On The Privatising Of State Housing Provision, By Stealth

Published: Wed 22 May 2024 11:44 AM
The scathing “independent” review of Kāinga Ora barely hit the table before the coalition government had acted on it. The entire Kāinga Ora board will be replaced, and a new chair (Simon Moutter) has been announced. Hmm. No aspersions on Bill English, but the public would have had more confidence in this “independent” critique of Kāinga Ora’s expanded building programme if it had been carried out by someone other than a former National Party leader.
In this case, it was carried out by the same National Party leader whose own administration’s inadequate housing build – and selling of state houses- had caused Kāinga Ora to embark on its crash building programme in the first place. To use a rugby analogy, this situation is exactly like hiring Ian Foster to carry out an “independent” assessment of Scott Robertson’s coaching abilities.
Supposedly, Kāinga Ora was “underperforming,” had “little accountability” and was on a “financially unsustainable” debt path. Really? While the coalition government has chosen to highlight the rising debt, it has deliberately ignored the rising value of the assets being created via that debt. This is called investment in the future. Alien territory, I know, for the National Party.
Frankly, a $9 billion debt looks acceptable in future, because:
(a) Kāinga Ora would be building housing assets on a debt pathway that as Labour’s Kieran McAnulty has pointed out, would by 2060, have generated assets worth in the region of $200 billion, against that debt of $9 billion. Along the way, McAnulty added, debt was estimated to be running at only 25% of the worth of the assets being created.
(b) Kāinga Ora would be receiving an income stream from its rents, and
(c) Kāinga Ora has the ability to borrow to service its debt at cheaper rates than anyone else.
Ultimately, debt is what you inevitably incur when you make the investments necessary to address a housing crisis. There is no convincing reason given in the English report as to why that debt – relative to the assets being created, the income stream, and the debt servicing costs – is unsustainable. It would become unsustainable only if, in 2025, the government suddenly stopped funding it. Talking of which, there is, as yet, no indication of whether an alternative approach would be expected - or able - to match Kāinga Ora’s current rate of sustainable housing builds.
Besides...if we’re truly worried sick about Kāinga Ora’s administrative overheads – what will be the cost of the bureaucracy that will be required in future to manage the interface between the essential levels of government funding, and the community/private sector that’s apparently soon going to be expected to be delivering housing on the scale that’s necessary?
Some of Kāinga Ora’s extra costs -when compared to a theoretical build by other providers – have been inevitable, due to its involvement in brownfield development, which can require existing state tenants to be re-housed while rebuilds occur. (Tenants receive scant attention in the English report, and their prospects are uncertain.)
All of that aside, Kāinga Ora seemed to be on track to meet a build of 4,800 state houses this year. To date, it has built 14,000 new state houses in six years. By comparison, in the last year of the previous National government led by Bill English, the net achievement was minus 1,500 state houses.
More to the point... the government clearly has an ideological objection to the state being the prime provider of sufficient and affordable quality housing. Yet Housing Minister Chris Bishop’s alleged enthusiasm for social and community providers has not yet extended to (a) providing certainty that these providers will receive sufficient government capital to do the job, let alone (b) ensuring that a new combination of state and community provision will be able to match what Kāinga Ora is currently achieving.Targets? What targets?
Funny that. This government is normally so keen on targets and 100 100-day plans and multi-point quarterly goals, and on providing the business sector with the certainty it craves. In this case though, and even when pressed, it will not commit to targets, or to certainty of funding for the community providers it is touting. All Bishop is saying is that‘ more’ social housing will be built in future. Duh.
No doubt Kāinga Ora could do better. It could always be more efficient. We all can. But organisations tasked with responding to a crisis tend not to be textbook examples of theoretical precision. Yet in this case, a trumped-up case has been made to justify throwing the ideological baby – the state as the primary provider of housing need – out with the bath water.
If Bishop believes so staunchly in community provision, let him give those current community providers the funding certainty they are asking for and need. Don’t wait to see what the new board/new chair might come up with by November, by way of a plan for future consideration.
We simply haven’t got the luxury of putting housing policy back on the whiteboard, for another bout of blue-sky thinking. There is already a social backlog that will require circa 5,000 houses to be built each year to keep pace with existing demand. As Child Poverty Action Group social housing expert Alan Johnson told RNZ:
Part of the problem with the review is that there is no indication of what the government’s intention is to support public housing into the future: how many houses are going to be built, what sort of operating subsidies are we going to see, and what’s going to happen to tenants – are they going to be shipped around, and are we going to have limited tenancies back again? These questions haven’t been answered and it would have been good if they had been.
Footnote One: Evidently, part of the funding for social housing providers is going to come from axing the grants for first-home buyers. Only a couple of years ago, Nicola Willis was lambasting the Labour-led government over there being an insufficient number of those grants. Well, this week Shane Jones mistakenly assumed Bishop had already let this cat out of the bag. Apparently, the scheme will be scrapped entirely in this week’s Budget, and the money diverted into social housing. Tough luck, new home buyers.
Overall, the denigration of Kāinga Ora in such a lopsided and misleading fashion can only raise suspicions as to what Bishop’s real agenda is here – because it looks very much like the privatisation of housing provision, by stealth.Gaza, Biden’s Waterloo
US President Joe Biden seems hellbent on defending Israel, no matter what horrors it inflicts on the citizens of Gaza. Biden also seems oblivious to the prospect that his “ironclad” commitment to Benjamin Netanyahu may well end up handing the White House back to Donald Trump.
Reportedly, Biden finds it “outrageous” that the International Criminal Court has issued arrest warrants against Israel’s PM and Defence Minister for their war crimes in Gaza, alongside similar warrants issued against three Hamas leaders for their war crimes on and since, October 7.
Biden can only be outraged if he thinks the lives of Palestinian civilians and their children are worth less than the lives of Israeli civilians, and their children. The ICC hasn’t lightly chosen to put the leaders of Israel and Hamas on the same moral footing. As the Jewish newspaper Haaretz has noted, that moral equivalence is the direct consequence of the choices made by Netanyahu’s extremist government. Those choices have been a criminally disproportionate way of “defending” the state of Israel.
Apparently, though, Biden doesn’t care that his blind support for Israeli exceptionalism contradicts everything the Democratic Party claims to stand for. Young voters, minority voters… and yes, even some Jewish voters are going to desert Biden in November on his policy towards Gaza.
They will feel compelled to take that stance in protest against (a) Biden’s refusal to stop supplying the weapons that enable Israel to commit its crimes, and (b) the President’s rejection of any and all attempts to restrain Israel from committing its acts of butchery.Los Campesinos!
Incredibly, it is now 17 years since the Welsh band Los Campesinos! became critical darlings with their “You! Me! Dancing!” single, and the subsequent album Hold On Now, Youngster. To a fault, this band has always allied its whimsical faux romanticism and heart-on-sleeeve neuroses with tuneful noise pop. Typical song titles like “Drop It, Doe Eyes,” “We Are All Accelerated Readers,” and “TipToe Through the True Bits,” maxed out on the tweeness factor. Ultimately, lyrics like “ They appropriated everything we ever loved/and dressed it up in quotations and fluff” sounded as much like self-criticism as social commentary.
What stopped the whole winking project from being insufferable was (a) the quality of the melodies (b) the plaintive quality of Gareth Paisey’s voice, which could make defensive mockery sound like genuine emo heartache and (c) the fact that amidst the avalanches of Los Campesinos! lyrics there were phrases that sounded great when sung out loud, especially while crying in the rain.
For instance: this couplet from “ Letteres From Me to Charlotte” ( a song that skates around domestic abuse) still comes to mind on any solitary walk when the skies are grey:
Walk out onto your front lawn and face into the rain
Shout into the wind, this will never be the same...
Los Campesinos! are now about to release All Hell their first full album of new material in seven years. While more sombre in tone, the “Feast of Tongues” single basks in the emotionalism (half feigned, half real) that made this band so distinctive from the outset. By their standards, this is something of a slow burner. Plus, they’re older now, even though Paisey’s life on the ledge of self-parody still sounds dramatic:
When the black cloud comes, if one flame flickers
We will feast on the tongues of the last bootlickers....
And for most of us, here is where it all began:

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