John Armstrong is the Herald's chief political commentator

John Armstrong: National gives mixed signals with housing

Government policy almost North Korean in inspiration

National's attempt to play catch-up with Labour on housing affordability is becoming ever more interventionist - dare one say it, even North Korean in inspiration. Photo / File
National's attempt to play catch-up with Labour on housing affordability is becoming ever more interventionist - dare one say it, even North Korean in inspiration. Photo / File

One of the reasons why Governments slowly decay and die is that the longer they are in office the more prone they become to ugly pragmatism and compromise of principle.

As idealism evaporates in the day-to-day struggle, ministers increasingly face having to keep their heads above water, the voting public begins to wonder if the governing party really believes in anything beyond maintaining its grip on power and accordingly starts looking for a fresher, unsullied alternative.

It is far too premature to diagnose the current National minority Government as being so afflicted - just as it is too early to suggest Labour is anywhere near conveying the authority and ambience of a government-in-waiting.

However, National displayed some worrying symptoms in Thursday's Budget, most noticeably in the context of housing policy, the document's most crucial component, and in the form of its minister and his complex personality.

The emphasis on housing saw National mix unrelenting pragmatism tinged with a streak of ideological fundamentalism - which not coincidentally pretty much describes Nick Smith's belief system.

National's attempt to play catch-up with Labour on housing affordability is becoming ever more interventionist - dare one say it, even North Korean in inspiration.

The negotiation of "housing accords" between central and local government and subsequent designation of "special housing areas" where resource consents for new housing developments will be "streamlined" - in other words approved without fail within 60 working days - certainly sounds like something out of the Muldoon era.

More so given that where an accord cannot be reached, central Government will have the right to exercise these more permissive consent powers anyway.

It all has the ring of desperation about it.

Having lost faith in market forces to deal with the problem of affordability, National's problem is that its latest plan still lacks the simplicity of Labour's promise to build 100,000 homes over 10 years - a policy which is popular because people want to believe it can happen.

That is a bridge too far for National.

The party has anyway devoted considerable effort to trying to shoot down Labour's claim to be able to build such homes for around $300,000 in Auckland.

National would look silly if it now tried to replicate Labour's plan.

National's stance on affordable housing is in marked contrast to the one it has taken on the provision of state-funded social housing, where it seems to be driven instead by ideological forces towards reducing the role of the state.

National and state housing have always been uncomfortable bedfellows.

National opposed the state house construction programme initiated by the post-Depression Savage Government of the 1930s, arguing it marked the first step towards the "nationalisation of property".

As part of Ruth Richardson's onslaught against welfarism, the party introduced a more commercial approach to the management of state housing in the 1990s, setting up Housing New Zealand as a state-owned enterprise and introducing the accommodation supplement and market rents.

The current National Administration has moved more cautiously, but the direction in which it seems to be heading appears to be taking it towards quite a radical shift in the delivery of public housing, including establishing a new regulatory agency.

National's current thrust is to contribute more and more taxpayer funding in favour of community housing groups and voluntary organisations.

The latest step is the extension of income-related rent subsidies to community housing providers.

Smith has described such moves as a "substantive shift" in direction. Labour and other opponents are calling it "backdoor privatisation" or "privatisation by stealth".

Housing New Zealand has been increasingly shorn of a policy role with its social housing unit having been shifted to the Department of Building and Housing on the grounds that policy and operational functions should be clearly separated from each other.

The Budget deprives Housing New Zealand of another function by shifting the assessment of people's housing needs to the Ministry of Social Development.

Labour agrees this makes some sense, given the ministry's operational arm, Work and Income, already assesses people's other assistance.

However, the suspicion remains that Housing New Zealand is being progressively deprived of functions and will be left with the sole task of managing the state's housing stock - a job which ultimately could be farmed out to the private sector.

Indeed, during debate on enabling legislation rushed into Parliament on Budget night, Labour MPs asked what was stopping the Government going the whole hog and handing Housing New Zealand over to the likes of real estate agents Barfoot and Thompson.

National, meanwhile, has taken a tougher stance on eligibility for state housing, first by culling the waiting list, and second by reviewing tenancies to check whether the occupants can afford to shift to private sector-provided rented homes.

This originally applied to new tenancies signed after July 2011.

Thursday's Budget has extended that provision to all tenancies. National believes it can free up 3000 state houses over two years for new tenants.

National counters critics by saying it is not only still pouring money into building and renovating state houses - the latest initiative involves the addition of kitset bedrooms to existing houses to align the housing stock more closely to need - it is spending more than Labour did.

That may be the case.

But Housing New Zealand's developments now include stock which is earmarked for private sale rather than retention as public housing.

National is still a long way short of generating real "contestability" in the social housing market. That would require a major shift of housing stock to community providers.

Reports that Smith was planning to transfer 12,000 units across to that sector were strenuously denied by his office earlier in the week.

The reality is that the community sector is not able to take full advantage of the extra funding National has made available in this and other recent Budgets.

There was significant underspending in 2012, for example.

National's contrasting approaches to housing affordability and the provision of social housing might be interpreted as horses for courses.

However, the schizoid behaviour suggests that when the political heat goes on to deliver results as quickly as possible - the case with housing affordability - ideological principle very much takes a back seat.

- NZ Herald

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John Armstrong is the Herald's chief political commentator

Herald political correspondent John Armstrong has been covering politics at a national level for nearly 30 years. Based in the Press Gallery at Parliament in Wellington, John has worked for the Herald since 1987. John was named Best Columnist at the 2013 Canon Media Awards and was a previous winner of Qantas media awards as best political columnist. Prior to joining the Herald, John worked at Parliament for the New Zealand Press Association. A graduate of Canterbury University's journalism school, John began his career in journalism in 1981 on the Christchurch Star. John has a Masters of Arts degree in political science from Canterbury.

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