CTU Submission to Monetary Policy Inquiry
New Zealand Council of Trade Unions Te Kauae Kaimahi
Submission on the Inquiry into the future monetary policy framework
to the Finance and Expenditure Committee
19th July 2007
Read the executive summary below, or download the full submission:
Executive Summary
The CTU has suggested a number of measures that can improve the operation of monetary policy. In particular, we emphasise the need for a measure or suite of measures to address house price inflation. The key submissions are:
(a) Amend the Reserve Bank Act and reword the PTA by specific reference to the impact of a high exchange rate on export performance and employment.
(b) Give Monetary Policy decisions to the Board of RBNZ
(c) Enforce current tax rules on investment housing
(d) Introduce a more comprehensive capital gains tax by reviewing current wording in the Income Tax Act
(e) Introduce variable stamp duties
(f) Remove ability to offset expenses in rental properties
(g) Apply a variable mortgage levy to apply to investment housing and mortgages on houses above median price
(h) Address supply side initiatives in respect of housing. This includes shared equity, increasing state housing stock, addressing zoning issues, more high density development, acquisition of land banked property
(i) Consider a range of other housing initiatives such as developer levies, higher levels of trade training in construction, higher levels of restriction on foreign purchasers of property in New Zealand, targeted housing assistance, improved accommodation supplement policies, subsidised home lending, and enhancements to the KiwiSaver benefits for first home buyers.
(j) Consider a transactions tax
(k) Implement greater controls on bank lending practices
