Barry Soper: Tax cuts are the least of our worries

Finance Minister Bill English. Photo / Mark Mitchell

At times the Finance Minister, the Dipton drawler Bill English, sounds a bit like a tyre kicking cockie. This is hardly surprising considering in his other life that's exactly what he is.

Talking to a room full of suits in Wellington yesterday he told them not to hold their breath for a tax cut next year, which had them spluttering into their Pinot Noir.

And when it came to questions from the floor, their silence said it all. Just one question was forthcoming, which was from one of the luncheon's organisers.

Afterwards he drawled on that if there's any spending to be done, it'll go on infrastructure because "people are turning up" which means the immigration gates are swinging as rapidly as the sheep counting gates down on the farm.

To emphasise his point he said that when kids are turning up you have to build the classrooms.

And when they're not spending they'll be paying down debt, which is sitting at around 30 per cent, compared to the value of the country, up from just 17 per cent when Mr Scrooge, Michael Cullen was pulling the purse strings.

The Beehive's also having to come to terms with a problem that's been plaguing them for much of their term in office - the out of control housing market.

The Reserve Bank's now exploring the possibility of requiring the trading banks to set a ratio of loans to income which would price Auckland out of the first home buyer's market.

The traffic congested City of Snails isn't going to improve as people are forced further into the wop wops where they can almost still afford to buy, like in that well known Auckland suburb of Taurmarunui.

Consider this, if the income to loan ratio's set at 4.5, it'd mean a home buyer in Auckland, where the average price is nudging a million, would have to have an income of more than $220,000.

A typical family in the city, we're told, has an income of around $82,000, which means the ratio would allow them to buy a house worth around $369,000.

A Labour MP in the city and the party's housing spokesman Phil Twyford says he's been inundated with calls from developers, worried that people buying off plans could be forced to withdraw, meaning the development would fold.

Think of the global financial crisis, triggered by jittery banks and collapsing house prices in the United States, and think of the magnitude of the problem confronting us.

Tax cuts should be the least of our worries.

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