Andrew Little rallied his troops with an aggressive speech full of personal touches and a new housing policy at Labour’s last party congress before the election, Bernard Hickey reports.

If there was any doubt that Labour would focus on housing as its main point of attack in the election campaign, it was removed in leader Andrew Little’s final address to the Labour Party’s annual congress in Wellington on Sunday.

He focused his speech completely on housing and roused the packed audience at Te Papa to its feet several times with his focus on Labour’s housing policy, and the party’s early history of building state houses.

The news in the speech was Little’s announcement that a Labour-Led government would phase out over five years the ability of rental property investors to offset their property losses against their personal income. He cited Inland Revenue Department figures showing this practice of negative gearing reduced potential tax revenues by $150 million a year and the policy of phasing out negative gearing would raise an extra $1.2 billion over a decade. Labour would use that extra revenue to fund a grant of up to $2,000 per dwelling for insulation, double glazing and heating upgrades.

Little used his own personal experience to argue action was needed to deal with a housing crisis. He said he and his wife Leigh Fitzgerald (he gave her a bouquet of flowers for Mother’s Day at the beginning of the speech) bought their first house in Wellington in 2000 for $315,000. It was the house they bought their son Cam too, but it was now worth $830,000.

Prices were out of control, rents were rising rapidly and regular moves of tenants in private rentals disrupted the education of thousands of children, he said.

“Housing is now the main cause of growing inequality and growing poverty in New Zealand today,” he said.

Little described how he had found chronic over-crowding while door-knocking in Mt Roskill with Labour candidate (and now MP) Michael Wood during last year’s by-election.

“I knocked on one door, a typical house, and I realised very quickly there were three families living there. Not one family. Three. It was a modest home. I was gobsmacked by that,” he said, adding many of the houses on the street were packed with multiple families.

‘Wanting to emulate Michael Joseph Savage’

Little said housing was the number one issue people raised with him and deputy leader Jacinda Ardern in their public meetings. He went on to talk about meeting a woman in a once thriving state housing area in Hamilton that had gradually emptied out as Housing New Zealand moved people out.

“Shirley couldn’t understand it. Why have they left those houses empty and rotting in the middle of the housing crisis? She told me she just wants her community back. She had tears in her eyes,” he said.

“I’ll even carry a dining table in if I have to,”

Little said he had told her Labour would tear down the abandoned buildings and replace it with more than 100 affordable Kiwibuild and state houses to rebuild the community.

“That’s the difference we will make up and down this country by building those homes,” Little said to a standing ovation from the standing room only crowd.

“That’s why I come to work every day. I do it because when I meet people like Shirley, or the people crammed into houses down that street in Mt Roskill, or even look at my own son, Cam and his mates, and wonder what the future holds for them, I know we must do better.”

Little pledged that Labour would lead the largest house building programme since the first Labour Prime Minister Michael Joseph Savage carried a dining table into 12 Fife Lane, the first state house built in Miramar.

“I’ll even carry a dining table in if I have to,” he said to applause.

Little made little mention in the speech of Labour’s Kiwibuild programme to build 100,000 houses in 10 years, but focused instead on the measures to reduce competition for first home buyers from non-resident buyers and rental property investors.

“If we want to make sure all Kiwi families get a fair shot – that when it comes to buying a home they have a level playing field – and we’ve got to get the speculators out of the way,” he said.

“We can’t let our homes be gambling chips anymore.”

Little reiterated Labour’s policies of stopping non-residents from buying existing homes and extending the current two year bright line test for rental property investors to five years.

Policy hits the richest hardest

Later, when speaking to reporters, he also reiterated Labour would launch a review of tax policies once in Government that would look at issues such a capital gains tax or a land tax. Little dropped Labour’s 2014 policy that favoured a capital gains tax when he was elected leader after the 2014 election loss.

He said stopping negative gearing was aimed at larger rental property investors, rather than ‘Mums or Dads’ with one or two properties. He cited IRD figures showing the top 30 percent of income earners claimed over 70 percent of the losses for tax purposes. The removal of negative gearing would have affected 90,700 taxpayers in 2014/15, including 52,800 who reported losses who were in the top 30 percent of income earners.

Unintended consequences?

The Property Institute’s CEO Ashley Church described the move as a cynical electoral ploy that would lead to less investment by ‘Mums and Dads’ in rental properties and shortages of rental properties that would rebound in higher costs for the Government.

He called on Labour to offer incentives to rental property investors.

“That might include giving preferential tax treatment to Investors who build, or buy, new homes – not punishing them for doing so,” he said.

Little rejected suggestions that the tax move would increase rents, saying it would reduce competition for housing.

Property Investors Federation Executive Andrew King said removing negative gearing would increase the cost to landlords of owning a home by around $79 a week.

“Labour’s proposal would likely result in increased rents, making it be harder for first home buyers to save the deposits required to purchase homes,” King said.

Finance Minister Steven Joyce said the policy would increase rents and reduce the number of new houses funded by rental property investors.

ACT Leader and Epsom MP David Seymour said Labour had put the politics of envy above economics.

“It is a recipe for rent hikes, putting the most vulnerable out on the streets,” he said.

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