Involving non-government organisations will not provide the answer to need, as can be seen overseas.

This week, Finance Minister Bill English was dealt a blow by the Salvation Army, which rejected his suggestion it buy Housing New Zealand stock.

Like his colleagues he is adept at rolling a turd in glitter, and laughed it off like no big thing. He then said something quite flabbergasting: "We're all learning about this." As we go, was the inference.

Is this man for real? The largest change to the provision of state housing since it was first built in the 1930s, and he's telling us the Government is feeling its way and isn't bothered by the fact the most obvious partner in this half-baked scheme has given it a giant thumbs down?

Finance Minister Bill English
Finance Minister Bill English

A more honest response would be the Government isn't worried yet - it needs to find a convenient non-profit cover for the inevitable transfer of public housing stock to private concerns.


If that sounds harsh, consider how Bill English and John Key have described the performance of Housing New Zealand over successive years. As far back as 2013, Mr English was describing it as performing poorly, and saying the nationalised housing industry was a "disgrace".

Shortly thereafter, Housing New Zealand beat six Australian social housing providers to scoop a major prize for "leading innovation". No matter. What was said could not be unsaid, and changes were afoot. John Key chimed in, saying the experience of countries like Australia and the UK is that having non-government organisations involved in social housing alongside the government is a "better way of doing things".

I couldn't wait to read all about what amazing things had happened in the UK and Australia to justify this incredibly bold change in state housing policy. I was looking forward to seeing how, in systems where a segment of society falls further and further behind everyone else economically, more and more of them were able to access affordable housing.

Either I was reading completely different reports, or our political leaders are misrepresenting the downstream effects of selling off publicly owned housing. Because what I read from the UK, at least, suggested quite the opposite.

At one time, "council housing" was the predominant way people on low incomes were housed in the UK - much more common, but analogous to our state housing. The houses were built to last using money loaned from the government at low rates with repayment terms over several decades.

Over the years, however, less money went into public housing, and a depleted system fed into public perceptions that the system was broken and its tenants didn't "deserve" subsidised housing (the same thing happened in Australia, and it's happening here).

In 2010, the UK Government cut funding for state-funded housing by 60 per cent - homes that housed one fifth of the population. But it did create enormous, contestable budgets for private and non-profit providers to come in and build and run housing, ostensibly for those in need. Many big non-profits moved into the space but have since found themselves having to become overwhelmingly commercially focused to keep their heads above water.

For example, some now refuse to rent properties to beneficiaries - the very people they were established to help.


To obtain a government subsidy, they have to charge 80 per cent of market rates, which has pushed more and more people back on to the waiting list for council housing - a list that currently has almost two million people on it.

Rents for social housing have risen by almost 8 per cent year on year, and fewer new houses are built because costs cannot be recouped.

In Australia, despite a more innovative mixture of subsidies, tax breaks and other incentives, there is still a shortage of new housing, with non-profit providers a very small part of a market dominated by commercial operators. A quarter of a million Australians needed help from homelessness services last year.

And Carol Croce, CEO of the Community Housing Federation of Australia, has even gone as far as to say the New Zealand model wouldn't work because financial constraints on the community housing provider would be too great - precisely what the Salvation Army has echoed this week.

The Government doesn't seem concerned that those on the front line of poverty and homelessness are telling them that their plans for state housing will not provide the answer to acute need, both here and elsewhere where it's been tried. Which begs the question: who benefits? Which generates, unfortunately, the usual, depressingly familiar answer.

Debate on this article is now closed.