Cash-for-Consents Won’t Fix NZ Housing – Dave Bainbridge-Zafar

Budget 2026’s $400 million Incentives for Growth Fund is being sold as the answer to New Zealand’s housing shortage. Dave Bainbridge-Zafar argues it is a cash-for-consents illusion that blames councils while central government refuses to confront the real infrastructure and state housing failures.

How you assume other people make decisions often reveals far more about your own personal motivations than it does about theirs.

We saw a perfect example of this psychological projection recently with David Seymour’s cynical attack on local councils. By insisting that the only reason local authorities do anything — down to the simple act of issuing a parking ticket — is because “there’s money in it,” the ACT leader didn’t expose local government. Instead, he betrayed his own core life values: the absolute belief that the only logical reason to do anything at all is personal financial gain.

This transactional worldview underpins the centre-right coalition’s flagship housing announcement in the recent Budget: the $400 million, four-year “Incentives for Growth Fund.” It is a policy that is misguided at best, and ideologically corrupt at worst. It relies entirely on Seymour’s belief that councils can be bribed into compliance, revealing a staggering, fundamental lack of understanding of how and why local government actually operates.

Local councils are not corporate sales teams chasing a quarterly commission cheque. Having spent years managing the Dunedin City Council’s housing portfolio — the second-largest council housing stock in the country — and now serving as General Manager at the Gore District Council where I am directly responsible for planning and consenting, I know first-hand how these systems actually operate. Having worked extensively in the social and community housing space across both New Zealand and the United Kingdom, I can tell you that the bottlenecks are structural, not financial.

Councils are statutory bodies funded primarily by property rates, tasked with managing complex, decades-long long-term plans (LTPs) for the benefit of their communities. They are bound by strict debt caps and legal responsibilities to provide core, enduring infrastructure — the pipes, water treatment plants, local roads and other services that communities rely on.

Seymour’s new fund treats councils like Pavlovian dogs, offering cash payments linked to housing growth if they meet the Government’s chosen measures of success. But councils don’t limit housing because they lack a profit motive; they limit it because they are legally and financially restricted by the immense upfront capital costs of infrastructure, which central government has consistently refused to fairly co-fund. You cannot buy off a structural debt crisis with a transactional bonus.

Furthermore, this “one-size-fits-all” market approach ignores geographic and economic reality. Not every council in New Zealand exists in a high-growth zone. Building or consenting to excess housing in regional areas that are currently stagnant or depopulating would be the height of economic folly. Yet, under this framework, those regions are effectively punished for not chasing phantom growth.

What the Incentives for Growth Fund gets wrong

So, who is this $400 million really for? And what is it actually going to achieve?

The reality is that it will achieve next to nothing for everyday New Zealanders struggling to find an affordable place to live. Our state housing provider was successfully delivering warm, dry, secure homes at scale until this coalition put a sudden, grinding stop to it following the ideologically driven Bill English review

If you want a true look at this government’s priorities, contrast that $400 million developer-incentive slush fund with their other major housing announcement today: a pathetic $69.2 million into the “Flexible Fund” for social housing. Spread over three years, and not even kicking off until the 2028/29 financial year, this funding is an absolute drop in the bucket. It is a rounding error disguised as compassion.

Where is the Kāinga Ora building plan?

Meanwhile, the elephant in the room remains completely ignored: where is the funding for Kāinga Ora to actually build houses?

Our state housing provider had been delivering warm, dry, secure homes at scale until this coalition used the Bill English review to reset, constrain and redirect its role in building the public housing New Zealand desperately needs. If this government had any genuine interest in helping vulnerable people, they wouldn’t be trying to buy off local councils with transactional bribes. They would be directly funding Kāinga Ora and Community Housing Providers to get bricks in the ground and roofs over families’ heads right now.

Councils are not the bottleneck here, and central government cannot buy them out of a housing crisis. Local government operates to serve communities, not to turn a quick buck.

The real roadblock to housing in New Zealand is sitting in the Beehive. By imposing savage cuts on essential services like state housing while throwing hundreds of millions at artificial, market-incentive illusions, the government is proving that it understands the price of everything and the value of absolutely nothing.

Dave Bainbridge-Zafar is the Opportunity Party candidate for Dunedin