Robertson signals govt will boldly go where action is needed to tackle the housing crisis

Latest from the Beehive   –

The need for bold action to deal with the country’s housing crisis was acknowledged when Finance Minister Grant Roberson this morning addressed a BNZ Breakfast in Wellington and released the 2021 Budget Policy Statement.

But he spoke only in general terms about the initiatives that will be taken on both the demand and supply side of the housing market.

The speech was posted on the Beehive  website along with news of a new trough being established.

This is yet another “no Pakeha” initiative, a $5.7 million contestable fund “to support Māori with projects that safeguard their mātauranga and taonga on marae, from the ongoing threat of COVID-19.”

We live and learn, eh, because here at Point of Order we did not previously appreciate that the pandemic posed a threat to matauranga and taonga as well as to people.

Among other Beehive announcements:

  • Health Minister Andrew Little congratulated the inaugural Mental Health and Wellbeing Commission and its board, as the Commission marks its first day as an independent Crown entity.
  • From today employers can receive a $350 payment if their employees cannot work from home while awaiting a COVID-19 test result.

The Budget Policy Statement sets out how the government will prioritise and target spending to where it is needed most in Budget 2021.

The key objectives listed by Robertson are not new – they were set out in the Speech from the Throne:

  • Continuing to keep New Zealand safe from COVID-19
  • Accelerating the recovery and rebuild from the impacts of COVID-19, and
  • Laying the foundations for the future, including addressing key issues such as our climate change response, housing affordability and child poverty.

Robertson was shy with specifics when he said Budget 2021 will play a critical role in all three of these objectives.

Specific Budget 2021 investments will fall under four high-level priorities:

    • continuing the COVID-19 response
    • delivering priority and time-sensitive manifesto commitments
    • supporting core public services through managing critical cost pressures, and
    • continuing to deliver on existing investments.

Then came the matter of prioritising which investments to make under those priorities, which is where wellbeing comes into its own.

Robertson mentioned changes to the Public Finance Act, requiring the Budget Policy Statement to include the Wellbeing Objectives that will guide the government’s budget decisions.

The Wellbeing Objectives for Budget 2021 are:

    • Just Transition – Supporting the transition to a climate-resilient, sustainable and low-emissions economy while building back from COVID-19
    • Future of Work – Enabling all New Zealanders and New Zealand businesses to benefit from new technologies and lift productivity and wages through innovation, and support into employment those most affected by COVID-19, including women and young people
    • Māori and Pacific – Lifting Māori and Pacific incomes, skills and opportunities, and combatting the impacts of COVID-19
    • Child Wellbeing – Reducing child poverty and improving child wellbeing, and
    • Physical and Mental Wellbeing – Supporting improved health outcomes for all New Zealanders and keeping COVID-19 out of our communities.

Robertson did signal that one priority would override all other priorities when he said several challenges cut across the Wellbeing Objectives, such as climate change, housing and child wellbeing, before declaring:

In the time I have remaining, I’m going to focus on one of those areas – housing.

And

Across the Wellbeing Objectives, Budget 2021 will have a clear focus on housing.

Again he spoke only in generalities.

Housing outcomes can be influenced across a range of the Budget 2021 Wellbeing Objectives:

    • The sustainability of our housing stock will contribute to our Just Transition and climate change goals;
    • Māori and Pacific communities currently have lower rates of home ownership and will benefit from more affordable housing;
    • And, improving children’s wellbeing will be greatly influenced by improving access to warm, safe, dry and affordable housing, as will physical and mental wellbeing.

Robertson referenced economic forecasts that house prices would fall 5%-10% over the next year due to the COVID-19 downturn and conceded that between June 2020 and December, the nationwide median house price rose by 17%, and sat 19% higher than at December 2019.

REINZ’s house price index was up 17% from a year ago – 9% in the final three months of the year.

Rents, in comparison, had remained relatively stable, Robertson said. Stats NZ’s two monthly measures for rental property prices – incorporating bonds lodged for rentals – were up 1.5% and 3.1% annually in December.

Then he reiterated that big announcements – is this a promise? – are on their way:

As we foreshadowed in January, the Government will announce a rolling series of measures to build on what we did last term to address the crisis in housing.

The first of those will be on the demand side measures which will come in late February. We all know that building more houses, particularly affordable houses, is critical. But we also can do more to manage demand, particularly from those who are speculating.

What can we expect?

Something we’ve heard before:

We want to tilt the balance more towards first home buyers, while also incentivising more investment in the construction of homes.

As I said late last year, we have received advice from both Treasury and the Reserve Bank on our existing measures to manage demand and discourage speculation, and how they can be enhanced or changed. Proposals will shortly go before Cabinet.

Anything else?

Why, yes.  There will be action on the supply side, too:

As the Prime Minister has outlined, we will also make more announcements on the supply side as Budget 2021 is finalised. These will build on the Government’s housing programme that has seen us build more houses than any Government since the 1970s.

Having braced us to expect big decisions, Roberstson conceded:

Anyone who tries to tell you that there is a single silver bullet for addressing the housing crisis is not facing reality (or is speaking from the safety of Opposition).

We sensed a “but” was coming.

Not quite.  Instead, Roberstson said:

What we do know is that now is the time for bold action. The market has moved quickly and rapidly in a way that is not sustainable. We have to confront some tough decisions, and we will do that.

Will tough decisions amount to bold actions?

We’ll just have to wait and see.

Latest from the Beehive  

9 FEBRUARY 2021

Fund to support iwi, hapū, whānau protect taonga on marae

Mental Health and Wellbeing Commission gets to work

Government remains focused on building back better

8 FEBRUARY 2021

New COVID-19 Payment Supports Businesses

4 thoughts on “Robertson signals govt will boldly go where action is needed to tackle the housing crisis

  1. More announcements about announcements? No surprises there. That’s all this government does. The only way to stop the insane increase in house prices which nobody welcomes is to stop churning out monopoly money through the Reserve Bank.

    Liked by 1 person

  2. False low interest rates will eventually bring this fiscally dyslexic government to its irresponsible knees. Unfortunately, many hardworking and productive Kiwis will be casualties, many of them being foolish enough to vote for these unemployable losers.

    Liked by 2 people

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