In brief

• The MSM didn’t blame Labour much for the fact the budget deficit for 2023  increased by $3B in 4 months since Labour’s May budget.

• Not much issue either with the IRD ’s guesses and simplified assumptions for the high wealth report.  

• Same for 3 Waters where, outrageously, over $40B of increased debt was sold as “savings”. 

• Compare this to their frenzy over estimates regarding National’s projected tax on foreign home buyers.  

A media feeding frenzy over National’s tax policy modelling

Part of National’s  “Back pocket boost” tax plan is lifting the ban on foreign buyers purchasing homes over $2M with the imposition of a 15% tax on the purchase price. 

National says they can raise about $740M per year over four years. 

It has been a veritable frenzy of MSM analysts proclaiming a lot of doubts over their numbers and repeated demands to release their modelling. 

Dozens of MSM articles are overwhelmingly against National as the media have managed to keep the issue alive for weeks. 

Generally the MSM narrative is that the estimates are too high. They may well be. The reality is National’s numbers are just guesses but they are not hard to follow. The big picture is an average of about $4.9B of sales to foreigners is required each year.   

Maybe foreigners will be ecstatic with a new government that allows them to buy again, when they haven’t been able to for a number of years. Or maybe they will think NZ is to be avoided because of how wildly it can swing politically. Nobody knows.

What happens if National is wrong about their numbers?

If National is optimistic about their numbers then the error will result in less money generated than their estimate. But the total of their estimate, $740M per year, is much smaller than a lot of numbers in the government’s budget, which is estimated to be about $140B in 2024. And the tax will raise some money. 

Polling indicates that voters are not overly interested in National’s lack of transparency around their modelling considering the party has endured weeks of media attacks over the (non) issue. 

What does the media feel justified in haranguing Chris Luxon over a relatively trivial issue?

Compare the MSM’s treatment over the foreign buyer tax to the obvious lack of interest in Labour’s wild eyed estimates over the past several years. 

Many of Labour’s much bigger boondoggles don’t get nearly the same amount of attention. 

Treasury’s Pre Election Economic and Fiscal Update (Prefu) contained a few surprises, which included a deficit for the current year of $10B, which is $3B more than projected just 4 months ago. This aspect of Prefu did not make a lot of waves.  Instead of focussing on the current and therefore more real numbers, much of the media buzz was about how the books would be in surplus again, in 4 years, under numbers very much influenced by Labour’s projections. 

Also, the high net worth IRD study was largely just accepted, even though it was based on a lot of guesses and simplifying assumptions. And what about the numbers for the “savings” on 3 Waters? What they considered savings was just increased debt, which would need to be paid back eventually with interest. 

Both schemes were very open to criticism, as a number of non MSM articles showed, but it just didn’t catch on like National’s supposed lack of transparency around their very much smaller tax policy modelling. Why?  

Could it be the media is picking and choosing who they’re trying to paint as “fiscally flawed” based on their preferred narrative?