Prime Minister Jacinda Ardern and Housing Minister Phil Twyford can't say they weren't warned.

Just a month ago, I wrote here that KiwiBuild was becoming a major problem for Labour strategists. It wouldn't be long, I counselled, before the way Twyford was going about implementing the flagship Labour policy would be seen as grossly unfair.

KiwiBuild's high income limits, $100,000-plus deposits and lottery element would obviously increase inequality and worsen all the mathematical measures of child poverty against which Ardern wants to be judged as Prime Minister.


None of the points I made was original.

Had Twyford and Ardern listened to anyone in the property development sector outside those who want to cash in on the "buy-off-the-plans" scheme, or anyone from grass-roots social agencies, they would have reached similar conclusions.

Were KiwiBuild ever to deliver the promised 100,000 houses and apartments to create material downward pressure on prices, the new homes would have to be additional to those that would have been built anyway.

The first necessary step was to recognise that former Housing Minister Nick Smith was not some evil Machiavellian who pretended to promote new construction while secretly wanting supply to remain constrained.

Smith's fiercest critics would acknowledge his passion and work ethic. If he is given a job by a Prime Minister, whether saving the kākāpō, implementing an emissions trading scheme or having more houses built in Auckland, he will be utterly single-minded in its pursuit.

Smith failed not because he didn't issue the right decree to officials but because of a lack of resources in the real economy, especially skilled labour, impossibly slow consenting procedures, an out of date building code, the retention of the Auckland urban limit, and hopelessly naive advice from the Wellington bureaucracy.

A mere change of Government doesn't alter any of those realities, yet Twyford has continued to listen to the very Wellington bureaucrats who made a fool of Smith. The new Government has done nothing to address the resource and regulatory issues that caused the problem in the first place.

Only a Government completely out of touch with the challenge it faces could have thought it was a good idea to proceed with last weekend's "street party" in Papakura, let alone allow Ardern to publicly compare herself with Michael Joseph Savage.


The couple chosen by Ardern's PR machine to personify KiwiBuild, Derryn Jayne and Fletcher Ross, could not have more perfectly demonstrated everything going wrong under Twyford's watch.

If Beehive spin doctors judged Jayne and Ross the most politically acceptable of last weekend's 18 KiwiBuild winners, we can only speculate on the privileged circumstances of the other 17.

Jayne and Ross, of course, have done nothing wrong, merely acting consistently with my advice a month ago that everybody who is eligible should register for a KiwiBuild home.

Jayne, 25 and set to graduate as a doctor, spoke a little too freely to the Herald's Bernard Orsman, saying "it feels like we have won Lotto", while Ross, 24 and an online marketing expert, took to Facebook to joke with friends about their immediate $70,000 or so capital gain.

With 44,642 people already registered with KiwiBuild and just 70 KiwiBuild houses under construction nationwide, all of them "bought-off-the-plans", Jayne's Lotto comparison was exactly right except that buying this ticket is free.

Luckily for the Government, National's Judith Collins wrongly suggested on Twitter that the admittedly well-travelled couple may have visited as many as 204 countries and elements of the daily media decided that was more newsworthy than Twyford's mismanagement of a $2 billion flagship Government programme.

For as long as mass immigration continues to New Zealand, a programme such as KiwiBuild makes sense, at least as originally announced by then Labour leader David Shearer at his annual conference in 2012.

Realistically, only the state can cut through the red tape that has created the housing shortage and commission new greenfields construction on a scale to allow real resource constraints to be overcome, meet the 100,000 target and make a difference to house prices.

If Ardern and Twyford remain committed to those goals — and to their re-election — they still have time to abandon plans for any further embarrassing PR stunts, turn their backs on the Wellington bureaucrats who have failed them and the previous two governments, and get up to Auckland to talk to people who have experience in delivering massive property projects on time, under budget and within the real resource constraints of the New Zealand construction sector.

- Matthew Hooton is managing director of PR and corporate affairs firm Exceltium.