Prime Minister refuses to reaffirm Kiwibuild numbers

In the first Question Time under the new Government Bill English pressed acting Prime Minister Kelvin Davis on Labour’s commitment to build 100,000 houses in 10 years. Davis refused to reaffirm this repeatedly.

(Davis is Acting Prime  Minister while Jacinda Ardern and Winston Peters are at APEC in Vietnam.)

GovernmentMeasurable Targets

1. Rt Hon BILL ENGLISH (Leader of the Opposition) to the Prime Minister: What will the specific measurable targets be, if any, that she will use to hold her Government to account?

Hon KELVIN DAVIS (Acting Prime Minister): As Prime Minister, I will hold my Ministers to account for improving the well-being and living standards of New Zealanders.

Rt Hon Bill English: What is the appropriate measure we should follow to monitor progress on KiwiBuild where the Government has committed to build 100,000 houses over the next 10 years?

Hon KELVIN DAVIS: We will make decisions on appropriate targets in due course.

Rt Hon Bill English: So does that mean that the current expression of the Government’s commitment, which is “to build 100,000 houses over the next 10 years” does not necessarily mean what most people would take it to mean?

Hon KELVIN DAVIS: We will make and confirm decisions on appropriate targets in due course.

Rt Hon Bill English: Does the Prime Minister stand by her Government’s commitment to “build 100,000 houses over the next 10 years”?

Hon KELVIN DAVIS: We will make and confirm decisions on appropriate targets in due course.

Rt Hon Bill English: Why did the Government commit to “build 100,000 houses over the next 10 years” if it is now not willing to re-express that commitment in this House?

Hon KELVIN DAVIS: Because the previous Government didn’t build houses.

Rt Hon Bill English: Is it possible that the Government is revising this commitment because of public statements made by the Minister of Housing and Urban Development, that the commitment may involve not building houses but buying existing houses?

Hon KELVIN DAVIS: No.

Rt Hon Bill English: What other reason could there possibly be for not being willing to restate a commitment made by all its members right though the election campaign to “build 100,000 houses”? What other reason could there be not to make that commitment here today?

Hon KELVIN DAVIS: We are not revising targets. We will make and confirm decisions on appropriate targets in due course.

Rt Hon Bill English: So is the commitment to build 100,000 houses an appropriate target, or one that is subject to revision or further decisions, or is it one that we should take at its word?

Hon KELVIN DAVIS: The member will find out in due course.

Rt Hon Bill English: My question to the Prime Minister is this, then: are there other commitments that were made during the election campaign and in the Speech from the Throne that are now open to revision and later decisions?

Hon KELVIN DAVIS: We are committed to implementing what the Governor-General has said in the Speech from the Throne.

Hon Amy Adams: I raise a point of order, Mr Speaker. I just want to clarify: it’s been the practice in the House for some time that a member answering on behalf of another member should clearly identify that. I didn’t want to interrupt the question, but can you clarify whether that is still the case?

Mr SPEAKER: The Prime Minister answered the question.

Davis may have been playing safe, but this was an odd opening performance.

From the Speech from the Throne:

Housing is a top priority for this government. Action will be taken to address homelessness. State house sell offs will stop. And the State will take the lead in building affordable houses.  Through its Kiwibuild programme, this government pledges to build 100,000 high quality, affordable homes over the next 10 years; half of them in Auckland.

Davis said they were committed to implementing that but wouldn’t make a direct commitment.

In the next question Housing Minister Phil Twyford was prepared to make a commitment.

Hon PHIL TWYFORD: Both the Prime Minister and the Minister of Housing and Urban Development have reiterated our policy, which is to build 100,000 affordable homes to restore affordable homeownership to this country.

So it is odd that Davis wasn’t prepared to make this same commitment directly.  He seemed to be avoiding saying anything.

However the Opposition has emphasised the Government’s housing commitment to build 100,000 ‘affordable’ homes in ten years.

Of course amongst other things this may depend on whether Labour stays in government for long enough to ensure they fulfil the commitment.

Source: https://www.parliament.nz/en/pb/hansard-debates/rhr/combined/HansDeb_20171109_20171109_12

Twyford on land for Kiwibuild

Labour’s housing spokesperson Phil Tyford was interviewed on The Nation yesterday (repeated this morning). He was questioned about where Labour would get land to build on in Auckland for the 50,000 houses they planned to build under their Kiwibuild policy.

Twyford seemed unprepared for this fairly predictable line of questioning, and was very vague on what land would be available.

  • “many of them around the railway network in Auckland”
  • “on the fringes of the city as well”
  • “if necessary, we will buy private land to develop”

And “We are going to work with the council, we are going to work with Ngati Whatua, we’re going to work with other investors.” Much like the current Government is trying to get land for development.

With the not insignificant matter of the RMA to deal with.

Let’s move on to what your solution is, which is KiwiBuild. You’ve already said that freestanding houses will be 600,000 or less. And where exactly are these 100,000 houses going?

So, Lisa, we don’t have a land shortage in New Zealand. Fewer than 1% of the land is urbanised. We have a highly restrictive planning system that chokes off the supply of new land. Labour’s going to free up those controls and allow cities to grow up and out.

So where specifically? Where specifically? Because as you pointed out, we’re four months from an election. Where’s the list from Labour which shows exactly where the houses go? Like this list from National, which shows me exactly which suburbs and how many houses. Where’s your list?

So, we’re going to build large urban development projects, many of them around the railway network in Auckland. So places like Henderson, Manukau, Mt Wellington, Onehunga, Panmure, Avondale.

Have you got the sites specifically identified?

Actually, Auckland Council’s already done much of the work on this. Their development agency, Panuku, has already identified all of those sites as being appropriate for development. Lisa, we’re also going to developments on the fringes of the city as well.

Amy Adams says that they are using, in this plan, basically all the available Crown land, so I’m struggling to understand where your land is that you’re going to build 100,000 houses on and why I haven’t yet seen… Because this policy of yours is, what, four and a half years old?

So here’s where Labour’s approach is different from National. National lacks ambition in this area. Their approach is confined to knocking down state houses and building private houses on that land. We are going to take a much broader, more productive approach, so—

So have you got a list of lots, of land lots, that you can give to us so we can have a look at it? Have you got that?

We are going to work with the council, we are going to work with Ngati Whatua, we’re going to work with other investors. And if necessary, we will buy private land to develop.

Okay, and what budget are you putting aside for that?

We’ve committed $2 billion to kick-start KiwiBuild, and we’re going to establish an affordable housing authority that will act as an urban development agency.
So that $2 billion of seeding money, are you telling us that that’s going to pay for the first wave of houses and all the commercially bought land that you’re going to have to buy?

Well, we haven’t identified exactly how much land we will buy, but we are going to establish an affordable housing authority—

Isn’t that the problem, Mr Twyford? Isn’t that the problem, though — the details?
Hang on, Lisa, you’ve asked me a question. Let me answer and I will give you an answer. We’re establishing an affordable housing authority that will cut through the red tape. We’ll put capital in to get it started, but it’s going to manage the Crown’s entire urban land holdings. It will use that balance sheet to buy land and develop land with other partners. So it’s a very different approach to what the government is saying.

Who will build all the houses?

So, who is going to build your 10,000 houses a year? Because we know that there’s a shortage of workers in the construction industry. So who’s going to build these?

So, call us old-fashioned, but we think it’s the job of the government to grow a New Zealand workforce of skilled tradespeople. So we’re going to massively increase the training for the construction trades and professions. That’s our priority. Now, the fact that National—

That takes time, doesn’t it? And you are aiming to build 10,000 houses a year. The apprenticeship industry tells us that we need 60,000 new workers over the next five years, and half of them need to be tradies. So come December 24th, who’s— September 24th, who’s building these houses?

Look, so National has completely failed to build the New Zealand workforce. They haven’t invested in the apprentices and the professions to do this work. Now, if we have to, we will rely on skilled tradespeople. We’ll bring in electricians, plumbers and carpenters from overseas if we have to.

Despite your policy of tightening up immigration.

Well, Lisa, the reason it’s called an immigration policy is we get to choose who comes here. So we will choose the electricians, the plumbers and the carpenters instead of bringing people to this country to flip burgers and pump gas.

Andrew Little has said Labour would cut immigration by “tens of thousands” and at one stage intimated by up to 50,000 a year.

I would have thought on two of the key issues Labour is pushing for this election campaign they would have things worked out better than this by now.

Newshub: Interview: Phil Twyford

Full transcript: The Nation: Lisa Owen interviews Phil Twyford

Labour’s Kiwibuild supported

Newshub/Reid Research have polled on Kiwibuild.

‘Do you support Labour’s Kiwibuild policy?’.

  • Yes 56%
  • No 41%
  • Don’t know 3%

This time a reasonable headline – Labour’s ‘Kiwibuild’ popular with voters  – but Patrick Gower again goes a bit overboard with his commentary.

Labour’s policy of building 100,000 affordable homes over 10 years for first home buyers is supported by a clear majority of voters.

It’s another blow on the housing front for National, as it shows Labour’s signature policy has significant support.

I don’t see it being a game changer, not at this stage at least. Much may depend on the state of the housing market in a year, leading into the next election.

Labour likes the result.

Leader Andrew Little says the result vindicates the policy and is proof it’s not only popular, but Kiwis believe it’s one of the best solutions to the crisis.

“People do expect when we do have a crisis of the nature we’ve got – a shortage of houses across the country – that if the private sector can’t do it, then the Government needs to step in and lead a building programme,” says Mr Little.

And Greens beat National over the head with it.:

Greens co-leader Metiria Turei is also welcoming the result, saying it flies in the face of the Government’s vehement opposition to a mass-scale house-building programme.

“National will not do it because they are so fixed in their ideology,” she says.

“I mean, they just launched a billion-dollar fund which had nothing to do with building new homes. They have no new ideas and I think that’s why they’re failing.”

Ironic for Greens to accuse someone else of being fixed in their ideology.

Prime Minister John Key says the poll result is not a sign the current system is failing.

“We don’t think it’s necessary because that’s 100,000 homes over 10 years,” he says.

“We’re going to build 100,000 homes under our programme in about 3.5 years.”

There has to be real signs of progress towards that by next year’s election or National could be dumped on housing.

 

Twyford admits Chinese name mistake

Housing spokesperson Phil Twyford has conceded that Labour’s profiling and analysis of Chinese sounding names was “a less than masterful piece of political communication”.

It was highly embarrassing for Labour and they were strongly criticised, including from the left.

Richard Harman revealed Twyford’s admission at Politik: Phil Twyford – rebuilding after the Chinese names affair.

Mr Twyford, made a controversial entry into the debate on foreign buyers last July with his release of statistics based on Chinese sounding names of house buyers in Auckland.

Now, over six months later he is prepared to concede that it was “a less than masterful piece of political communication” and he is careful to emphasise that he is talking about non-resident foreigners.

And that was the point of it though he says that offshore money probably accounts for 5 – 10% of the housing market.

However even that amount, he argues, has an impact at the margins of what is a market facing very tight supply constraints.

So what will Labour do about housing?

In a way Labour has disarmed itself in this battle by deciding to put the capital gains tax it went into the last two elections with on the table.

Finance spokesperson Grant Robertson earlier this year told POLITIK that Labour could consider extending National’s “brightline” capital gains tax out to five years.

But that’s as far as they would go.

This leaves Twyford scrambling to find a way to deal with the pervasive idea in New Zealand that property is a preferred investment option.

“Cracking down on property speculation is one of the things we have to do if we are going to turn this around,” he says.

“There is no question in my mind that there are four or five things we have to do and cracking down on speculation is one of them.

“We have said we are going to ban non-resident foreigners from speculating in housing and what we will do in Government is explore all the other legislative and policy things that currently drive vast amounts of capital into basically unproductive speculative real estate market which is damaging for home ownership and also the wider economy.”

But that’s about as specific as it gets.

“We’ve said we’re not looking at wholesale reform going into the next election,” he says.

But they also have their house building policy.

Labour plans to address those supply constraints with its Kiwibuild policy which would see 10,000 modest, “entry level” homes built every year for 10 years by Housing New Zealand onsold to private buyers.

That too poses its own challenges and Twyford concedes that the Resource Management Act is going to have to change to make it easier to build homes both within and without Auckland.

So will Labour work with National to reform the RMA?

The Labour ‘self-select’ model

Labour’s Kiwibuild policy will provide some people with cheap houses, giving them a windfall capital gain if it doesn’t drag all house prices down.

These houses could be eagerly sought, but the Kiwibuild fact sheet suggests the queue will ‘self-select’.

No household type will receive preference over any other household type. Nor will there be any income restrictions. On the whole, people will ‘self-select’, with those who can afford to move up the property ladder excluding themselves.

Is this based on the well proven Labour leadership ‘self-select’ model?

More blog comment on Kiwibuild: