Home > Social Issues, The Body Politic > National’s blatant lies on Housing NZ dividends – The truth uncovered!

National’s blatant lies on Housing NZ dividends – The truth uncovered!

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cold and damp houses - newspaper magazine front pages

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Recent statements by Minister for Social Housing, Paula Bennett,  Minister Responsible for Housing New Zealand, Bill English,  Building and Housing Minister, Nick Smith, and Prime Minister John Key, have been shown to be deceptively misleading – and in many instances, outright lies.

Their public utterances have been revealed  to be untrue after this blogger discovered a statement from Housing NZ, buried deep within one of their Annual Reports.

#1 – Nick Smith

On 25 April 2014, Building and Housing Minister, Nick Smith, was indignant when he rejected a claim by the Labour Party that National was planning to siphon off  Christchurch earthquake insurance payouts to Housing NZ as government dividends.

As Radio NZ reported;

Papers obtained by Labour under the Official Information Act reveal plans to delay maintenance and redirect Canterbury quake insurance payouts to meet the Government’s demands for increased returns from state housing.

Labour’s housing spokesperson Phil Twyford says Housing New Zealand has agreed to pay higher dividends to the Government by using some of its $320 million insurance payment and putting off repairs and maintenance.

Mr Twyford says the Government is robbing Housing New Zealand in Canterbury to fund dividends going into the Crown account. He says Housing Minister Nick Smith needs to explain why money that should have gone into the rebuild has gone into Government coffers instead.

But Housing Minister Nick Smith says it’s not a case of earmarking any particular income towards the dividend, but it’s not true to say it will come from the insurance payout.

He says insurance proceeds are going towards capital expenditure, including 2000 new houses, which will be under construction by the end of 2015.

Dr Smith says Housing New Zealand has always been expected to return a dividend to the Crown, including under the previous Labour-led Government. This comes from normal operating revenue, including rent and rent subsidies from the Government.

Housing New Zealand’s latest statement of intent shows $308 million in insurance money earmarked for capital expenditure this financial year.

#2 – Bill English

Barely five months later, Housing NZ announced a dividend of $118 million to be paid to the government for financial year – the largest since 2009-10;

Housing New Zealand returned a $108 million dividend in the past financial year, the third largest ever paid.

At the time the responsible minister, Bill English said the higher dividend would allow the Government to help more people with serious housing needs.

Green Party co-leader James Shaw said the idea the Government was continuing to make money off State housing when children were getting sick from living in those houses was unacceptable.

He said the Crown must rule out taking a dividend until all Housing New Zealand stock was up to standard.

“Given that Housing New Zealand homes are actually killing their residents, I think it makes no sense for there to be any dividend at all.

“Everything that they get should be ploughed back into making sure that their homes are safe.”

Minister Responsible for Housing New Zealand, Bill English justified the massive  dividend with the extraordinary statement;

“Housing New Zealand has sufficient cash to invest in new houses and at the level that we’ve specified, and to do its maintenance programmes. So really the dividend is about just a bit of pressure on them to be efficient.”

The cash-grab by National had been hinted earlier, on 24 March, when Bill English signalled that maintenance on HNZ properties would be deferred;

Mr English says the lack of maintenance on state houses is concerning and that in the long run the government will need to invest the $1.2 billion dollars in state houses to get them up to scratch.

However, he says that won’t all happen this year.

When asked why Housing New Zealand had not spent as much money as it should have on maintenance, Mr English put the blame partly on the previous Labour government saying they had chosen to build new state houses rather than fix up old ones.

Yet, that quiet admission did not stop both Paula Bennett and Bill English from repeating their ‘spin’ that Housing NZ had sufficient cash for necessary maintenance of their housing stock;

Bill English  – 5 June 2015

“They’ve done a very large scale programme – insulated every house that it can, which is 48,000 houses over the last four or five years.

It’s got to deal with the same limitations of process as everybody else, it’s got to get consents, it’s got to find a workforce, but it’s not short of money to do the job.”

#3 – Paula Bennett

Paula Bennett, Minister for Social Housing – 12 June 2015

@ 4.28

“What I will say is that it’s not, um, not a money problem. So there is enough money there for us to get that stock up.”

@ 5.42

“It’s not actually about the money. The money is there to be spent on the maintenance.”

Bill English – 8 September 2015

“Housing New Zealand has sufficient cash to invest in new houses and at the level that we’ve specified, and to do its maintenance programmes.”

Bill English – 9 September 2015

@ 2.36

“The constraint on repairs isn’t cash. They have enough money to do the jobs that they need to do.”

@ 4.28

“With respect to the maintenance. Ah, yes, if any tenant lets Housing NZ azbout any, what they call urgent maintenance needs, and they got 125,000 of those notifications, ah, in the last year or two, ah, then Housing NZ has the cash to act on those…”

@ 6.11

“In fact, our main challenge there is not [a] lack of money…”

@ 6.35

“So the constraint isn’t cash, it’s a lack of houses.”

All of which was  revealed to be dishonest spin by these two Ministers, when this statement was discovered from Housing NZ’s 2013/14 Annual Report;

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housing nz annual report 2013-14 maintenance cutbacks

The responsive repairs programme, which includes work on vacant properties, is dependent on demand, which was higher than expected in 2013/14. Consequently, the budget was overspent due to higher volumes of work orders. The average cost per work order was also higher as a result of more comprehensive repairs and upgrades being carried out on vacant properties. To mitigate this overspend, we deliberately reduced the planned maintenance programme, which decreased the percentage of maintenance spend on planned activity.” – [p28]

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Perhaps English and Bennett forgot – or did not realise – that Housing NZ would disclose the true nature of their lack of funds for on-going maintenance of their increasingly dilapidated properties.

#4 – John Key

Perhaps English and Bennett both hoped that the media and public would buy their #1 deflection – that it was all a problem left over from the previous Labour government. Even our esteemed Dear Leader repeated the same spin in Parliament on 26 August this year;

“But what I can say is that this Government is proud of the fact that it is spending $300 million a year improving the mess we inherited from Labour. Its own house was never in order. It is not in order at the moment. No wonder we inherited-“

“It would be easier to take the member seriously if what Labour did when in Government was actually maintain the houses. But, in fact, not only did it not do that, it let them run down … It is a joke for the Labour Party members to come here and talk about this. They ran the housing stock down. They should hang their heads in shame—that is what they should do.”

“Where is the moral compass of an Opposition that just failed to upgrade and maintain houses? They were a mess under the Labour Government. They were a disgrace, and this Government has actually had to fix them up. It is the same old story all the time with Labour: hopeless in Government; roaring like lions in Opposition.”

“I am advised by the Minister responsible for HNZC that the previous Labour Government suspended the maintenance on those properties to build more properties. Labour let those houses run down, it let those tenants get sick, and now in Opposition it wants to pass the buck to someone else. It is a disgrace, Mr Little. It is a disgrace.”

In that one exchange, Key repeated the Blame Labour mantra four times.

During the 9 September interview on Radio NZ’s ‘Checkpoint‘ with Bill English, Guyon Espiner voiced his obvious disgust/weariness at that hoary old excuse;

“Ok, I think after seven or eight years we’ve had enough of you blaming the [previous] Labour government.”

Bennett and English did the same throughout various Radio NZ and television interviews.

At one point during the  9 September Radio NZ interview, English even  blamed tenants for the state of their run-down homes;

English: “And generally the reason a repair or an upgrade doesn’t happen is because they don’t –  is because they need to be told it’s needed, ah, they’re not in every house every week  but when, y’know as I said -“

Espiner: “So hang on, it’s the tenant’s fault, for not telling them, is it?”

Key used that blame-gaming on 26 August, in Parliament,  during his previously mentioned blame-game session;

“But also I will say that my mother took absolute pride in making sure that she kept the house clean, tidy, and ventilated.”

So, according to Key, English, and Bennett, the poor state of Housing NZ properties is due to;

  1. The previous Labour Government
  2. Tenants

Nothing to do with $664 million in dividends siphoned off by National to fund reduced tax revenue post-2009/10 tax cuts, which led to National demanding bigger and bigger dividends from SOEs such as Solid Energy; state-owned power companies, and social services such as Housing NZ.

If ever there was a clearer picture of transferring wealth from low-income New Zealanders to the top 10% of income earners and “high net worth” (ie; filthy rich) individuals – it is the financial gutting of Housing NZ.

Despite claims that Housing NZ has “the money is there to be spent on the maintenance” – the facts prove otherwise. Housing NZ’s own statement condemns two ministers and the Prime Minister as manipulative liars;

“To mitigate this overspend, we deliberately reduced the planned maintenance programme, which decreased the percentage of maintenance spend on planned activity.”

# 5 – Nick Smith (again)

Perhaps the most tragic result of National’s cash-grab was the death of two-year old Emma-Lita Bourne, who died in a grotty, damp, cold State house. The death was preventable, as the Coroner, Brandt Shortland ,reported;

The coroner’s report into the toddler’s death, which was released on Thursday, says the poor condition of the state house in the South Auckland suburb of Otara was a contributing factor to Emma-Lita’s death.

[…]

“I am of the view the condition of the house at the time being cold and damp during the winter months was a contributing factor to Emma-Lita’s health status.”

Building and Housing Minister* Nick Smith, expressed his version of human empathy with this callous observation of the little girl’s short life;

“People dying in winter of pneumonia and other illnesses is not new.”

Three lying ministers and an emotionless psychopath/automaton.

This is what we have for a government.

It also offers a third option for National’s blame-gaming spin when challenged on their failures;

 

  • The previous Labour Government
  • Tenants
  • Winter illnesses

 

No doubt National will come up with other excuses and others to point a finger at. This is, after all, the party of personal responsibility.

#6 – Memo to Mainstream Media

In the meantime,

Memo to Mainstream Media:

Next time English, Bennett, or Key claim that Housing NZ has sufficient money, after dividends are extracted, to carry out maintenance please ask them why HNZ stated in their 2013/14 Annual Report;

“To mitigate this overspend, we deliberately reduced the planned maintenance programme, which decreased the percentage of maintenance spend on planned activity.”

Because we’d really like to know.

* National has not one, but three ministers for housing portfolios. And they still can’t get it right.

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Addendum1 – Housing NZ dividends under National

HNZ Annual Report 2009-10 – $132 million   (p86)

HNZ Annual Report 2010-11 – $71 million   (p66)

HNZ Annual Report 2011-12 – $68 million   (p57)

HNZ Annual Report 2012-13 – $77 million   (p47)

HNZ Annual Report 2013-14 – $90 million –  (p37)

HNZ Annual Report 2014-15 – $108 million –  (p33)

HNZ Statement of Performance Expectations 2015/16 – $118 million – (p12)

Total: $664 million (over seven years)

Addendum2 – Housing NZ dividends under Labour

Annual Report 2001/02 – $9 million (p51)

Annual Report 2002/03 – $3 million (p55)

Annual Report 2003/04 – $176 million (p50)

Annual Report 2004/05 – $44 million (p42)

Annual Report 2005/06 – $14 million (p71)

Annual Report 2006/07 – $20 million (p54)

Annual Report 2007/08 – $13 million (p51)

Annual Report 2008/09 – $2 million (p71)

Total: $281 million (over 8 years – no figures found for ’00-’01 period)

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1-in-10health

Source: Shelter.org.uk

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References

Radio NZ: Housing NZ not cash cow – minister

Radio NZ: Housing NZ to pay Crown $118m dividend

Radio NZ: Morning Report – English defends $118M Housing NZ dividend (alt. link)

Radio NZ: Housing NZ to pay Crown $118m dividend – audio (alt. link)

Housing NZ: Annual Report 2009-10 (p86)

Radio NZ: State housing criticism valid, says English

TVNZ News: English concerned by State House deferred maintenance bill

Radio NZ: The state of state housing (alt. link)

Parliament: 2. Housing New Zealand Corporation, Minister – Confidence

Fairfax media:Damp state house played part in toddler’s death

National Party: About Personal Responsibility

Previous related blogposts

Government Minister sees history repeat – responsible for death

Housing Minister Paula Bennett continues National’s spin on rundown State Houses

Letter to the Editor – How many more children must die, Mr Key?!

National under attack – defaults to Deflection #1

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Theres always a market solution - housing nz - bill english

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This blogpost was first published on The Daily Blog on 13 September 2015.

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