Political Report: December 7

Sitting listening to the Reserve Bank Guv it's hard not to reflect on life and to give thought to the fact this is part of it you're never going to get back again.

Finance speak, like TWIs, HLFSs, the MSCIs and the VIX, which has nothing to do with clearing congestion (although who would know), is enough to make you considering jumping off the fiscal cliff without giving a thought to an ambulance at the bottom of it.

The new Guv, who'll soon develop writer's cramp signing our bank notes, is physically quite unlike the former combustible bloke Alan Bollard but intellectually they play on the same field. Graeme Wheeler's a former World Bank boffin who's lived for the past 15 years in the States where hyperbolic spoonerisms are part of the local dialect, so he slipped into Bollard's boots without too much trouble.

Even on his inflated salary The Guv says he found house prices here expensive and of course that's more so for those earning a normal crust. House prices rose more in this country in the six years from 2001 than the whole of the western world.

At the moment when the dosh that households have to spend is compared to the cost of a house, it's four and a half times as much while in the '90s it was just three times.

So then with the high cost of housing, is it better to rent?

Now that's a question that was answered in the affirmative by the Dapper Doctor Don Brash when he was in control of the economic tiller. It was a question always avoided by Bollard though despite the fact that he thought our fixation with bricks was as dense as the mortar that bound them together.

But his successor saw it this way: House prices in relation to disposable income, or the money you've got to spend, are high and house prices relative to rent on a national basis still looks to be fairly high.

So it's better to rent? Well no, he said, he's said what he's said.

Yeah well a frustrated President Harry Truman once said, give me a one-handed economist because they always said 'on the one hand, on the other'.

Now you could relate to that even if his proposition was an impossibility!


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