One particular word was noticeable by its absence from the Prime Minister's speech yesterday detailing his Government's complex and contentious plan for the future of what National now calls "social" housing rather than state housing.

That word is "market". That officials from the Treasury and the Ministry of Business, Innovation and Employment talk endlessly in papers prepared for Cabinet ministers of the need to construct a "market" for social housing obviously gives John Key the heebie-jeebies - and, quite possibly, his new Minister of Social Housing, Paula Bennett, as well.

Like Key, she realises "market" is now a very dirty word in politics. It carries highly negative connotations. It jogs people's memories of National's asset sales. It suggests National is putting profit first and the needs of the poorest members of society a long way second.

The policy cuts back Housing New Zealand's near monopoly on the management of state housing and enables community providers like the Salvation Army to play a far greater role in supplying such accommodation.


As no one has yet come up with any hard evidence that community-based providers will necessarily do a better job than Housing New Zealand, it is difficult to erase the suspicion that the policy is motivated by ideology as much as anything else.

All up, this is political territory within which Key feels most uncomfortable. However, the policy work, which was initiated by Finance Minister Bill English, has reached a critical stage where decisions are required as to whether to proceed and how.

Key's worry has less to do with the actual policy. His quibble is clearly with how it is being presented to the public.

Otherwise, he would not have made it the centrepiece of his first major speech of the political year.

While softening up the public for change, yesterday's speech smooths the policy's sharp edges.

In particular, Key is promising more people will be accommodated in social housing over the next three years regardless of whether that accommodation is supplied by the state or private providers.

He is also stipulating that only a relatively small number of state houses - between 1000 and 2000 of Housing New Zealand stock of around 65,000 homes - will be sold to community providers within the next year or two. That is far short of the "sizeable" chunk envisaged by officials to boost competition in their so-called market for social housing.

Nevertheless, while Key - as Labour's housing spokesman Phil Twyford put it - may have placed a "human face" on the bureaucracy's efforts, officials can console themselves that yesterday's package, although watered down to some degree, still remains a not-so-thin end of a rather large wedge when it comes to paring back the state's role in housing the poor.


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