Finance Minister Bill English has defended today's modest
Budget measure to trim the cost of new homes as one step in a
larger programme to improve home affordability.
However, he said the most significant feature for helping New
Zealanders into their first home in today's Budget was the
Government's focus on limiting spending to levels that would
not drive up interest rates.
The sole new home affordability policy today was the
temporary suspension of tariffs and duties on building
products which the Government said would reduce the cost of a
standard new home by about $3500.
Mr English said the move was temporary due to technicalities
of relevant legislation but the Government would ultimately
like to make it permanent.
He defended it as "another step yet a significant one'' in
what he said had been a three year programme which would run
for a further five years, "to allow more New Zealanders into
a housing market where they're shut out mainly by poor
But Mr English said the biggest factor affecting home
affordability was interest rates.
"The best thing that Government can do is limiting its own
spending to take pressure of those rates.''
He warned a Labour-Greens Government with less disciplined
spending could push interest rates to over 10 per cent, which
for those wanting to buy their first home, meant "their dream
- by Adam Bennett of the NZ Herald