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Poverty, housing crisis highlighted in OECD report on Kiwi economy

Xinhua, June 10, 2015 Adjust font size:

Soaring house prices, lack of infrastructure investment and the large divide between the richest and poorest are at risk of undermining an otherwise sound New Zealand economy, according to a report from the OECD (Organization for Economic Cooperation and Development) on Wednesday.

The report said New Zealand's economic growth had been faster than most other members of the OECD group of developed nations and the inflation was low, but the current account had been "in sizeable deficit for some time."

"Well-being is high, although a considerable income gap with the top half of the OECD remains," said the Economic Survey report.

"However, bottlenecks in housing, urban infrastructure and skills, inequalities in living standards, and rising environmental pressures all pose risks for sustaining growth."

In particular, house prices had risen sharply in Auckland, the largest city, eroding affordability and raising financial- stability risks.

The report blamed "burdensome" environmental regulations and " community resistance" to housing intensification.

Finance Minister Bill English told Radio New Zealand that the government was already addressing many of the recommendations made in the report.

The report highlighted many of the risks the government had identified, but had some interesting ideas about encouraging local authorities to make it easier for more houses to be built, said English.

Business interests said the report highlighted the need to loosen building and environmental regulations in order to accelerate home construction.

The main opposition Labour Party said the government should heed the warnings and deal with the country's problems.

"The OECD report finds that housing is increasingly unaffordable, inequality and poverty need to be tackled head on and the health of the economy is increasingly at risk from a further downturn in commodity prices," Labour finance spokesperson Grant Robertson said in a statement.

The opposition Green Party said the government had to step up and start building affordable housing rather than relying on the private sector.

"When even the OECD is saying the housing crisis is causing growing inequality and hurting New Zealand families, you know you' ve got a serious problem on your hands," Green co-leader Metiria Turei said in a statement. Endi