KiwiBuild failed

September 5, 2019

The government’s KiwiBuild reset is an admission of how flawed the policy was in the first place.

The 10,000 houses it said it would build wasn’t a target, it was a figure plucked out of the air, completely distanced from reality.

Worse than the unrealistic number, was the money wasted on houses no-one wanted to buy and houses sold to people who should not have been beneficiaries of taxpayer assistance.

Now Housing MInister Megan Woods has announced another plan, with no targets, which includes selling the houses no-one wanted – almost certainly to be a win for the buyers and a lose for the public.

There’s also a government backed low equity scheme that sounds horribly like the Fannie Mae and Freddie Mac scheme in the USA that precipitated the Global FInancial Crisis.

The Taxpayers’ Union points to the potential  dangers that poses to taxpayers:

Replacing KiwiBuild with easy credit policies for first home buyers places significant risk on taxpayers, says the New Zealand Taxpayers’ Union. 

Taxpayers’ Union Economist Joe Ascroft says “The American housing crash and ensuing Global Financial Crisis was driven in part by the American Government’s decision to offer subsidized mortgages to low income households, who then failed to meet debt repayments when interest rates increased. Our Government’s decision to adopt a similar approach by offering taxpayer-backed mortgages to households who can only scrape together a 5 percent deposit is an uncomfortable echo to those easy credit policies which induced a housing crash overseas.”

“If households on ultra-low deposits ever failed to meet repayments due to rising unemployment or interest rates, either taxpayers or the banking system would be put under significant pressure.”

“Of course, the best approach to housing unaffordability isn’t to load on more debt and subsidies – which will inevitably push housing prices higher – but to enact meaningful supply-side reform. Allowing our cities to become more dense and removing the rural-urban boundary would be good places to start.”

The new policy, like many of this government’s lack details and the Minister’s repeated “we’ll build as many as we can as quickly as we can” is no substitute for a target tand a concrete plan to get there.

The root of the housing problem is simply one of supply not keeping up with demand, this hasn’t been helped by Prime Minister Jacinda Ardern’s calling a halt to development at Ihumātao.

The solution is more houses, faster which requires sorting out the infrastructure restraints, regulations that make the consent process so long and costly, and building here so much more expensive than in many other countries.

Anything which gives people more money without increasing the supply of houses will only make them more expensive.

KiwiBuild failed because it didn’t deal with the underlying causes of the problem and the so-called reset will do very little, if any, better.

We’d all benefit if the government set about addressing the constraints on supply rather than throwing more taxpayers’ money at policies that will benefit a relatively few people at considerable cost and risk to all of us.


Stardust dulls in sunlight

August 7, 2019

A Prime Minister who is well regarded overseas is good for a small country.

But being well regarded overseas isn’t good enough. A Prime Minister has to earn, and keep, approval at home and the stardust that settled on Jacinda Ardern early in her leadership is dulling under the sunlight of scrutiny.

There is no doubt she is a good communicator, compassionate and likable. As Matthew Hooton told Sky New Australia, she would be a good princess or president without power, but she is a hopeless Prime Minister.

But, but, but what about the way she handled the aftermath of the mosque shootings?

There is no question she did that well but that’s the New Zealand way. Other recent Prime Ministers, Bill English, John Key (who did at least as well after the Canterbury earthquakes) and Helen Clark would have reacted with similar compassion.

But those Prime Ministers also delivered, and this one is failing to. Matthew Hooton, again, on the year of delivery:

. . . For those still committed to reality-based politics, Ardern’s “year of delivery” is as credible as her earlier promise to be “transformational”.

KiwiBuild, the Billion Trees programme and the Provincial Growth Fund handing out only 3 per cent of the money Shane Jones has paraded are the most risible. . .

He goes on to list more failures and there are plenty of them.

He isn’t alone in his criticisms and that’s not surprising for people on the right of the political spectrum but even the very left blog The Standard is saying it’s time to ditch the default Jacindamania:

Despite the babies and the engagements, maybe it’s time to ditch the default Jacindamania.

Let’s not bother with the criminal waste of tax on hundreds of working groups, existing to successfully suppressing oppositional opinion through co-option.

Oranga Tamariki has got three investigations underway for removing children, and is being kicked all over the park by the media. Cue another year of paralysis by analysis. . . 

. . .  it’s a very partial leadership. It’s not ‘transformational’, it’s not the year of delivery. What is this government?

This is the weakest leadership on policy of any government since the last term of Holyoake, 60 years ago. That’s on Ardern.

It’s time, since we are now getting emails to volunteer and donate money on their behalf for the next election, to expect more from Jacinda Ardern.

Coming from the left that’s damning.

But wait there’s more. Her interview this morning with Mike Hosking was a train wreck which Steve Braunias dissects:

O the joys and woes of being Prime Minister! One minute you’re swaying your hips for the cameras in the lovely warmth of Tokelau while the world gazes with adoration at your picture on the cover of Vogue, as chosen and commissioned by Her Royal Highness Meghan Markle the Princess of Trans-Atlantica; the next minute you’re back in New Zealand, there’s a serious sex scandal rocking the Labour Party, the cops have gone feral at Ihumātao, the weather’s gone all to hell – and worst of all, you’re stuck on the phone for your regular Tuesday morning convo with Mike Hosking.

It’s paramount that the Prime Minister keeps her cool and shows every sign of being at ease and in control when she makes media appearances. There is but one emoji to maintain: the one with a smiley face, round and yellow and all good, expressing the optimum vibe of inane happiness. . . 

But good cheer and happiness was entirely absent during Ardern’s 10-minute interview with The Hosker on Newstalk ZB this morning. Her appearance was an emoji trainwreck, and it crashed every time that the Prime Minister called the ZB talkback host by his first name.

She said it 11 times. . .

He goes on to give an emojiological analysis of those 11 times.

It’s behind the paywall and it’s worth paying for, here’s a taste:

The interview which prompted this is here.

There was no stardust dazzling and personality sparkling there and even had there been it is no longer enough.

Stardust is no use without substance and personality doesn’t pay the bills.


Police complaint over Ardern’s interference

July 30, 2019

A senior member of Te Kawerau a Maki, David Rankin, plans to lay a complaint with the Police this week over Prime Minister Jacinda Ardern’s interference in the current land dispute at Ihumatao.

The complaint will allege that the Prime Minister used her position to interfere in a legal transaction and as a consequence, will deprive the iwi of dozens of homes which Fletchers has contracted to provide to the mana whenua of Ihumatao.

“I don’t take this action lightly,” says Mr Rankin, “but the Prime Minister has directly interfered in a legally valid arrangement, and at great cost to the iwi. First, she destroyed kiwi-build, and now she is destroying iwi-build. Fletchers have agreed to provide 40 houses to our people, which is exactly 40 more houses than the Labour Government has managed to provide to us.”

Gerry Brownlee quipped at the National Party conference that Kiwibuild was aptly named because it can’t fly.

Now Ardern has grounded iwi-build.

Mr Rankin admits that the complaint to Police will make him unpopular, but he says that there is a bigger issue at stake. “Ms Ardern has breached the kawa of our hapu, and her actions will leave some of our old people without houses. This is intolerable, and also breaches the law.”

Whether or not it’s a matter for police, it threatens the whole Treaty process, as Whanau Ora Minister Peeni Henare pointed out:

. . .But I want to be very clear and put a word of caution here. If the government steps in to buy this land back, we undermine every treaty settlement that’s been done to date. We then allow re-litigation of settlements that have been done in the past, and are we prepared for that? . . .

For many of the protesters the issue is bigger than Ihumatao. 

The PM’s interference has made it even bigger.

She has given way to protesters in what is a fraught family disagreement.

In doing so she has trampled over Fletcher Building’s property rights and an agreement between he company and Mana Whenua, and is delaying the building of much-needed houses.

She has also sent a message to businesses that they can’t rely on the government to back them, even though the law is on their side.


Counting down

June 30, 2019

David Farrar has been doing a regular count-down on what’s required for the government to keep its KiwiBuild promise:

I don’t usually gamble, but am confident to wager they’re not going to make it, even with all the new ministers.


More than half way

June 24, 2019

This government is more than half way through its term and what has it achieved?

Duncan Garner says it’s the least effective government in 25 years.

It’s flagship KiwiBuild policy has flopped and the flop looks even worse now we know how it began:

. . .Senior MP and shadow housing minister Annette King had just the ticket.

King, who declined to comment for this story, had been in a car on the way to an event with Salvation Army head Campbell Roberts and Housing Foundation head Brian Donnelly in the months before the conference, chatting about the emerging problems in housing. Donnelly’s agency had a scheme where affordable homes were built and sold, and the capital immediately recycled to build more. King liked the idea.

“We said there was a supply problem, and there was a need for there to be an increase of supply of affordable entry-level housing. But the emphasis was on the affordable,” Roberts told Stuff.

“To tell you the truth, I was a bit concerned with the speed at which they grabbed it. I don’t think there was pretty much more than our conversation – which was in the car going to something – it was a not a sitdown meeting, and the next thing they were introducing it,” Roberts said.

And then  it grew:

. . .KiwiBuild is an unmitigated disaster. Dreamed up by Annette King in the back seat of a car, she latched on to it and set the original target of 50,000 houses because it sounded good in her head. A wish-list, not a policy.

Legend has it the close breathing of David Cunliffe down David Shearer’s neck was precisely what prompted the last-minute decision to blurt out 100,000 homes on the day of the announcement. . . 

It wasn’t a carefully thought-out and costed policy. It was an idea prompted by a conversation and a number blurted out.

And what else has the government done?

  • Wasted millions on fee-free education for tertiary students, many of whom would have enrolled anyway.
  • Got soft on beneficiaries – ending the requirement to be looking for work and for solo mothers to name their children’s fathers.
  • Wasted millions prolonging the grief of those mourning the lives lost in the Pyke River mine.
  • Wasted millions on good looking race horses.
  • Incentivised overseas purchases of farmland for conversion to forestry.
  • Virtue-signalled on the environment while ignoring the science provided by the Parliamentary Commissioner for the Environment.
  • Wailed about the road toll while refusing to do anything to deter drug driving.
  • Done nothing about the risk to mothers and babies with the lack of maternity centres in Central Otago and Southland.
  • Failed to increase funding to Pharmac to keep up with inflation.
  • Contributed to a slowing economy and a drop in confidence. . .

And while it’s spending more on doing less, it’s taking more money from us to do it:

Kiwi households will be $1750 a year worse off on average because of the taxes being piled on by the Labour-led Government, Leader of the Opposition Simon Bridges says.

“This Government has increased fuel taxes three times since it came into power, it’s added on a regional fuel tax in Auckland, introduced ring fencing of losses, an Amazon Tax, GST on overseas roaming, extended the bright-line test, increased Worksafe levies and cancelled tax relief.

“When you add all of these taxes together and take into consideration the cancelled tax relief, Kiwi families are looking at $7000 out of their pockets over four years. That does nothing to increase the wellbeing of an average family.

“The economy is continuing to weaken because of this Government’s poor policy decisions. The cost of living is increasing, rents are up an average of $50 a week, petrol and electricity are increasing.

“New Zealanders can’t afford this Government.

“You can’t trust Labour when it comes to tax. National will index tax thresholds to the cost of living and will not introduce any new taxes in our first term. National believes New Zealanders should keep more of what they earn.”

A lot of the commentariat are taking it for granted that this government will have another term.

But it has less than half a term left to earn a second one.

It will have to do a lot more effective in the next few months than it has been in the last 19 if it’s going to translate its warm words about wellbeing into making a positive difference to the country and its people.


Sometimes a sausage is just a sausage

February 15, 2019

If all publicity is good publicity the National Party’s latest advertisement has succeeded.

It’s a dig at KiwiFarce KiwiBuild.

One character says it’s good, the second points out that there’d have to be 33 houses built a day to meet its goal and so far it’s built only 33.

The third character who is barbecuing says that’s Labour, all sizzle no sausage.

So far so good, except that the character who thinks the policy is good is  a woman and the other two are men which some people have taken exception to, saying it’s sexist.

Would it be sexist if the one asking the questions was a bloke and at least one of the others was a woman?

No. So why is it sexist if the less informed character is a woman?

Doesn’t that that suggest women aren’t people who can be portrayed as stupid but men could be?

If equality is  the aim, women have to accept the bad with the good.

If equality is the aim, women can’t just be shown in more positive roles.

If equality is the aim, it’s best to look at people as people and not get hung up on gender.

And let’s not lose sight of the message in the clip – KiwiBuild is an expensive mistake.

The priority for housing is not people on well above the average income.

The need isn’t for  two- bedroomsemi-detached houses without garages in Wanaka.

. . .Waitaki MP Jacqui Dean said yesterday she considered the houses ”not practical” and ”not functional”.

”The Government expects Wanaka families looking for a home to pay over half a million dollars for a two-bedroom townhouse that doesn’t even have a garage.

”How appealing is a two-bedroomed town house that’s attached to another property by a shared wall, with no garage, and costs upwards of $560,000?

”It’s no wonder no-one wants to buy them.”

Ms Dean said the lack of interest showed how out of touch the Government was ”when it comes to delivering suitable first homes for young Kiwi families”. . .

Not only is the target unachievable, the houses being built are replacing others that would have been built by the private sector.

The Reserve Bank estimates that for every 100 houses built under the government’s KiwiBuild programme over the next three years, between 50 and 75 other houses may not be built because of capacity constraints. . . 

The government should be working to change the root causes of the housing shortage – the Resource Management Act, compliance costs, land availability, infrastructure constraints and skill shortages.

And people who think the National ad is sexist should remember that sometimes a sausage is just a sausage.


Labour pains National delivers

January 31, 2019

The National Party will put an end to tax bracket creep:

A National Government would link income tax brackets to inflation, ensuring income taxes are adjusted every three years in line with the cost of living and allowing New Zealanders to keep more of what they earn, National Leader Simon Bridges says.

“New Zealanders’ incomes are struggling to keep up with the rising cost of living because this Government is imposing more red tape and taxes,” Mr Bridges said in his State of the Nation speech in Christchurch today.

“Over the next four years, New Zealanders will be paying almost $10,000 more per household in tax than they would have been under National. The Government is taking more than it needs, only to waste billions on bad spending.

“On top of that, by 2022 New Zealanders on the average wage will move into the top tax bracket. That’s not right or fair. So in our first term National will fix that by indexing tax thresholds to inflation.

“We will amend the Income Tax Act so tax thresholds are adjusted every three years in line with the cost of living. That will mean that within a year after every election, Treasury will advise the Government on how much the thresholds should be adjusted for inflation.

“This would prevent New Zealanders from moving into higher tax brackets even when their income isn’t keeping up with the rising cost of living. It would ensure New Zealanders keep more of what they earn to stay on top of rising costs of living such as higher prices for necessities like petrol, rent and electricity.

“We will include a veto clause so the Government of the day can withhold the changes in the rare circumstances there is good reason to. But it will have to explain that decision to New Zealanders.

It would take a very serious change in economic health, or a very stupid government, to do that.

“The changes would make a real difference. Assuming inflation of 2 per cent, someone on the average wage would be $430 a year better off after the first adjustment, $900 after the second and $1,400 after the third.

“A family with two earners – for example, one earning $80,000 and the other $40,000 – would be $600 better off a year after the first adjustment, about $1,300 after the second and $1,900 by the third.

“That’s more of their own money in their own bank accounts.

“The first adjustment would prevent Kiwis from paying an extra $650 million a year in tax based on today’s estimates. We can afford that by managing the books prudently and spending wisely.

“We will also do more on tax – but add no new taxes – and I’ll continue talking about our plans between now and next year’s election.

“National is committed to helping New Zealanders get ahead. This step means that as well as cancelling new taxes this Government has piled on, we won’t allow future governments to use inflation as an annual tax increase by stealth.” 

This is a very positive start to the political year from National and a stark contrast to Labour’s which featured what amounts to an admission of failure on their flagship policy:

KiwiBuild’s “interim” targets for this electoral term have been scrapped as the Government recalibrates the programme.

Prime Minister Jacinda Ardern and Housing Minister Phil Twyford told media from their caucus retreat on Wednesday that their commitment to building 100,000 affordable homes over the next decade remains intact, but the interim targets for this term did not.

The Government has been dealing with the fallout from an admission by Twyford that the Government would not be able build 1000 of the homes by July 1, its first interim target. Instead it expects to build just 300.

The KiwiBuild policy aims to build 100,000 affordable homes for first-home buyers over 10 years, half of them in Auckland. . . 

They expect us to believe they can build 100,000 affordable homes in a decade when they can’t build 300 in the first year?

Labour is planning to waste money on houses for a relatively few people earning well above the average income. National has committed to letting people keep a bit more of their own money.

It gives voters a very clear choice – Labour pains over housing or National delivering clear policy to end bracket creep.

 

 


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