02 November 2012
Key Notes – Building a more productive economy

In this issue:
Improving housing affordability
Investing in infrastructure
Rebuilding Christchurch
A more productive economy

Key Notes: The Prime Minister's newsletter

Improving Housing Affordability
On Monday I announced measures the Government will take to improve housing affordability over the long-term.

There is growing concern that getting on the first rung of the home ownership ladder is a large stretch for too many New Zealanders.  The cost of home ownership is too high, partly because there isn't enough land available for residential purposes.

We'll be making changes to reduce costs and complexities that act as a barrier to home ownership.  We'll also work with local government to increase land supply.  While there is no quick fix, we expect our broad work programme will restrain housing prices over time.

Find out more here.

Click here to watch my latest video journal on YouTube.
Video Journal

Building a more productive economy
One of our priorities for this term in office is to build a stronger economy based on savings, and investment in productive assets.

Because of the high cost of home ownership, most Kiwis need to borrow large amounts to buy a home.  This has implications for our economy.  It means money invested in housing debt cannot be invested in more productive assets such as businesses, or other assets in our economy. 

Our changes to help increase housing affordability will allow more Kiwis to climb onto the property ladder. Less investment in housing and more in other assets will help restore balance to our economy and is part of our plan to build a brighter future.

Our opponents promise a capital gains tax.  They say this would help curb the increase in housing prices.  Their argument is flawed.  Adding a new tax to our economy would do more harm than good and would be very complex to administer.  A capital gains tax would apply to every productive business hurting the economy, growth, and jobs.

Investing in Infrastructure
Yesterday, a number of senior Ministers were in Christchurch to release the Government's fourth Business Growth Agenda progress report.  Our Business Growth Agenda is a programme of initiatives to help Kiwi businesses grow, hire more staff, invest in their future, and compete on the world stage.

Providing business with access to critical infrastructure - like roads, rail, and ultra-fast broadband - is one of the most important things the Government can do to help build a more productive and competitive economy.  Our infrastructure progress report shows we are making progress in 67 areas to help grow the economy, and deliver more jobs, higher wages, and better living standards for all New Zealanders.

In brief

Rebuilding Christchurch
This week, the Government completed the residential zoning process for Cantabrians.  This is a significant milestone in the recovery, and will help give homeowners in wider Christchurch some certainty about their future.

Read more about our progress in Christchurch here.

Did you miss these important stories?

You can now apply for a passport online, and we've reduced the cost of doing this.

Construction on the National War Memorial park has begun.

From my diary
Today I'm enjoying a two-day visit to Dunedin.  I've taken time to visit the redevelopment of the new Speight's brewery, as well as handing out this year's Class Act awards to young leaders.

Next week I'll be in Wellington for another week in Parliament.


John Key
Prime Minister

Recent events on Flickr:

Opening Le Cordon Bleu in Wellington

Visit to St Hilda's in Dunedin

With Singapore PM Lee

Class Act Awards - Dunedin

40 years of diplomatic relations with China

New retirement village in Waikanae


No Trackbacks

Display comments as (Linear | Threaded)

#1 - Margaret Dynes 2012-11-02 20:10 - (Reply)

Dear Mr Key While I agree that the cost of housing for young New Zealanders is out of range now the reason has nothing to do with lack of available land for housing, and more with the current low wages and high cost of living facing New Zealanders, especially those with a student loan. It is now out of affordability for most people and no way should the banks be getting richer from high loan repayments from these young people. Ripping the next generation off has gone on too long. As for owning a farm one would have to be MP David Carter to be able to afford one, let alone two farms in this day and age in NZ. Sad New Zealand.

#1.1 - Angela McCleary 2012-11-17 10:19 - (Reply)

I second your comments. Our Debt to GDP ratio is as high as Greece's we are in a housing 'bubble' not that the Government/media will tell you that.A study that came out in the Herald had housing at 38% in Auckland over valued! The housing market will crash and if you have a large mortgage you will lose everything. Banks are too blame worldwide, THEY HAVE GAMBLED WITH OUR MONEY ON DERIVATIVE TRADING WHICH IS ESTIMATED AS HIGH AS 100 TRILLION DOLLARS TO PAY BACK THE MONEY THEY HAVE LOST THEY ARE STEALING FROM THE MIDDLE CLASS!ALSO DEVALUATION OF OUR CURRENCY HENCE INFLATION AS THE US DOLLAR FALLS DUE TO INFINITE MONEY PRINTING BY THE FED!

#2 - Tom Hair 2012-11-03 05:24 - (Reply)

t make first home buying more affordable Take the section price out ,So just buy the house.Pay a rental for section,and have a company own the sections.Every thing would stay the same ,rates ect,

#3 - Dianne Black 2012-11-03 05:45 - (Reply)

We are very proud of you John. You are doing an excellent job.

2012-11-03 11:42 - (Reply)

Good work on infrastructure development. The Government needs to simplify its strategic message to being "The aim is to focus on increasing real income for all New Zealanders by growing real wealth from efficient use of our resources."

#5 - Gary 2012-11-03 12:32 - (Reply)

To be frank PM the events of the last two weeks have been totally overriden by the tragic case of JJ that is currently before our courts. The country has had enough of the appalling mistreatment and deaths of our children and the failure by successive governments to address the situation. The 'Bradford bill' is an inadequate joke and we all knew that before it was signed. Let's also do away with one of the main causal factors by way of taxpayer funded wage cheques to produce unwanted children. This is a situation that needs such urgent attention - Paula Bennett has made a great start on benefit reform but she needs to go much further. It won't be a vote loser, these people either don't vote or don't vote National and you may just gain a few as a result. It isn't the votes that matter so much, it's those poor bloody kids and the misery they go through before they are eventually killed (never mind though, they are easily replaced).

#6 - Basil Verf 2012-11-06 08:29 - (Reply)

The housing situation is caused by the councils restricting the land and making building expensive and not anything the government has done... Keep up the good work John...

2012-11-09 21:03 - (Reply)

We have to stop the emotional claptrap of the Greenies which costs huge amounts in appeals against innovation. Challenge Labour and the Greens to come up with plans to increase real incomes for all New Zealanders. The emotional argument against "fracking" is a classic example of the way that the greenies invent new names to attack traditional techniques of drilling.

#8 - Ronald A Palmer said:
2012-11-17 09:08 - (Reply)

Regretfully the Greenies are here to stay and they will always hold a 10 to 15 seats in Parliament at the great expense of the Tax Payers. There will always be sufficient drug addled and demented voters to vote for them. I recently returned from a couple of weeks in Australia and anybody who supports that political claptrap of equal pay rates between NZ and Australia must have rocks in their head. The cost of living in Australia has sky rocketed since 2002. If world economists can use a MacDonald Hamburger as a measure of buying power a 15 pack of beer can be used between Australia and NZ to give an accurate indication of true costs. A 15 pack on special in Australia cost Aud$33. In NZ a 15 pack on special is NZ$18 to $20. That example of costs reflects on everything apart from Petrol and electricity. The latter has increased by some 80% in Australia but nothing like the rip off in NZ were electricity and gas has increased by in excess of 130% since 2000. If NZ pay rates were to match Australia all our costs would have to increase to parity - There's no free lunches in this World except for the select minority race.

#9 - Khin M Thwin 2012-11-17 09:45 - (Reply)

Dear Rt Hon PM NZ should establish a solid platform regarding business opportunities and cultural exchange programmes with South East Asian countries especially with newly emerging country like Myanmar. It will be the right decision to visit those countries at the right time.

#10 - Gaylene 2012-11-18 05:43 - (Reply)

i want to know why Telecom are employing phillipine people. this is taking away jobs of new zealanders. i cant employ someone from overseas unless they have a work permit. i want to know why the government allows this and what they are going to do about it. if telecom can employ people outside nz then we should all be able to employ foreigners.

#10.1 - Ronald A Palmer said:
2012-11-19 23:01 - (Reply)

Is it OSH that insists on the use of excessive machinery and man power when Fulton & Hogan are cutting grass on the side of a motorway. Two very large manned trucks an a smaller maned truck parked in the breakdown lanes to indicate that a motor mower is cutting the grass well off the side of the road. This is a huge expenses and most certainly feather bedding of manpower - 4 people and 4 trucks to cut a strip of grass. That's similar if not worse than the wharfies back in the 50's through to the 80's It is alleged that it is an OSH requirement. Fulton and Hogan must be laughing all the way to the Bank - Perhaps someone in OSH may be doing likewise - It's time this matter was investigated. In Victoria I witnessed the grass being cut on the medium strip on the Hume Highway. Only one man and one truck that conveyed the mower was used. Speed limit on the Hume is 110kmph and twice the traffic flow of our motorways. Reduce the feather bedding and it may save the motorist from the 3 cent increase in fuel for more roading

#11 - Gary 2012-11-19 22:03 - (Reply)

Gaylene, if you are not already aware NZ companies operate a number of large call centres here in NZ servicing offshore companies. We are for instance ideally placed due to international time zones to provide British companies with their after hours call centre service. Using your logic Kiwis are taking away British jobs. To use an old phrase 'we live in a global village now'.

Add Comment

To prove you're not a spambot, just answer this simple question: Who is the Prime Minister of New Zealand?
Submitted comments will be subject to moderation before being displayed.