Houses by the dozen – Woods rebuffs sneers about game-changing policies while Robertson brings RBNZ into the action

Our Beehive Bulletin … 

It’s all go – well, sort of – on the housing front.

The Nats yesterday were scoring brownie points by scoffing at the state’s spending on a professional promotional video, including drone footage, celebrating a housing scheme that has helped only 12 families.

But Housing Minister Megan Woods announced the Government has added 1,000 more transitional housing places, which (for those who have forgotten) was promised under the Aotearoa New Zealand Homelessness Action Plan, launched one year ago.

And Finance Minister Grant Robertson today announced the Reserve Bank is now required to consider the impact on housing when making monetary and financial policy decisions.

The other fresh announcements on the Beehive website are –

  • A second batch of Pfizer/BioNTech vaccines has arrived safely at Auckland International Airport. The shipment contained about 76,000 doses, and follows the first shipment of 60,000 doses that arrived last week. Further shipments of vaccine over the coming weeks.
  • The Government has announced the list of life-shortening congenital conditions that will guarantee early withdrawal under a new KiwiSaver category created last year.  People with Down syndrome, cerebral palsy, Huntington’s disease and fetal alcohol spectrum disorder are automatically entitled to apply to withdraw from their fund at a time that is right for them to retire, rather than once they turn 65. 
  • The Government will invest $6 million for 70 additional adult cochlear implants this year to reduce the historical waitlist. As at 31 December 2020, the adult cochlear implant waitlist was 269. The additional 70 implants are expected to be delivered by 30 June 2021.

Robertson’s announcement is that changes have been made to the RBNZ’s Monetary Policy Committee’s remit requiring it to take into account government policy relating to more sustainable house prices, while working towards its objectives.

“The Committee retains autonomy over whether and how its decisions take account of potential housing consequences, but it will need to explain regularly how it has sought to assess the impacts on housing outcomes,” Grant Robertson said.

A direction has also been issued (under section 68B of the Reserve Bank Act) to the Reserve Bank requiring it to have regard to government policy on housing in relation to its financial policy functions.

And the Minister has asked the Reserve Bank to provide advice on debt-to-income ratios and interest only mortgages.

It’s important that any potential restrictions do not disproportionately affect first-home buyers and low-income borrowers, Robertson said.

But wait, dear reader.  There’s more to come: 

“Today’s announcement is just the first step as the Government considers broader advice about how to cool the housing market.

“We know the rapid increases we have seen in recent months are not sustainable, which has meant many first-home buyers are struggling to access the market. We’ll be making further announcements in the coming weeks on other policy responses,” Grant Robertson said.

Woods yesterday had been chuffed about the milestone of 1,000 more transitional housing places, which supports the Government’s priority to ensure every New Zealander has warm, dry, secure housing.

The majority of new transitional housing places (605 out of 1,000) are for families with children.

Meanwhile the Government is increasing the overall supply of housing stock. Of the extra 1,000 transitional homes, 43% are newly constructed homes.

Delivering new build housing is a priority for the Government and is a key focus of the recently released Public Housing Plan 2021-24, the statement said.

“We are moving at pace to build more homes. Since this Government took office, we’ve added 4,579 new build public houses across New Zealand and 2,111 transitional housing places.  We are on track to deliver over 18,000 public and transitional housing places by 2024,” Megan Woods said.

But dishing out press statement is one thing.  Being grilled at Question Time is another.  

National’s Nicola Willis asked if the Government had kept the commitment made in the 2017 Speech from the Throne to develop a “Rent to Own” scheme; if so, how many families has the scheme helped into houses since then?

In reply, Woods said yes to the the first part of the question.

Her audience then was required to pay close attention while she explained:  

“The Speech from the Throne is delivered at the beginning of each parliamentary term and sets out the three-year work programme for the Government. At the KiwiBuild reset in 2019, I announced funding for the establishment of a progressive home-ownership scheme, of which Rent to Own forms part of it.

“ In July 2020, during our first term, I was proud to announce the launch of the first phase of that scheme with two providers. At that time, I said that the first two contracts under phase one of the programme would support 100 low to medium income families who were struggling to pull together a deposit or pay a mortgage into homeownership.

“Good news: to date, 133 houses have been announced, with $39 million of the allocated $45 million in the first phase already committed. Twelve families are already living in their own homes while the remainder are currently working with providers in preparation for home ownership.”

Willis followed up by asking if Woods stood by her statement that the progressive homeownership scheme is a “game changer”, when it has helped just 12 families, and how is it a game-changer for the hundreds of thousands of Kiwis locked out of the housing market?

Hon Dr MEGAN WOODS: Yes, it is a game-changer for those families that can get into a progressive homeownership scheme. I think what that member and the Opposition need to understand is this is not a conventional way of buying a house. This is not about finding a house on the internet, deciding you want to purchase it, going to the bank, getting a mortgage, and moving in. This is often about families having to deal with high levels of debt, rebuilding credit history, establishing savings history, and then getting themselves into a position where they can purchase a home. I think what we need to do is understand that this is a complex set of problems that we are dealing with. We said we would get 100 families in the first phase. We have 133 contracted.

Nicola Willis: Can she confirm that the Government has issued more press statements about the progressive homeownership scheme than it has confirmed families in the scheme?

Hon Dr MEGAN WOODS: The answer to that is no, and I think—[Interruption] I do want to take a moment to say that this is not a laughing matter. This is actually a way in which we get families for whom otherwise homeownership is cut off into homeownership, and while that member may find that being snide and mocking is the best approach, what I would remind that member is that the party she is a member of had no substantial commitment to progressive homeownership. Over their entire nine years in Government, you could generously say 149 families were helped into progressive homeownership—that’s over nine years. In less than five months, we have 133 homes contracted.

Willis drew attention to National’s First Home Grant scheme, which she said had helped 93,000 people into a home since being established, and asked if Labour’s progressive homeownership scheme, which has helped 12, was more successful. 

Hon Dr MEGAN WOODS: I think that question belies the lack of understanding on that side of the House around what progressive homeownership is. As a Government, we are continuing with deposit assistance and grants for people to help them, assist them, to buy a home. What that member may not realise …  is that for the families that we are helping into the progressive homeownership scheme, simply getting a First Home Grant or a bit of help with deposit assistance is not going to open up homeownership to them; this requires more assistance.

Point of Order then learned something new about the causes of the housing crisis.

Woods said:

I think the sneering attitude that the Opposition are showing is part of the reason we are in the crisis we are in.

There were more questions yesterday – readers can check out Woods’ answers here – and she faced further questions today.   

She also referred more than once to National’s sneering and its role in causing the crisis.   

Nicola Willis: Does she think it was a good use of taxpayers’ money to release a professional promotional video, including drone footage, celebrating a housing scheme that has only helped 12 families?

Hon Dr MEGAN WOODS: Yes, I do. I think this is an important story to tell. Sneering, mocking, and deriding schemes that are just getting under way is not going to allow more New Zealanders into homeownership. That kind of attitude is what got us into this mess, and failure of action for nine years by that party while they were in Government.

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