Four years of failure


KiwiBuild is four but it’s not a happy anniversary for anyone hoping for a resolution to the housing crisis.

Today marks the fourth birthday of KiwiBuild, but there’s nothing for the Government to celebrate with just 1,366 homes built out of the 100,000 promised, National’s Housing spokesperson Chris Bishop says.

“After promising to deliver 100,000 homes and fix the housing crisis, KiwiBuild has delivered a meagre 1.4 per cent its target.

“At its current rate, KiwiBuild will hit the 100,000 mark in the year 2315!”

“Last month, Housing Minister Megan Woods ludicrously claimed that KiwiBuild is ‘alive and well’, but no amount of spin can hide the utter policy failure.

“In July 2018, then-Housing Minister Phil Twyford said that KiwiBuild would deliver 1,000 homes within a year, another 5,000 by June 2020, and 10,000 in total by June 2021.

“In July of 2022, the total is still just 1,366.

“Labour has utterly failed on housing. Rents are up $150 per week, the state housing wait list is at an all-time high of 27,000, and just this month the Government racked up $1 billion being spent on emergency housing since it came to office. 4,500 Kiwi kids will wake up tomorrow living in a motel.”

“Labour cannot achieve anything, and KiwiBuild is the poster child of their failure to deliver.”

Housing record fail


$1 billion bandaid


Remember how Labour was going to solve the housing crisis?

It’s got much worse on their watch and  they’ve spent $1 billion on a bandaid:

The Government’s housing failure has clocked up a new milestone: $1 billion has been spent on emergency housing, National’s Acting Housing spokesperson Nicola Willis says.

“This is a staggering amount of money and is emblematic of Labour’s complete and utter failure on housing.

“Labour promised they would solve New Zealand’s housing crisis. Five years on, taxpayers have paid more than $1 billion in Emergency Housing Special Needs Grants, mainly to motels, with thousands of people living in motels for months at a time.

“Rapidly rising rents and unaffordable housing have pushed thousands more New Zealanders onto the state house waiting list and into emergency housing motels.

“Motels were meant to be a short-term fix to New Zealand’s housing problems. Under Labour motels have become the solution. Emergency housing has become a get-rich-quick scheme for motel owners, and has proven to be disastrous for vulnerable New Zealand families.

Many motel owners would have welcomed the government money when borders were closed and domestic travel was severely restricted.

Motels are better than no house but they’re a very poor substitute for proper homes for families.

“It is just shameful that around 4,500 New Zealand kids wake up every morning in a motel room.

“The Government seems to have given up on solving the underlying drivers of emergency housing need, instead opting for the short-term approach of writing a big cheque and looking the other way.

“The Government says state houses are the solution, but have allowed the state house waiting list to explode from fewer than 6000 people when National left office to more than 27,000 today. Meanwhile its state-house builder, Kainga Ora, has demolished or sold more houses this year than they’ve actually built, while only 1365 of the 100,000 Kiwibuild homes promised have been delivered.”

Demolition of selling houses isn’t necessarily bad policy if the houses are in the wrong place, poor condition or otherwise unfit for purpose.

But it’s hypocritical for Labour to be so eager to highlight the state houses sold or demolished when National was in government when they’re doing it too.

National would:

  • Take pressure off rapidly rising rents (up $50 a week in the past year) by removing Labour’s “Tenant Taxes”, restoring interest deductibility for private rentals and taking the 10-year brightline test back to two years.
  • Fund community housing providers to build new social homes and provide targeted support to vulnerable tenants. The community housing sector is ready and willing to grow, they just need a Government that will back them.
  • Using a targeted social investment approach to support vulnerable individuals with effective interventions that get results.
  • Support more housing supply by removing RMA barriers and working with local government to fund infrastructure needed for growth.

“Labour has failed on housing. The state house waitlist has quadrupled, rents are up $150 per week and now the Government has spent $1 billion on housing people in motels.

That’s a very expensive and inferior bandaid.


House prices over 40 years


This shows the real growth in house prices over 40 years:

I was chatting to someone yesterday who said when he bought her first house about 40 years ago it was about three times his annual income.

How much is the average house now compared with the average income – eight or nine times?

If they can’t build houses


Sixteen months on from the Ihumātao settlement and there’s still no houses:

Progress at the disputed land, Ihumātao, remains stalled as the Crown waits for the final members of the governance group to be appointed, writes political editor Jo Moir

Māori Development Minister Willie Jackson had hoped the governance group, Roopu Whakahaere, would be up and running in February but it could now be late May before that happens.

It’s been 16 months since the Government announced the controversial land – home to a long-running occupation – had been purchased by the Crown from Fletcher Building for $30 million.

By then, SOUL (Save Our Unique Landscape) protesters at Ihumātao had been peacefully occupying the privately-owned land for the best part of four years. . . 

If Jacinda Ardern hadn’t interfered many, perhaps most or even all, of the houses Fetchers was going to build would have been built, sold and now housing people. And they’d have been built for a much lower cost than that of building now.

Her interference set a very bad precedent and has kept people out of new homes.

The Crown’s appointments were made in December, but haven’t been announced due to delays around the other members of the group.

Jackson told Newsroom he knew that would leave him open to criticism about the speed in which things are progressing.

“That goes with the territory – this is a hard area,’’ he said.

“You’re talking about people having to give way and it’s taken much longer than I wanted, I wanted this to be away last year for goodness sake.’’

Jackson blames Covid for much of the delay due to the various parties not being able to meet face-to-face to work through any concerns.

“The main thing is they start working together and putting down a plan and a strategy.

“It’s not going to happen overnight – Māori politics is a tough area.’’ . . 

A plan for how to use the land is expected to be drawn up by the end of the year, Jackson said.

He has no intentions of intervening any time soon, because he wants to give the group a decent opportunity to “nut it out’’.  . . 

This is why so many people are so concerned about co-governance.

If it takes this long to get nowhere with houses, what damage will be done to health, three waters and all the other areas for which the government is proposing co-governance?

Political PR is not public service


Public Service Commissioner Peter Hughes has rebuked Kaianga Ora for acting politically:

Public Services Commissioner Peter Hughes has reprimanded the Government’s public housing agency Kāinga Ora after Newshub revealed a cover-up in 2021. 

Newshub revealed last year that Kāinga Ora brazenly took steps to cover up the fact it was using a Labour Party candidate in its taxpayer-funded advertising, risking political neutrality. 

While the agency knew Arena Williams – now MP for Manurewa – was planning to run for Labour in 2020, emails showed it hid the fact, choosing to act like it was unaware.  . .

Hughes said in a statement that Kāinga Ora got it wrong when it considered the principle of political neutrality, which he said was fundamental in the New Zealand Public Service.

“Kāinga Ora failed to do the right thing when it became aware the person it was to feature in a Kāinga Ora sponsored article was a candidate,” Hughes said. 

“The email suggesting the agency pretended it did not know about Ms Williams’ candidacy was unacceptable. All parties agree.

“I expect Public Service agencies to consider whether it is appropriate for public funds to be used to give positive exposure to a political candidate in this way. Government advertising must always be impartial and free from partisan promotion of government policy and political argument.” . . 

Not only was it acting politically, it was paying to promote itself in what looked like news stories:

The Housing Minister must act to restore confidence in Kāinga Ora after a Public Service Commission investigation concluded that the agency repeatedly failed to meet the standards expected of a public service agency, National’s Housing spokesperson Nicola Willis says.

“The release of this report by Peter Hughes responds to concerns I raised last year about Kāinga Ora’s use of public money to promote a Labour Party candidate and the subsequent cover-up.

“I revealed this conduct following my discovery of a $25,000 per month contract Kāinga Ora entered into with a media entity through which it promoted itself through paid content designed to look like news stories.

How could public servants think self publicity was good use of scarce funds?

“The investigation by the PSC confirms my grave concerns, stating these events ‘demonstrated a misunderstanding of the principle of political neutrality at all levels within the organisation’, with their response to the airing of these issues showing a ‘pattern of minimisation’ and was below the standards expected of a public service agency.

The Public Service Commissioner found, among other things, that:

    • Kāinga Ora’s actions had the ‘effect of providing positive publicity for a political candidate, just before and during an election period’.
    • Kāinga Ora failed to acknowledge their mistake, instead ‘maintaining a position that minimised the issues and contained some factual errors’.

“I am astonished that despite this damning report, no one at Kāinga Ora has been held accountable for its failure to meet its duties as a custodian of taxpayer money.

“Kāinga Ora is a key public service agency, having more than doubled in size since Labour came to power, with 2560 employees and an annual operating revenue of $1.7 billion.

How many of those new employees are paid to do public relations and political activism rather than core business?

“It will be of serious concern to all taxpayers that despite these massive responsibilities Kāinga Ora failed to meet standards of political neutrality, and then when these failings were revealed did not front up but instead sought to cover up.

“Minister Woods must explain why she continues to have confidence in the leadership of Kāinga Ora when not one person has been held accountable for these extraordinary failings.

“Kāinga Ora’s response to this investigation has been extremely weak and amounts to little more than the formation of a government relations team (within the government agency) and an offer from the PSC to hold the hand of executives on future issues.

“New Zealanders deserve much better from an agency that employs more than a dozen people on salaries in excess of $300,000 a year.

“The standard you walk by is the standard you accept. Minister Woods must not walk past this report. She must act.”

Political PR is propaganda not public service.

Wasting OPM


How can this happen?

The Auditor-General’s inquiry into the Government’s funding of emergency housing reveals a shocking waste of taxpayer funds, and raises serious questions about the financial control being exercised by the big-spending Ministry of Social Development (MSD), National’s Housing spokesperson Nicola Willis says. 

The Auditor-General inquiry reported on today was initiated following a complaint from National MP Simon O’Connor about the way MSD had used taxpayer funds to procure emergency housing accommodation.

Had he not complained would the extravagance have been noticed?

The inquiry concludes that MSD paid exorbitant sums of $2000-$3000 per week for private rental properties for use as emergency accommodation, when the median rent that would typically have been paid for those properties was between $450 and $560 a week. The report concludes that “the Ministry could not demonstrate that it received value for money” and that the high rates MSD was paying for emergency accommodation “will have distorted the rental market”.

Did the people negotiating these rentals think they had to pay so much more because the tenants would be anti-social?

Did they do so to meet a government target for housing people at any cost?

Was the rental the only money paid or did they have to pay more for repairs once the tenants moved out?

“The Minister for Social Development must explain who will be held accountable for this shocking mismanagement. She must assure taxpayers of what has changed at MSD to strengthen the systems, processes and oversight controlling the use of taxpayer funds,” Ms Willis says. 

“The Minister must make it clear that the wasteful, sloppy approach revealed in this report is completely unacceptable from a government agency. There must be consequences for failures of this magnitude.

How could systems, processes and oversight be so inadequate, are they any better now and what has been done to ensure such waste couldn’t happen again?

In the private sector the people who made the decision to waste this money, and the people in charge would lose their jobs.

“Taxpayers need confidence that these mistakes will never be repeated. Sadly, there is ongoing reason for concern. 

“Emergency housing has exploded under Labour. Today, the Government continues to spend around $1 million a day on emergency accommodation for more than 8,000 New Zealanders. How can taxpayers have any confidence this represents good value for money when it’s being overseen by the same agency that created the mess revealed in this inquiry? 

“What plans does the Government have in place to ensure the mistakes revealed in this report aren’t repeated when New Zealand reconnects with the world and motels once again fill up?

“The Government must ensure value for its use of taxpayer money. This inquiry shows it has fallen very short of that standard. The Minster must now step up and ensure this can never happen again.”

The money came from taxpayers and the waste meant it wasn’t available for other areas where it would have made a much-needed and positive difference to people’s lives and wellbeing.

The extravagance distorted the rental market, shutting would-be renters out of homes they would otherwise have been able to afford.

Has there ever been a worse example of wasting other people’s money, total disregard for fiscal rectitude and complete lack of common sense?

Protect bad, punish good


Are there no longer consequences for anti-social behaviour?

Two pensioners claim they’ve fielded death threats from their state housing neighbours, including a Black Power gang member who allegedly threatened to slit an 82-year-old’s throat and watch him “bleed out”.

And though they feel terrorised in their long-time home, the couple say Kāinga Ora is powerless to evict the offending tenants despite a prolonged campaign of intimidation and fear.

Police have been called to the Whangārei property about 20 times since the family moved into it earlier this year. The pensioners – aged 69 and 82, who live in the neighbouring Kāinga Ora house – say they are at breaking point and suffering constant anxiety.

A responsible landlord would evict the bad tenants, but that’s not happening.

In response to multiple complaints about the tenants’ antisocial behaviour, Kāinga Ora has halved the couple’s rent, paid for them to attend weekly counselling sessions and arranged for a security firm to visit the property five times a day due to safety concerns – costing taxpayers more than $5000. . .

Rent reduction, counseling and security firm visits won’t be making them feel any safer.

Kāinga Ora had offered to find the couple alternative accommodation but they did not feel they should be forced to move as a result of their neighbours’ behaviour.

The woman said a Kāinga Ora tenancy manager admitted the agency was powerless to evict antisocial tenants due to a “directive” that protected state housing clients.

She was disgusted that people enjoying a taxpayer-funded property could terrorise residents without consequence or fear of eviction.

“We are now having to leave because my husband’s life has been threatened and she has threatened to kill me. It’s appalling.

“It’s a privilege to have one of these homes and they’ve just abused the system. . .

It’s a privilege some tenants regard as a right with absolutely no responsiblities.

National leader Judith Collins said the appalling situation was happening right across the country. She blamed a Government edict that prevented Kāinga Ora from evicting antisocial tenants.

It meant good people were being forced to live next to gang members and having their lives turned upside down, she said.

“Kāinga Ora needs to evict these tenants who are being antisocial and creating mayhem for their neighbours and everyone else in the community.

“There are consequences but the consequences should be felt by the people who create the problems.”

Kāinga Ora denies there is any such directive but admits evictions are a last resort reserved for “extreme” cases. . .

If this isn’t “extreme”, what is?

People who abuse the privilege of a state house like this should face consequences:

The Government must harden up its policy for managing abusive, anti-social state house tenants after revelations that an innocent pensioner couple are being forced to move home because Kāinga Ora refuses to evict their abusive neighbour, says National’s Housing spokesperson Nicola Willis.

“I was horrified to learn the story of a pensioner couple living state housing in Whangārei, feeling terrorised after their state house neighbour has subjected them to a ‘prolonged campaign of intimidation and fear’, including death threats.

“This is unacceptable. Why should law-abiding neighbours be the ones to pay the price? The abusive tenant should be evicted.

“There must be consequences for people who abuse their state tenancy and use it as a platform for victimising others in such a revolting way.

“It appears that under Labour, state tenants can get away with virtually anything, with little consequence. 

“Data I have obtained confirms the view that Labour has virtually banned evictions for state-house tenants. Even for the worst of the worst. 

“Answers to my Parliamentary Questions show that Kāinga Ora has not evicted any tenants since March 2018.

“The state landlord should be firm and fair. No tenant should think they can act without consequence or punishment. They must understand that the state is prepared to remove them from their house if they don’t meet basic standards of behaviour. Evictions should not be the first response but they must be a tool in the toolkit.

“The Minister for Public Housing, Poto Williams, must urgently revisit this naive and cruel policy which is resulting in the victimisation of innocent, law-abiding New Zealanders.”

A government and its agencies ought to protect the good and punish the bad.

Labour has reversed that in going far to far to protect the bad and in doing so are punishing the good.

Interest rates rising


The cost of borrowing is going up:

The Monetary Policy Committee agreed to increase the Official Cash Rate (OCR) to 0.50 per cent. Consistent with their assessment at the time of the August Statement, it is appropriate to continue reducing the level of monetary stimulus so as to maintain low inflation and support maximum sustainable employment.

The level of global economic activity has continued to recover, supported by accommodative monetary and fiscal settings, and rising vaccination rates enabling a relaxation of mobility restrictions. While economic uncertainty remains elevated due to the prevalent impact of COVID-19, cost pressures are becoming more persistent and some central banks have started the process of reducing monetary policy stimulus. . .

This is a response to a steep increase in inflation:

Headline CPI inflation is expected to increase above 4 percent in the near term before returning towards the 2 percent midpoint over the medium term. The near-term rise in inflation is accentuated by higher oil prices, rising transport costs and the impact of supply shortfalls. These immediate relative price shocks risk leading to more generalised price rises. At this time, measures of core inflation and medium-term inflation expectations remain close to 2 percent.

The Committee noted that further removal of monetary policy stimulus is expected over time, with future moves contingent on the medium-term outlook for inflation and employment. . . 

The Taxpayers’ Union lays the blame for the increase at the government’s door:

“Today’s OCR hike – which will see households squeezed with hire mortgage payments, is a direct result of the Government’s reckless spending over the last 18 months. Even worse, with COVID’s economic shock now coming, it comes at the very worst time for households.”

“The Government needs to do all it can to focus on quality, not quantity, of spending. Its programme of money-printing and borrowing for political purposes has pumped up inflation to unacceptable levels and left future generations of taxpayers with a debt monster. Higher interest rates will increase the financial pain caused by that debt.”

It’s a risky move:

Today’s move by the RBNZ to raise the Official Cash Rate by 0.25 per cent to 0.5 per cent shows the bank has been forced to make the risky move despite two major New Zealand cities still being locked down, says National’s Shadow Treasurer Andrew Bayley.

“The Government’s failure to rollout the vaccine and prepare our Covid defences has resulted in the Reserve Bank having to make this decision in the middle of lockdown, which is incredibly risky for the economy.

“Obviously, the Reserve Bank has seen that the cost of living is rising too quickly, and its hand has been forced. This has been exacerbated by huge amounts of wasteful, untargeted spending from the Government on matters entirely unrelated to the Covid response.

“As a result of the Government’s lack of fiscal discipline and failure to prepare for another Covid outbreak, mortgage-holders and businesses are now set to face rising interest costs at a time they can least afford it.

“The Government should now take a cue from the Reserve Bank and rein in its wasteful spending and focus unrelentingly on its Covid response, and ensuring businesses survive the current extended lockdown.” . . 

The announcement has already led to an increase in interest rates:

It took just a few minutes for ANZ to announce it was increasing its floating and flexi rates by 0.15 percent. . . 

No doubt other banks will follow.

It’s a small increase on what was a historically low rate and is unlikely to bring much cheer to savers.

But it could bring woe to some borrowers.

A small increase on a big amount, which many who have bought into the overheated housing market have borrowed, could be more than some can afford.

The younger ones among them might not have seen interest rates in double digits and will have no memory of the 1980s when inflation and interest rates were raging.

Like most conventional sheep and beef farmers then, most of our income came in a couple of big chunks when we sold our lambs and wool. That was always several months after our major costs had to be paid so we survived on seasonal finance and at the peak we were paying around 26% for everything we bought for the farm and household.

Thanks to the “failed” policies of the 80s and 90s, such eyewatering interest rates should be consigned to history.

That won’t be of any comfort to home and business owners whose finances are already stretched and for whom even a very small increase in interest could stretch them too far.

Good intentions but


Who or what does this remind you of?:

Intention these days is nine-tenths of virtue, and intention is measured mainly by what people say that their intentions are. 

The words are Theodore Dalrymple’s and he was writing about urban environmentalists and their belief in the green credentials of electric cars but it immediately made me think of our government.

Many of its intentions are good.

Who could argue against solving the housing crisis, reducing poverty or keeping us all safe from Covid-19?

But intentions are not achievements and time and time again the government’s good intentions have got very little, if any, further than their announcements.

Housing prices have escalated so that even outside the big cities they’re selling for far too many times the average wage. That has made anyone who doesn’t own their own home poorer and worsened conditions for people already struggling to pay the rent and power and feed their families.

The government won a few skirmishes against Covid-19 last year but the war continues and we’re all having to fight the latest battle because the intention to keep the disease out hasn’t been matched by learning from past mistakes and ensuring they’re not repeated.

Then there’s Afghanistan.

No doubt the government intended to rescue all New Zealand citizens and the locals who had helped our army but again it’s fallen well short in delivering, leaving behind an estimated 375 New Zealand citizens, visa holders, and Afghan allies.

New Zealand isn’t alone in the botched withdrawal but that doesn’t make our government any less culpable for letting those people down and making the chances of getting them out successfully much, much poorer.

The proverb tells us the road to hell is paved with good intentions.

It is too big a stretch to say the government is taking us to hell, but its repeated failure to deliver on its good intentions certainly aren’t helping New Zealand feel like paradise.

When it’s other people’s money


Housing the homeless in motels is costing $millions:

New figures show the multi-million dollars being netted by top-earning emergency motels with the Government expecting this to continue for at least the next few years, National’s Housing spokesperson Nicola Willis says.

“Emergency Housing should be about getting people back on their feet and into stable housing as soon as possible. Instead, these figures show that it’s become a get-rich-quick scheme for motel owners.” . . 

“In total more than half a billion dollars has been spent on housing people in emergency accommodation since Labour came to office,’ Ms Willis says.

“The Government needs to create a plan to end long-stay emergency housing. A National Government would work with community organisations to create more stable, secure homes, instead of continually padding the bank balances of motel owners.

“But there’s no end in sight as the Government acknowledges it expects the number of emergency housing grants to peak at 170,000 for each of the next two years. That’s a dramatic increase compared to 2017, when that number was 35,994.

“What’s worse is that the Government can’t confirm the safety of people living in emergency housing as it’s not monitoring the conditions in these motels.

“It isn’t getting value for the huge cheques it’s writing, with motel owners charging more than $440 a night for rooms that don’t even have to meet quality standards. People are living like this for longer and longer, with the average stay now more than three months.

“Labour came to office saying $90,000 a day was too much to be spending on motels, but it’s now more than ten times that with no end in sight.

“This is a shocking policy failure with frightening consequences for the thousands of children who are now being raised in motels.

“Moteliers aren’t social workers and the stories we are hearing about the dangerous conditions in emergency motels are just heart breaking. The Government must achieve more with the extraordinary amounts of money it is spending. 

“The millions being spent on emergency housing would be better placed in the hands of community housing organisations who can provide wrap around support to help people get back on their feet and into stable accommodation.

“The Government needs to stop putting emergency housing in the ‘too hard basket’ and end the current arrangement as soon as possible.”

This is a ridiculous amount of money to spend on what amounts to band-aids – covering the homeless sore while the bleeding housing shortage continues.

On top of the money spent on accommodation, is the unknown cost of damage:

Unknown sums of money are being handed over to moteliers to cover damages caused by emergency housing clients – officials aren’t keeping track of what’s being spent and can’t put a total figure on it.

That’s “not ideal”, admits Minister of Social Development Carmel Sepuloni, who wants a system that can better monitor those costs and the damage being caused.

Not ideal?

This is the 21st century, we’re not still using parchment to record information and carrier pigeons to deliver it. It wouldn’t be hard to develop and use a system that keeps account of these costs.

That no-one has been and all the Minister in charge can say is that it’s less than ideal is an appalling reflection on the government’s approach to other people’s money.

It’s a lack of accountability and respect shared by too many recipients of it, a point Lindsay Mitchel makes:

. .  But some (often blameless beneficiaries) who live in or near emergency housing feel very unsafe. The protestors doubtless sleep all day and come out at night to wreak havoc; do drugs, do violence and do damage. These aren’t working people who have to get a decent night’s sleep.

They are anti-social miscreants who arc between apathy and aggression and wear their alienation as a badge of honour.

Instead of a system that refuses to tolerate their destructiveness, we get a system which rewards them with no-strings-attached cash and plenty of excuses for their defection from the rest of society.

Nobody has explained to them that the social security system was born out of shared values, shared compassion for genuine need, and shared commitment to fund it.

Certainly Sepuloni hasn’t bothered. And it is highly unlikely that the new compulsory history curriculum will cover what Mickey Savage envisaged when he created it over eighty years ago.

Green associate housing Minister Marama Davidson is appalled. The situation is unacceptable she says. Yet this is a leading proponent of an anything-goes benefit regime. Is she really surprised at what such a mushy modus operandi results in?

A much harder line must be taken with offenders. They will be breaking multiple laws and for the sake of those in closest proximity – those in genuine, unavoidable need – the very least that should happen is a threat to immediately end their benefit entitlement. Whatever ensues, we have a police force to deal with.

Someone needs to get – and someone needs to give – the correct message: you can’t keep biting the hand that feeds you.

Don’t hold your breath for that someone to be the person in charge though.

Some people require permanent assistance through circumstances beyond their control such as ill health or disability.

Others need temporary help and then are able to find work and support themselves.

Then there’s the people who use and abuse the system and keep doing it with no sanctions.

It would be bad enough if their anti-social lives were self-funded. When it’s other people’s money, and borrowed money at that, their disregard for other people, their properties and the law makes it far worse.

It’s not just the money, making other people’s lives a misery compounds the wrong-doing.

If they aren’t willing to fulfill their part of the social contract that comes with receiving a benefit, they must face appropriate consequences.

When lawmakers abuse the law


Governments are supposed to make laws not abuse them:

The Auditor-General has confirmed the Labour Government unlawfully used millions of taxpayer dollars to settle the Ihumātao land dispute.

In response to a letter from National’s Housing spokesperson Nicola Willis, written in March, the Auditor-General has confirmed today that the $30 million deal to buy the disputed land from Fletchers was not done by the book.

“The Auditor-General’s report uncovers extremely dodgy behaviour from Labour Government Ministers as they tried to justify this spending,” Ms Willis says.

The Auditor-General’s inquiries have revealed that after Treasury officials refused to let the Government use money from the Land for Housing programme to make the Ihumātao payment, Ministers invented a completely new spending category: ‘Te Puke Tāpapatanga a Hape (Ihumātao)’ within Vote Housing and Urban Development in the Budget.

“They did this on February 9 but tried to keep it secret,” Ms Willis says. “The Auditor-General raised serious concerns about the way this was done, saying ‘the payment of $29.9 million was incurred without the proper authority’.

Tried to keep it secret? What happened to the most open and transparent government?

According to the Auditor-General, the Ministry did not seek the correct approvals for money in the Budget to be used in this way, making the payment unlawful until validated by Parliament as part of an Appropriation (Confirmation and Validation) Act, Ms Willis says.

“This is a disgraceful abuse of the law. Ministers are not a law unto themselves with authority to write cheques whenever they wish. They need to get the approval of Parliament first.

“But when it came to Ihumātao, the Labour Government decided the usual rules need not apply.”

The Auditor-General says the Housing Minister will now be required to explain the matter to the House of Representatives and seek validation of the expenditure from Parliament through legislation.

National’s Finance spokesperson Michael Woodhouse says this is a shocking abuse of privilege and of taxpayer funds by the Labour Government.

“We warned the Government all along that its treatment of the dispute was leading to awkward precedents, and here is the proof.

“Taxpayers aren’t a bank to be called upon to clean up the Government’s poor decisions, particularly when it is meddling in private property rights.

“The Prime Minister should never have involved herself in the Ihumātao dispute and stopped 480 much-needed houses from being built.

“National would protect the land owner’s property rights and ensure full and final treaty settlements are just that – full and final.”

You can read the Auditor General’s reply to Nicola Willis here.

He is quite clear that the payment was unlawful:

. . .In our view, the intent of the Ministry of Housing and Urban Development, and the intent of Ministers, was to establish a new appropriation that would provide authority for the purchase of the land at Ihumātao. However, because the Ministry did not seek the correct approvals, the expenditure was incurred without appropriation and without authority to use Imprest Supply. For these reasons, the payment is unlawful until validated by Parliament. . .

This started when the Prime Minister interfered in an illegal occupation with a total disregard for property rights and the urgent need for more houses.

As a result of her interference the occupation was prolonged, houses weren’t built and the taxpayer ended up with a $30m bill that the government paid unlawfully.

This wasn’t accidental or carelessness. It was deliberate and compounding the wrongdoing was using money set aside to build houses to stop houses being built.

What happens when lawmakers abuse the law in this way?

They will retrospectively approve the payment to validate it.

That will sort the legal issue and the government will ride out any political damage it’s inflicted on itself.

But it won’t build any houses and it won’t do anything to remedy the undermining of the principle that Treaty settlements are full and final.

Addressing supply deficit


National has a policy that will address the root cause of the housing crisis – the supply deficit:

National is proposing an alternative solution to the housing shortage that will urgently address the country’s land supply problem and help councils fund supporting infrastructure.

  • Judith Collins’ Emergency Response (Urgent Measures) Member’s Bill will put in place emergency powers similar to those used to speed up house building in Canterbury following the 2010 and 2011 earthquakes.
  • The new law would require all urban councils to immediately zone more land for housing – enough for at least 30 years of expected growth.
  • Resource Management Act (RMA) appeals process would be limited to ensure these new district plans can be completed and put in place rapidly.
  • $50,000 infrastructure grant would be provided to all local authorities (urban and rural) for every new dwelling they consent above their five-year historical average.

Across our country, a toxic mix of land use restrictions and consenting requirements severely limit the new land available for housing and how intensively existing residential zones can be developed. The result is that developers have limited options for where they can build new houses and face extensive costs, delays and legal hurdles when they embark on a new housing development.

Judith Collins has drafted a Member’s Bill that will go into the ballot this week. The draft legislation will effectively put in place emergency powers similar to those used to ramp up house building in Canterbury following the 2010 and 2011 earthquakes.

The law change would also incentivise councils to lift their game by providing a grant of $50,000-per-house for every new dwelling consented over and above a historical average.

This streamlined mechanism for allocating the Government’s $3.8 billion Housing Acceleration Fund would provide councils a simple tool for funding the infrastructure needed to support new housing, such as pipes, roads and public transport stops.

The time has come for an extraordinary solution to this unfolding emergency. We need to short circuit the faltering RMA to get more houses built. National acknowledges that under the current law even if councils want to make more space available for housing, they face multiple handbrakes. The RMA ties them into a knot of consultation requirements and infrastructure costs loom as a heavy burden.

Our Emergency Response (Urgent Measures) Bill gives councils permission – in fact it requires them – to say ‘yes’ to housing development and to get as much new housing built as they can as soon as is possible.

These RMA changes will expire after four years, reflecting the fact they are a temporary solution while more fundamental changes are made to New Zealand’s planning laws. Rural councils would not be compelled to rezone but could utilise the new powers if they wished.

National’s approach has a proven track record of success in Christchurch where the resulting surge in housing supply after the earthquakes saw affordability improve while it was deteriorating across the rest of the country.

House prices rose by 7.4 per cent annually across New Zealand from July 2014 to March 2019, but only rose by 2.9 per cent annually in Christchurch during that time.

Swift action is needed to help first-home buyers, with New Zealand’s housing market now the least affordable in the OECD.

Despite Labour’s big promises prior to the 2017 election, the median house price jumped from $530,000 to $780,000 between October 2017 and February 2021, a 47 per cent increase in just over three years.

National is the party of home ownership. We are committed to sensible solutions that will get more New Zealanders into their own home without hitting them with more taxes.

Judith Collins will be writing to all Members of Parliament to seek their support for her Emergency Response (Urgent Measures) Bill to go straight on to the Order Paper, rather than into the Member’s Ballot.

Prime Minister Jacinda Ardern could also do the right thing by New Zealanders by adopting this Member’s Bill as government legislation to help it become law faster.

The government has been tinkering with policies that try to restrict demand. They might raise a bit more money from taxes, but they won’t build more houses.

National’s policy isn’t tinkering. It’s addressing the shortage of supply by making building easier.

It worked in Christchurch, it would work again everywhere else if the government could get over its reluctance to accept good advice because it came from National.

This is too important an issue to put politics before people and the practical solution that will help house them.

You can read the whole Bill here.

Complicating tax won’t build houses


Norman Gemmell writes that New Zealand’s new housing policy is really just a new tax package:

Economists like to talk about “optimal policy instruments” – essentially, policies that achieve their objectives more effectively or efficiently than the alternatives, and have minimal unintended consequences.

Judged by those criteria, the New Zealand government’s recently announced package of housing policy instruments is a long way from optimal. You might even call it a shambles. . . 

The aim of the policy is fine, but like so many of this government’s policies, it has several unintended consequences which will almost certainly make matters worse.

Arguably, the primary target of this policy package is stopping the inexorable upward march of (mainly Auckland) house prices. Failing to achieve that would simply put it among a long line of attempts by previous governments (National and Labour) over the past 20 years at least.

In all cases, the biggest problem has been insufficient political commitment to boosting housing supply. . . 

And in spite of its supposed focus on wellbeing, reducing poverty and solving the housing crisis, this government is not tackling the root causes of too few new builds.

All taxes cause “distortions”, mostly unintended, which need to be mitigated. Furthermore, policies that have conflicting objectives are “incoherent” and typically among the most distorting. This applies to the housing package’s removal of interest deductibility. . . 

That wasn’t, as the government claimed, closing a loophole. It was treating landlords differently from every other business which can claim interest as a tax deductible expense.

Making matters worse is extending the bright line test to 10 years.

It would be rare to find a liability based on transactions and timing among the principles of a good tax policy. But the bright-line test manages both – it incentivises delaying property sales to avoid the tax even when selling would otherwise be in the taxpayer’s best interest.

It was originally introduced in 2010 with a two-year threshold, without supporting evidence, supposedly to stop so-called speculators from flipping properties for quick profits. A 10-year threshold cannot be branded an anti-speculation policy, it is simply a back-door CGT.

As with most back-door policies, this CGT is inevitably less transparent and coherent than a policy designed to tackle the problem head-on would be. . .

It might, as taxes can, contribute more to the government’s coffers but it won’t build more houses.

If there are better alternatives, they do not lie in even more ad hoc fiddling with a coherent tax regime.

Instead, like the famous real estate mantra of “location, location, location”, the mantra for New Zealand housing policy should be “supply, supply, supply”. Specifically, supply in Auckland.

Successive governments have aimed policies nationwide when rapid house price inflation is almost exclusively urban and essentially an Auckland phenomenon.

Without policies that reform construction sector regulations and open up more land for urban housing, there is little prospect of Auckland house prices stabilising while current demand-driven trends persist. To make matters worse, the government’s first-home buyer schemes will merely raise demand without incentivising supply.

With too many objectives and the probability of numerous unintended consequences, the government’s housing policies risk being seriously incoherent.

What would help are policies which make it easier, less expensive, and less time consuming for new builds.

Complicating the tax system won’t do that but it will  increase rents thus making life even harder for the poor and those already struggling to save enough for a deposit to buy their own homes.

National helps govt with numbers


A misdirected email from the Prime Minister’s office sought information on rent rises.

The response was probably not what they wanted:

In the spirit of bipartisanship, National has helped the Prime Minister prepare for her post-Cabinet press conference today by collating the data she requested on rent increases – although she might want to think carefully before drawing public attention to it, Leader of the Opposition Judith Collins says.

“Unfortunately for the Prime Minister, recent trends in house price growth, rental hikes and wage growth don’t make good reading for her Labour Government.

“Jacinda Ardern has unleashed a raft of changes on rental properties: two extensions to the bright-line test, banning letting fees, and major amendments to the Residential Tenancies Act. All the way through, officials told her that rents would increase but her Government maintained a view that the officials were wrong.

“The Government’s policies have seen weekly rental costs shoot up a massive $120 in just over three years. This is a record increase and a clear sign these policies are failing.

“Rents have increased by 8 per cent per year under Labour, compared to 3 per cent per year under the previous National Government. The median house price has also spiralled out of control on Jacinda Ardern’s watch, jumping 12 per cent per year compared to the 5 per cent per year increase under National.

“Neither of these increases under Labour have been in step with wage growth. The median weekly income increased by 2.7 per cent per year under the previous National Government and has only increased by 2.1 per cent per year under the current Government.

“The sad reality is, renters have been thrown under the bus by this Labour Government.

“As was the case with its changes to rental standards last term, Labour has failed to grasp that forcing more costs onto landlords will ultimately reduce the number of rentals on the market, making renting more unaffordable and exacerbating homelessness.

“This is why Finance Minister Grant Robertson is now on the verge of dictating terms to landlords even further by introducing a cap on how much rent they can charge.

“This policy-on-the-fly approach is eroding the confidence of property investors and, ultimately, discouraging them from building more houses, which is exactly what needs to happen to solve New Zealand’s housing shortage.

“But at least now the Prime Minister will be fully informed when she addresses the media today. I hope she has some decent answers for the many New Zealanders who will be worse off because of her Government’s housing policies.”

One of this government’s priorities was reducing poverty.

Rising house prices and rising rents have done far more harm than any good any other policies might have done.

While we’re on the topic of housing.

How much confidence does this give you that the government has what it needs to tackle the crisis?

Broken promises and bromide


Yesterday’s announcement on housing was mere tinkering.

It broke the promise of Grant Robertson that there would be no changes to the bright line test and Jacinda Ardern’s promise there would be no capital gains tax while she was leader.

What makes it worse is that the broken promises will do nothing to solve the housing crisis. It could well decrease the supply of rental accommodation and will lead to increased rents.

That pressure on rents will be compounded by the decision to single property owners out by ending their ability to claim the cost of interest against their income for tax purposes.

This is not as the government asserts, and some in the media parrot, closing a loophole, it’s a change to tax law that has until now applied to every business.

Higher costs for landlords will inevitably be passed on to their tenants.

Increasing income caps and house prices for First Home Grants is a token gesture when house prices are so high and if it does anything it will add fuel to the fire. Anything which makes it easier for people to buy a house without increasing the supply will push up prices.

At first glance the infrastructure accelerator looks good, but will it be effective?

. . .However, Kiwibank chief economist Jarrod Kerr said the policy changes simply “tinkered at the edges”, and were not enough to address the systemic supply issues that have caused New Zealand’s house prices to soar beyond the reach of many.

“It was pretty disappointing to be honest. Some of the ideas are good, but the size is pathetic. It’s a drop in the bucket and it’s a leaky bucket at that.”

Kerr said the tool with the most potential was the $3.8b infrastructure accelerator, which is intended to help local councils create the necessary services infrastructure – plumbing, roads, power – to unlock remote land for property development.

“I think the idea is great; we need to get funding into councils to sort out woeful infrastructure and get it to areas that need to be developed. But the fact that it only got $3.8b means that it’s going to be ineffective – $3.8billion spread across all our councils is a rounding error.” . . 

The whole package is underwhelming, it’s just broken promises and bromide that ignore the root cause of the crisis – a lack of supply and the foundation for that is an unwillingness to cut the red tape that holds back development.


Identity politics matters more than issue


This is what happens when identity politics matters more to a Minister than the issue:

A tweet by Greens co-leader Marama Davidson, accusing National MP Nicola Willis of using “racist and classist undertones” when discussing emergency accommodation, led to a showdown in Parliament. 

It began with Willis asking Davidson about the Government’s Homelessness Action Plan and how she aimed to reduce the ballooning use of emergency accommodation such as motels, as Associate Housing Minister responsible for homelessness.  . . 

Willis asked Davidson if she was accusing New Zealanders who raise concerns about their safety in relation to increased numbers of people in emergency accommodation as being racist. 

“I am accusing a member, a National member of this House, of attempting to stigmatise a group of people with little access to power and resourcing, of attempting to whip up stigmatising and dehumanising narratives around groups of people who need our support, around groups of people who need us to address the systemic causes of crime,” Davidson responded. 

“Yes, I am accusing a National member of raising that dehumanising narrative.” . . 

The only one to mention race or class was Davidson who in doing so let her focus on identity politics blind her to the issue – that central Wellington streets are not safe and that the use of motels for emergency accommodation is part of the problem.

And it’s a multi-million dollar problem.’

Newshub can reveal the multimillion-dollar extent of the Government’s emergency motel bill and just how much Kiwis are forking out to some of the top earners.  

One motel made $6 million off the Government last year, charging much more for rooms than it normally would. 

In the three months to December 2017, the Government spent $6.6 million on motels. By the following year it more than tripled and just keeps growing.  . . 

A problem that ought to be Davidson’s focus, instead of which she’s doing what?

Sepuloni could ask the Associate Minister of Housing with responsibility for homelessness, Green Party co-leader Marama Davidson, to shoulder the load. 

But in the five months that she’s been a minister, Davidson hasn’t taken a paper to Cabinet committee or issued a press release. 

“Not yet,” she said, adding that she’s been engaging with the community. 

Newshub checked Davidson’s latest ministerial diary. In January there were just two housing entries – a couple of interviews. 

She walked away when pressed on what work she’s been doing in housing. 

If she stopped blinding herself width identity politics she might be able to see, and do something about the real and related issues of unsafe streets and homelessness.

Building for future


Housing price increases have been outpacing wages for 20 years:

If nothing significant changes now that will get worse:

If New Zealand politicians thought the housing crisis in 2020 was bad, the worst is yet to come, warns a new report by The New Zealand Initiative.

In The Need to Build: The demographic drivers of housing demand, Research Assistant Leonard Hong modelled 36 scenarios and found that New Zealand’s population gets older and larger by 2038.

Hong calculated that the number of additional dwellings needed would reach between 26,246 and 34,556 annually under the most plausible scenarios. This excludes the annual housing replacement and demolition rate, and the current 40,000 undersupply calculated by Informetrics. 

“Historical data tells us that only 21,445 new houses have been built in New Zealand annually since 1992. This is nowhere near enough to accommodate our growing population,” says Hong.

For the next 20 years, even with zero net migration, we still need to build close to 20,000 dwellings annually to keep up with population changes.

“Policymakers should stop blaming the housing crisis on land banking investment and speculation and find policy solutions to drastically expand housing supply to keep up with demographic changes.”

Demographic changes will also have adverse effects on our prospects for fiscal prudence. The report demonstrates that the number of those over 65 years will be up by at least 23% in 2060.

This means fewer future taxpayers and more pressure on working-age New Zealanders to fund public services such as health care and education.

“Our future is an older and larger New Zealand and we must start preparing for it,” says Leonard Hong.

“We need to make a growing and ageing New Zealand a liveable place for New Zealanders, and this starts by building more houses now. Otherwise, future generations will have to deal with terrible housing affordability prospects.”

“This report should be a wake-up call for the government,” concludes Leonard Hong.

The full report is here.


It is no use tinkering with policies that attempt to reduce demand. The shortfall in supply is too great for that to make any significant difference.

The only solution is to build a lot more houses and start doing that now.

The government is frightened of the fallout should house prices decrease. It won’t have the courage to say that building more houses is a much higher priority than safeguarding the equity of existing home owners with big mortgages.

But the demand for housing is such to mitigate a lot of that risk.

Even if it didn’t, the financial and social costs of not addressing the housing crisis are a much greater problem that needs urgent action to enable a lot more houses to be built much sooner than any existing policies will do.

Where’s the urgency?


Another day, another announcement of an announcement that shows no sense of urgency:

The Government needs to show more urgency and commitment if it ever wants to make meaningful strides towards solving the housing shortage and getting wins for the environment.

National’s spokesperson for Housing and RMA reform Nicola Willis says first-home buyers will be disappointed the Government isn’t moving fast enough to make house building easier.

“House prices have risen more than 40 per cent since Labour came to office, yet Labour has shown no urgency when it comes to making it easier to build houses in this country.

“National has offered to work with Labour on emergency legislation, much like the special powers used in the Christchurch rebuild, which would accelerate house building nationwide.

What worked in Christchurch would work everywhere else.

“We’re disappointed that Labour hasn’t accepted our offer to form a special select committee and get on with this, much like it turned down the chance to work in a bipartisan way on RMA reform while National was last in Government.

“Now Labour plans to spend another three years moving RMA legislation through Parliament. Given the time it will also take local councils to amend their plans, it could easily be the late 2020s before any of these changes take effect.”

Ms Willis says she is concerned about the proposal for developments to be within biophysical limits and have positive environmental outcomes before proceeding, which David Parker has acknowledged will need to be carefully managed to avoid impacting house building.

“These changes may actually make it harder to build houses.”

National’s spokesperson for Environment and RMA reform Scott Simpson says Labour is heading down the wrong path with its reforms.

“For a Government that talks a big game on the need for environmental gains, it is moving at a snail’s pace.

“There’s a real risk its plans for new legislation will make things more complicated, costly and confusing than is currently the case, without achieving the environmental gains they seek.”

At the last election, National proposed splitting the RMA into an Environmental Standards Act, setting clear and efficient environmental bottom lines; and an Urban Planning and Development Act, making it easier to build houses in our cities, Mr Simpson says.

“This approach would ensure that our natural spaces are well protected, while also making sure we have a positive process for allowing houses to be built in already developed areas.”

Labour was telling us there was a housing crisis long before the party was in power.

It’s now in its second term, the lack of supply is driving house prices well beyond the means of average earners and rents are following a similar path.

The RMA is one of the factors contributing to development and building costs.

The government should stop playing politics and work with National to get solutions with the urgency that’s required.


Crisis warrants emergency response


Emergency powers are needed to solve the housing crisis:

National is calling on the Government to introduce urgent temporary legislation to make housing easier to build, and has offered to support the law change through Parliament.

At her State of the Nation speech in Auckland today, Leader of the Opposition Judith Collins said the time had come for an extraordinary solution to an unfolding emergency.

“It is too hard to build houses in New Zealand. We need to make it drastically easier. With rents and house prices spiralling out of control, Kiwis can no longer afford to wait.”

The law change would give Government the power to rezone council land, making room for 30 years’ worth of growth in housing supply, both through intensification and greenfield development.

The appeals process would be suspended so district plans could be completed as quickly as possible. Requirements for infrastructure to be built prior to zoning would also be suspended.

It would be a nationwide equivalent of the emergency powers put in place to get houses built in Christchurch following its earthquakes, which enabled the multiple between median incomes and house prices to remain constant there between 2014 and 2020.

What worked in Christchurch could work in the rest of the country.

Ms Collins has today written to Prime Minister Jacinda Ardern, suggesting that a special Select Committee be established immediately to develop the emergency legislation, with the committee’s recommendations available for consideration by the end of March.

With house prices having jumped 41 per cent since Ms Ardern became Prime Minister and the waiting list for public housing almost quadrupling to 22,409 households, building public houses alone will not be enough to make a meaningful difference, Ms Collins says.

“New Zealanders have had enough. It’s time for the two major political parties to work together to fix this problem.”

National’s housing spokesperson Nicola Willis says that while the dream of home ownership has been disappearing for many Kiwis, rents have also ramped up by an average of $100 a week in just three years.

“This means people are struggling to keep up with the other necessities of life – food, power and doctors’ visits.

“National wants more for New Zealanders. We don’t want a future where the only answer to being able to afford a place to live is to get on a Government housing waiting list.”

The debate over whether or not there is a housing crisis is over.

House prices are increasing far faster than incomes and inflation, rents are following, and poeple earning more than the average wage can’t afford to buy a house.

Unless drastic action is taken to address the root cause – supply falling so far behind demand, prices will continue to climb and the problems associated with unaffordability will get worse.

The government must make it easier to build houses and it must do so with urgency.

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