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2007: John Key says Housing is in crisis
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On 20 August 2007, National’s new leader, John Key, made a stirring speech to the Auckland branch of the New Zealand Contractors Federation. In it, he lambasted the then-Clark-led Labour government;
“Over the past few years a consensus has developed in New Zealand. We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse.
This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.
The good news is that we can turn the situation around. We can deal with the fundamental issues driving the home affordability crisis. Not just with rinky-dink schemes, but with sound long-term solutions to an issue that has long-term implications for New Zealand’s economy and society.
National has a plan for doing this and we will be resolute in our commitment to the goal of ensuring more young Kiwis can aspire to buy their own home.”
(Hat-tip: Bert)
In 2007, Key described “home affordability and ownership” as a “crisis”.
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2016: John Key says Housing is a more like a “challenge”
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Almost exactly five years, one of my first blogposts involved the looming housing crisis. On 3 August, 2011, I wrote;
The shortage of state housing is a serious matter, though. This critical problem of decent, affordable housing is not helped by the fact that the Fourth National government (1996-1999) sold around 13,000 State Houses in the 1990s. These properties were supposedly made available to tenants – but actually went mostly to property speculators (who later sold them for tax-free capital gains).
When Labour was elected to power in November 1999, they immediatly placed a moratorium on the sale of state housing. According to HNZ, they currently ” own or manage more than 66,000 properties throughout the country, including about 1,500 homes used by community groups”
This government has re-instated the sale of state houses. It does not take rocket science to work out that selling of state housing reduces the availability of housing stock. Housing Minister Phil Heatley said that,
“… about 40,000 of the 69,000 state house stock will be available for sale,” but then added, “that the vast majority of tenants do not earn enough to be required to pay market rent means relatively few will be in a position to buy“. (Source.)
There seems to be nothing stopping tenants from buying their state house and immediatly on-selling it to a Third Party.
Is it any wonder that the shortage of state housing is not being addressed in any meaningful way?
That was five years ago.
The housing crisis appears to have only recent dawned on National ministers. As Social Housing Minister, Paula Bennett said on 25 May this year;
“Certainly what we’ve seen is it has been more acute in the last two years.”
It is most certainly not a recent problem. It is only “new” if you are a well-paid National minister, living in a tax-payer-funded residence.
In my blogpost five years ago, I offered a solution to the housing crisis confronting this country;
Solution: build more houses.
This may seem like a ‘flippant’ answer to a desperate problem – but it is not.
The building of 10,000 new state houses may seem an outrageously expensive idea. But it would address at least three pressing problems in our economy and society;
1. Persistantly high unemployment.
2. Low growth.
3. Inadequate housing for the poorest of our fellow New Zealanders.
At an average housing cost of $257,085 (calculated at DBH website @ $1,773/m for a 145 square metre, small house), the cost (excluding land) is $2.57 billion dollars, including GST (approximate estimate).
By contrast, the October 2010 tax cuts gave $2.5 billion to the top 10% of income earners.
For roughly the cost of last year’s tax cuts, we could have embarked on a crash building-programme to construct ten thousand new dwellings in this country. …]
It would be a boom-time, as two and a half billion dollars was spent on products and services.
Would it actually end up costing taxpayers $2.57 billion dollars? The answer is ‘no’. Government would actually re-coup much of that initial outlay through;
- gst
- paye
- other taxes
- reduced spending on welfare for unemployed
- and investment re-couped by rent paid for new rentals
Would it work?
Yes, it would. An NZIER survey expects a strong pick-up in 2013 when the rebuilding phase hits full-flight, with 3.9% annual growth predicted from a previous forecast of 2.6%.
[…]
There is no reason why a determined government cannot adopt a bold programme for economic growth.
Instead of borrowing to pay for tax cuts we can ill afford, we should be investing in jobs. The rest will almost invariably take care of itself.
We have the resources. We have the money. We have the demand for new housing. What else is missing?
The will to do it.
National has been half-hearted in it’s will to address this crisis. It has implemented a few lukewarm, ad hoc measures, but they are five years too late and too little.
Some of National’s announcements have been panic-driven;
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At other times, National has indulged in it’s favourite past-time of “blame-gaming”;
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By 2016, under Key’s watch, homelessness has increased; housing affordability has worsened, and home ownership has plummeted. Our esteemed Dear Leader no longer calls it a “crisis“. It is now just a “challenge“;
“I don’t think it’s a crisis, but prices are going up too quickly.”
“There are plenty of challenges in housing, and there have been for quite some time.”
Make no mistake, this is a direct consequence of National’s laissez-faire approach and an opportunistic reliance on mass immigration to keep the economy afloat at a time when dairying is no longer the main driver of economic growth.
By any definition, National’s “hands off” approach to housing – whether social housing for the poor or affordable housing for the Middle Classes – has been an abject failure.
The mood for change has never been as palpable since the dying days of the Shipley-led National government in 1999.
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The Labour Response
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On 10 July, Labour leader Andrew Little congratulated Labour on it’s 100th year birthday. He also put the boot firmly and fairly up National’s backside for it’s hopeless track record on housing.
If the supply of food were in short-supply and expensive as is housing for poor and middle-class New Zealanders, there would be rioting in the streets by now. By morning there would be a revolutionary government sitting in the Ninth Floor of the Beehive and Key and his ministerial cronies would be in hiding, exile, or under arrest.
Little began with a brief, but accurate refresher course in New Zealand history;
“We’re here to celebrate Labour’s creation of the welfare state, the achievements of widespread home ownership and the creation of state housing, a free health system and a free education system.
In short, we celebrate the building of a nation.
We celebrate and we remember the image of Michael Joseph Savage carrying the very first furniture into the very first state house.
Offering hope to people that the years of depression were over and there were brighter days ahead.
We’re here to celebrate the beginning of the reconciliation between Maori and Pakeha and the restoration of the mana of the Treaty of Waitangi.
We’re celebrating the decision to make New Zealand nuclear free. We celebrate the courage shown by thousands of New Zealanders who marched against the Springbok Tour.
We’re celebrating KiwiBank. Kiwisaver. Working for Families. The Cullen Fund.
We celebrate Homosexual Law Reform and we remember the scene of the packed galleries in Parliament rising in song after we passed Marriage Equality.
These are Labour achievements.
This is the legacy of our party.”
Little omitted Labour’s de-railing in the 1980s at the hands of a small cadre of Neo-liberal fifth columnists. They who delivered our country into the hands of global finance. They who were the authors of a failed economic experiment that caused generations of misery, and rewarded the top 10% with unearned wealth. They whose names will pass into history and be quietly forgotten.
This was a moment where Little – like his predecessor David Cunliffe – turned his back on neo-liberalism and announced to the country that the experiment was over. Labour would take back the reigns of responsibility for ensuring housing for all;
“After eight years, this government’s lost touch.
And nowhere, nowhere, is this government more out of touch and out of ideas than on housing.
Housing is at the core of a good life.
It provides security and stability.
It helps families put down roots in their communities and save for retirement
It is one of the most common sources of capital for people setting up their own small business.
The ambition of widespread homeownership sits at the heart of our social contract. It is at the heart of the Kiwi Dream.
The promise that if you work hard and do the right thing, you can earn a place of your own.”
A few salient statistics drove home the worsening crisis to anyone who needed convincing;
“Since 2008, when this government came to office, the average house price in Auckland has nearly doubled.
But over the same period, incomes have increased by only 24%.
In the last year, house prices in Auckland have increased by $2600 a week.
Twenty six hundred dollars a week.
It’s crazy. How on earth do you save enough to keep up with that?
[…]
The proportion of Auckland houses being bought by investors has now reached 46% – around twice the level of first home buyers.”
Little went on to explain how the housing crisis went in tandem with other worsening social indicators;
“And then there is the hard edge of the crisis.
The rising poverty and homelessness that National turns a blind eye to.
We’ve all heard the stories of Kiwi kids admitted to hospitals with respiratory illnesses because the cold damp homes they have to live in are making them sick.
We’ve all seen the awful media reports in the last few weeks about what life is like for those who can’t find any home at all.
Of the 42,000 people living in overcrowded conditions or in garages or in cars.
Of children sleeping under bushes in South Auckland.
We’ve seen the story of the 11 year old girl, whose mother has a job, but whose family spent months living in a van before they were taken in by Te Puea Marae.
She said that the hardest part is actually not being able to read in the van, because you don’t have space. And there’s not much light because it would waste the battery.”
These are matters raised that Labour’s opponants on the Right cannot easily dismiss or explain away. These are real events from real New Zealanders living under the currently all-too-real neo-liberal system.
Increasing child poverty; income/wealth disparity; and a worsening housing crisis – all of which are the spawn of thirty years of neo-liberalism.
Those who maintain that poverty has deepened because the “market” has not been sufficiently de-regulated, nor government reduced, nor taxes sufficiently cut, need to ask themselves; “At what point does an experiment that is showing no signs of positive improvement have to be concluded as an abject failure”?
As Little demanded from the party-faithful;
“When did this become the New Zealand we lived in?”
Little then laid out what he called Labour’s comprehensive plan to take to the election next year. He said that a Labour government would;
- …urgently address the shortage of emergency housing – with $60 million to provide 1400 new beds in emergency accommodation – enough for 5100 extra people a year. With the existing support that will take the number of people helped each year to over 8,000.
- …reform housing New Zealand – so that instead of being run like a corporation making a profit off the most vulnerable, we can invest hundreds of millions of dollars in building thousands of new, modern, high quality state houses instead.
- …will build 100,000 new affordable homes to be on sold to first home buyers.
- …will set up an Affordable Housing Authority to deliver ambitious new urban development projects, at scale and at pace. We are going to change the face of our towns and cities, and fix this housing crisis. The Authority will have a target to meet: 50% across all of the homes in its developments will have to be affordable. The Authority will look after the Government’s urban land holdings, and will make sure there is a pipeline of land for future needs – for housing, business, schools, parks and hospitals.
- …ban offshore buyers from the market unless they are willing to build a new home and add to the stock..
- …will extend the bright line test so that if you sell an investment property within five years, you’ll pay the full tax on it. That means the short term speculators won’t be able to get away tax free anymore. It means ending the tax incentives to speculate in short term property gains at the expense of families trying to get into a home.
- …will begin consulting on how to end the loop hole of negative gearing.
Perhaps Labour’s most audacious plan is to set up a new “Affordable Housing Authority”.
If one reads his speech a certain way, he is planning on reviving a newer, 21st century version of the old Ministry of Works (which was privatised by National in late 1996.) If so, it could be the most direct way to build houses for people in desperate need.
Considering that most of this country’s infra-structure was built by the old Ministry of Works (or similar state bodies), including the telecommunications systems being used to upload this blogpost onto this website, it would not be a far-stretch of the imagination that it could be done again.
If so, this wasn’t just a speech – it was a Manifesto for the Last Rites of Neo-liberalism.
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Property Investors throw their toys out of the cot
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The reactionary response from the NZ Property Investors Federation was utterly predictable. They were miffed. All of a sudden, their tax-free pot of gold was about to be denied to them
The Federation’s executive officer, Andrew King, bleated like a spoiled brat who had just been told to share his toys;
“In one part of his speech, he said there were homeless people and people living in overcrowded conditions and they wanted to do something about that. How does making it harder to provide rental homes to these people achieve it? Unbelievable.”
It may have escaped King’s somewhat narrow-attention, but homelessness and over-crowding has worsened during the time that his members have enjoyed spectacular tax-free gains. What were they doing in the last eight years?
He also compared businesses, shares, and farms with housing;
“No other investment is like that. If you do the same with a farm, with shares, with a business, all of those wouldn’t be affected, just rental properties – it’s just wrong.”
Generally speaking, people do not live in “shares”, “businesses”, or farm paddocks (yet). People live in houses. That is the critical difference.
On top of which, astronomical rents are directly contributing to homelessness and over-crowding;
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So to whine that, all of a sudden, Labour’s housing policies will “ make it harder to provide rental homes to these [homeless] people” is contemptible.
His members should be held to account for their part in our housing crisis. The sooner that a capital gains tax is introduced at the same rate as New Zealand’s company tax (28 cents in the dollar), the better.
Mr King’s absurd “pity me” comments have crossed the borderline into territory commonly known as;
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National discovers Problem & Solution!
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Last year, as stories of homelessness; over-crowding; fewer available Housing NZ homes; and worsening housing affordability began to make headlines around the country, National was grabbing money from a government department tasked with caring for the most vulnerable people in our society;
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In all, National has raked in over half a billion dollars from Housing NZ;
Housing NZ dividends under National
HNZ Annual Report 2009-10 – $132 million (p86)
HNZ Annual Report 2010-11 – $71 million (p66)
HNZ Annual Report 2011-12 – $68 million (p57)
HNZ Annual Report 2012-13 – $77 million (p47)
HNZ Annual Report 2013-14 – $90 million – (p37)
HNZ Annual Report 2014-15 – $108 million – (p33)
HNZ Statement of Performance Expectations 2015/16 – $118 million – (p12)
Total: $664 million (over seven years)
See more here: National’s blatant lies on Housing NZ dividends – The truth uncovered!
Labour took dividends as well, around a third of National’s figure. The difference between the two is that Labour builds State housing, whilst National continually flogs them off.
This amounts to looting a critical government organisation that is akin to thieving from a charity.
This year’s 2016 Budget indicated that Housing NZ would pay a dividend of $38 million and $54 million next year, for 2017.
Twenty four hours after Andrew Little gave his speech to the country, Housing NZ suddenly announced no dividends would be paid for the next two years;
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Labour’s Grant Robertson offered his rationale for National’s policy U-Turn;
“The first we hear from National that they suddenly believe Housing New Zealand needs to retain that money to invest in state houses is the morning after an announcement by the Labour Party that Housing New Zealand will never be required [by Labour] to provide a dividend to the government.
This is not a coincidence, this is a panicked, desperate response from the government.
What we know is that National has extracted dividends from Housing New Zealand over recent years and it’s quite clear that National has seen Housing New Zealand as a cash cow in the past.”
Bill English refuted allegations that National was panicking over Labour’s housing announcement only 24 hours previously;
“It’s nothing to do with Labour and the Greens. This is a $20 billion entity – you don’t come up with capital plans for the next five years because Labour puts out a press release.”
He also denied that National was looting Housing NZ;
“We don’t accept that taking the dividend is stealing from state housing, because the dividend is not the constraint on what gets built…
…If there was less dividend, we’d just put in more capital – it’s not driven by the availability of the cash.”
National takes money in the form of dividends and taxes from Housing NZ – whilst non-government charities are tax-free? And he earnestly claims it is not “stealing”?!
English then issued the most ridiculous explanation ever heard, that the figures in this year’s May 26 Budget “appear to be based on older HNZ numbers dating from almost a year ago“.
Yeah, right, Bill.
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Is the Finance Minister really expecting New Zealanders to believe that the government’s May 2016 budget was full of inaccurate figures?
What is really galling is that Bill English, Steven Joyce, and other National Ministers expect us – the public – to believe this rubbish. It is revealing just how stupid they think we are.
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Who is in charge anyway?!
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Whenever National implements unpopular legislative changes, they often point to Labour having carried out similar policies.
In 2014, National “borrowed” Labour’s policy by implementing free health-care for children under 13.
Last year, National raised benefits by $25 (to take effect this year) for people on welfare.
This year, having their ‘hand forced’ by Labour’s housing policy, the Nats have cancelled dividends from Housing NZ for the next two years.
National seems to be highly influence by Labour.
Which raises the question; who is actually setting policy and governing the country? Because it appears we almost have a de facto Labour Government pulling the strings.
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A Cautionary Note for Labour
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On TVNZ’s Q+A on 10 July, Corin Dann quizzed Andrew Little on Labour’s policy toward Housing NZ tenants. Corin Dann specifically asked Little about whether or not tenants should have state houses for life;
Corin Dann: You talk about state houses – an extra thousand state houses. Does Labour believe that someone should have a state house for life?
Andrew Little: I think we think when people are in circumstances where they can’t afford to buy their own home, can’t afford to rent, they’ve got to have a home. They’ve got to have a home, get their life on track, underway.
Corin Dann: Do they have it for life?
Andrew Little: If they’re at a point in their life where their circumstances have changed, and actually, they can afford to buy, my view is I would rather work with them to get them to buy that house so we could then release some funds to build the next state house.
Corin Dann: So you keen National’s policy? They don’t keep them for life?
Andrew Little: Well, I don’t agree with the policy that says we’ll target elderly people on fixed incomes in a state house and see if we can toss them out. That’s not a solution to anything. But what I would say is people who have gone into a state house early, got their lives sorted out,…
Corin Dann: They should move on if they can.
Andrew Little: …the circumstances are right, if we can sell that house to them, why wouldn’t we? And use the funds then to build the next state house for the next vulnerable person.
Selling State houses to tenants is text-book privatisation policy for National, and was a prime plank for the Bolger and Shipley-led governments in the 1990s.
It is a dangerous road for a Labour government to go down.
Selling a state house to a tenant may seem a kindly gesture from a benevolent left-wing government.
But eventually a National-led government will be elected back into power. Their track record on selling State houses is evident and they would have no hesitation in taking a Labour policy of selling State housing to tenants and expanding on it.
This is thin-edge-of-the-wedge, slippery-slope stuff.
This is mis-guided to the extreme, and will provide a future right-wing government a ready-made policy to act upon. And not in a nice way.
If Labour is serious in returning to it’s social democratic roots, it would do well to think carefully before embarking on such a naive policy.
Instead, it should consider the following;
[1] Transience
Transience is one of the greatest problems affecting low-income, poverty-stricken families. Moving from one house to another is debilitating to such families – especially for children.
A government report states that transience for children can have extreme, negative impact on their learning;
Nearly 3,700 students were recognised as transient during the 2014 year. Māori students were more likely to be transient than students in other ethnic groups.
[…]
Students need stability in their schooling in order to experience continuity, belonging and support so that they stay interested and engaged in learning.
All schools face the constant challenge of ensuring that students feel they belong and are encouraged to participate at school. When students arrive at a school part-way through a term or school year, having been at another school with different routines, this challenge may become greater.
Students have better outcomes if they do not move school regularly. There is good evidence that student transience has a negative impact on student outcomes, both in New Zealand and overseas. Research suggests that students who move home or school frequently are more likely to underachieve in formal education when compared with students that have a more stable school life. A recent study found that school movement had an even stronger effect on educational success than residential movement.
There is also evidence that transience can have negative effects on student behaviour, and on short term social and health experience
Encouraging families to stay long-term in State housing not only creates a sense of community amongst tenants; stability for fragile, vulnerable families, but assists in the long-term stability and education of children.
Not only is a state house “for-life” fair, it provides real, tangible, long-term benefits.
[2] Guaranteed Tenancy
Low-income, vulnerable families in State housing must be given guaranteed, protected security-of-tenure.
Currently, tenants are exposed to the winds-of-change whenever there is a change in government. Their tenure is at the pleasure of right-wing governments, and mass-evictions have been commonplace under John Key’s administration;
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A progressive government must do all within it’s power to protect such vulnerable families. Otherwise what is the point of throwing out right-wing regimes when their ideologically-driven policies no longer palatable, and well past their Use-By date?
Tenancies must be secured. Either by the use of long-term contracts, enforceable in Courts of law, or by some other means such as entrenched legislation.
Labour-led governments come and go.
But tenancies for our most vulnerable must be protected from the whims of others.
[3] State Housing Protected
As well as protection for tenants of state housing, state houses themselves must be entrenched and protected from the rapaciousness of right-wing governments.
In modern, First World societies, the power of contract is supposedly sacrosanct.
It should not be beyond a progressive government to use some means of contract-law to safe-guard state housing. Once this is accomplished, it should make it near-impossible for a right-wing regime to wreak havoc with the lives of the poor.
Perhaps it is time to look at how we can make the concept of contract-law work in the favour of those who have least wealth to lose.
There is much more work to be done.
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References
Scoop media: Key – Speech to New Zealand Contractors Federation
theyworkforyou.co.nz: State Houses—Sale and Disposal
NZ History: Construction and sale of state houses, 1938-2002
Housing NZ Corporation: Rent, Buy or Own – overview (archived page)
Beehive: State houses available to buy from today
TV1 News: First home buyers set to be disappointed with Budget
Department of Building & Housing: Estimated building costs (archived page)
Dominion Post: Inequality report ignores tax cuts for rich – Goff
NZIER: Home
TVNZ News: NZ economic outlook grim until 2013 – NZIER (archived page)
Interest.co.nz: Paula Bennett announces plan to offer $5,000 to homeless Aucklanders
Hive News: Hive News Tuesday – Key blames ‘Dirty Politics’ for lack of state house sale debate
Reuters: NZ Prime Minister says central bank should get on with housing measures
Parliament Today: Housing NZ’s Woes Blamed on Labour
TV3 News: Housing blame game flares up in Parliament
NewstalkZB: Govt accused of blaming Auckland Council for its own failings on housing
Sharechat: Key blames Labour for barrier to foreign buyer ban
Youtube: Bill English Blames Greens for Housing Crisis
Otago Daily Times: Homelessness increasing in NZ
NZ Herald: Auckland has the fifth least-affordable houses in the world
Fairfax media: NZ home ownership at lowest level in more than 60 years
TV3 News: Key – No housing crisis, foreign buyers’ influence ‘minor’
Labour Party: Andrew Little’s Centenary policy speech
Treasury: Income from State Asset Sales as at May 2014
Fairfax media: Labour’s plan to tax property investors slammed as ‘attack’ on rental property providers
Radio NZ: High Auckland rents forcing people onto the streets – Sallies
IRD: Company Tax Rate
Radio NZ: Housing NZ to pay Crown $118m dividend
Radio NZ: Housing NZ confirms it will not pay govt dividend
Fairfax media: Bill English denies U-turn after Steven Joyce reveals Housing NZ won’t pay dividend
National Business Review: Govt blames outdated Budget figures for Housing NZ dividend U-turn
Metro mag: Opinion – Is John Key the finest actor of his generation?
NZDoctor.co.nz: Free care for the under-13s features in growth Budget
Radio NZ: Welfare increases – what $25 buys you
TVNZ: Q+A – Corin Dann and Andrew Little (video)
TVNZ: Q+A – Corin Dann and Andrew Little (transcript)
Te Ara NZ Encyclopedia: Housing and government – Total Housing Stock
Education Counts: Transient students
Dominion Post: Housing policy will destabilise life for children
Fairfax media: State tenants face ‘high need’ review
NZ Herald: Elderly, disabled included in state house review
NZ Herald: State tenants to make way for workers
Previous related blogposts
Can we do it? Bloody oath we can!
Budget 2013: State Housing and the War on Poor
National recycles Housing Policy and produces good manure!
National Housing propaganda – McGehan Close Revisited
Housing; broken promises, families in cars, and ideological idiocy (Part Tahi)
Housing; broken promises, families in cars, and ideological idiocy (Part Rua)
Housing; broken promises, families in cars, and ideological idiocy (Part Toru)
Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?
Government Minister sees history repeat – responsible for death
Housing Minister Paula Bennett continues National’s spin on rundown State Houses
Letter to the Editor – How many more children must die, Mr Key?!
National under attack – defaults to Deflection #1
National’s blatant lies on Housing NZ dividends – The truth uncovered!
State house sell-off in Tauranga unravelling?
Upper Hutt residents mobilise to fight State House sell-off
Park-up in Wellington – People speaking against the scourge of homelessness
National and the Reserve Bank – at War!
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= fs =
Wow Frank
This is a valuable resource indeed. We also need a discussion on the taxation of housing because the wealth inequity is not addressed just through more state houses. I think we also need to seriously consider the 2001 Tax Review Risk free rate method– tax individuals on net equity with a highish exemption so modestly well off people re not affected. See
https://thedailyblog.co.nz/2016/04/29/good-policy-is-rarely-done-on-the-run/
Great wrap again Frank,
Now I as many other NZders do will look at his weasel words and view them as suspicious and this set of weasel words can still let him claim he has delivered when he said “more young Kiwis can aspire to buy their own home.”
Perhaps but we now find that not very many outside the rich beltway can afford them now, only those who are in Key’s own circle I venture to say.
“Over the past few years a consensus has developed in New Zealand. We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse.
This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.
The good news is that we can turn the situation around. We can deal with the fundamental issues driving the home affordability crisis. Not just with rinky-dink schemes, but with sound long-term solutions to an issue that has long-term implications for New Zealand’s economy and society.
National has a plan for doing this and we will be resolute in our commitment to the goal of ensuring more young Kiwis can aspire to buy their own home.”
“If Labour is serious in returning to it’s social democratic roots, it would do well to think carefully before embarking on such a naive policy.”
Indeed, Frank, we have here in Auckland, where I live, a total failure of “the market” when it comes to providing affordable housing, not only for those wanting to buy as occupiers, but also for renters.
What Labour is doing is desperately trying to balance the interests of some in the middle class, who they want to gain as potential voters, with the interests of the state and those needing state intervention to build affordable state and social housing.
This balancing act seems tricky and problematic at times, as Labour do not want to scare off middle class voters from voting them, as the perceived “hand outs” to those in need are not welcome by the brain washed and vested interest holding professionals, contractors, small business owners and home owners. Trouble is Labour did itself do little to face up to the now largely private MSM using prejudice and bene bashing as a convenient way of influencing the public for their own ends (more circulation, helping their mates into power).
What we need is significant state intervention into the housing market, to re-balance the market and bring back affordability, but this will not happen without vested interest holding persons and businesses fighting this with all their powers.
Some will be hurt, lose values in their homes, but they knew the risks, as buyers in an inflated market and as investors in the same.
People need to learn that a society is also about responsibility for those that are better off, and that some sharing is needed to keep it stable and functioning.
This idea of people investing in their second, third or more homes for additional retirement income must be stopped, as we have too many small scale landlords all thinking they are some smallish kind of Donald Trump with much power and say.
We need Housing New Zealand to be returned to be a socially focused, yet fiscally responsible, government department, that provides affordable homes to those most in need. When people’s circumstances may improve, they can charge them market rents, which will raise funds to build more homes and maintain existing ones for those that need them most.
Selling state homes would somehow undermine it, and offer the Nats and ACT a great opportunity to undermine a future Labour led government. Andrew is cautious, presented at least some good new policy over the weekend, although some needs improvement, as it seems flawed. But before the media he needs to also at times get a bit bolder and stand firm, presenting clear positions.
That is what most voters expect, clear policy and positions, now we can only hope that Labour will learn more and return to its roots, as a valid alternative to this rotten and hopeless government, which has run the country into very high risk territory.
Looking back over the chronological reporting, one can see, how the Key led government seemed to have got drunk on power, and ignored and neglected the very problem that John Key accused the then Labour led government of in 2007.
The Key government was too busy bringing in policies that offered tax cuts to its clientele (favouring the high income earners and wealthy), and policies that were going to hit the poor on benefits.
I remember it all, there was also the Christchurch earthquakes, which made people and the government focus on that, and so after the GFC fall-out was under control (also by bailing out finance companies), many National voters went back to their normal activities, feathering their nests, and adding to their housing portfolios. Immigration was allowed to continue at high net gain levels, to “cushion” the economy once the dairy boom led to bust.
All this “helped” the ones able to afford homes and those already owning homes, to have the demand for housing drive up values, to grow their equity, and enabling them to use more credit to spend on yet more real estate, or on improving their own homes, to get new flash vehicles and boats and what else they desired.
Private debt has never been higher in New Zealand, and many warned about this, so we are in precarious territory, but few see the risks, it reminds us a bit of 2007, before the last major crash.
Labour will be left with a huge mess and gigantic challenge to deal with, and to tidy up. When the shit will hit the fan, John Key will be one of the first who will quietly vanish from the country, to go into semi retirement in his home in Hawaii.
Labour/GREEN will be left with a huge mess and gigantic challenge to deal with, and to tidy up.
Excellent summation and analysis, Frank. It’s a lengthy read but well worth it to put everything into context.
No they haven’t. They’ve been fully supportive of the rentier model that makes a few people rich at everyone else’s expense.
When the Labour Party made it that way back in the 1980s.
But are they going to provide the new infrastructure that will make those urban developments worthwhile?
Hospitals, factories, parks, etc, etc.
He damn near got a standing ovation for that bit but the enthusiasm died down for the rest of it. Labour still aren’t listening to what the people want and the people actually want a full ban on offshore buyers.
It’s actually what’s needed so that private monopolies can be destroyed.
We can hope so but it wasn’t the feeling that I got from him at the gathering.
Especially when Labour would be building houses to rent to homeless people – unlike him and his rentier mates.
I’d like to see housing being a right guaranteed under a written constitution. A constitution that cannot be changed or ignored by parliament.
This would mean that no one would be able to be kicked out of their home for any reason. This would apply to homes that are coming up for mortgagee sale as well. The banks took the risk when they loaned out the money on the mortgage and now they should take the loss that comes with that risk. Would probably make them more responsible lenders whereas at the moment their profits are pretty much guaranteed by the law.
State housing would, of course, be a lifetime lease.
We shouldnt give national an inch they had 8 years to fix this problem its time mass protest action to demand that the key government deliver wheather they can or not is irrelevant .it readable to expect after 8 years and bloody awesome the natz have told us they are we should not be resanable with our demand given lies and bullshit we have been subjected by this corrupt government
darth smith 100%
1. Housing is more affordable today than it was under Labour.
2. There are more houses being built today than at any time in the history of NZ.
3. House prices doubled under Labour, and they did nothing.
There. FIFY.
1. No it isn’t. It’s far, far worse. Affordable housing is 3 to 4 times the average wage. Under Labour it grew to about 6 or 7 times. Now it’s 10 to 11 times.
2. But not enough to cover population growth
3. Yes, Labour didn’t do well enough in this but that doesn’t excuse the fact that National have not only done nothing about it but have actually encouraged the housing bubble that will bring down our entire financial system.
You really do come out with some tripe in your authoritarian need to defend your leaders.
1. Yes it is. Your numbers are meaning less without considering interest rates. Check out the Roost/Massey reports.
2. NZ is doing so well, people are flocking to live here. Unlike under Labour.
3. No, it won’t. House prices are rising in many major cities across the planet. There may or may not be a correction. The market will take care of it.
1. The latest Demographia Survey does not support your belief;
ref: https://assets.documentcloud.org/documents/2693598/Dhi-Embargoed-Copy-20160120.pdf (page7)
2. Citation please.
And please provide data relating to what price bracket those “more houses being built today than at any time in the history” are at. Because thousands of houses at $800,000 are not much use to low and middle income families.
3. The old “Labour did it too” argument? Even if it’s true (which is not, as you haven’t provided any evidence for your claim), National asserts it is a better manager of the country than Labour. In effect you’re telling us National is no better?
Aside from which, if things are as “good” as you would have us believe, the Nats seem awfully spooked by Labour’s policy announcement last Sunday.
1. You haven’t provided a quotation nor reference. Perhaps you can’t or won’t, because it doesn’t support your belief?
2. People are “flocking here” for a variety of reasons. Some are of dubious value, under this country’s lax immigration/education policies.
” Immigration NZ battling widespread fraud over fake student visa applications” – https://www.tvnz.co.nz/one-news/new-zealand/immigration-nz-battling-widespread-fraud-over-fake-student-visa-applications
New Zealanders returning from Australia are doing so because of a slump in the job market and increasing unemployment. New Zealanders caught up in Australia’s down-turn cannot apply for unemployment benefits. So they either return home, or starve.
I doubt they’re returning because housing suddenly got more affordable.
In 2013, Key said;
Housing Minister Nick Smith said as much on 14 June 2015;
Ref: http://www.nbr.co.nz/article/govt-drive-housing-supply-fast-it-can-nick-smith-ck-174156
And in January this year, Key admitted;
ref: http://www.radionz.co.nz/news/national/294835/akl-houses-dearer-than-london-and-la
Christ, even National admits that housing has become more unaffordable! You seem to be on your own, maninthemiddle.
3. Ah, so you’re a free market ACT libertarian? No wonder your ideology is the same as your so-called “facts” – full of delusional crap. We’ve been waiting for “the market will take care of it” since 1984.
Still waiting.
Still waiting.
Still waiting…
Thank you for posting. It gives me more opportunities to demonstrate how you right-wing incompetents have screwed things up.
1. Interest rates have nothing to do with it. It’s a simple comparison. Affordable housing = housing being 3 to 4 times the average wage. Present house prices are 10 to 11 times the average wage.
2. When the government opens the floodgates then people flock here. The only thing that’s changed is that National have opened them really wide so as to make it look like NZ has growth.
3. The market will take care of it – as soon as the government puts in place regulations that ensure things are properly priced. National will not do that and Labour probably won’t either.
Maninthemiddle, I’ve never read so much utter drivel in my life. Even your precious Nats admit that housing is more unaffordable than ever. You must be the only fool in the country to say otherwise.
Are you also a climate change denier?
As for your “Roost/Massey” report, give us a link. Frank has provide references for everything he gives us and your inability to do so means you’re not being upfront with us.
🙂
Labour did enable National to survive the GFC and the Christchurch earthquake through prudent financial planning.
National are now behaving like headless chooks on housing
which is hardly surprising given Nick Smiths involvement.My wife and I have had two homes in the past which were affordable but we now live in a housing climate under National which makes point 1. of your opinion a fallacy.
Point 2. you raise bares no significance whatsoever to modern N.Z. as National are responsible to house the ever increasing immigrants they promote.
Point 3 may well be correct but they will have quadrupled by the end of 2016.
All 3 of your points appear to have come from Nick Smiths housing speech, yet it is Labour who have created a sandstorm amongst National MP’s, .with it’s comprehensive housing policy
RUBBISH TO maninthemiddle
Maninthemiddle, hard data and citations please. We’ve seen your comments before and they turn out to be half-truths or outright lies.
1. Not true. Home unaffordability has worsened. http://nzinitiative.org.nz/site/nzinitiative/Priced%20out.pdf
2. By how many? Evidence please.
3. Oh, the Labour-did-it-too finger pointing again? I thought National was supposed to be better at managing the country??
The fact you haven’t provided the information and references indicates you’re bullshitting us again.
Interesting. Even the right-wing “NZ Initiative” agrees with the premise of increasing housing unaffordability;
(page ii, ‘Executive Summary)
Maninthemiddle won’t provide citations because he makes it up. I suspect he’s a staffer or Young National brat working for one of the Nat ministers. It’s the level of low intellerct we’ve come to expect from right-wing sycophants.
BS, comparing apples with pears and trying to pull the wool over people’s eyes will not get you anywhere here on TDB.
Kiwi’s flocking back home from Australia in record numbers because N.Z. is doing so well under National is B.S, diatribe. Their coming home because Aussies mining industry has crashed.
Large numbers of Asians are entering N.Z. because National have made it so easy and even promote N.Z. as a tax haven.
http://www.newshub.co.nz/business/nz-based-real-estate-website-targets-chinese-buyers-2014121417#axzz4EE8GRKRY
The above is evidence, can you provide any MIA or are you just quoting Nick Smith?
Here is Nick Smith again quoting Kiwisaver as the answer to get people into homes back in 2013. Not the comment “it will treble home ownership”. It didn’t, so shouldn’t Smith resign for making false statements.
“In August 2013, when Smith announced the Auckland cap was rising from $350,000 to $485,000, he predicted that it would “treble the number of Welcome Home loans”.
“The number of Aucklanders accessing the [KiwiSaver] first-home deposit subsidy is expected to grow from 1030 to 3000 a year, and Welcome Home loans from 52 to 867 per year,” he said then.
In fact, only 1139 KiwiSaver deposit subsidies were paid out in Auckland in the year to March this year, and Welcome Home loans in the city have dropped from a peak of 133 in the year to June 2014 to just 74 in the year to last month.
So MIA, your 3 points parroting Nick Smith, need to be backed up by evidence as Nick Smith has a very poor record on evidence based facts.
Great work Frank. Love the “crisis then but challenge now” statement by Key.
H.Y.P.O.C.R.I.T.E
This is a National Party in panic mode who can see that home affordability will lose them the next election. Policy ad hoc around the build of state homes in response to Labours “comprehensive” housing policy once again shows National to be a reactive government.
Bollocks to building so called affordable housing. ..my solution is far simpler. ..concentrate on building state houses for income related rents…this will reduce investors demand to buy houses for rental properties,as they won’t be making huge rental returns and capital gains and then the existing houses will be sold at realistic prices. Combine this with a capital gains tax for houses over 500k and ban non residents from buying existing houses……..anyone have any issues with this?
HOUSING, election 2017 topic number one, it will be!
The government is made up of headless chickens, running in all directions. A day or two ago “Steven Goebbels Joyce” came with the comment that Housing NZ would not need to pay the government a dividend for a while. A flabbergasted Bill English swiftly joined the ranks yesterday, saying that the government had already considered not expecting a dividend. Today Bennett says that a dividend was not an issue, that Housing NZ needed the money for new construction of up to 4,000 new homes.
But strangely, a dividend payment was provided for in the last Budget, only barely two months ago. Strange that, is it not?
Today Bennett also announced they want to use pop up housing in places like South Auckland, but few details seem available so far:
http://www.stuff.co.nz/national/politics/82011651/Aucklands-housing-shortage-Government-moves-ahead-with-temporary-homes-plan
“On Tuesday, Social Housing Minister Paula Bennett confirmed the Government was moving ahead with plans for modular social housing on three sites.
Bennett said the sites could fit between 100 and 140 houses if density rules allowed, most of which would be one- or two-bedroom homes.
The modular houses would be for existing state house tenants who had to be moved out of their homes, those on the social housing waitlist, and people who needed emergency housing.”
So another drop into the ocean, that is of the 41,000 recorded as homeless now.
Also today, RNZ reports that the government wants to use international top ranking real estate agent ‘Colliers’ to arrange deals with motels and hotels to house homeless:
http://www.radionz.co.nz/news/national/308518/colliers-to-help-govt-pre-book-motels
“However, Mrs Bennett’s office responded last week and confirmed the Ministry was working with Colliers.
“The Ministry of Social Development has been working with Colliers International to develop new options to expand temporary emergency housing in Auckland over the winter period.
“As a result the Ministry is entering into exclusive use agreements for motel units across Auckland, where clients who are eligible to receive a new, non-repayable special needs grant can stay for up to seven days.””
Great, more high fees to be earned by the National Party’s mates and property owners!
Oh SHIT, what about the hotel business, they were only quoted as facing an accommodation shortage just a few weeks ago:
http://www.radionz.co.nz/news/national/276791/shortage-of-hotel-rooms-at-'critical'-levels
“Colliers International’s head of hotels Dean Humphries said the number of rooms was growing by one percent compared with five percent annual growth in demand, due to record tourist numbers.
He said Auckland was actually losing hotel rooms with 40 percent being converted to apartments.
Mr Humphries said Tourism New Zealand’s new strategy to encourage visitors to come during the off-peak seasons was a good idea but it would not stop the growth in visitors in summer.
He said the Government and councils should also look at offering incentives to developers.”
Hooray, more demands for sweeteners for developers, the casino game can continue, put your chips on the table, Miss Bennett, Mr Joyce, Mr English and Mr John So Glorious Key!
So here we have headless chicken stuff, the government is desperate to offer “solutions” to the housing crisis, but what “solutions” they are, laughable:
http://www.radionz.co.nz/news/national/308518/colliers-to-help-govt-pre-book-motels
Only a couple of weeks ago we learned this:
http://www.radionz.co.nz/news/national/276791/shortage-of-hotel-rooms-at-'critical'-levels
So will the use of hotel rooms for homeless harm our booming tourism trade? Will homeless have too wrestle with the tourists for accommodation on “the market”? Colliers are the agency they now use, to solve these “challenges”, wow, what a joke!
Apologies Mike In Auckland, got you mixed up with Maninthemiddle when responding. Disgraceful I know.
Headless chickesn is the best analogy I’ve seen. Smith, Key, Bennett, English and now Joyce, hardly free range!
Mike in Auckland, good follow-up, as its all a bloody mess that the Nactional creeps have caused to be left by Labour ect’ to clean up after ward next year.
But we have to have a media who will stand with us instead of helping this National corrupt lot back in next year to kill the whole country!
As of today 13th July evidence is clear that SS Joyce is controlling heavily now the Radio NZ news and current affairs programming because their is virtually all good news for National and nothing for us all with Labour’s policies so Steven Goebbels Joyce has tight control all over our media like NAZI Germany had in 1933.
Thank you, Frank.
Singapore with a population of 5.665 million has recorded home ownership of 90%. To cope with increasing home ownership demand, Singapore is now studying 3D printing of homes for 1st time buyers and the elderly:
http://www.sciencealert.com/singapore-is-planning-on-building-3d-printed-homes-for-its-people
Maybe you might consider a fact-finding visit, Frank. As a paid consultant, of course, for the National Government which doesn’t appear to have a clue of 21st Century technology or anything else for that matter.
Thanks Frank, for another excellent article, you are by far one of the best commentators out there!
Great work Frank we are currently experiencing John Keys “STEP CHANGE”
It was going to fix everything and deliver our brighter future.
We are still waiting.
MOSA,
“Brighter future”- a change for the rich only he should have said.
Frank – I appreciate your thorough and honest coverage.
You are teaching us all the importance of references and backing up what we claim.
Great job !
Without getting free from ANY ! association with ( Agenda 2030 ) and the U.N. ( Phil Goff and David Shearer ! ! ( previously – Queen U.N. Helen Clark ) etc. I have sincere doubts about Labour being successful in the long run. We need to be independent and sovereign and not beholding to the U.N. and the building industry and the greedy multi-national corporations and criminal banks getting richer and the people getting poorer.
Other countries can do it – so we can as well.
http://www.naturalnews.com/051058_2030_Agenda_United_Nations_global_enslavement.html
http://www.theforbiddenknowledge.com/hardtruth/un_not_friend.htm
Brilliant piece, Frank!!
Labour and the Greens must be bold if they assume the reigns of government. There is a lot of work to be done to clean up the mess of 30-plus years of New Right failed policies.
New Zealanders may be a complacent lot 99% of the time, but I think they will react positively if they can be shown a better way.
Wouldn’t it be great if we became a Scandinavian nation of the Sth Pacific!!
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