For the first time in a long time, Labour has come up with
something radical on the policy front which may grab the
public's attention, and which National cannot really get away
In promising to build 100,000 modest but affordable homes
over 10 years, Labour is drawing inspiration from its proud
legacy as a provider of state houses during the Savage and
But the similarities end there.
Labour's KiwiBuild programme will see the Government borrow
about $1.5 billion to start what will become a self-funding
scheme as the proceeds from the sales of houses to first-home
buyers are reinvested.
National has sought to paint the scheme as unworkable,
especially in Auckland where the crisis in home ownership is
at its worst.
National argues that Labour's claim a modest entry-level home
can be built for less than $300,000 is absurd, given the
price of sections in Auckland are close to that even in less
Labour's policy, however, is being written by the formidable
Annette King, who holds responsibility for Labour's shadow
She says high section prices in Auckland could result in
Labour promoting mixed housing developments which would see
the more expensive homes cross-subsidising others meeting the
Ms King is still fleshing out the detail of the policy
framework, which was unveiled by David Shearer at Labour's
annual conference two weekends ago.
There have been rumours this might be Ms King's last term in
But she says she is not going anywhere.
That is bad news for National. She has outfoxed National
generally and Housing Minister Phil Heatley in particular.
The Government's affordable housing "package", released in
late October, focused on freeing up land for new housing and
cutting red tape to speed up building consents.
That is all fine and dandy. But it takes a while for such
changes to have an impact. They do nothing to address what
amounts to the market failure. In Auckland, only about 5% of
new homes are targeted to the lower end of the market.
National's response to the affordability crisis was to be
seen to be wringing its hands. In contrast, Labour is rolling
up its sleeves.
The latter's package directly addresses market failure. The
policy heralds Labour's adoption of a more interventionist,
hands-on style of governing which the party believes the
electorate is increasingly willing to embrace, especially
where market-driven approaches are not delivering.
Labour is being bold. Like the push for a capital gains tax,
the housing promise is a break from Labour's immediate past
of playing safe and finding excuses for not doing things.
David Parker, Labour's finance spokesman and third-ranked MP,
this week spoke proudly and unselfconsciously of using "the
power of the state" to bulk build houses.
Helen Clark and Michael Cullen were hardly averse to state
intervention, but couched their language in more cautious
What the housing policy says about Labour's direction is
arguably as important as the policy itself. It shows Labour
regaining its soul.
The policy will appeal to middle-income voters in the
political centre, especially those worried they or younger
relatives will never get on the homeownership ladder.
Those voters worried about Labour being profligate with
taxpayer dollars will be comforted by knowing the $1.5
billion will be designated as capital so will not slow the
country's return to Budget surplus.
The capital injection will provide a stimulus to a sluggish
economy. The 10-year programme will provide some certainty to
an industry notoriously victim to boom-bust cycles.
The ramping up of building activity dovetails with Labour's
long-held preference for an effective apprenticeship system.
The policy is also an answer to the anti-poverty lobby which
argues not enough is being done to lift the quality of the
housing stock, reduce the effect of poor living conditions on
a person's health and alleviate child poverty.
Labour also intends using the policy to turn the tables on
National in another way.
New Zealanders will be offered the chance to invest in
Housing Affordability Bonds, with Labour arguing that is
preferable to buying shares in state assets they already own.
Lastly, the target of 100,000 new homes over 10 years is the
kind of promise which only one or other of the two major
parties can make with any certainty it will be fulfilled.
It should shift votes Labour's way and thus shift the balance
of power on the centre-left away from the surging Greens and
back to Labour.
All of this should be of major worry to National. Labour may
well be capable of shooting itself in both feet on occasion.
In fact, the very public argument at Labour's conference over
how the party will elect its future leaders, combined with
David Cunliffe's less-than-subtle self-promotion,
overshadowed the announcement of the new housing policy,
reducing the amount of publicity it got.
However, in terms of ideological renewal and momentum, Labour
is stating to get it right.
National's nervousness at what Labour might come up with on
the housing front was evident even before the unveiling of
Having got wind that housing was a major component of Mr
Shearer's keynote conference speech, National sought to
cancel out in advance whatever the Labour leader had to say.
On the preceding Friday, National announced up to 600 of the
2500 to 3000 homes to be built at Auckland's Hobsonville
Point would be priced at $485,000 or less.
This massive U-turn was very cynical politics. National
originally set aside 100 houses for first-home buyers. That
was cut to less than 20 last May.
National was punting that its sudden generosity would be
sufficient to neutralise Mr Shearer's announcement. That
might have worked in the past. Labour's newfound willingness
to take risks suggests it won't in the future.
• John Armstrong is The New Zealand Herald