National Leader Christopher Luxon’s point-blank refusal on Saturday to address the question of whether lifting the foreign house buyer ban would survive the coalition negotiations says it all.
National must have decided to be ready to drop the proposal if that it what they need to do to get New Zealand First to agree to their tax cuts.
Anyone with a passing knowledge of NZ First knows the party stands above all else for economic nationalism; allowing foreign home buyers is not part of that.
But National can also offer NZ First some bait.
It could drop the current review of the Emissions Trading Scheme, which would be to the huge relief of Maori foresters, whose lead spokesperson just happens to be the son of NZ First deputy leader Shane Jones.
The revenue that would flow from stopping the review and thus allowing ETS auctions to proceed could compensate for the loss of income from the lack of a foreign home buyers’ tax.
So here’s the deal: drop the ETS review, and the revenue could replace the foreign buyer’s tax for the tax cuts; not that Luxon was ready to concede that when he spoke to media on Saturday.
POLITIK: Can you give an absolute guarantee that the National-led government will implement the tax cuts and will lift the ban on foreign buyers?
Luxon: What we’re going to do is make sure we deliver income tax relief for low and middle-income New Zealanders executives we went to the campaign with and that’s what we’re going to do.
POLITIK: And the foreign buyers ban?
Luxon: Again, we’re going to deliver income tax relief to low and middle income.
POLITIK So you’re not you’re not able to say whether or not the foreign buyers ban is going to be able to be lifted.
Luxon: What I can gladly guarantee is that we’re going to deliver tax relief for low and middle-income New Zealanders exactly as we talk to them.
Newshub: A source has told us last night that you have 48 hours from a deal. But the sticking point was that foreign buyers tax. Winston Peters was a holdout.
Luxon: I appreciate there’s lots of commentators, there’s lots of people on the margins with lots of reasons. The reality is there’s three leaders on the right. We’re talking with both party leaders, and we are making good progress. And there is good intention from both of those leaders to make sure that we can move through this process as quickly as possible, but importantly, to deliver a strong and stable government. That’s what we’re doing.”
But Luxon’s non-answers obscure some real challenges in the negotiations.
National will find it hard to abandon the lifting of the foreign buyers ban.
It was welcomed by the real estate industry, who were big donors to National.
“ I’ve spoken to real estate agents who are in this room who have told me that there is huge demand from people who want to buy expensive luxury homes in New Zealand, and they’re going to come back, and I’m going to text them and I’m going to use that to ensure New Zealanders, the squeezed middle working people, get to keep more of what they earn and that is a priority for National,” said National’s finance spokesperson Nicola Willis during the ASB Finance Debate in Queenstown in September.
A former National MP, Hamish Walker, is a real estate agent in Queenstown specialising in luxury real estate.
He already actively markets his high-end properties in those jurisdictions like Singapore, where buyers may purchase in New Zealand.
Walker said in September that the end of the ban was “good news for Queenstown and a relief for many in the high-end construction sector”.
He said the proposal would lead to more enquiries from overseas for Queenstown homes.
National has also received big donations from real estate companies, including $103,260 this year from Chris Meehan, the chair of Winton, a major upmarket property developer in the Queenstown Lakes area.
Meantime, negotiations continue using a variety of go-betweens and back channels.
There is ongoing speculation as to whether Luxon can make APEC in San Francisco on Thursday.
“We’ve been pushing on conversations through the course of the weekend, and we’ll continue to do that,” he said on Saturday.
“We’re working really hard to do exactly that and complete these negotiations. And if we have them completed, we can go, to APEC, if we don’t, we won’t.”
Even though APEC is taking place at a time of massive strategic uncertainty in the world, Luxon sees it mainly as a business event.
“For me, it’s about making sure we’ve got good bilateral meetings and a good opportunity to say to the world that New Zealand is open for business again.,” he said.
“That’s really one of the big messages with its economic focus and particularly the opportunity to spend time with the APEC Business Advisory Council as well. That’s the focus. “
Even if the negotiations are not wrapped up in time for Luxon to go to APEC, POLITIK understands that some of the National negotiating team are optimistic they will have an agreement by the end of the week.