Mike Hosking: Five key questions for this economically muddled Government

Jacinda Ardern has some explaining to do. Photo / Mark Mitchell

Here are some questions the Government is going to have to answer this year from voters.

Why, when you said the rise in house prices was out of control when you were in opposition, are they even higher now despite the fact you said you would fix it?

Why, when you said people were priced out of houses because the rental market was out of control, are the rents even higher, even though you said you would fix it?

Why, when you said poverty was your calling card and income distribution was a major part of that, is the gap in incomes unchanged?

Why, when poverty, particularly child poverty, was another of your calling cards, is the number of people living below the so-called poverty line unchanged?

There are many more questions of course. Why, despite a general redistribution towards the welfare side of the economy is every single social indicator from food grants to welfare payments to queues for emergency housing not only up, but in many cases at record levels?

Part of the answer falls into the category of naivety, and part of it in delusion.

The naivety is to be found in the housing market.

We all know the cluster that Kiwibuild turned out to be. To this day, if you look at the Kiwibuild register that's available to us all online as part of the so-called reset, you can see that they're still building next to no houses - seven in December.

By the way, when I asked Meghan Woods about these tragically embarrassing numbers last week, she told me it's understandable because builders need a holiday. Yes, you heard right.

And then the naivety and the cold, hard reality that they could never manipulate the market the way they thought they could. Is it any wonder with interest rates the way they are, and the lack of supply, that house prices, as we saw last week from the Real Estate Institute, are off and running again?

Forecasts for the country as a whole up 10 per cent if not more this year, regions like Hawke's Bay, Wanganui and Otago up well into the teens, some over 20 per cent.

They made much of these figures in the campaign of 2017 and yet in the campaign of 2020 how do they explain they have achieved literally nothing?

And the delusion comes from the belief that if you meddle in things like the rental market you can make it all right, when in reality it's exactly the opposite.

Making it harder to be a landlord they way they have leads to fewer people wanting to be landlords.

Fewer houses means higher rents. Are rents up? Yes they are.

On average rents rose over 10 per cent last year. Ask yourself why.

Of people who rent, 28 per cent of them used 40 per cent or more of their income.

In contrast, 28 per cent of those with a mortgage had interest payments of less than 10 per cent, and they wonder why the gap is widening.

So they are making house owners richer, access to home ownership harder, renting more expensive, the gap between renters and owners wider, poverty unchanged, the income gap unchanged.

Just which part of their economic thinking makes sense?

A government lives and dies on economic credibility.

This Government has spent all the money it was left, and is now borrowing.

This Government has seen growth shrink to what most likely this year will be a figure in the ones.

Its only defence on growth appears to be that we out-perform our trading partners and even that seems no longer true.

The United States, Australia and China all forecast to grow more than we are and, besides, excusing lack of performance by finding people more useless than you has never been a way to conduct business or life.

Of course an election is about more than numbers, but numbers count because they are real and inescapable, and these numbers represent a government and an approach desperately short on experience and expertise.