Category Archives: opinion

John Key’s inaction on property: Words not deeds

After reading the article on The Spinoff from Arthur Grimes about bursting the property bubble, and then seeing John Key’s response during his post-cabinet press conference, it made me realise that John Key has no intention of doing anything about improving housing affordability in Auckland. None, whatsoever.

Everything that the National government has announced around the housing situation is aimed at keeping the status quo and making it appear that progress is being made when nothing is actually happening. Words, not deeds, rather than the opposite.

I need to respond to John Key’s assertion that a massive drop in house prices would be bad: this is nonsense.

There are several reasons for this.Firstly, a drop in the average house price doesn’t actually mean that anyoue would need to be worse off. The only real way in Auckland to build a significant amount of additional housing stock is by intensification, that means building more dwellings on the same land, rather than building all the way to Hamilton or Taupo which seems to be the current plan. (Obviously, in reality there needs to be a combination of building up and building out).

A simple example of intensification would be taking a couple of $1,000,000 sections and building 6 2-bed units on the land. These units might sell for $700,000. So the average price has dropped by 30% but no one has lost any money. How is this “crazy”, as John Key described it?

Currently, the value in Auckland properties is mostly in the land. No one is paying for the house, as this article about a pre-fab house on the market for $549,000 shows. Putting more housing on less land is the only way that housing is going to become more affordable in Auckland.

One of Key’s main reasons for not wanting property prices to fall is because buyers would lose money. This strikes me as cynical and putting self-interest ahead of the public interest. If property prices fall on the government’s watch, then National will struggle to get re-elected: it would be the end of John Key’s government.

The government claims that housing needs to become more affordable, but prices can’t be allowed to fall. Logically, this does not make sense. It is nothing but a contradiction.

In addition to being worried about house buyers losing money, I would be interested to know why the government isn’t also concerned about buyers earning a profit out of housing. Any potential future loss would be, by Mr Key’s logic, unearned and possibly undeserved. But is any gain in value not also equally unearned and undeserved? The government is removing any hint of moral hazard and turing housing into a one-way elevator.

So, the government is talking about getting houses built without actually getting any houses built. And it is talking about making housing more affordable without make it more affordable.

A complete failure of ideology at the expense of a whole generation of New Zealanders.




New Zealand Flag Referendum

New Zealand is just about to start on the second leg on the flag referendum.

I’m currently watching the flag debate that was run by Radio New Zealand this morning. Radio New Zealand have recently made a move to broadcasting some of their programs on television and streaming them on YouTube. This has been a good move and good use of the reduced cost of technology.

Unfortunately broadcast political debate seems like it might be improved by fewer politicians. They don’t listen to anyone and instead want to press their talking points and score points. Winston Peters and Maggie Barry were both pointless additions to the debate.

Apart from that, the debate was interesting and highlights some of the advantages of Radio New Zealand using the visual medium. The opening vox pop interviews were significantly improved by being able to see the interview subjects, especially the four women in Auckland dismissing the alternative flag by saying “this is yucky” and “I don’t think it goes with my eyes”. Comedy gold!

Having video also helped to explain that Maggie Barry is constantly talking over the top of the other guests because she is in a different room and it’s much easier to cross-talk when you’re remote.

The voting papers are being sent out at the moment, with voting taking place over the next three weeks.

It has been interesting to see this flag issue ebb and flow over the past twelve months.

First there were the public meetings that no one turned up to. For a politically driven process this was not a good start. At this point the process should’ve been reconsidered. It wasn’t.

I don’t usually read through the minutae of the political manifestos so was unaware of the political parties’ policies on flag change. Apparently the two major parties support change. However, this really seems to be the sort of change that needs to be driven by popular support rather than political will.

Then there was the public submission process. This created the greatest of all flag submissions amongst many others. What it didn’t generate was much serious debate about what we actually wanted from a flag.

What I am looking for in a flag is something that encompasses our country’s Maori, European and Pacific heritage, is simple and powerful, and doesn’t look like an All Blacks flag or a Black Caps flag.

Following the public sumbissions were the long list and the short list. Some worthy candidates were on the long list. Given the contents of the long list, the short list was disappointing. As someone (maybe Gareth Morgan) said, it was three ferns and a baby fern. We got the technicolour Kyle Lockwoods and two black and white sops.

As an example of the lack of interest in the whole process, I tried to watch the unveiling of the short list on television. None of the channels covered it live. This was, maybe, the biggest political event in generations and I was watching it on Periscope (remember when that was a thing?). Total apathy.

As a final sign of how the process was a complete failure, there was the rise of Red Peak. Of the five flags that made it on to the ballot paper, this is the only one that I thought I could actually live with in the future. It was understated yet powerful. The site showed some great images of how the image could be used.

I consider the addition of Red Peak to be a failed opportunity. Instead of simply adding Red Peak to the ballot paper, the whole process should’ve been re-examined. No-one asked why there was popular demand for a decent flag to be added to the short list. Politicians just gave us the faster horse we asked for.

As with everything in this flag debate, it Red Peak was divisive. Some embraced it. Some loathed it.

Then it was on to the initial flag referendum. Predictably one of the Kyle Lockwood flags won.

In the lead-up to the voting there were a number of places in Wellington that flew the five alternative flags. It made a real difference to me to be able to see the flags in person. Up until that point, I had considered the two Lockwoods to be identical and I didn’t understand why people had a preference. After seeing them in person, one became something I might be able to live with. The other just appeared hideous.

Unfortunately the one I thought to be hideous won selection to go through to the final round of this epic battle.

That battle commences today.

The process has been a disaster. The public have largely not embraced it and it has carried on despite the apathy. I believe that it was clear from very early on that this process was going to be a failure and the timetable should’ve been amended until popular support caught up with political will. It wasn’t.

The failed process created a failed outcome. the winner of the vote is the flag you might design if you were looking for just the minimum amount of change to the existing flag. It is the flag that you might take to the rugby or the cricket to support your team and drape over your bare shoulders.

It has been widely described as a tea towel and I believe that is an apt description.

I can’t vote for the poor result of a failed process. It has failed to produce a flag I can be proud of.

The only good thing about this process is that it has convinced me that I am ready for a flag change. This is something I wasn’t sure about 12 months ago. Better luck next time, maybe?





ISIS and the IRA

I haven’t written anything here for ages. Maybe it’s because I try to write too much and just give up on it. Anyway, here is something longer than a tweet but shorter than an essay.

I replied to a comment on an article by Duncan Garner about reactions to the terror attacks in Paris. Given the events it is not surprising that most comments were of the opinion that the terrorists should be wiped out, and while we’re at it we might as well just wipe out all Muslims.

I think that many of the reactions I have seen online are angrier than I have seen for previous events. But also less coherent and less productive.

So, if you think that all the Muslims should be wiped out, here’s a thought experiment for you.

Imagine for a second that Britain’s response to the IRA terrorists had been drone strikes and fighter jets. Would this have brought about a quick resolution to the conflict or prolonged it?

I’m pretty sure the IRA would still be active now if that had been the case. Violence might make you feel better but it won’t resolve a conflict with terrorists, only prolong it.

The Labour Party and foreign property buyers in New Zealand

On Saturday, the New Zealand Herald released data provided by the Labour Party that attempted to provide figures around the impact of foreign buyers in the New Zealand property market.

This has caused quite a stir on left-wing blogs and on Twitter. Some people with foreign sounding names have stood up and said that the use of this data is racist or possibly poorly-conceived. I tend to agree with them. Some white folk have said that it’s not racist at all because numbers don’t lie. They’ve got a point too.

I thought I should weigh in here, since as a middle-aged white bloke I don’t really know anything about racism.

Anyway, the problem I’m seeing here is that the two sides of this argument aren’t even arguing the same thing.

On one side, Rob Salmond and the Labour Party have taken ethnicity data from the electoral roll, used that to correlate surnames with ethnicity, then from that worked out the likely ethnicity of property buyers in Auckland. This has used 3 months of data from one real estate company that apparently comprises 45% of sales in Auckland during that period.

This data shows that of those buyers, 39.5% have names that are likely to be of Chinese origin whilst the electoral roll has only 9% of people with Chinese names. Ergo, foreign buyers are a problem.

Rob Salmond has written at length to describe the effort made to investigate other possible causes for the disparity between the electoral roll and property buyers. Do Chinese earn more? Do they have more assets? He can’t find anything, so it must be foreign buyers.

So, what’s the problem?

There are numerous problems that I see with this analysis.

Firstly, the 39.5% figure is treated as an absolute fact. It is rather precise, presented as a percentage to 1 decimal place. But it’s not precise, it’s an estimate based Bayesian inference. Labour are inferring ethnicity based on names on the electoral roll. It’s unclear to me whether the source for this is solely the electoral roll or the electoral roll in conjunction with census data. If it is the latter then it is clearly less reliable.

Then they are taking real estate data of unknown provenance. We are told that it comprises 45% of the data for Auckland during the relevant period. This is a pretty big sample and it should be reasonable to use it. But we know nothing about it, other than that it came from one firm. It is not a random sample of data so that may skew the outcome of analysis. It could make the final figure of 39.5% either higher or lower than in the whole market.

From the ethnicity data and the real estate transactions, they are inferring again the ethnicity of buyers. This seems like a school project or data that might be useful within the Labour Party. It is so unreliable that it should never be publish. Even if it’s accurate, we cannot possible infer the country of origin of buyers.

But my biggest problem is that the data is letting New Zealanders draw the conclusion that 39.5% of buyers are foreign Chinese. Labour isn’t coming out directly and saying this because it’s not true, but in the immortal words of John Key, “At the end of the day, New Zealanders will make up their own mind about this”.

The data only refers to likely ethnicity. You cannot infer with any certainty whether these buyers are New Zealanders or not. It is highly unlikely that they are all NZ Chinese but we have no idea. Absolutely no idea.

Labour has been very careful not to make that inference themselves but it is hard not to unconsciously make that mental leap yourself, especially when the media are constantly referring to “Chinese buyers” and “ethnic Chinese”. Who wouldn’t assume that means Chinese people, from China? “You might very well think that but I couldn’t possible comment.”

Finally, this data analysis appears incomplete because we have no idea how accurate this is. In an opinion poll, we have a margin of error. In other forms of statistical analysis, we have the concept of statistical significance. I’ve seen no documentation anywhere of whether these results are statistically significant. This is very important in making these assertions.

So, to summarise, the Labour Party is saying that the number of buyers (based on name) that are of Chinese ethnicity differs markedly from the number of residents (based on name) that are of Chinese ethnicity. There is some merit there. As I understand it, those accusing the Labour Party of racist tactics are saying that the “good” Chinese (NZ residents) are being lumped in with the “bad” Chinese (foreigners) and the data analysis is incomplete. There is also some merit there.

If I were a Chinese New Zealander, I would be pretty pissed off about the release of this data.

Chinese buyers (by country) are allegedly the enemy, but Chinese buyers (by name) are the proxy. The use of this proxy works for creating dodgy statistics, but it also works for creating a target: all those Chinese faces you see at auctions, whether they are Chinese by citizenship or just happen to look Chinese and maybe have a Chinese name. They are now the target.

The inference that I take from Labour’s use of this data is that the Labour Party is accusing Chinese-New Zealanders of being part of the 39.5% of the housing market that is the problem. And that’s not acceptable to me.

Note: in all of this I have expressed no opinion about the state of the property market or whether foreigners should be allowed to buy property here. This might be an issue, or it might not be. Vilifying New Zealanders with Chinese names is also an issue.