Editorial: Labour misses its chance

19:23, Oct 02 2013

The immensity of the task facing new Labour leader David Cunliffe is starkly illustrated by his party's bungled attempt to embarrass the Government over new minimum house deposit rates.

Mr Cunliffe has talked about putting Labour on a war footing. This week's events show it is not on a war footing. It is in a deep slumber.

Housing is the issue of the moment. Young New Zealanders have been shut out of the market by escalating prices that have not only made the quarter-acre section an impossible dream but have also put the two-bedroom suburban doer-upper out of reach.

The issue resonates with voters in a way New Zealand's bid for a seat on the United Nations Security Council and even the Government Communications Security Bureau farrago do not.

That is why Prime Minister John Key tried to persuade Reserve Bank Governor Graeme Wheeler to exclude first-home buyers from the tighter borrowing rules which took effect yesterday.

His failure to do so provided Labour with an opportunity to present itself as the custodian of the Kiwi dream and the champion of young Kiwi families.


But, having recognised the opportunity, Labour's strategists failed to take advantage of it.

It is six weeks since the bank announced a minimum deposit level of 20 per cent for most home buyers. You'd think in that time Labour would have been able to come up with a young family who'd been saving for several years and had had the dream of home ownership snatched from their grasp at the last minute. Instead the best the party could manage was a 23-year-old IT consultant who was not even sure he would live in a house, if he bought it. "If it's good enough I could live in it, otherwise it could be an investment property," said Kanik Mongia.

No criticism of Mr Mongia. Good on him for saving enough for a 10 per cent deposit on a $400,000 to $500,000 home.

But does Labour really want to portray itself as the party of upwardly mobile young property investors? And is it really prepared to undermine the integrity of monetary policy to give Yuppies a leg up?

The bank has good reason for trying to prevent the formation of another housing bubble. Not only does the economy suffer when prices rise too fast, so do over-leveraged homeowners when interest rates inevitably rise with them.

Labour's failure to find a more suitable "victim" for its campaign indicates that it is either out of touch with the issues or not well connected to the community it purports to represent.

Mr Cunliffe has made an interesting start as leader. Already there have been verbal stumbles in Parliament and missteps outside it, but it will not have escaped the notice of his political enemies, either inside or outside the Labour Party, that he has been far more assured and forceful than his predecessor David Shearer.

However, the party's fortunes will not be transformed simply by the leader performing better. The party must also do its bit. On this week's evidence it has a long way to go.

The Dominion Post