With 13 days to go, National doubled its grant to first home buyers, Labour detailed its plan of action for its first 100 days and the Greens announced a new climate change policy. Shane Cowlishaw, Bernard Hickey and Lynn Grieveson report from the campaign trail.

It’s approaching crunch time for both National and Labour as they fight for every last vote before September 23.

The latest Colman Brunton put Labour four points ahead of National, but the reality is that race is likely much closer and this election is looking tighter than most.

Prme Minister Bill English is in Auckland today and made a pitch to young home buyers, announcing the HomeStart grant would double from 1 January at a cost of $74 million a year.

It means a couple will now be able to access $20,000 towards an existing home or $30,000 towards a new build. Both grants will rise by $10,000.

It is expected to be used by 80,000 people buying their first home in the next four years. With the $20,000, combined with the $40,000 a couple were expected to be able to withdraw from Kiwisaver if they had been in the scheme for five years, that would leave them with a 10 percent deposit for a $600,000 home – all that is needed under the Government’s Welcome Home Loan.

Backed by Ministers including Amy Adams, Jonathan Coleman, Nick Smith, and Nikki Kaye, English said he was confident the market would respond to increased demand.

“What we hear from the builders and developers is because there is now much more availability of demand. If there’s demand there, they will be able to build to it,” English said.

“This is halftime in a full-length game,” he said of the election campaign.

The announcement was made at Hobsonville Point, one of the largest new developments in Auckland.

The Government has been hammered over housing and with the election race so close National will be trying to shore up support in its weak spots.

The trouble with first home buyer grants

National announced during the 2014 election campaign that it would double KiwiSaver Home Start grants to $10,000 after a 36 percent rise in Auckland’s median house price over the previous three years and after the Reserve Bank restricted lending with loan to value ratios of over 80 percent. However, the move was one of the factors that pushed up house prices far faster than the rise in the first home buyers’ grant. Auckland’s median house price rose 39 percent or $253,000 to $905,000 between September 2014 and March this year.

Treasury warned the Government in 2013 that increasing first home buyer subsidies would undermine the Reserve Bank’s efforts to slow down the housing market, force an early Official Cash Rate hike and push up house prices.

Treasury said in cabinet papers the expansion of the Welcome Home Loan and KiwiSaver withdrawal schemes “may undermine the power and credibility of the Reserve Bank’s proposed use of restrictions on high Loan to Value Ratio mortgages, depending on up-take,” Treasury said.

“Experience with homeowner grants in Australia suggests that such programmes tend to push prices up in a supply constrained environment by supporting greater demand, rather than improving affordability,” Treasury said.

“The Kiwi Saver Home Deposit Scheme increases the cash available to homebuyers for deposits. Increasing eligibility may encourage buyers to take on more debt/seek more expensive houses. This could exacerbate house price pressures,” it wrote in July 2014.

It also noted the case for big increases in the price caps was weak because it would shift the focus of the scheme onto those on higher incomes.

A separate aide-memoir from Treasury to Finance Minister Bill English and then Prime Minister John Key from July 2013 said: “Government subsidies for home ownership are low value for money and tend to be regressive.”

That means they are overwhelmingly used by the richest home buyers. See more here in this Newsroom Pro article from August 2014.

Labour’s Jacinda Ardern said after a campaign rally that the higher subsidy could push up prices without extra supply. She said Labour would not look at matching National’s move for at least a year to 18 months while it concentrated on increasing the supply of affordable homes.

Greens plan Kiwi Climate Fund and annual dividend

Facing a desperate battle to ensure the party’s survival, the Greens have unveiled their flagship climate change policy.

Currently polling around the five percent threshold to make it back into Parliament, the party has been rolling out a string of policies including equal pay and food labelling. It is set to make a mental health announcement tomorrow.

But at a packed Auckland event today, leader James Shaw announced an idea to replace the Emmissions Trading Scheme with a “Kiwi Climate Fund”.

The first priority if in government would be to pass the Zero Carbon Act and set up an independent Climate Commission to reduce climate pollution to net zero by 2050.

The commission would advise on a charge for emissions, with Shaw expecting the price to be about $40 per tonne by 2020, with $6 and $3 per tonne for nitrous oxide and methane emissions from agriculture.

The money would be used to plant 1.2 billion trees over 1.1 million hectares of erosion-prone land. This would be funded through forestry payments from the fund and through the creation of a $40m grant for native forest planting.

Any money leftover would be returned to New Zealanders aged over 18 through an annual dividend, estimated to be $250 per person in 2020.

Under the Greens’ plan farmers would no longer be exempt from reducing climate pollution and would start contributing in 2020. The plan is estimated to reduce the average dairy farm’s profitability by less than two percent, or less than six percent when combined with the party’s clean rivers nitrate levy.

Farmers who plant trees on their land will receive $40 for each tonne of carbon sequestered. A $210m fund will be created to assist farmers in transitioning to sustainable agriculture and depreciation on dairy farm equipment would be accelerated to ease the transition.

“No farmer I’ve talked to wants their child to inherit a world with longer droughts and drier rivers. Agriculture can no longer be exempt from reducing climate pollution; farmers need to be part of the solution,” Shaw said.

“We’ll ensure Government walks the talk by directing the Super Fund and ACC Fund to completely divest from fossil fuel companies, so that pensions are not dependent on economically risky and environmentally toxic investments.”

Ardern speaks at mental health rally

Labour Leader Jacinda Ardern broke down in tears as she began talking at a World Suicide Prevention day commemoration event on the steps of Parliament on a cold and windy day.

Ardern said her best friend’s brother had taken his own life when she was 13.

“Those shoes are quite moving. The idea that we have lost 600 New Zealanders in the last year – I find absolutely devastating,” she said.

She recommitted Labour to launching an inquiry into mental health and said she would not accept a suicide target any higher than zero.

“You will be heard when we review mental health services,” she said to applause from an audience of several hundred people.

She was speaking in front of 606 pairs of shoes laid out on the lawn in front of Parliament to represent the number of New Zealanders lost to suicide in the past 12 months.

Part of the “Yes We Care” suicide awareness campaign organised by the Public Service Association, the shoes have travelled from Cape Reinga to Bluff in the last 15 days to illustrate the suicide problem the country is facing. Families affected by suicide were also present at Parliament for the event.

When the collection started the number of shoes totalled 579, but 27 extra pairs were added when new suicide figures were released during the roadshow. In total, 130 pairs belong to Maori and 475 are for men.

Mental health and suicide has received extensive coverage in the past 12 months, with both major parties signalling it as a priority issue as the Government comes under increased criticism.

Labour has committed to an urgent inquiry into mental health if it forms the next government, while National has announced a package at the Budget that will increase funding for the area by $224m over four years.

“I do not believe in setting a target that is anything other than zero. If setting a target is a way of telling the public that it is a focus for a Government I lead, then the commitment I can give you right now. It will be a focus because I believe we shouldn’t have one life lost that we can prevent by working together,” she said.

“It is time for us to move from grief and loss to love and hope for our next generation.”

Climate change stays in the news

Meanwhile, Labour gazumped the Greens by releasing their own climate change policy on Friday. It included a target of net zero emissions.

It took some more wind out of the Greens sails and is not the first time Labour has done so, as illustrated in this piece by Fairfax’s Stacey Kirk.

This afternoon the Greens will announce their own climate change policy, which is a central plank of the party.

Environment issues were also debated this morning on TVNZ’s Q+A, with seven politicians including Shaw, Winston Peters, David Parker, Scott Simpson, Marama Fox, David Seymour, and Damian Light taking part.

Alongside climate change, issues including mining, a tourist tax, and water ownership were discussed. You can watch a replay here.

Those taking part were also asked what they did personally to care for the environment. The most surprising answer came from Simpson, the Associate Environment Minister, who said he packed his soft plastic recycling in his luggage when he travelled down to Wellington from Thames so he could recycle it at New World Thorndon.

Shaw said he did not have solar panels on his house because he rented, while Winston said he cared for the environment without actually explaining how.

“I do my best to not pollute at the start, I do my best to make sure the place is clean,” he said.

Labour’s 100 day plan

Grant Robertson and Jacinda Ardern leave the stage of the St James Theatre in Wellington after a campaign rally on September 10. Annette King and Andrew Little look on. Photo by Lynn Grieveson

Ardern detailed Labour’s plans for its first 100 days in office at a packed-out rally in Wellington’s St James Theatre. The mostly young audience spilled over into the aisles and there was barely standing room at the back of the theatre.

She committed to the following 10 priorities in the first 100 days:

  • Make the first year of tertiary education or training fees free and increase student allowances and living cost loans by $50 a week from January 1, 2018
  • Pass the Healthy Homes Guarantee Bill so renters could live in warm, dry homes
  • Ban overseas speculators from buying existing residential properties
  • Stop the sale of state houses
  • Legislate to pass the Families Package, including the Winter Fuel Payment, Best Start and increases to Paid Parental Leave, to take effect from 1 July 2018.
  • Introduce legislation to set a child poverty reduction target and change the Public Finance Act so the Budget reports progress on reducing child poverty
  • Resume contributions to the New Zealand Superannuation Fund
  • Set up ministerial inquiries into mental health and abuse in state care
  • Hold a Clean Waterways Summit
  • Increase the minimum wage from the current $15.75/hour by 4.8 percent to $16.50/hour from 1 April 2018.

Labour also said it would begin work to set up an Affordable Housing Authority and begin the Kiwibuild programme, establish the Tax Working Group, establish a Pike River Recovery Agency, set a zero carbon emissions goal and begin setting up the independent Climate Commission.

Jacinda Ardern with Labour Party supporters at the St James Theatre in Wellington. Photo by Lynn Grieveson

Coming Up…

Tomorrow – Polling booths open for early voting.

September 14 – TVNZ’s youth debate

September 20 – The final leaders debate on TVNZ.

September 23 – The General Election.

October 12 – Winston Peters has said he will make a decision about which party he ‘crowns’ to be in Government by October 12, which is when the writs with the final election results are returned. That is assuming the current polling is replicated on election night.

Updated: 4 pm

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