Ardern’s Kiwibuild turns epic ‘Kiwibust’

By Leith van Onselen

I’ve noted previously how the New Zealand Labour Party’s promise to “build 100,000 affordable homes across the country” is shaping up as an epic failure due to:

  1. the government changing the program from “building” to “facilitating” the delivery of 100,000 affordable dwellings, meaning that NZ taxpayers would merely ‘underwrite’ many dwellings that would have been built anyway, thereby protecting developer margins;
  2. the government increasing the price threshold on a Kiwibuild 3 bedroom home to $650,000, which is unaffordable to more than half of Auckland households; and
  3. the government announcing a ridiculously high income cap of $180,000 for would-be Kiwibuild homeowners – a level that is more than twice the average household income – thus turning the program into “socialism for the rich”.

Towards the end of 2018, it was reported that Kiwibuild’s popularity is plummeting:

Kiwibuild’s “plummeting popularity” could spell out Kiwibust for the Government’s flagship policy… the initiative was getting no traction and there was low interest in Kiwibuild homes…

“Houses are too expensive and too small. The minister isn’t building enough houses, he isn’t selling enough houses, and those few that are sold aren’t going to the people that need them” [said National Party housing spokeswoman Judith Collins]…

Whereas ex-Labour Party MP, Peter Dunne, described Kiwibuild as “one of Edmund Blackadder’s cunning plans”:

…no longer will the government build “100,000 high quality affordable homes”. And no longer does “affordable” mean $350-450,000, but $650,000.

Moreover, now the plan is merely to “deliver” 100,000 homes, which, in the best Blackadder fashion, means accumulating all the new homes already being built over the next 10 years by the private sector anyway, and dressing them up as Kiwibuild homes… All that is happening is that existing plans are being branded under the Kiwibuild label, which is win-win for both the government and the industry.

Therefore, in reality Kiwibuild is a very clever strategy of the government doing very little, but making it look like a lot…

Last week, the New York Times entered the fray, lamenting that only 47 homes have been delivered through Kiwibuild:

When New Zealand’s housing crisis became so bad that one study found only Hong Kong less affordable, the country’s prime minister came up with a solution: An ambitious plan to prompt the construction of 100,000 new homes over the next decade to help ease prices.

But on Wednesday, the government of Prime Minister Jacinda Ardern said it would scrap its initial targets after failing to meet them, with just 47 of the 1,000 homes it had promised by July built so far…

Stuff.co.nz has also piled in:

Fixing KiwiBuild… is going to require more than tweaking. It should have been obvious to all that the policy is too big to fail – yet on the evidence so far, that is the road it is headed down.

There are now serious questions within her Government over whether the policy is still fit for purpose.  There are even more serious questions about whether Housing Minister Phil Twyford is the person who can fix it.

Some immediate tweaks will help.  It seems that only now are the scheme’s architects planning on surveying the tens of thousands of people who registered for KiwiBuild to find out what they want. The big question is why that never happened in the first place…

But more fundamental changes, like tossing more sweeteners at developers, are fraught. The Labour grassroots are already antsy that the programme delivers to middle New Zealand, and not the poorest Kiwis.  Lining the pockets of property developers will hardly mollify them.

Sadly, Kiwibuild appears to become a smokescreen designed to give voters the impression that the Government is acting on housing affordability, while not actually doing much at all.

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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Comments

  1. reusachtigeMEMBER

    This is why people should never vote for a Labor party and should always vote for a conservative business minded party as they want enterprise to prosper which includes construction of lots of buildings unlike Labor which will always destroy an economy.

    • Reausa … That is eyewash.

      The Tories never will do anything to fix the housing problem … mainly because they are never prepared to take on the protectionists within the ranks.

      I learned that way back in the early 1990’s while South Island President for the Property Council !

      New Zealands IPSOS Issues Surveys through 2018 (3 of them) found twice as many Kiwis are of the view Labour is more likely than National to fix the problem.

      They voted accordingly.

      The New Zealand public … thanks to a very engaged and responsible media across the board … is very well informed on these issues.

      Check out my archival website … http://www.PerformanceUrbanPlanning.org

      • reusachtigeMEMBER

        ^^ Housing problem? What the are you talking about? I’ve met a load of people at the parties who say that they’ve made a sh1t load investing in New Zealand property. I’ve always been to busy locally to check it out but prices do seem to confirm that it has been a brilliant market to get into.

        Voting for Labor will always destroy an economy, one that the conservatives have built into a very profitable one thankfully.

  2. Oh, looks like you didn’t get the updated slogan for KiwiBuild. It no longer is “Backing the Kiwi Dream”, it’s “Bare-backing the Kiwi Dream”… just a small addition.

  3. Divide et impera

    You should lay off Jacinda Adern – she does excellent virtue signalling and is a Social Justice Amazonian Warrior.

    She had a baby while Prime Minister – thats more than any man has ever done – and think about all the things she SAID she would do – so enough.

    It doesn’t matter what she actually does – its what she says and who she is that matters – like Obama – he said a lot and thats what matters, so who cares if he did nothing.

    And Ralph Northam – who cares if he dresses up in black face and KKK outfits – he SAYS hes a Democrat – and thats all that matters.

    Maybe you have some sort of masculine mental disorder – you know its now a mental disorder just being a man right ? Don’t believe me – well they’re changing the laws, regulations, definitions of the Australian Psychology Association guidelines to make being a man a mental disorder……

    Who cares about facts, science, reality – its what you say, and who you pretend to be – how you posture and signal, its about iconoclasts not iconoclaters…..its post modern.

    https://www.abc.net.au/news/health/2019-02-05/mens-mental-health-masculinity-gendered-psychology-guidelines/10768294

    If anyone wants a rebuttal as to what the hell I am talking about regarding virtue signalling and reality vis-a-vis Adern

    https://jordanbpeterson.com/political-correctness/comment-on-the-apa-guidelines-for-the-treatment-of-boys-and-men/

    Then again – we aren’t allowed to even listen to Jordan according to the Age

    https://www.theage.com.au/national/the-world-doesn-t-have-time-to-take-jordan-peterson-seriously-20190131-p50utr.html

    Heres the governors year book photo – that CNN says means he is the best kind of white person to help black people because he is reformed – (no this is true).

    https://bloximages.newyork1.vip.townnews.com/richmond.com/content/tncms/assets/v3/editorial/a/c8/ac8cee24-ce19-5eed-8252-78de49f31c58/5c54bb4a74115.image.jpg?resize=1200%2C842

  4. So it appears Australia now has some genuine competition in the Population/Immigration ponzi stakes !! Gold

    • Divide et impera

      Yes – any white western nation.

      Japan ? You cool bro – you yellow – its not racist to have zero foreigners.

      Africa ?!! No way – whities – no chance, yellow and Indian is even worse.

      Middle East – ok – SOME foreigners – but only as slaves.

      Russia ? Poland ?

      нет

      Germany ?

      مرحبا بكم من فضلك بيتي وعائلتي

      • Divide et impera

        Did I say something wrong – or just something you didn’t like….Dennis.

        I, along with literally everyone else, is so completely sick and tired of the FEELS over the REALS.

        Either have a conversation about reality like an adult and stop blubbering about how life is unfair – or just seriously shut it.

        The bleating, blithering, whining is just pathetic.

      • I, along with literally everyone else, is so completely sick and tired of the FEELS over the REALS.

        LOL. From the guy phoenixing into a new account every month for (at least) the last three-odd years.

        Next you’ll be trying to lecture us about ethics.

  5. What on earth is the academic Arthur Grimes thinking ? …

    Despite recent set-backs KiwiBuild says its mass produced housing plans are still on-track | interest.co.nz

    https://www.interest.co.nz/property/97954/despite-recent-set-backs-kiwibuild-says-its-mass-produced-housing-plans-are-still

    Didn’t he learn anything from the “British lesson’ …

    Inquiry. The Great British Housing Disaster (Adam Curtis, 1984) – YouTube

    https://www.youtube.com/watch?v=Ch5VorymiL4

    • Hugh,
      Everyone told you Labour’s programme would be a failure. What happened to all the land/RMA reform Twyford was supposed to do? They haven’t done a thing and are dead in the water now. You’re not still drinking the kool aide?

  6. I dunno what to make of Jacinta. Is she a cynical and manipulative liar who will spout whatever platitudes people want to hear to obtain power (aka a typical politician), or is she a well intentioned but weak puppet who meant what she said but hasn’t had the power to push it through the entrenched opposition (aka a typical politician of a different variety)?

    • kiwikarynMEMBER

      A naive and unqualified idiot who has never had a real job but who has lived in a bubble her whole life, who thought that running an economy was as simple as writing an essay for her dumbed down Arts degree.

    • She’s a politician who managed to navigate her partys power structures in order to rise to the top and become leader. That answers your question.

      I was always a bit bemused MB feted her as anything different from just another useless politician (albeit prettier than most).

  7. … New Zealand: A government in crisis …

    After Davos, a reality check for Jacinda Ardern | Tracy Watkins – OPINION | Stuff.co.nz

    https://www.stuff.co.nz/national/politics/opinion/110316253/after-davos-a-reality-check-for-jacinda-ardern
    .
    .
    Stacey Kirk: KiwiBuild noose tightens; Labour’s flagship policy is a dead duck | Opinion | | Stuff.co.nz

    https://www.stuff.co.nz/national/politics/110100092/stacey-kirk-kiwibuild-noose-tightens-labours-flagship-policy-is-a-dead-duck
    .
    .
    Kiwibuild makes the NY Times – Kiwiblog

    https://www.kiwiblog.co.nz/2019/02/kiwibuild_makes_the_ny_times.html
    .

    • Hats off to you!

      I probably said “she could turn out to be the next Gillard”.

      Janet in NZ was probably sceptical as well.