Govt shouldn’t be competing with private sector

February 18, 2020

Attempts to get onto the property ladder are being made more difficult by a government agency:

A first-home buyer has been left disappointed after Housing New Zealand, now called Kāinga Ora, bought out the apartment development she was purchasing a unit in.

The woman, who did not want to be identified, signed an agreement to buy a one-bedroom apartment in the Onehunga Bay Terrace Development, being built by Avanda.

She paid a 10 per cent deposit, of $54,200, at the start of August last year.

But in November she was told by real estate agents selling the development that the developer had entered into a conditional agreement with Kāinga Ora for it to buy the unsold units in the development. 

She said she was told if that happened she would be given the chance to cancel. She said she requested more information through her lawyer but was told there was no requirement to tell her anything further.

On January 16, she was sent a deed of cancellation by the developer, cancelling her agreement. She was told she would get her deposit back, plus the expenses she incurred in the deal, such as legal fees and the cost of a valuation. . . 

Housing is supposed to be one of the government’s priorities.

It won’t solve the shortage if its own agency is shutting out private buyers.

That’s unfair competition which does nothing to solve the problem of over demand and under supply.

The government should not be competing with the private sector in the housing market.

It should address the underlying reasons for the housing shortage, chief of which is the difficult and expense consent process.

 


Shouldn’t smoke anything in other people’s houses

June 27, 2018

Chief science advisor Sir Peter Gluckman has found there is no evidence that contamination from smoking meth poses a risk to health.

• Methamphetamine is a powerful, highly addictive stimulant used illicitly in New Zealand and around the world. It is obtained either through smuggling into the country, or by being manufactured locally in clandestine laboratories (meth labs). These meth labs may be found in residential dwellings, commercial accommodation, and even vehicles. 

• A dwelling can become contaminated with methamphetamine residues if the drug is manufactured or smoked within it. Smoking usually results in much lower residue levels compared with manufacture. . . 

• Passive, third-hand exposure to methamphetamine can arise through residing in a dwelling previously used as a clandestine meth lab, or where a significant amount of methamphetamine has been smoked. Former meth labs generally have relatively high levels of methamphetamine residue on sampled surfaces (levels greater than 30 μg of methamphetamine per 100 cm2 surface area are thought to be indicative of manufacturing activity). There is some evidence for adverse physiological and behavioural symptoms associated with third-hand exposure to former meth labs that used solvent-based production methods, but these symptoms mostly relate to the other toxic chemicals in the environment released during the manufacturing process, rather than to methamphetamine itself.

• However, there are no published (or robust, unpublished) data relating to health risks of residing in a dwelling formerly used only for smoking methamphetamine. Yet, given the relatively low number of confirmed meth labs found, and the very low average levels of methamphetamine found in most houses that test positive for the drug, most New Zealanders will only ever encounter very low levels of residue that are the result of methamphetamine use. . . 

In the past meth users were evicted from state houses, now Housing NZ will let meth users stay in their houses and try to get them help.

Housing Minister Phil Twyford said Housing New Zealand is a landlord for some of the most vulnerable people in the country.

He said if the agency discovers a tenant is smoking meth, it will try to help them. . . 

He said the response from Housing NZ now was to treat people using meth as a health issue.

“Under the old government the policy was to make that person homeless – the worst possible thing that you could do.

“If someone’s got a drug addiction problem, you couldn’t do anything more calculated than to make them vulnerable to greater risk in their health, and in fact incurring greater expense to the taxpayer than throwing them out of their home and making them homeless.

“Housing New Zealand is a landlord … they’re not the police.

There is merit in treating drug use as a health issue and  trying to find help for addicts.

But I am concerned that this policy sends a message it’s fine to smoke in other people’s houses.

All landlords have the right to tell tenants they can’t smoke anything – legal or illegal – in their houses.

We have a strict no smoking rule in all our farm houses. One of our sharemilkers goes further, telling his staff the whole farm is smoke-free.

Property owners and employers have a right to do that.

Another thing to remember is that no evidence of harm is not the same as proof of no harm.

Science is rarely settled and regardless of what the research has found, I wouldn’t want to live in a house where people had been smoking meth.


Number matters not owner

November 3, 2014

The opposition and the other usual suspects are exercised by the government’s plan to sell some state houses and labelling it an asset sale. But Prime Minister John Key said:

“If at the end of the day, Housing NZ sells a few state houses, well, actually, that’s happened for a long period of time. We often trade our stock.

“So if we sell some individual state houses, it’s not an asset sale. If we sold Housing New Zealand or part of it, it would be, and we have absolutely no plans to sell.”

This is like Landcorp selling some of its farms.

I’d be happy if the SOE sold more, but selling farms isn’t the same as selling the company, just as selling some houses isn’t the same as selling the entity that owns them.

Mr Key said the Government was undertaking a massive redevelopment of state housing stock because many houses were in the wrong place or unsuitable for housing needs.

If the houses are in the wrong place, in poor condition, have too many or two few rooms or are otherwise not fit for purpose it is sensible to sell them.

The issue shouldn’t be who owns which houses but what’s the best way to ensure people who need a house can get it and the government is planning to increase the supply by building more state houses and also making it easier for other providers of social housing to build.

The number of houses available matters far more than who owns them.

 

 

 


Incomes up, poverty down, inequality flat

July 9, 2014

The left tried to manufacture a manufacturing crisis and manufacturing improved.

They’ve declared a housing crisis and are particularly critical of the government’s social housing initiatives.

But Lindsay Mitchell reports good news on that front too:

. . . On the positive side,  in March 2008 the HNZC waiting list stood at 9,935. Now the number is 5,840 and includes those waiting for other social housing. A good news story for National. . .

And there’s improvement on two other problems on which the Left has been critical of the government – child poverty and inequality.

Social Development Minister Paula Bennett has welcomed the latest Household Incomes Report showing child poverty has fallen three percent.

“Today’s release shows we are making progress.  From a survey conducted between July 2012 and June 2013, findings show that median household incomes rose four percent in real terms in the two years since July 2011,” says Mrs Bennett.

“While the gains since 2011 were shared reasonably evenly across incomes, the global recession in the two years previous impacted slightly more on lower incomes.  The report also shows that trend-line inequality has remained flat.

“This latest research shows New Zealand households have bounced back.  In the past year 84,000 more jobs have been added to the New Zealand economy, 8,600 sole parents have come off benefit in the past year and there are nearly 30,000 fewer children in benefit dependent households compared to two years ago.

Moving from welfare to work is one of the best ways to address poverty for adults and any children who depend on them.

Yet the opposition have opposed and criticised every move National has made to help people get off benefits and on to wages.

“Nevertheless the Government recognises more needs to be done to support our most vulnerable families. 

“Which is why, on top of free breakfasts to all schools that want it, a social worker in all decile 1-3 schools and warming up nearly 300,000 homes, we are in this year’s budget investing nearly $500 million over four years in services and support for families. 

Initiatives include:

  • $171.8 million to boost the paid parental leave scheme. Paid leave will be extended by four weeks – starting with a two-week extension from 1 April 2015, and another two weeks from 1 April 2016. The eligibility of paid parental leave will also be expanded to include caregivers other than parents (for example, permanent guardians), and to extend payments to people in less-regular work or who recently changed jobs.
  • $42.3 million to increase the parental tax credit from $150 a week to $220 a week, and increase the entitlement from eight weeks to 10 weeks, from 1 April 2015.
  • $90 million to enable GPs to offer free doctors’ visits and prescriptions for children under the age of 13, starting on 1 July 2015. Over 400,000 more children will benefit by including six- to 12-year-olds.
  • An additional $155.7 million to help early childhood centres remain affordable, meet demand pressures and increase participation towards the Government’s 98 per cent target.
  • $33.2 million in 2014/15 to help vulnerable children, including eight new children’s teams around the country to identify and work with at-risk children and their families, to screen people who work with children, and to support children in care.

“Recognising that housing costs are a significant issue for low income families, the Government is investing $95.7 million of new money into social housing over the next four years.

“There’s more financial assistance to help people into private rentals to free up social housing for those who need it most, there’s new funding to grow more social housing in partnership with NGOs, and easier social housing assessment processes with the transfer of responsibility to Work and Income

“This Government is determined to improve the lives of children in low income families by targeting resources to services and support that are guaranteed to make a difference for those children,” says Mrs Bennett. 

The Household Incomes Report for the 2012 calendar year can be found at: www.msd.govt.nz

Lindsay Mitchell notes:

Using MSD’s Economic Living Standards Index (ELSI), hardship rates for children rose from 15% in the 2007 HES to 21% in HES 2011, then fell to 17% in HES 2012. The trend finding is robust, though the actual levels at any time depend on a judgement call on the threshold used.

 Poorer people will always be hardest hit by hard times.

But the government borrowed to take the hardest edges off the GFC for the most vulnerable and has put a lot of effort into addressing the causes of poverty – one of the biggest of which is benefit dependence.

There’s still a long way to go but the trend is in the right direction – inequality is stable, benefit dependency has reduced and poverty is declining.


Firm on fraud frees up 1000 houses

August 19, 2013

Housing New Zealand’s firm line on criminal offending and dishonesty has freed up 1000 houses since the Government changed its policy in 2008, Housing Minister Dr Nick Smith said.

“State houses are heavily subsidised by other taxpayers and tenants abuse this support when they are dishonest about their living situation or income, or use the home for criminal activity like drug manufacturing. We need to take a firm approach to such abuse to be fair to the vast bulk of honest tenants, to ensure public money is supporting improved social outcomes, and to ensure our state houses are available to those most in need of housing support,” Dr Smith says.

“Housing New Zealand expanded its fraud unit and started taking a firm approach on the change of Government in 2008. This has seen the number of tenancies terminated for fraud or criminal offending grow from 42 in 2008/09 to 292 in the year ending of 2012/13. A total of 1001 tenants have been evicted as a result of fraud investigations since the new approach was adopted.

“Housing New Zealand also takes a zero tolerance approach to state houses being used to manufacture and supply drugs. Four houses were used as meth labs in the 2012/13 year, as compared to seven in the previous year. It is an appalling breach of faith for tenants, generously provided with a home by other taxpayers, to then use that home to manufacture and peddle drugs. I am hopeful that the decline in the number of state houses being used as drug houses is a sign that the message of zero tolerance is getting through.

“The work by Housing New Zealand investigators resulted in 129 criminal convictions and the identification of $11 million of rent subsidies tenants were not entitled to.

“While the vast majority of Housing New Zealand’s 62,000 tenancies on income-related rent are in legitimate need of housing, a small minority are rorting the system. I make no apologies for the hard line taken to make sure state housing is freed up for those who actually need it.

“Housing New Zealand investigations for fraud arise from tenancy manager observations, anonymous tip-offs, information from other government agencies and inconsistent information from tenants themselves. 22 per cent of investigations result in no further action because of honest misunderstanding or mistake, insufficient information to prove dishonesty, or other exceptional circumstances that negated what appeared fraudulent.

“Housing support fraud will become more difficult with the Government’s social housing reforms that bring together the administration of financial support for housing and welfare. Many of the people defrauding Housing New Zealand were also committing benefit fraud and it makes sense for both sorts of financial assistance to be considered together.”

A thousand out of 62,000 is not a large number but state houses are supposed to be for those who need them, not those rorting the system or indulging in criminal behaviour.

Last week Victoria University accounting and commercial law associate professor Lisa Marriott said that Inland Revenue was more likely to write off unpaid tax than the Ministry of Social Development  was to write off welfare debts.

MSD would often keep welfare debts on its books, sometimes until people died or retired.

Tax debt totalled nearly $6 billion, while welfare debt was about $1b, she said.

“There appears to be no basis for treating debtors to the two government agencies differently,” Marriott said.

The study indicated tax debtors got off more lightly, she said.

Inland Revenue was more likely to negotiate with debtors and collect core tax, and write off penalties and interest, Marriott said. . .

Associate Social Development Minister Chester Borrows said those claims were misleading.

“The Ministry of Social Development (MSD) has a duty to take care with taxpayer money. When they find evidence someone has fraudulently taken money they are not entitled to, they will prosecute, and make no apologies for that,” says Mr Borrows.

“To describe this as being particularly ‘punitive’ is simply wrong. It implies we should ignore welfare fraud, and shows a basic ignorance of the wide range of support MSD provides to New Zealanders.”

Mr Borrows singled out claims that more is spent chasing welfare fraud than tax fraud as demonstrably false.

“This year IRD has a budget of $142 million to enforce tax obligations. This is more than quadruple MSD’s collections and integrity services budget of $29.8 million.”

He also pointed to the use of penalties and interest to illustrate the different approaches taken by MSD and Inland Revenue.

“To focus on penalties and interest written off by Inland Revenue ignores the very different way IRD and MSD operate. Inland Revenue has a tough regime of penalties and interest, whereas MSD only uses penalties in rare cases where dishonest behaviour needs to be sanctioned by a criminal prosecution is not appropriate.

“The numbers clearly illustrate this. In 2011/12 MSD imposed around $144,000 of sanctions on 164 cases – a stark difference to the more than $600 million of penalties and interest IRD imposed in the same year.” . . .

Revenue Minister Todd McClay says there can be good reasons to write some tax off.

“Businesses that are finding it a little bit difficult to meet their obligations can stay in business and keep employing New Zealanders,” says Mr McClay.The Minister says comparisons between the two Ministries are unhelpful, partly because there are under half a million kiwis on benefits, but more than 7 million tax customers. . .

Fraud is fraud and taking other people’s money is wrong. But simple comparisons between the way the MSD and IRD treat debt is misleading.

The $1b written off by MSD will be a much larger percentage of benefit payments than the $6b written off by IRD is of tax payments.


Hickey accepts Cullen’s challenge

May 28, 2008

Bernard Hickey blogged this morning in Show Me the Money that every day from now until the election he’s going to accept Michael Cullen’s challenge to identify some pointless or wasteful Government spending that could be cut.

 

This includes spending by state-owned enterprises and jobs being offered by all manner of agencies and quangos. This is going to be fun because there is a lot of low-hanging fruit.

The good doctor believes the government runs a tight ship and critics won’t be able to find much in the way of cost savings from government spending to fund tax cuts or to help reduce the inflationary pressures that are keeping interest rates high. He has challenged National and any other proponent of income tax cuts (although I am not one right now) to explain how they will be able to afford tax cuts without massive cuts in government spending and services.

My sense is that nine years of strong government spending growth have created an atmosphere where bureaucrats employ extra people, pay for more consultants and launch more projects without asking the basic question: Do we really need to do this and will we create more value for the economy by doing this than by allowing the private sector to use these resources?

 His first example was Transpower’s new website winterpower watch which was difficult to find and didn’t tell him what he needed to know.

 

He asked for other suggestions and this afternoon added Housing New Zealand staff’s weekend conference at the luxury Tongariro Lodge which has been widely reported in the MSM and on blogs including kiwiblog  and No Minister.

In the same post Bernard wonders why the Government is looking for a fulltime web communications advisor.

 I don’t get it. I can understand IRD and ACC and a few other government departments that deal with the public need fulltime webmasters to run sites that provide services to the public. That could actually be quite useful and efficient.

But the MSD is an policy advice body. It deals with ministers and other bureaucrats. Surely it’s not that hard. You put all the advice and research up on the site using the basic publishing systems already there. It’s either publicly available on the Internet or it’s available only to other bureaucrats via an Intranet. Do we really need someone doing this fulltime?

Here’s the most interesting gem from the job description. It explains why the MSD wants a fulltime web manager.

The Knowledge Sharing and Communications unit is based within the CSRE group in National Office and has a team of nineteen staff. It includes a Library team to provide effective and proactive library and information services to all Ministry staff.

Just the communications unit within the MSD, let alone the MSD head office, has 19 staff!

Add these examples to the areas ripe for culling suggested by The Hive and me and the potential for tax cuts might increase from just enough for a block of cheese to an amount that could buy a whole cow.

 

 

 


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