In his self-described state of the nation address to Party members last weekend, ACT leader David Seymour came out with some world-class tosh.
Referring to the housing supply crisis, he said, “…you’ve just overseen the greatest transfer of wealth from those who work to those who own”.
Not very logical David. Regrettable though the housing demand-supply imbalance is it does not represent a wealth transfer from the poor to the rich, not the least because the poor by definition have no wealth to transfer.
It’s like someone discovering a Da Vinci painting in their attic and selling it for a billion dollars. That new found billionaire will have derived his wealth, not at the wider public’s expense but in a fair trade to a buyer with an idle billion dollars. Everyone else is unaffected.
If house prices had been steadfastly falling would David argue this was a transfer of wealth from those who own to those who work? If not, why not?
Due to a shortage of supply. In part, driven by speculators using historically cheap money, prices have soared and cut out the poor from purchasing. But there ‘s been no wealth transfer between rich and poor.
One could argue there’s been a wealth transfer between vendors and buyers but that’s a lucky circumstance for the buyers few foresaw.
Seymour leads a party which is supposed to promote the market economy and should know better than to spout this guff.
Characteristic of a working market economy are winners and losers, more so these days with so many unforeseen major events that seemingly overnight turn previously accepted certainties on their head.
We constantly read the envy-ridden call for wealth taxes.
History records, target the wealthy and they transfer their wealth to more receptive locations.
Others say ban private landlords. Take that to its ultimate step and give them say three years to sell up. That’s about a third of our housing stock so who would be the only major buyer? That easy; the government or more accurately, the taxpayer who with no rising prices would have bought a dog, net housing rental returns being virtually non-existent.
There’s only one remedy for our housing crisis and that’s to massively increase supply, which as I’ve repeatedly pointed out, is of a shortfall size beyond our building industry’s capacity to deal with.
Building tiny pretend houses is a poor answer to the problem.