person manually sign in and apart from this one instance I have seen no others scanning when going into or coming out of shops. I have visited malls, small shopping complexes, picture theatres and petrol stations so many hundreds of people are in and out of shops.
What a complacent lot we have become and shame on us all. Is it that hard to grab one’s phone and use the app? Takes all of 10 seconds and in spite of comments from people saying that it does not always work, I have not experienced this problem.
Should we have another community outbreak and lockdown, no doubt use of the app will increase 100 per cent.
Margaret Wyatt, Tauranga.