Former Prime Minister Chris Hipkins calls out Kāinga Ora criticisms

Former Prime Minister Chris Hipkins says Kāinga Ora has been “unfairly targeted” in criticism of its debt situation, calling it “a bit of a beat-up”.

His comments come as a new Government-commissioned report looking into allegations of financial unviability was published last month, with former Prime Minister Sir Bill English leading the work that found operating deficits were forecast to grow from $520 million in 2022/23 to over $700m in 2026/27 and debt was forecast to blow out to $23 billion.

It found unsustainable deficits were driven by interest and staff and maintenance expense increases.

Housing Minister Chris Bishop said the report found Kāinga Ora was “not financially viable without significant savings, as well as funding and financing changes”.

Labour Party leader Chris Hipkins at Te Puia. Photo / Andrew Warner

A review of the existing housing programmes the Government currently runs was also announced, which included 24 apartments in the final stage of a housing development in Rotorua.

Rotorua’s MP Todd McClay had said: “There shouldn’t be a blank chequebook just because we need houses.”

Speaking to Rotorua’s Local Democracy Reporting during a visit on Thursday, Hipkins said the debt was an “upfront investment”.

“And you can’t build houses for nothing.”

Hipkins said those living in the houses the debt was taken on for would pay it off over time in rent.

“So I think they’ve [Kaīnga Ora] kind of been a bit unfairly targeted,” he said.

“I think there’s been a bit of a beat-up here.”

He believed ways to build cheaper housing should be investigated as it looked like New Zealand was “getting back into the business” of large-scale housing developments not seen since the 1960s and 1970s.

Last week, Associate Housing Minister Tama Potaka announced that the Ministry of Housing and Urban Development would apply for one-year resource consent extensions for seven of Rotorua’s 10 contracted emergency housing motels. It initially said it would apply for 10 motels for two years.

Associate Housing Minister Tama Potaka. Photo / Mark Mitchell

In December 2022, resource consent was granted for 13 motels for two years but since then, three of those motels were phased out as demand reduced.

Asked for his thoughts on this decision, Hipkins said: “I mean, I think everybody wants to see people out of emergency housing, the real question is where are they going to go?”

Hundreds of state houses were built or are being built in the city, and Kāinga Ora deputy chief executive, Central, Daniel Soughtton told a Rotorua Lakes Council meeting in March that a lower proportion (about 2.5 per cent) of Rotorua’s housing was publicly owned, compared to the national average of 4 per cent.

“So we had a big focus on building new state houses,” Hipkins said.

“My concern about prematurely closing emergency accommodation is that you could end up with people homeless, living rough, living on the streets.”

This was “not great for Rotorua” from a community safety point of view or for tourism.

He said building more houses was the key to less emergency accommodation.

What the polls say

“We realise we lost the election. You know, you can’t argue with the numbers.”

It’s early days with two years until the next election, but Hipkins was pleased with the latest polls.

As the Herald reported, the National Party has failed to win voters over with its latest Budget, joining a long line of other parties who have endured a post-Budget poll slump.

The latest Taxpayers’ Union-Curia Poll, taken after the Budget, put National’s support at 35.4 per cent, down 1.9 points. Labour was down 0.6 points to 29.4 per cent.

National leader Christopher Luxon’s net favourability dipped to -5 per cent, while Hipkins rose to +3 per cent.

“Polling is pretty encouraging for this point in the electoral cycle,” Hipkins said.

“It’s pretty unusual for the opposition to be polling level, if not slightly ahead of the incumbent.”

People voted for a change in the last election, he said, but believed what they were getting was not necessarily the change they thought they were voting for.

“I don’t think they thought they were voting for a massive slash and burn and for rolling back smoke-free laws and for some of the more divisive policies that this Government are putting forward.”

Laura Smith is a Local Democracy Reporting journalist based at the Rotorua Daily Post. She previously reported general news for the Otago Daily Times and Southland Express, and has been a journalist for four years.

- LDR is local body journalism co-funded by RNZ and NZ On Air.