Bill Ralston: Words are louder than actions

In politics, especially in an election year, it is not the delivery that counts, it is simply the promise of action that matters. When a problem arises, the Government must appear to act decisively. So, in the past week, we have seen the Prime Minister grab the front page with a series of initiatives.

The issue of tagging hit the headlines and Helen Clark immediately announced the Government would ban the sale of spray paint to under 18-year-olds and impose harsher penalties for graffiti.

In case it has escaped anyone's attention, under 18-year-olds are banned from buying liquor and cigarettes but they seem to be able to access these forbidden fruits with ease, and there is no reason to expect they will have any more difficulty laying hands on spray cans once the ban comes into force.

Harsher penalties are unlikely to have much effect, either. There are some heavy penalties for using drugs but some people keep happily getting stoned anyway.

What matters is that the public's attention became focused on tagging as an urgent issue and the Government had to appear to act quickly.

In fact, despite the flurry of media attention given to graffiti in recent weeks, tagging has been a problem throughout the country for more than two decades and successive Governments have done nothing about it, leaving hard-pressed local bodies to deal with the mess. Now, because it is election year and it must look like it is in charge, the Government announces this largely futile law change.

Many thousands of low- and middle-income earners have been struggling with finding affordable housing for more than 10 years. Last week, the Government announced an affordable housing strategy and a shared equity scheme.

Well, actually it's been announcing an affordable housing strategy and shared equity scheme since 2004. This week it simply recycled the proposals and added a couple of extra ideas for investigation.

National's Phil Heatley was quick to point out that the Government's proposed affordable homes were not so easily afforded by the needy.

The average household income in New Zealand is $68,000 a year but the average couple would need to earn $70,000 to service a mortgage on the "affordable" home. If there is only one breadwinner in the household and he or she earns the necessary $70,000 then, of course, the Government declares that person to be rich and taxes the last desperately needed $10,000 of their earnings at the top tax rate of 39 cents in the dollar.

The Government will claim that is why it proposes a shared equity scheme, whereby a state funding body will effectively give struggling first-home buyers a second mortgage, interest free, to be repaid when they eventually sell the house. If that second mortgage is 30 per cent of the value of the home then the Government gets back its initial investment and 30 per cent of the value of the home when it is sold.

The Government appears to have fallen into the same trap many of us have already. It is assuming it will, over time, get a capital gain on property. Some real estate observers are predicting a fall in house prices of 20 per cent to 30 per cent. What happens if the poor first-home buyer ends up in a negative equity situation? Forced by debt to sell their home at a dramatically depressed price the drowning homeowner has to dig deeper to find the full amount of the second mortgage, plunging still further into debt.

In another odd piece of logic, Housing Minister Maryan Street declared building consent processes were expensive and acting as a deterrent to people trying to build a home. This conclusion was not rocket science, as builders, developers and home buyers have been telling the Government this for years.

She proposes to streamline the process to remove the roadblock. Except, Street only wants to streamline the system for first-home buyers wanting an "affordable" home.

A saner course of action would be to revamp the entire building consent process for everyone, eliminate the extortionate charges, strip the infuriatingly time-consuming bureaucracy out of the system, and all homes may become more affordable.

The Opposition has the advantage in an election year of being able to announce new strategies and programmes. Governments which try to stand on their past record generally fall. They have to come up with something fresh to survive.

What Helen Clark is attempting to do is gazump John Key by demonstrating her Government still has plenty of ideas and policies, and that it has not become stale and moribund after three terms in office. That is a good concept, so long as those new ideas and policies are more than just words.

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