A Response to The Great Divide

This Winter, North & South published "The Great Divide", by Rebecca Macfie, looking at the causes and effects of how "in a single generation New Zealand has transformed itself from a home-owning democracy into a society fractured by property wealth — between those who have it, and those who do not." 

CPAG researcher Caitlin Neuwelt-Kearns responds:

Macfie’s feature on the housing crisis provides a clear overview of how this housing calamity arose. As her historical account highlights, the current situation is the result of deliberate policy decisions. Since 1991, speculators have been enabled and encouraged to use the housing market to turn a profit, resulting in families living in overcrowded or uninhabitable dwellings and increasing homelessness.

We forget at our peril that a decent home is essential to child wellbeing and development. By enabling housing to be a commodity traded for capital gain, successive governments have compromised many children’s physical and mental health, educational opportunities, and ability to live and thrive in secure communities.

This crisis demands a multi-pronged approach. Beyond accelerating our state housing build and investigating ways to control rent increases, we must also revisit taxation. The Child Poverty Action Group urges the Government to correct the severely damaging distortions, and start taxing income from housing the same as income from paid work and other investments. The University of Auckland’s Susan St John and Terry Baucher set out how this can be done in a recent working paper– Fair Economic Return: restoring equity to the social fabric. Urgent action is both vital and achievable.

For a summary of the Fair Economic Return approach, see CPAG's two-page backgrounder

For a brief history of housing policies since the 1930s and how they shifted in the early 1990s, see the first section of our report The Accommodation Supplement: The wrong tool to fix the house (2019).