Rich-lister Stephen Jennings' warning that "we are facing an iceberg" deserves to shatter business complacency on housing.

It should also shatter the complacency of the Prime Minister - if he allows himself to hear it.

Jennings has confronted the business elite with some unpalatable truths: rising house prices and immigration-fuelled economic growth are masking an underlying "iceberg that lies ahead".

"We are sleepwalking into an economically ugly place," he warns. "How can we look at ourselves in the mirror and say how can we live with having one of the most unequal education systems in the Western world - and even if you are very selfish you better say to yourself that is not sustainable.


"Those chickens are going to come home to roost."

Powerful stuff.

Many at Jennings' address to an NZ Initiative dinner know very well indeed the role surging immigration has played in driving up house prices and putting home ownership beyond many of the younger generation.

But like many of us, some have preferred to put that to one side while they revel in their new-found housing wealth.

It is not often a Kiwi businessman - one now building a new empire in sub-Saharan Africa - talks the truth about the role the immigration surge has played in boosting growth figures.

Jennings' confronting address was a breath of fresh air. One of the questions posed to him was, "Are you standing for Prime Minister?"

Jennings let that go. But it is notable that in his earlier career as a Treasury official and investment banker in Wellington, he was sounded out to become a National Party politician. Ruth Richardson has the story on that one.

The question is whether Jennings' messages will percolate through to the Prime Minister. John Key prefers to remain in a state of denial on the full impact of the housing crisis and the role the immigration surge has played in disguising some emerging issues in the economy.


No one from National's front bench was present to hear him prick the Key Government's self-satisfaction.

That Government has been widely lauded for grappling with the fallout from the Global Financial Crisis and getting the books back into surplus. It has also been a stable Government.

But it is now dangerously moving into the self-satisfaction zone that tends to creep up on an administration that has held power for a long time.

Two Cabinet ministers that I personally rate were at the Jennings' address.

Paul Goldsmith. Photo / Mark Mitchell
Paul Goldsmith. Photo / Mark Mitchell

Jonathan Coleman and Paul Goldsmith are part of National's future. They are intelligent. They are incisive. They are in for the long haul.

But it takes bottle to confront Key's "kitchen Cabinet" - Bill English, Steven Joyce, Gerry Brownlee and Paula Bennett - and tell them that when it comes to the housing crisis, many in business are coming to the view that their emperor has no clothes.

Several guests were disappointed no one from Key's inner circle was present. "Are they going to take the message back to the big guys?" one asked me.

"Jesus Christ, what are your grandkids going to do?" said another, predicting it would not be long before young New Zealanders head off overseas again because they could not get a toehold here.

The question I have for both ministers is what will they say when the Cabinet convenes on Monday? Both looked slightly ill at ease when I teased them on Thursday evening by suggesting they present a brief.

A one-page brief that slices through the issues, confronts the problems directly and stops the endless spin machine might just do the trick. But they are politicians.

Jennings did not let business off the hook either.

As a society, New Zealand needed to debate these crucial issues so they are raised to the level where politicians are forced to respond.

There was plenty more besides. NZ's tax rules favoured the old and rich. The housing crisis is made to look complicated.

But it could be solved quickly with the right regulatory reforms on land use, density and height.

It just needed commitment and determination.

But the clock was ticking.

"I do think we have a chance to get in front of some of these issues," said Jennings. "But if we don't get in front of them at some stage we will be rolling the dice.

"With MMP we can easily end up in a situation where we have a logjam with political decision-making where reforms are impossible."

In the introduction to Jennings, Bryce Wilkinson said he had the "capacity to execute", "exceptional focus" and "energy".

To that I would add a "no bullshit" approach.

Maybe Richardson was right.