Tax Loophole on Housing Undermines New Zealand's Productivity

Economist Gareth Morgan argues that decades of misdirected capital have led to poor productivity performance and loss of position for New Zealand in global per capita income league tables.

The main culprit is the tax break on imputed income from owner-occupied property, which has made it a no-brainer investment for Kiwis.

Morgan points out that successive tax task forces have highlighted the issue, but politicians have been reluctant to address it due to personal enrichment and political tenure.

The Reserve Bank's inaction on house price inflation is also criticized, with Morgan suggesting that even they recognize its destructive impact.