National is increasingly on the back-foot with New Zealand’s ever-worsening housing crisis. Ministers from the Prime minister down are desperately trying to spin a narrative that the National-led administration “is getting on top of the problem“.
Recently-appointed Finance Minister, Steven Joyce, has found a new unlikely scapegoat, blaming the housing bubble and worsening housing affordability on current low interest rates. On 11 May, on Radio NZ’s Morning Report, he said;
“We have very, very low interest rates historically, and as a result that’s directly linked to how much house prices are being bid up around the world. It’s not the sole reason for why we have high asset prices around the world, it’s not just houses, it’s shares and everything else. But it is certainly one of the dominant reasons for that. And unfortunately it’s going to be a little bit of time yet before that changes, although there’s indications that this period of ultra-low interest rates that the world has seen is coming to an end. And so I think that, that, will improve affordability over time.”
Radio NZ’s Guyon Espiner reacted with predictable incredulity that Joyce was relying on interest rates rising to “improve affordability over time“.
Joyce’s finger-pointing and blaming “very, very low interest rates historically” is at variance with a speech that former Dear Leader, John Key, gave in January 2008 where he specifically indentified higher interest rates as a barrier to home ownership;
* Why, after eight years of Labour, are we paying the second-highest interest rates in the developed world?
* Why can’t our hardworking kids afford to buy their own house?
Good questions, Mr Key
Got any answers, Mr Joyce?
Because according to Statistics NZ, home ownership rates have worsened since John Key gave his highly-critical speech, nine years ago;
Home ownership continues to fall
In 2013, 64.8 percent of households owned their home or held it in a family trust, down from 66.9 percent in 2006.
The percentage of households who owned their home dropped to 49.9 percent in 2013 from 54.5 percent in 2006.
Home ownership reached a peak of 73.8% by 1991. Since then, with the advent of neo-liberal “reforms” in the late ’80s and early ’90s, home ownership has steadily declined.
Those who have benefitted have tended to be investors/speculators. In 2016, 46% of mortgages were issued to property investors/speculators in the Auckland region. Despite a watered-down, pseudo-capital gains tax, referred to as the “bright line” test implemented in October 2015, investors/speculators still accounted for 43% of house purchasers by March of this year.
The same report revealed the dismal fact that first home buyers constituted only 19% of sales.
John Key’s gloomy plea, “Why can’t our hardworking kids afford to buy their own house?” rings truer than ever.
Poorer families are fairing no better.
National’s abysmal policy to sell off state housing has left a legacy of families living in over-crowded homes; garages, and cars. This scandal has reached the attention of the international media.
From the Guardian;
From Al Jazeera;
As with our fouled waterways, we have developed another unwelcomed reputation – this time for the increasing scourge of homelessness.
But it is not just the sons and daughters of the Middle Classes that are finding housing increasingly out of their financial reach. The poorest families in our society have resorted to living in over-crowded homes or in garages and in cars.
National has spent millions of taxpayer’s dollars housing families in make-shift shelters in motels. At the behest on National ministers, WINZ have made it official policy to recoup money “loaned” to beneficiaries to pay for emergency accommodation;
National’s track record on this growing community cancer has been one of ineptitude.
In 2015, Dear Leader Key made protestations that no problem exists in our country;
“No, I don’t think you can call it a crisis. What you can say though is that Auckland house prices have been rising, and rising too quickly actually.”
He kept denying it – until he didn’t;
Unfortunately, former-and current State beneficiary, and now Social Housing Minister, Paula Bennett, apparently ‘did not get the memo’. She still denies any housing crisis in this country;
“I certainly wouldn’t call it a crisis. I think that we’ve always had people in need. So the other night on TV I heard the homeless story was second in and then the seventh story was a man who’d been 30 years living on the streets.”
Despite being in full denial, in May last year Bennett announced that National would be committing $41.1 million over the next four years for emergency housing and grants.
By April this year it was revealed that National had already spent $16.5 million on emergency accomodation. It had barely been a year since Bennett issued her Beehive statement lauding the $41.1 million expenditure, and already nearly a third of that amount has been spent.
This is clear evidence as to how far out-of-touch National is on social issues.
The stress and pressure on Ministers and state sector bureaucrats has become apparent, with threats of retribution flying. This month alone, a MSD manager and associate minister of social housing, Alfred Ngaro, were revealed to have warned critics of the government not to talk to the media;
Bennett went on to make this extraordinary statement;
“I spend the bulk of my time on social housing issues and driving my department into seriously thinking about different ways of tackling this.”
Her comment was followed on 20 May, on TV3’s The Nation, when current Dear Leader, Bill English tried to spin a positive message in National’s ‘fight against homelessness’;
“Our task has been to, as we set out three or four years ago, to rebuild the state housing stock. And that’s what we are setting out to do.”
English and Bennett’s claims would be admirable – if they were not self-serving hypocrisy.
In 2008, Housing NZ’s stock comprised of 69,000 rental properties.
By 2016, that number had fallen to 61,600 (plus a further 2,700 leased).
In eight years, National has managed to sell-off 7,400 properties.
No wonder English admitted “we set out three or four years ago, to rebuild the state housing stock“. His administration was responsible for selling off over ten percent of much-needed state housing.
No wonder families are forced into over-crowding; into garages and sheds; and into cars and vans.
Confronted by social problems, National ministers duck for cover. Especially when those same social problems are a direct consequence of their own ideologically-driven and ill-considered policies.
National ministers English, Bennett, Joyce, Nick Smith, et al are responsible for our current homelessness.
Left-wing parties and movement are generally proactive in identifying and resolving critical social problems and inequalities. It is the raison d’etre of the Left.
The Right seem only able to belatedly react to social problem and inequalities.
Especially when they caused it.
Interest.co.nz: PM says no housing crisis in Auckland
NZ Herald: Housing shortage growing by 40 homes a day
Radio NZ: Lessons for NZ in Australia’s Budget
NZ Herald: John Key – State of the Nation speech
Statistics NZ: 2013 Census QuickStats about national highlights
Statistics NZ: Owner-Occupied Households
Radio NZ: Homeless family faces $100k WINZ debt
Simpson Grierson: New “bright-line” test for sales of residential land
Radio NZ: Key denies Auckland housing crisis
Radio NZ: No housing crisis in NZ – Paula Bennett
Radio NZ: Ngaro apologises for govt criticism
Housing NZ: Annual Report 2008/09
Housing NZ: Annual Report 2015/16
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