KiwiBuild: tinkering not transforming

Megan Woods. Photo: RNZ
Megan Woods. Photo: RNZ
And another one bites the dust. The Capital Gains Tax, half-baked anyway because a proper tax would have had to include the politically unpalatable family home, failed to rise. This week, Labour, finally, admitted the collapse of its KiwiBuild goal of 100,000 new houses.

These were two cornerstone policies on which Labour had plenty of time to cogitate. In the so-called year of delivery, they were both stillborn. What is next?

KiwiBuild's origins go back to leader David Shearer and his catchy announcement of 2012. There has been plenty of time to study, consult, amend and fine-tune.

Labour's working parties, consultations and draft proposals chug away. The latest plan, announced yesterday, was by Labour for freshwater. How many of these, in the end, will result in successful policies and outcomes?

Given the abandonment of any KiwiBuild targets in the "reset" by replacement Housing Minister Megan Woods, how will we know whether these changes fail? And if failure cannot be ascertained properly, neither can success.

The Government might be spared blushes in areas that are harder to measure. It is, for example, pushing ahead with centralising polytechnics, endangering the fortunes of thriving institutions in Otago and Southland. Outcomes here will be much harder, at least in the short-term, to calibrate. Loss of innovation, pride and local involvement are not so easy to quantify.

Certainly, structures can change and delivery will occur in a narrow sense. But Labour will find it much easier to obfuscate any failures.

The party was hoisted high and exposed, however, by the 100,000 figure. There was no way it could massage the figures sufficiently to make any meaningful dint in the numbers.

Labour and the Greens, in the "reset" on Wednesday, pointed to the positive concept of a "progressive ownership" scheme, perhaps similar to what Habitat for Humanity has used to get families into their own houses. But the details are vague at this stage. In any case, it is expected to help only 4000 families, a mere 4% of the 100,000 homes in 10 years target.

But, at least, for this part of the policy, there is a number - albeit small. Similarly, dropping deposit levels at a time of low mortgage rates and the pooling of First Home Grants and KiwiSaver from more than two people are helpful measures. This and a handful of other tweaks, however, are tinkering. They are not transformational in themselves.

Perhaps, though, the frustrated cries from the Left for bold, revolutionary actions are misguided and unrealistic. Tinkering accumulates, and former prime ministers Helen Clark and John Key were masters at incremental change and bringing the electorate along with them even as they steered in differing directions.

In any event, the housing fundamentals have not changed. Where is the land on which to build? Where are the builders? Where is the wherewithal to put in the drains, the water pipes and the roads?

Again, supposedly, changes to the Resource Management Act will help. Every Government seems to say that RMA reforms will streamline and improve processes. But every simplification is accompanied by another complication.

Nevertheless, more work is needed in this area so that cities can be become more compact and so that outlying land that is not on high-grade agricultural soils is more readily available.

Labour and its partners, therefore, can focus on where the blockages are and clear them one after the other, in co-operation with local councils. They can endeavour to remove these so that private enterprise can then build the homes and apartments this country needs.

Serious and systematic step-by-step tinkering can make a difference.



Utopian policies make people believe that the economy is far,far better than it really is.

Yip. The arrogance of elitism, came crashing down.
We’ll fix inequality by taxing the evil capital that capitalist use to repress the masses.
We’ll build the housing for the masses because those greedy builders only build for the rich.
Then reality hits. To buy a house you need to build up capital, for a deposit. To save for retirement, you need to build up capital to invest.
But the real kicker comes when they realised that the largest cost in building is government controls and taxes.
As someone trying to get a build started, I’d say it’s over half the cost on a modest house, reducing as you increase the value.
All done in the name of your best interests in mind, of course.

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