Plan? What plan?

Everyone can see National are freaking out about housing and lots of knee-jerk panic button pressing is going on.

Political cynicism has reached new heights in Parliament with the Speaker of the House accepting a statement the government has a Comprehensive Housing Plan as fact, because it was written in caps.

The government has desperately been churning out policies and initiatives in the hope of creating the perception it is on top of the housing crisis.

Part of a housing development in the Tamaki area in Auckland. Photo: RNZ / Kim Baker Wilson
Figures out this week showing house prices rising at the fastest level in 12 years and the average Auckland price just a whisker away from $1 million show the government clearly is not.

The government has also tried to inspire confidence through its language, inserting the word “comprehensive” into any statements about its housing initiatives, and doggedly refusing to utter the word crisis. However, ministers now acknowledge it is a “challenge”.

In the last day of the sitting session before a month long recess, National MP Todd Muller had a patsy question to the Building and Housing Minister Nick Smith, asking about house building under the “government’s Comprehensive Housing Plan”.

When questions for ministers are submitted, any statement of fact contained in them have to be authenticated and then approved before they are included in the list for question time.

Whether or not the government does in fact have a “comprehensive” plan for housing is clearly subjective, which was acknowledged by Mr Carter.

Labour released their own plan yesterday, and also labeled it as “comprehensive”.

All of this presents an opportunity for Labour, which has promised its own “comprehensive” housing plan, built around its 100th year centenary.

The first of its policies is to create thousands of new emergency housing places, mainly by funnelling money through non-government organisations.

The rest of the plan will be based on the existing Kiwibuild policy, constructing 100,000 homes with the government involved.

Last year the National government introduced what it calls the “brightline” test, aimed at dampening demand – taxing capital gains on houses bought or sold within two years, excluding the family home.

Labour is likely to build on this policy, potentially extending eligibility past the two years to cover more houses, and make it harder for speculators to get around the policy.

The advantage is the policy is already in place, so National has already done the explaining.

The disadvantage is it raises tricky questions about the Capital Gains Tax policy Labour took to the last election but has since abandoned, and why it can’t come up with its own plan to reduce demand.

As well as being comprehensive, Labour’s plan will also have to be credible; if it’s too ambitious it will just become easy target practice for National Party ministers.

It’s all talk, has no depth and will fail under any level of scrutiny. This is the same Labour that don’t really expect to have to carry out anything they ‘promise’ because they know they won’t be in government come 2017. This allows them to make all kinds of extreme promises or, in this case, vague “plans”.

Deputy Reserve Bank Governor Grant Spencer has acknowledged all of the pressures on the Auckland residential market, saying the heavy investor presence has the potential for greater financial instability, as evidence from overseas shows they are more likely to default on mortgages.

If a home owner defaults, they have to move out, but investors do not face the same prospect.

The bank also says even with the boost in supply, Auckland is probably 20,000 to 30,000 houses short of what is needed.

The supply side needs to be “urgently addressed” which Mr Spencer hopes will be delivered through Auckland’s Unitary Plan.

The pressure may now be on the government, but the root of the problem lies in Auckland Council’s obsessive vision to intensify the city. As a result, all the money has gone into infrastructure for people who can’t afford to live there.

I trust National will figure something out, to come in on a white horse before the election, but right now it looks like plain panic and nobody is earning any brownie points.

Recess should provide some time to think.

 

– RNZ


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