Greens' economics blind spot takes you faster into debt

act-new-zealand

Fri Nov 25 2016 13:00:00 GMT+1300 (New Zealand Daylight Time)

Greens' economics blind spot takes you faster into debt

Friday, 25 November 2016, 4:27 pm
Press Release: ACT New Zealand

“The Greens’ Faster into Homes policy is a cute piece of political marketing that will hurt the young people it is trying to help,” says ACT Leader David Seymour.

“The fundamental problem is that once you’ve saved for a deposit you have to start making repayments to your mortgage, but under the Greens’ plan you’ve still got your student loan taking 12 per cent of your income. Not only does that reduce your ability to pay a mortgage, banks will likely take it into account, demanding higher deposits and or higher interest rates.

“Added to that, the Greens don’t appear to have costed their policy. They have not even acknowledged writing off student loan interest for, say, five years, will cost taxpayers, i.e. the very people the policy is meant to help.

“Altogether it's a policy that gets young people faster into debt, leaving them with a student loan, a mortgage, and a higher tax bill all at once. Not to mention the inflationary effects of funnelling even more money into an overheated housing market.

“It is not even an equitable policy, if you wanted a policy focused on housing affordability, it should be focused on the poor rather than University Graduates, however this is champagne socialism at its best.

“The real problem is the decline in the per capita home building rate - less than half what it was in the 1970s. Moving money around as the Greens propose makes great politics but terrible policy. The only real response to a shortage of housing is to build more homes.”

ENDS

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