KiwiSaver not an LVR life raft for first homes

National is stuck in a lending limits hole of its own making but its attempt to use KiwiSaver employer contributions to dig out of it is doomed to fail, said Labour’s Housing spokesperson Phil Twyford and Finance spokesperson David Parker.
“National is trying to limit the damage from its cack-handed loan to value ratios plan that locks out first home buyers. It is considering allowing KiwiSavers to withdraw their employer’s contributions in addition to their own contributions to make up a home deposit. That will not limit the fallout.
“On an average working wage an employer’s contribution is about $1800 a year. National’s plan to increase the deposit from 10 per cent to 20 per cent will add $60,000 to a deposit on an average Auckland home. It will take 30 years of employers’ contributions to save that $60,000.

“Yet again John Key shows he is out of touch with Kiwis. National is siding with speculators, not first home buyers. They have ignored calls from the IMF, OECD and Labour to introduce a Capital Gains Tax to deal with speculators.
“National has also refused to deal with housing supply by rolling up its sleeves and building affordable houses as Labour would with KiwiBuild,” said David Parker.
“John Key doesn’t have a plan for first home buyers and now his inept mismanagement has forced the Reserve Bank into a corner,” said Phil Twyford.
“Thousands of first home buyers won’t be able to scrape together a 20 per cent deposit with house prices increasing far too quickly. They will rightly blame John Key. Labour is calling for an interim exemption for first home buyers from LVRs until speculators are dealt with and supply issues fixed. That won’t happen under National.
“National is trying to cover up its incompetent handling of this issue by getting first home buyers to pay for its mistake out of their retirement savings. This is not a sweetener, it’s a double whammy.
“The irony is that National has resorted to using KiwiSaver as its LVR life-raft, when it voted against Labour’s KiwiSaver in 2006,” said Phil Twyford.
17 July 2013 MEDIA STATEMENT

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Author: David Parker MP

I am a List MP for the New Zealand Labour Party, and Spokesperson for Trade & Export Growth and Treaty of Waitangi Negotiations and the Shadow Attorney General

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