Claire Trevett: the lesson of KiwiBuild, the Little Engine that couldn't

Labour's "reset" of KiwiBuild has proved to be the party's Little Engine that Couldn't moment.

For five years in opposition and two in government, Labour ground away at it, puffing "we think we can, we think we can".

Alas, unlike the stoic Little Engine of the childhood book, yesterday Labour had to concede that it could not. Reality trumped optimism.

The KiwiBuild saga is a salutary lesson to all political parties of the adage that if something looks too good or simple to be true, it probably is.

In the short-term, the failure to deliver has been an embarrassment.

In the long-term, it has given Labour a credibility problem.

This will cause Labour problems in future elections when they put up similarly ambitious policies.

Urban Development Minister Phil Twyford was charged with trying to bring KiwiBuild to life. Photo / Mark Mitchell

Ambitious is a kind way of saying unbelievable.

It gives voters greater cause to doubt whether they can actually deliver.

It has, in short, become Labour's folly.

The reset is an attempt to remove the focus on KiwiBuild as the big solution – a focus Labour only has itself to blame for.

Shouting out numbers like 100,000 over 10 years is a pithy sales pitch on an election campaign.

It proved a headache in reality because it was all anybody remembered.

The reset showed Housing Minister Megan Woods' solution to the failure to meet targets was to simply remove them all.

The 100,000 figure was replaced by the rather more nebulous "as many homes as we can".

That is far less pithy – but also much harder to hold the Government to account for.

It was not until yesterday that Labour itself admitted that the 100,000 number was "overly ambitious".

Housing Minister Megan Woods' solution to the failure to meet targets was to simply remove them all. Photo / Mark Mitchell

Woods was refreshing in her blunt assessment of the policy's failures, saying pressure to meet the targets led to homes being built in the wrong places.

Woods also sought to make a virtue of what amounts to a massive backdown on the policy, saying it showed the Government was willing to act when it was clear a policy had not worked.

It was a very sensible and pragmatic backdown, but it was a backdown. All that remains of its original policy is the name.

Labour's homes policy now better emphasises what it always should have – trying get lower-income people into homes, and first homes in places those buyers actually want them, rather than simply where they could be built.

KiwiBuild is not the only Labour policy that has not lived up to the billing, although it is the most spectacular. There is also the fees-free policy for tertiary students, and the Best Start payments for parents of new babies.

The policy giving a year of free fees to tertiary students delivered no lift in participation in post-school education or training, and the leftover money has now been siphoned off to spend elsewhere. The roll-out to cover two years of fees from 2020 is now in question.

There are signs that Best Start, weekly $60 tax credits for those with new babies, has not taken off as expected.

Figures for the first nine months show it is tracking well under what demand was expected to be: between July 2018 and 31 March 2019 about $8 million was paid out.

The Government had budgeted for $52m over the year, rising to $231m for 2019/20.

The critical factor in that will be a breakdown on which households are claiming and benefiting from it the most.

That level of research does not yet exist, but if it shows it is predominantly higher-income households taking up that payment, Labour needs to have a rethink.

Coming up with an attention-grabbing policy is the easiest part of a campaign. The harder part is persuading voters you can deliver it.

So we can expect this to haunt Labour in 2020. KiwiBuild has armed National with the big question: "Can Labour deliver?"

But some of those very same policies also land National with a problem. In 2008, the National Party realised that it was one thing to oppose a policy which put more money into people's pockets – and another thing altogether to take that money away from them.

That saw it decide to carry on with Working for Families, and to keep interest-free student loans. It was also why it kept up Winston Peters' SuperGold card with its transport costs to the government.

Come 2020, National Party leader Simon Bridges will have to make that very same decision about policies such as Best Start, the Winter Warmer payments, and, yes, some aspects of Labour's housing work.