Housing affordability: IMF recommends capital gains tax

PHOTO: Photo: RNZ / Nate McKinnon

The International Monetary Fund has praised the economy’s performance in response to Covid-19, but warns it is vulnerable to a housing downturn.

In its regular review of New Zealand, it said the government’s swift moves to control the spread of Covid-19 and significant support for the economy have allowed a quicker than expected rebound in activity.

“On the fiscal side, I would particularly say the wage subsidy programme was very helpful during the initial lockdown and has helped a much, much worse labour market outcome,” IMF Australia New Zealand division chief Harald Finger said.

“It made sure that 60 percent of wage earners in New Zealand could benefit from it and that actually is, from what we can see, is the highest coverage in the world.”