Kāinga Ora not financially viable - Sir Bill English

Neighbours are claiming Kāinga Ora is failing to be upfront and transparent with communities...
Photo: RNZ
The country's social housing system isn't financially sustainable or delivering the homes people need, an independent review has found.

Former prime minister Sir Bill English was commissioned to look into Kāinga Ora's financial situation, procurement and asset management last year.

His report, released this afternoon, found the agency wasn't financially viable, had limited attention to value for money and opaque transparency around internal costs and revenue.

It made seven recommendations, four of which the coalition government is moving to implement immediately.

Cabinet has agreed to align contractual arrangements across Kāinga Ora and Community Housing Providers and refresh the Kāinga Ora Board.

It's also agreed to issue simplified direction to Kāinga Ora and that Ministers will set an expectation the new board develop a robust plan to improve financial performance.

"The review makes it clear that Kāinga Ora's financial situation is very worrying," Housing Minister Chris Bishop said.

"The operating deficit at the time the review was undertaken was forecast to grow from $520 million in 2022/23 to over $700 million in 2026/27, driven by interest on the debt-financed capital investment programme.

"Debt is forecast to increase to $23 billion. Kāinga Ora's forecast cash requirement from the Crown is $21.4 billion over the next four years. This is equivalent to every New Zealander paying about $4000 for this activity."

Bishop said Simon Moutter, former chief executive at Powerco, Auckland International Airport and Spark NZ, would begin as the new chair of Kaīnga Ora from 4 June.

"Further consideration of the Board composition is ongoing with a refreshed Board expected to be in place in July.

"Ministers will then issue a new Letter of Expectations which makes crystal clear our expectations regarding Kāinga Ora's focus on fiscal sustainability, value for money, and a 'back to basics' approach for their essential functions.

"The first task of the refreshed Board will be to present a Kāinga Ora turnaround plan to Ministers by the end of the year, which focuses on returning Kāinga Ora to financial sustainability and eliminating losses."

Other changes proposed in English's review will be considered in the coming months, with Bishop saying the recommendations align with the coalition's broader social policy objectives.