What Price Warm and Dry Homes?
One of the crippling disadvantages suffered by the children of the poor is that they are too often brought up in houses that are cold and damp. The impact on the health of young children is all too apparent – ask any health professional – and the setbacks they endure can all too easily prejudice their life chances, imposing a handicap from which some will never fully recover.
Most thoughtful people will react to the news that rental properties must in future be heated and insulated, so that children will have warm and dry homes, by saying – about time too! Not everyone though; some claim that it is actually bad news for families and their children.
We are offered this surprising opinion by someone who professes to know exactly how landlords will respond to this attempt to give a new generation a chance to grow up fit and healthy. Judith Collins, no less, rubbishes our supposed naivety when we welcome the news.
“It can only mean that landlords, if they are forced to make their rental houses healthy and habitable, will recoup their increased expenditure by putting up rents,” she says. So there we have it. From somewhere in the dark recesses of her mind, she has unerringly put her finger on what she understands to be the true role of the landlord – to make as much money as possible from low-income families who have nowhere else to live but in houses that are a health hazard.
She appears to understand well how some landlords operate – buying cheap properties at mortgagee sales, evicting existing tenants and putting up the rents for new tenants, doing little or no maintenance (let alone improvements) and then selling the property off at a price and healthy profit – (perhaps that should be “unhealthy”) – that reflects the income stream they have been able to screw out of it.
She warns that requiring rented houses to be healthy and habitable could reduce the number of rental properties available, and could lengthen the waiting list for state or social housing – and this from someone whose government sold off large numbers of state houses and stopped building new ones.
Her message seems to be that trying to improve the early years of innocent children is futile because any attempt to improve their health and lives cannot survive the demand by private landlords for ever-rising profits, and should therefore be abandoned.
And this despairing tale of woe is embellished by lamenting the prospect of a capital gains tax which, she says, will further discourage actual and potential landlords from buying rental properties. So, it is fine for landlords to charge high rents that poor families have to pay out of their earned income on which they pay tax, but the huge profits and capital gains the landlords make from their operations must be tax-free?
Any discussion of these issues always calls to my mind a little-known speech made by Winston Churchill in 1909 when he was a budding young Conservative politician. Churchill addressed the issue of those who invested in land or real property, did nothing with it, but pocketed the lion’s share of its increasing development value.
Who creates the development value? Churchill asked. The development value of land and property, he said, is created by the community. It is the community that funds and provides the roads, the railways, the sewers, the water supplies, the communications connections (nowadays electronic) – all the services that allow the property to be developed. It is then the schools and parks and shops and factories that others build around it that enhances the demand for, and therefore the value of, that same land or property.
Churchill concludes by asking the obvious question – why should someone who has done nothing but sit on the land walk off with all the development value? And why should they pay no tax on that great windfall – while others have to pay tax on every penny they earn?
It may be that Judith Collins, in leaping to their defence and professing to know their minds, has unfairly maligned landlords. We must hope that at least some of our leaders have a better and kinder view of human nature.
The indications that China is displeased with New Zealand cannot be mistaken. China is a country where nothing of this kind happens by accident; the government’s reach into every aspect of Chinese life is virtually unlimited. Nothing happens without the government’s say-so.
There can be little doubt that the Chinese government has decided to send our government a carefully calibrated message – and that message has been to the effect that our hitherto excellent relationship, and particularly our trading relationship, with the new super-power is at risk. The import of that message has potentially serious implications for our economic future and is no doubt intended to arouse considerable anxiety in some circles.
Nor can there be any real doubt about the reason for sending the message. It seems painfully clear that the Chinese government has reacted adversely to New Zealand’s decision to exclude the Chinese IT giant, Hua Wei, from any involvement in setting up our new 5G network.
That decision was taken on the grounds that Hua Wei, like many major Chinese companies, is best regarded as an arm of the Chinese government and our government was warned by our security services, the GCSB, that there could be risks to our security if an enterprise with such close links to the Chinese government were allowed a central role in our internet system.
That advice mirrored of course similar advice tendered to and acted upon by the security services of some of our principal allies who have found themselves embroiled in even more direct retaliatory responses from China. Our government is criticised by its opponents for allowing this situation to develop – with the inevitable corollary, it must be assumed, that we should hastily backtrack and reverse the decision concerning Hua Wei’s role.
But are we really at fault? And is the Chinese response justified? And should we yield to the threatened reprimand, as some critics seem to suggest?
In that trade; the Chinese gain access to goods that they need or at least want, and we earn foreign exchange which helps us to balance our books.
There is, or should be, no implication that we are being done a favour by the Chinese in deigning to trade with us – a favour that will be withdrawn if we upset them in respect of a completely separate issue. And the Chinese have no one but themselves to blame if their governmental system makes it difficult for us to disregard the fact that a company like Hua Wei is in reality not just another commercial company but is rather an arm of government.
It is the Chinese, not us, who have introduced, into what should be a straightforward trading relationship, the complexities of security issues and the need to choose between China and the US in an apparent power struggle in the Pacific between the two super-powers – and can anyone really be surprised in the light of our history – in times of both war and peace – that we continue to give priority to our long-standing alliance with the US?
And when we review our own recent history and the value we have placed on refusing to be bullied – our nuclear-free policy, despite American hostility to it, was a classic instance of our insistence on independence – are we really being enjoined to yield to blackmail in this case?
Our proper response to the “message” sent by the Chinese is that we regret that they have taken umbrage at our decision on Hua Wei but that we can see no good reason why that should affect our mutually advantageous trade and tourism links and that the remedy that would qualify Hua Wei as a participant in our G5 rollout lies in Chinese hands.
If we were to follow the advice that we should reverse our decision, we would have cast aside a long-standing and hard-earned reputation as a small country that is not to be pushed around or bullied. Our future relationship with China will be all the stronger once they realise that good trade relations do not depend on one partner’s ability to dictate to the other and are harmed if that claim is made.