Is Andrew Little a fool’s fool?

By Barry

The latest Labour “policy” on housing is a myth. Harking back to the Age of Mickey Savage and the great State housing programme of the 1930s, appealing to nostalgia and the glory days of the Labour party is doomed. Firstly, in the great depression there were many thousands of people out of work and industry was at a low ebb. So, the stimulus of the building programme was useful to get people back into work and to get industry busy again on a grand scale. Whether it would have been successful economically we will never know because WWII intervened with its own unique set of economic circumstances.

Compare that with today where build activity is at an all-time high and there are constraints on land, materials and skills. How does he really think he can do even more than is currently being done? Even if we conveniently ignore the role of councils and the RMA as a handbrake on development, things are at pretty much at capacity now.

Then there is creating a ministry to do all the organising. I can see it now: expensive rental office space in Wellington with hundreds of bureaucrats to create policy – always a favourite. Then there are all the planning, administration and project staff. Then add in all the regional offices. Let’s just throw a ballpark number in there of 1000 staff at a cost of $100k each for salary and administration and overhead costs. Gosh, we are up to $1 billion before a single sod is turned, and this is just creating the bureaucracy to do what the private sector is doing currently. This is really doing my head in already.

We can add to that the time lag in anything happening whilst all this is being set up. Then there are the RFIs, RFPs and all the processes that are in involved in setting up and running the programme. I think Steven Joyce borrowed well from Whaleoil when he said “tell him he’s dreaming”. The irony is that despite the MSM opposition, Whaleoil is influencing things outside the blogosphere. Where are the MSM asking these sorts of questions about costings etc?

Meanwhile back at reality: the real problem with housing in Auckland, and following from that, is supply of land and the required infrastructure that goes with it. The politicians are pissing around the edges until this issue is addressed. So, where are the practical steps to address that then? Previously interest rates were the favourite tool of the Reserve Bank; even the threat of a rise had an effect. It would also impact the wider economy but, hey, this is a housing crises don’t you know.

Little fails in that he is looking back to the past without understanding it. The issues facing the country now are very different from the 1930s. We are looking at bigger numbers of returning expat Kiwis, as is their right. And, the flow from Australia is increasing. This is not to be underestimated. As much as the left like to moan at the neo-liberal reforms of the 1980s, they restructured our economy sufficiently to weather the GFC and to continue to prosper (with a little help from dairy returns).

Australia has lots of problems that will need to be fixed, like the unions and the protected industries eg Ford and Holden, which are shutting down various elements of their production over the next few years. They got through the GFC by digging stuff out of the ground in the commodities boom. So much so that they gave a cash handout to families of around A$2000. They won’t be able to do it this time as their commodities are suffering badly as a source of easy money. We can export more from this area if things deteriorate, especially if Turnbull doesn’t have the guts to tackle industrial reform.

I genuinely wish Andrew Little the best of luck in selling this masterpiece of policy to the thinking electorate. I can sell him a bridge at a discount as well.


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