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The housing crisis: NZers deliver their verdict

21 September 2018 Leave a comment

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New Zealanders appear to have rejected National’s on-going carping at the Coalition government’s ‘Kiwibuild’ programme.

In a recent Ipsos Survey, 50% of respondants chose housing as the country’s most pressing problem facing New Zealand. (A similar question put to Australians yielded less than half – 24% – as being concerned about housing.)

A further 63% chose other social problems (healthcare 31%,  poverty 32%).

An Ipsos media release pointed out that New Zealanders generally trusted Labour to be better equipped to handle critical social problems;

Labour is also viewed as the political party that is most capable of managing five of the top six issues facing New Zealand today, especially the issue of healthcare – at 41%, Labour’s ability to manage the issue of healthcare is 19 points ahead of National (22%).

Labour is also positioned 26 points ahead of National with regards to managing poverty-related issues in New Zealand (43% believing Labour to be better than National, at 17%)…

Managing Director of Ipsos NZ, Carin Hercock, pointed out:

“The fact that housing is rated as the most important issue by 59% of New Zealanders who have an Income over $100,000, the highest importance rating across all income levels, demonstrates that housing is not just an issue for the poor. Addressing social issues has become more important to New Zealanders over the last 6 months, while the importance of factors such as the economy, unemployment, taxation and household debt have all reduced.”

Only 9% picked “the economy” as a trouble-spot. This appears in stark contrast to successive business confidence surveys which puts a more negative spin on the economy.

Some, like former Reserve Bank economist, Rodney Dickens, expressed skepticism about business confidence surveys. He “believes the survey has a major political bias. Basically business leaders are likely National Party supporters and this view biases them against the new Government more than any actual concrete business risk“.

Research Manager for Ipsos NZ, Dr Richard Griffiths, under-scored Ms Hercock’s assessment;

“We know from media coverage that many New Zealanders are facing challenges relating to the housing market. Other issues such as poverty and healthcare have also been widely reported which is likely to increase New Zealanders’ awareness of these problems.”

Dr Griffiths made the insightful observation that social problems eventually touched more and more people and/or their families;

“As these problems continue to escalate, the likelihood of our respondents being personally affected by these issues will also have been growing.”

Meanwhile,  National’s Simon Bridges has dismissed the Coalition’s Kiwibuild programme;

“[It’s] private developers doing stuff, they stop, Phil [Twyford] comes in, he pays them more with taxpayers’ subsidised money and then he sticks a stamp on it.

“That is a KiwiHoax.”

The previous National government – of which Mr Bridges was a senior cabinet minister – oversaw a massive sell-off of Housing NZ houses.

In 2008, Housing NZ’s state housing stock comprised of  69,000 rental properties.

By 2016, that number had fallen to 61,600 (with a further 2,700 leased) – a reduction of 7,400 properties.

Even former Prime Minister, John Key’s, one-time state house that he grew up in, was not to be spared privatisation;

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No one could accuse National of being “overly sentimental” on such matters.

As state houses were sold to private owners, the surge in homelessness was predictable, forcing National to put homeless people – including entire families – in motels. National spent $8.8 million in just three months on motel accomodation for homeless – $100,000 per night.

Even senior/retiring “baby boomers” were feeling the effects of growing homelessness in New Zealand;

Barry Mills, chairman of supported living facility Abbeyfield Nelson, said they had to turn away two men, who looked to be in their 60s, in the last year.

He said in both cases they were single men from out of town, living out of their car with no place to call home.

“We couldn’t do anything for them because we didn’t have any rooms vacant.

“Even if we did have a vacancy, we probably still couldn’t take them because we have a process to go through and a waiting list.”

He said Abbeyfield in Stoke had 12 rooms and the one in Nelson 11, which were both full, with about 16 people on a waiting list ready to move in.

By February this year, a report authored by economist Shamubeel Eaqub;, University of Otago Professor of Public Health, Philippa Howden-Chapman,  and the Salvation Army’s Alan Johnson revealed that homeless was far worse in New Zealand than had previously been revealed.

The report referred to “a burgeoning “floating population” – people without safe and secure housing, including in temporary housing, sharing with another household, or living in uninhabitable places“.

National’s response had been to invest in the motel market;

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The number of motel rooms purchased by National was a fraction of the 7,400 properties sold off from Housing NZ’s stock. It was a drop in the tsunami of homelessness sweeping the country.

Meanwhile, National’s current spokesperson on Housing and Urban DevelopmentJudith Collins – has lately been ‘busy’ on social media, disparaging the Coalition government’s ‘Kiwibuild’ programme;

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Two ‘tweets’ in particular appear to have constituted spectacular own-goals from Ms Collin,

On 13 September;

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The article Ms Collins reposted in her ‘tweet’ referenced a Labour government led by the late Norman Kirk. It had been in power less than a year, following twelve years of National government.

The pattern is similar; a housing crisis after success National governments, followed by voters rejecting the lack of focus on social problems and electing Labour to clean up the mess. Judith Collins inadvertently reminded her followers of this fact.

But her next ‘tweet’ was not only an own-goal but a candid – if subconscious – admission how National views homelessness;

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Her comment – “4. Are there alternatives to houses? Yes: cars, Motels, camping grounds, tents. Which would you choose?” – left some of her followers stunned and scrambling for a credible explanation. “Sarcasm” appeared to be their preferred excuse for the incredibly callous comment.

The Ipsos poll reflects the understanding of most New Zealanders that a fair, egalitarian, socially-inclusive country is not readily possible under a National government. That task is best undertaken by a left-leaning government.

For National, under-funding and cutting corners in core social services and privatisation is their number one priority.

Only when the consequences of their policies becomes to much for New Zealanders to stomach do they rebel at the ballot box and change tack by changing government.

Judith Collins’ ‘tweets’ and other public statements by her and other National MPs will ensure they remain in Opposition in 2020. They are not good stewards of our social services.

I doubt they even fully understand what our social services are for. Or the consequences of neglecting them.

But New Zealanders certainly do.

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References

Scoop media: New Zealanders’ concerns about housing issues grow

Fairfax media: Fact check – Business confidence surveys have little to do with actual economy

Radiolive: KiwiBuild a ‘hoax’ – National leader Simon Bridges

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Mediaworks/Newshub: Homelessness on the rise in New Zealand

Fairfax media: Older people forced to sleep in car as housing crisis bites video

NZ Herald:  Prime Minister John Key’s childhood state house up for sale as Government offers 2500 properties to NGOs

NZ Herald: Homeless crisis – 80 per cent to 90 per cent of homeless people turned away from emergency housing

NZ Herald:   Govt to buy more motels to house homeless as its role in emergency housing grows

Parliament: Judith Collins

The Standard: Which National MP leaked Bridges’ expense details?

Twitter: Judith Collins 12 Sept 2018 2.25pm

Twitter: Judith Collins 12 Sept 2018 2.24pm

Twitter: Judith Collins 9 Sept 2018 6.19pm

Twitter: Judith Collins 13 Sept 2018 3.34pm

Twitter: Judith Collins 13 Sept 2018 11.34am

Twitter: Judith Collins 13 Sept 2018 8:13 AM

Wikipedia: Elections in New Zealand

Twitter: Judith Collins 8 Sep 2018 11.37 AM

Previous related blogposts

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

National continues to panic on housing crisis as election day looms

National’s housing spokesperson Michael Woodhouse – delusional or outright fibber?

The Mendacities of Ms Amy Adams – 2,000 more state houses?!

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This blogpost was first published on The Daily Blog on 16 September 2018.

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Children’s Commissioner Judge Andrew Becroft calls for a fairer, egalitarian New Zealand

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This weekend (26/27 May), two disparate voices called for a more egalitarian society in our country. The voices of Children’s Commissioner, Judge Andrew Becroft, and Chief Executive of the Employers & Manufacturers Association (Northern), Kim Campbell, both made statements on  TV3’s The Nation and TVNZ’s Q+A (respectively), that only a few years ago would have been heresy to neo-liberal orthodoxy.

The neo-liberal economic model demands minimal state intervention in the economy and reliance on private enterprise to provide services and desired outcomes.

After thirtyfour years, the results of our experiment in minimal government/freemarket has been dubious. The housing “market” has failed to meet demand, blaming local government “regulations”, central government regulations/RMA,  “town boundaries”, lack of skilled workers, sunspot activity, etc.

Writing for The Spinoff last year, author and journalist, Max Rashbrooke pointed out;

In short: overall poverty hasn’t increased, but its most extreme forms have. In a way, what the [National] government has done is to revive the old and false idea, never far from middle New Zealand’s intellectual surface, of the distinction between the “deserving” and the “undeserving” poor. The in-work battlers get carrots, the beneficiaries who make “poor choices” get mostly sticks. It’s a “distinction” that gets you nowhere, though, because those struggling the most are generally facing even tougher battles or have even fewer informal supports around them, rather than being lazier or more feckless.

The other point, of course, is that just maintaining poverty and inequality at their current high levels is a colossal failure. Under Labour both were falling, albeit slowly; that progress has been lost. The New Zealand Initiative likes to point out that our big increase in income inequality – the developed world’s largest – happened in the 1980s and 1990s, as if that diminishes the problem. In fact it intensifies it. Unfair inequality divides society, creating concentrated neighbourhoods of wealth and poverty, reducing people’s empathy for each other, and lowering trust. Poverty denies people a fair chance to succeed and leaves permanent scars on children. Every day those corrosions are left unchecked is a day lost, a day in which a child’s life is damaged and the social fabric is further rent. The fact that these problems have compounded for twenty years makes them worse than if they had sprung up yesterday. And such extremes – one in seven children living in poverty, while the wealthiest tenth have 60% of all assets – are neither necessary nor justifiable.

A July 2017 MSD report confirmed Rashbrooke’s observations;

Beneficiary incomes were flat or declining in real terms. The trajectory of incomes after deducting housing costs (AHC) is less favourable for the medium to long-term picture as housing costs now make up a much larger proportion of the household budget for most…

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For under 65s, over the whole bottom quintile, housing costs account on average for just over half of household income (51%), up from 29% in the late 1980s.

The same MSD report also briefly referred to the wealthiest in our country;

The share of income received by the top 1% of tax-payers has been steady in the 8-9% range since the early 1990s, up from 5% in the late 1980s.

[Note: “Quintile“: Any of five equal groups into which a population can be divided according to the distribution of values of a particular variable.]

In a report this year, Oxfam revealed a ‘snapshot’ of inequality in New Zealand;

A staggering 28 per cent of all wealth created in New Zealand in 2017 went to the richest 1 per cent of Kiwis. While the 1.4 million people who make up the poorest 30 per cent of the population got barely 1 per cent, according to new research released by Oxfam today.

The research also reveals that 90 per cent of New Zealand owns less than half the nation’s wealth.

Oxfam New Zealand’s Executive Director, Rachael Le Mesurier,  stated the fairly obvious;

“Trickle-down economics isn’t working. The extreme gap between the very rich and the very poor in our country is shocking. As new wealth is created it continues to be concentrated in the hands of the already extremely wealthy.

2017 was a global billionaire bonanza. This is not a sign of success but of economic failure. Experts are clear, high levels of inequality are bad for economic growth – for everyone except the small number of super-rich, who on a global scale are often able to translate their disproportionate control of resources into disproportionate influence over political and economic decision making. This can lead to policies that are geared towards their interests, often at the expense of the majority.

To end the global inequality crisis, we must build an economy for ordinary working people, not the very few rich and powerful.”

Ms Le Mesurier added something that may not be quite so obvious to some – at least not for those who traditionally vote National;

“Kiwis love fairness, not inequality. Governments can tackle extreme inequality here and globally by ensuring the wealthy and multi-nationals pay their fair share of tax by cracking down on tax avoidance – then using that money to make our country and the global economy a fairer place.”

Since 2008, between 1,053,398 and 1,152,075 New Zealanders – roughly a quarter of the population – have voted for a party that has over-seen a worsening of extreme poverty; falling home ownership; and rising homelessness.

The claim that “Kiwis love fairness, not inequality” may not be as fairly reflecting our society as we might like to believe. At best, it might be claimed that  “*Most* Kiwis love fairness, not inequality”.

Despite not wanting to measure child poverty in 2012,  five years later, Deputy PM Paula Bennett had to concede the enormity of the crisis that National had ignored for so long;

“We had no idea how much it was going to cost. We had no idea it would ever be this big… In hindsight, you always wish you’d gone earlier”.

Thanks to National’s negligence – and supported by over one million voters – our homelessness is now the worst, according to an international report last year;

YaleGlobal Online, a magazine published by the prestigious US university, says “more than 40,000 people live on the streets or in emergency housing or substandard shelters” – almost 1 percent of the entire population, citing OECD statistics.

On 26 May, interviewed on The Nation by Lisa Owen, Children’s Commissioner Judge Andrew Becroft said what *most* New Zealanders know in  their hearts to be axiomatic – or the bloody obvious, in Kiwispeak;

“…The gap is now massive. We dropped the ball on policy for children. I think one of the big, I guess, platforms of our office, the one thing I have to say clearly, is we need to have a community-wide consensus on policy for children. We haven’t had that. We could do it. Other countries leave us behind. Scandinavian countries have parental leave for 16 months. They have free school lunches for preschool and school children for the whole community, free doctor and dental visits, good social housing, free early childhood education. That’s what we need. We’ve never had the systemic commitment to a good policy for children.”

To illustrate (literally) Judge Becroft’s comment  a report from UNICEF published last year compared New Zealand’s abysmal ranking with that of our Scandinavian cuzzies.

Food insecurity:

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Income poverty;

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League Table* – Country performance across nine child relevant goals:

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However, to prove that not all is lost, and that New Zealand can excel – we are the eighth largest milk producing nation on the planet;

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Without doubt we display incredible efficiency when it comes to our agrarian sector.

Not so good, however, when it comes to ridding our shores of child poverty and homelessness.

Priorities, eh?

In our rush to achieve neo-liberal nirvana after thirtyfour years of economic “reforms” and the engendering of hyper-individualism, New Zealanders can only look with envy at Scandinavian countries.

Even Employers & Manufacturers Association (Northern), Kim Campbell lamented on TVNZ’s Q+A on 27 May;

“In fact, a government who has stepped right away from the state housing story completely. You know, when I was growing up we had the Ministry of Works building state houses, which were made available through suspensory loans and so on. That’s all gone. And you’re seeing the outcome there. So, frankly, we could fix it if we wanted to.”

But there is no Ministry of Works anymore. It was privatised in November 1996.

We now have to rely on private enterprise to build houses.

We now have families living in garages; overcrowded houses; and cars.

We now have greater income inequality and extremes of poverty.

So as Mr Campbell said on Q+A;

“And you’re seeing the outcome there. So, frankly, we could fix it if we wanted to.”

If we wanted to“…

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[* The Right love League Tables, so that particular one should be in no dispute.]

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References

Scoop media: Mediaworks/Newshub Nation – Lisa Owen interviews Children’s Commissioner Judge Andrew Becroft

TVNZ: Q+A – Panel on Homelessness

Investopedia: Neoliberalism

Scoop media:  ACT Party – NZers deserve honest appraisal of Government housing failure

The Spinoff: Why the attacks on National over poverty and inequality are unfounded – mostly

Ministry for Social Development: MSD’s Household Incomes Report and companion report using Non-Income Measures – Headline Findings

Oxford Living Dictionaries: Definition – Quintile

Scoop media: Oxfam NZ inequality data 2018

Wikipedia: New Zealand general election, 2008

Wikipedia: New Zealand general election, 2017

NZ Herald: Home ownership rates lowest in 66 years according to Statistics NZ

NZ Herald: Homelessness rising in New Zealand

NZ Herald: Measuring poverty line not a priority – Bennett

Mediaworks/Newshub: NZ’s homelessness the worst in OECD – by far

UNICEF: Building the Future – Children and the Sustainable Development Goals in Rich Countries

World Atlas: Top Milk Producing Countries In The World

Wikipedia: Ministry of Works and Development

Treasury NZ: Income from State Asset Sales as at May 2014

TVNZ:  Tax is vital for reducing inequality but NZ is not collecting enough of it – Oxfam report

Additional

Fairfax media: Housing stocktake blames homelessness on drop in state housing

Mediaworks/Newshub:  Govt will have ‘failed completely’ if they don’t reform benefits – Andrew Becroft (video)

Previous related blogposts

An unfortunate advertising placement, child poverty, and breathing air

Poor people – let them eat cake; grow veges; not breed; and other parroted right wing cliches

Poor people – let them eat cake; grow veges; not breed; and other parroted right wing cliches… (part rua)

Once were warm hearted

National’s Food In Schools programme reveals depth of child poverty in New Zealand

National’s new-found concern for the poor

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This blogpost was first published on The Daily Blog on 28 May 2018..

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The Mendacities of Ms Amy Adams – 2,000 more state houses?!

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Soon after criticising the Coalition for “hiding debt in SOEs” – a capital offense that National was guilty of in 2009, and which contributed to  bankrupting Solid Energy by 2015 – National Party’s finance spokesperson, Amy Adams, was at it again.

This time, Ms Adams was making claims on housing that official figures could not sustain. Her talking-up of National’s so-called “achievements” in social housing collapsed when exposed to scrutiny.

Appearing on TVNZ’s Q+A on 20 May, Ms Adams’ criticisms of the Coalition government were rigorously  challenged by a bemused Corin Dann. At every opportunity she took to attacking the Coalition, Corin Dann was able to turn the criticism back on National.

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National Party’s Finance Spokesperson, Amy Adams – A bad case of Foot-in-Mouth affliction.

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When Ms Adams asserted that;

“Even Treasury is saying that the GDP growth that they’re forecasting is only held up because of strong and, in fact, growing immigration numbers…”

– Corin Dann responded with undisguised disbelief;

“Are you seriously criticising this government for relying on immigration to grow its economy when your government relied on immigration and housing?”

Ms Adams became increasingly defensive. Instead of holding the current Coalition government to account, it rapidly became a cross-examination of National’s own track record whilst in government.

At one point, Ms Adams asserted;

” Just take state housing for example — we promised 2000 new houses a year, so 6000 over three years. This government is now committing to deliver less than they promised and only 1600 a year. “

If National had been re-elected last year; and if those six thousand new State houses had been built – it would have made little appreciable difference to homelessness in New Zealand.

In 2008, according to it’s 2008/09 Annual Report, Housing NZ stated that it’s housing stock stood at 69,173 (p25).

Housing NZ’s 2016/17 Annual Report revealed “we own or manage approximately 63,000 homes”. (p7)

After eight years in government, National had managed to “lose” six thousand state houses.

Meanwhile, waiting lists for state homes have rapidly ballooned as the scourge of homelessness worsened under National.

In March 2008, there were 206 applicants for a State house in the “A” Category: deemed “at risk”. There were 3,605 in “B” Category: deemed “in serious housing need”. Total: 4,017.

(NOTE: There were additional categories – “C” and “D” – considered less urgent by Housing NZ. These two categories were removed from Housing NZ’s books after July 2011.)

Since March 2016, the waiting list for a state house went from 4,017 in 2008, dropping to  3,352 in June 2015, and skyrocketing to 7,890 in March this year;

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Indeed, had National not disposed/sold/transferred 6,000 state houses and had they proceeded to build an additional 6,000 as Ms Adams asserted on Q+A, they could well have put a serious dent into homelessness, over-crowding, and living in sub-standard hovels in this country.

Instead, homelessness has worsened to an extent where National was forced – reluctantly – to even concede that there was a crisis. National went from this last year;

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– to this, this year;

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It took a long time.  Ocean-going behemoth oil tankers have made course corrections faster than National Party policy changes.

Unfortunately, National’s election policy on Housing offered scant information how they intended to resolve this crisis. Tellingly, their policy document referred to “social housing” once – and then only very briefly;

Freeing up Crown Land to see 34,000 more affordable, market and social houses built over the next ten years.

There is no reference to state housing.

Despite a NZ Herald report in July 2016;

In the past financial year, HNZ built or bought 871 state houses.

Its rate of construction will now be ramped up to around 1300 state houses this financial year, 1500 the following year, and around 2000 the year after.

– there appears to have been very little movement in increasing Housing NZ’s stock.

The same Herald story reported that;

Over the next two years, Housing New Zealand will also build another 800 affordable houses to be sold on the open market.

– effectively turning Housing NZ into a profit-driven property developer.

Ms Adams may have based her claim of  “2000 new houses a year, so 6000 over three years” on that Herald story. But Housing NZ’s own Annual Reports do not back up her numbers.

Once again, National’s spokespeople have been caught out embellishing the truth at best – or – telling deliberate fibs at worst. (A third option is that Ms Adams was simply making-up-policy-on-the-hoof.)

One thing is clear. Under a re-elected National government, this;

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– would have become this;

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References

Mediaworks/Newshub: Govt not honest about debt in new Budget – Amy Adams

Fairfax media: Solid Energy announces voluntary administration ahead of sale

Scoop media:  Q+A – Amy Adams interviewed by Corin Dann (transcript)

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2016/17

Housing NZ: Quarterly Housing Sector and Housing Assistance Report – March 2008

Housing NZ: Briefing for the Minister of Housing – December 2011

Ministry of Social Development: Housing Register

Mediaworks/Newshub: Flat house prices prove there’s no crisis – National housing spokesman Michael Woodhouse

Radio NZ: New National leader says there is a housing crisis in NZ

National Party: National’s comprehensive housing plan

NZ Herald: Housing New Zealand to spend $2 billion on new state houses

Other Blogs

The Standard:  There is no housing crisis in New Zealand

Previous related blogposts

Solid Energy – A solid drama of facts, fibs, and fall-guys

Solid Energy and LandCorp – debt and doom, courtesy of a “fiscally responsible” National Govt

National recycles Housing Policy and produces good manure!

Our growing housing problem

National Housing propaganda – McGehan Close Revisited

Housing; broken promises, families in cars, and ideological idiocy (Part Tahi)

Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?

Government Minister sees history repeat – responsible for death

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

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

National continues to panic on housing crisis as election day looms

National’s housing spokesperson Michael Woodhouse – delusional or outright fibber?

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This blogpost was first published on The Daily Blog on 23 May 2018.

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National’s housing spokesperson Michael Woodhouse – delusional or outright fibber?

18 February 2018 7 comments

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The recent Housing Report reveals National’s ineptitude when it came to homelessness and housing unaffordability. Even retiring baby-boomers do not escape National’s incompetence when it came to unrestrained migration; insufficient housing stock; spiralling speculation; and poorly-planned infrastructure to cope with a rising population;

It also showed home ownership had slumped dramatically since the 1980s – especially among Pacific and Maori people – and Auckland’s housing problem was created by a mix of population growth, partly fuelled by migration, and the construction and land development sectors “hindering” housing affordability.

It also pointed to a potential time bomb in the impact on housing affordability on the elderly, finding the proportion of older people who were living in mortgage-free homes had dropped from 86 per cent to 72 per cent since the 1980s.

The consequences are now plain for everyone to see.

And just in case some National voters have still missed the point;

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Dominion Post <letters@dompost.co.nz>
bcc: craig.mcculloch@radionz.co.nz,
Benedict Collins <benedict.collins@radionz.co.nz>
date: 12 February 2018
subject: Letters to the editor

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The Editor
The Dominion

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Sir/madam,

The recent Housing Report commissioned by the new Labour-led Coalition is a damning indictment of the previous National government’s indifference and gross negligence to homelessness and housing unaffordability.

The report confirms a worsening housing and homelessness crisis which most New Zealanders saw happening before their very eyes.

In response to their appalling record, National’s housing spokesperson, Michael Woodhouse, told Radio NZ on 12 February;

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“They acknowledge that social housing includes housing provided by NGOs [non governmental organisations] but then ignore that when they conclude that the number of state housing properties have gone down. Clearly that hasn’t happened, they’ve gone up.”

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What is clear is that Mr Woodhouse is utterly clueless when it comes to State housing properties.

In the 2008/09 Annual Report, Housing NZ stated that it “manages a portfolio of more than 69,000 houses” (p4).

Nine years later, Housing NZ’s 2016/17 Annual Report revealed “we own or manage approximately 63,000 homes”. (p7)

Either Mr Woodhouse’s or my arithmetic is way out, because that is a 6,000 drop in State housing.

No wonder housing has become this country’s worst social crisis since the Great Depression.

This explains why Bill English still thinks they should be governing. Apparently he and his former ministers cannot count.

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-Frank Macskasy

[address & phone number supplied]

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References

Radio NZ:   Housing report paints ‘sobering picture’ of crisis

NZ Herald:  New Zealand ‘a society divided by wealth’ – new housing report

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2016/17

Previous related blogposts

National recycles Housing Policy and produces good manure!

Our growing housing problem

National Housing propaganda – McGehan Close Revisited

Housing; broken promises, families in cars, and ideological idiocy (Part Tahi)

Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?

Government Minister sees history repeat – responsible for death

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

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

 

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This blogpost was first published on The Daily Blog on 13 February 2018.

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National continues to panic on housing crisis as election day looms

15 June 2017 6 comments

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The Grand Announcement!

On 3 June, National announced with great fanfare that additional state housing would be made available in Tauranga  and  Papamoa;

Almost 220 new social and transitional places are on the way for Tauranga and Papamoa, the Government has today confirmed.

“We’re on track to have 68 short term transitional housing places available in Tauranga and Papamoa by the end of the year. This will mean we can support up to 272 families in Tauranga and Papamoa every year while long term solutions are found,” says Ms Adams.

“Of those 68 places, 21 places are already open.

“Across the wider Bay of Plenty region, we will be providing a total of 146 transitional housing places meaning we’ll be able to help 584 families every year,” says Ms Adams.

“These houses are in addition to the 290 social houses we’re planning to secure in the Bay of Plenty. These new properties will be a welcome addition to the region, which is an area of growing need.”

Minister Amy Adams emphasised,

“We are working hard alongside providers to address the demand on social housing and help those most in need of warm, safe housing.”

Except…

Which would be fine – except that in December last year, National signed an agreement to sell off 1,138 state houses to IHC subsidiary, Accessible Properties;

Accessible Properties has signed a contract with the Government confirming it will acquire and manage 1,140  [actually 1,138] state homes in Tauranga, and plans to add 150 more houses to its portfolio.

The 1140 homes are currently with Housing New Zealand and will transfer on April 1, 2017. The contract was signed today and Housing New Zealand tenants are receiving letters this week explaining the change of ownership.

It was a similar deal to the one  the Salvation Army walked away from in March 2015;

The Government’s plan to sell off unwanted state houses to community housing providers has been dealt a massive blow with the Salvation Army walking away from the negotiation table.

The Salvation Army announced today it lacked the expertise, infrastructure and resources to deal with the number of houses and tenants that the Government wanted to offload.

[…]

Salvation Army social housing spokesman Major Campbell Roberts said the Government had underestimated the complexity of the task.

“I don’t think there has been enough thinking gone into it.”

Roberts said the current “Housing New Zealand monopoly” wasn’t working, but handing social housing over to single community organisations, like the Salvation Army, would fail.

Community Housing Aotearoa director Scott Figenshow rightly pointed out;

“ Last month the Government confirmed $1.2 billion of deferred maintenance on the state housing stock. Why would a provider want to purchase a liability? ”

IHC/Accessible Properties showed no such hesitation and on 1 April this year the sale was completed. Accessible Properties’ CEO,  Greg Orchard, appeared very pleased with the deal;

“The properties have been assessed as being at a very good standard – we will maintain this and seek to make improvements.”

The sale of the properties took place at the same time that Tauranga was experiencing a housing crisis similar to Auckland’s;

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Which means…

National’s “grand plans” for 220 new social and transitional places remains woefully short of the 1,138 houses that National sold off to IHC’s Accessible Properties at the end of March.

It is also unclear what is meant by “ transitional places“. Are these actual houses? Or motel units, à la Auckland-style;

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Only National would have the brazenness to sell off 1,138 state houses and then announce one-fifth of that number of “new houses” as some sort of “stunning achievement”.

Worse still is National’s over-all record when it comes to State housing;

In 2008, Housing NZ’s state housing stock comprised of  69,000 rental properties.

By 2016, that number had fallen to 61,600 (plus a further 2,700 leased) – a dramatic shortfall of 7,400 properties.

No  wonder we have families living in cars in the second decade of the 21st Century.

Where did those state houses end up?

Promises made…

In September 2009, then-Housing Minister, Phil Heatley, announced that state house tenants would be allowed to purchase the state houses they were living in;

From today those state house tenants in a position to buy the house they live in can do so, says Housing Minister Phil Heatley.

[…]

Over the next week, Housing New Zealand will be approaching about 3,800 state tenants who pay market rent and live in a home that is available for purchase, to make them aware of the opportunity.

[…]

To ensure a property is not on-sold to developers, a tenant who purchases their state house will be unable to reapply for a state house for three years from the date of purchase.

Heatley specifically made clear his opposition to state houses ending up in the hands of anyone but occupying tenants.

In January 2015, our then-Dear Leader, Key, repeated National’s plans to sell state houses – but only to social service providers;

We’ll then look to sell between 1,000 and 2,000 Housing New Zealand properties over the following year for use as social housing run by approved community housing providers.

In doing so, we’ll use open and competitive processes.

Community housing providers may want to buy properties on their own, or they may go into partnership with other organisations who lend them money, contribute equity, or provide other services.

Properties will have to stay in social housing unless the government agrees otherwise, and existing tenants will continue to be housed for the duration of their need.

Selling properties in this way doesn’t reduce the number of social housing places. It just means more of the tenancies will be managed by a non-government housing provider rather than Housing New Zealand.

We’re very conscious that the sale of properties has to work for taxpayers.

We’re looking to get a fair and reasonable price for these properties, bearing in mind they’re being sold as ongoing social houses with high-need tenants.

We’re not selling them as private homes or rentals.

Note his unequivocal guarantee; “We’re not selling them as private homes or rentals”.

As with many of Key’s statements, he was somewhat ‘loose’ with truthfulness.

Promises broken.

By May this year, it became very apparent where many of the 7,400 state houses sold off by National had ended up;

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The article by Virginia Fallon makes this extraordinary revelation;

While the Devon St sale gives buyers the chance to choose their neighbours, it marks a bittersweet ending for Kay Hood, who once owned 80 per cent of the street.

“I would have liked to have bought the sixth one, that’s the only eyesore,” she said.

Over 20 years, Hood and husband Peter bought five houses on the street, and she wishes the last one never got away.

“We bought them off Housing Corp and I did approach them for the last one, but we never got it.”

We bought them off Housing Corp…”?!

So while entire families are camping out in cars, garages, or  –  if they are lucky – motel rooms, private investors have ‘snapped up’ State House properties.

In this case, the Hoods on-sold their investments (ie, former state houses), and were candid in their plans;

“ We’re going to go skiing and spend the children’s inheritance. ”

Personally, I hold no antipathy toward the Hoods. In our current social climate of  hyper-individualism  combined with a degree of moral ambiguity, many of our fellow New Zealanders have exploited opportunities for speculation such as this.

But I do hold 100% responsible John Key and his fellow Ministers-of-the-Crown who allowed this travesty to occur.

More so John Key, who benefitted from a state house in his youth;

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The over-powering stench I can smell is either a dead, rotting whale on my front lawn – or Key’s appalling hypocrisy.

The sound of a train-wreck hurtling toward you

It is abundantly clear that National is panicking over the issue of housing.

Whether it is homelessness or over-crowding by poor families, or home unaffordability for middle-class Millenials, National has managed to spectacularly cock this up.

New Zealanders may be able to tolerate poverty. This country has had varying degrees of poverty since the Year Dot.

But the notion of homelessness is more than they can stomach. Homelessness strikes at the very core of the “Kiwi Dream”, where a roof over your head and a place to raise a family is one of our strongest values. (The other being the now-mythical notion of egalitarianism. That social ideal had the life throttled out of  it after 1984.)

Housing-related problems (I refuse to call them “issues”) for National keep mounting in a Trump-like way.

On 8 June, on Radio NZ, Major Campbell Roberts (the same Maj. Roberts who, in 2015, had thoroughly rejected National’s invitation to buy properties from Housing NZ)  from the Salvation Army’s social policy unit, had been invited by then Finance Minister English to become part of National’s Housing Shareholders Advisory Group.

Maj. Roberts revealed that now-Dear Leader, Bill English, had described a looming housing crisis as far back as 2010;

“ He [Mr English] said a couple of things; one, the use of of the $15 billion asset of Housing New Zealand, and the second was that he was seeing a major crisis in Auckland in housing in five or six years.  It was a passing comment – but it was one of the reasons for setting up the shareholders group.

English’s prediction has eerily come to fruition;

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Unsurprisingly, English rejected Maj. Robert’s revelations using a highly effective technique from his predecessor. One of English’s tax-payer funded spin-doctors said,

The Prime Minister was having a number of such conversations on housing reform at the time, including with a housing advisory group which included the Salvation Army, and he doesn’t recall exactly what he said.

Who else had memory problems when it came to potentially embarrassing gaffs and scandals?

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Meanwhile, in a latest move to dampen the ballooning housing market, the Reserve Bank is contemplating adding a new “tool” to it’s regulatory powers. The RBNZ wants to cap  debt-to-value ratios at five times a borrower’s income;

The Reserve Bank wants to be able to stop people taking out mortgages that are too big compared to their incomes.

It wants debt-to-income restrictions (DTIs), which limit the amount that people can borrow to a multiple of their income, added to its macroprudential toolkit, alongside loan-to-value (LVR) restrictions.

The restrictions are used in other markets around the world, such as Britain, where borrowers must have a loan no bigger than 4.5 times their income. The Reserve Bank is suggesting a limit of five times.

The size of New Zealand mortgages compared to incomes has increased sharply over the past 30 years. The Reserve Bank said increases since 2014 partly reflected the drop in interest rates over that time, but it was possible that rates could rise again in future.

The RBNZ estimates debt-to-income restrictions could prevent 8,800 investors from buying a property. But 1,600 First Home buyers  would also be caught up in stringent DTI restrictions and locked out of  owning their home.

The Bank’s chief agenda is to prevent a massive housing crash that would impact on the economy; cause mass unemployment; and result in thousands losing their homes through mortgage defaulting;

The housing market could collapse if mortgage rates rise to 7 percent, given the increasing numbers of households heavily in debt, the Reserve Bank says.

The Reserve Bank stress-tested the ability of borrowers to cope with mortgage rates at 7 percent, which is close to the average two-year mortgage rate over the past decade.

It found 4 percent of all borrowers, and 5 percent of recent ones, would be put under severe stress where they could not meet day-to-day bills for food and power.

Auckland borrowers appear particularly vulnerable to higher rates, with 5 percent estimated to face severe stress.

[…]

“So that if a downturn comes, you don’t get a whole lot of forced sales coming onto the market that depresses house prices even further, and create a risk for the banking system and also the broader economy.”

All because National ignored a crisis that Bill English predicted seven years ago, and could have dampened with a capital gains tax equivalent to company tax, and stopping investors from claiming tax deductions on mortgage interest payments.

It is bizarre and inequitable that tax-payers are in effect subsidising investor/speculators on their investments. Especially when, after two years, those properties can be on-sold with little or no capital gains tax paid.

If the RBNZ introduces a debt-to-income ratio of five times a person’s income, it may well succeed in dampening down the property bubble.

But as usual, it will be those at the bottom (or near the bottom) who pay the price. They will be the ones who continue to be locked out of the property market and denied a chance to enjoy the Kiwi Dream of home ownership.

The resentment and anger this will cause cannot be over-stated.

The sound in Bill English’s ear is the roar of a train wreck bearing down on him and his hopeless, self-serving ‘government’. ETA for the crash: 23 September.

All because National stubbornly refused to act to curb property speculation.

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References

Scoop media:  More social housing coming on board in Tauranga & Papamoa

NZ Herald:   Government sells off Tauranga’s state housing portfolio to Accessible Properties

Accessible Properties:  What is happening?

Fairfax media:  Salvation Army says no to state houses

Bay of Plenty Times:  Accessible Properties takes over state homes

TVNZ News:  Housing crisis hits Tauranga, forcing families into garages and cars

Bay of Plenty Times:  Tauranga’s homeless problem at ‘crisis point’

Sunlive: Housing crisis under the spotlight

Radio NZ:  Housing situation critical – Tauranga principal

Tauranga Budget Advisory:  City’s Rental Housing In Crisis

NZ Herald:   Govt to buy more motels to house homeless as its role in emergency housing grows

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Beehive:  State houses available to buy from today

Fairfax media:  John Key Speech – Next steps in social housing

Fairfax media:  Can’t afford your own island? How about buying your very own street?

NZ Herald:  Prime Minister John Key’s childhood state house up for sale as Government offers 2500 properties to NGOs

Radio NZ:  PM spoke of housing crisis in 2010 – Sallies

Otago Daily Times:  Auckland housing crisis expected to drag on

Fairfax media:  PM talked of major housing crisis – Salvation Army

Dominion Post:  Editorial – Prime Minister’s bad memory embarrassing

Fairfax media:  Debt-to-income ratio would stop thousands from buying houses – RBNZ

RBNZ: Consultation Paper – Serviceability Restrictions as a Potential Macroprudential Tool in New Zealand  (p26)

Radio NZ:  Housing market could collapse on 7 percent mortgage rates

IRD: Residential property

IRD: Taxation (Bright-Line Test for Residential Land) Act 2015

Additional

NZ Herald: Key admits underclass still growing

NewstalkZB: Demand for food banks, emergency housing much higher than before recession

Previous related blogposts

Budget 2013: State Housing and the War on Poor

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This blogpost was first published on The Daily Blog on 10 June 2017.

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Steven Joyce rails against low mortgage interest rates; claims higher interest rates “beneficial”

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National is increasingly on the back-foot with New Zealand’s ever-worsening housing crisis. Ministers from the Prime minister down are desperately trying to spin a narrative that the National-led administration “is getting on top of the problem“.

Despite ministerial ‘reassurances’, both Middle and Lower Working  classes are feeling the dead-weight of a housing shortage; ballooning house prices,  and rising rents.

Recently-appointed Finance Minister, Steven Joyce,  has found a new unlikely scapegoat, blaming the housing bubble and worsening housing affordability  on current low interest rates.  On 11 May, on Radio NZ’s Morning Report, he said;

“We have very, very low interest rates historically, and as a result that’s directly linked to how much house prices are being bid up around the world. It’s not the sole reason for why we have high asset prices around the world, it’s not just houses, it’s shares and everything else. But it is certainly one of the dominant reasons for that. And unfortunately it’s going to be a little bit of time yet before that changes, although there’s indications that this period of ultra-low interest rates that the world has seen is coming to an end. And so I think that, that, will improve affordability over time.”

Radio NZ’s Guyon Espiner reacted with predictable incredulity that Joyce was relying on interest rates rising to “improve affordability over time“.

Joyce’s finger-pointing and blaming “very, very low interest rates historically” is at variance with a speech that former Dear Leader, John Key, gave in January 2008 where he specifically indentified higher interest rates as a barrier to home ownership;

* Why, after eight years of Labour, are we paying the second-highest interest rates in the developed world?

[…]

* Why can’t our hardworking kids afford to buy their own house?

Good questions, Mr Key

Got any answers, Mr Joyce?

Because according to Statistics NZ, home ownership rates have worsened since John Key gave his highly-critical speech, nine years ago;

Home ownership continues to fall

  • In 2013, 64.8 percent of households owned their home or held it in a family trust, down from 66.9 percent in 2006.

  • The percentage of households who owned their home dropped to 49.9 percent in 2013 from 54.5 percent in 2006.

Home ownership reached a peak of 73.8% by 1991. Since then, with  the advent of neo-liberal “reforms” in the late ’80s and early ’90s, home ownership has steadily declined.

Those who have benefitted have tended to be investors/speculators. In 2016, 46% of mortgages were issued to property investors/speculators in the Auckland region. Despite a watered-down, pseudo-capital gains tax,  referred to as the “bright line” test implemented in October 2015, investors/speculators still accounted for 43% of house purchasers by March of this year.

The same report revealed the dismal fact that first home buyers constituted only 19% of sales.

John Key’s gloomy plea, “Why can’t our hardworking kids afford to buy their own house?” rings truer than ever.

Poorer families are fairing no better.

National’s abysmal policy to sell off state housing has left a legacy of families living in over-crowded homes; garages, and cars. This scandal has reached the attention of the international media.

From the Guardian;

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From Al Jazeera;

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As with our fouled waterways, we have developed another unwelcomed reputation – this time for the increasing scourge of  homelessness.

But it is not just the sons and daughters of the Middle Classes that are finding housing increasingly out of their financial reach. The poorest families in our society have resorted to living in over-crowded homes or in garages and in cars.

National has spent millions of taxpayer’s dollars housing families in make-shift shelters in motels. At the behest on National ministers, WINZ have made it official policy to recoup money  “loaned” to beneficiaries to pay for emergency accommodation;

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National’s track record on this growing community cancer has been one of ineptitude.

In 2015, Dear Leader Key made  protestations that  no problem exists in our country;

“No, I don’t think you can call it a crisis. What you can say though is that Auckland house prices have been rising, and rising too quickly actually.”

He kept denying it – until he didn’t;

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Unfortunately, former-and current State beneficiary, and now Social Housing Minister, Paula Bennett, apparently ‘did not get the memo’. She still denies any housing crisis in this country;

“I certainly wouldn’t call it a crisis. I think that we’ve always had people in need. So the other night on TV I heard the homeless story was second in and then the seventh story was a man who’d been 30 years living on the streets.”

Despite  being in full denial, in May last year Bennett announced that National would be committing $41.1 million over the next four years  for emergency housing and grants.

By April this year  it was revealed that National had already spent $16.5 million on emergency accomodation. It had barely been a year since Bennett issued her Beehive statement lauding the $41.1 million expenditure, and already nearly a third of that amount has been spent.

This is clear evidence as to how far out-of-touch National is on social issues.

The stress and pressure on Ministers and state sector bureaucrats has become apparent, with threats of  retribution flying.  This month alone, a MSD manager and associate minister of social housing, Alfred Ngaro, were revealed to have warned critics of the government not to talk to the media;

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Bennett went on to make this extraordinary statement;

“I spend the bulk of my time on social housing issues and driving my department into seriously thinking about different ways of tackling this.”

Her comment was followed on 20 May, on TV3’s The Nation, when current Dear Leader, Bill English tried to spin a positive message in  National’s ‘fight against homelessness’;

“Our task has been to, as we set out three or four years ago, to rebuild the state housing stock. And that’s what we are setting out to do.”

English and Bennett’s claims would be admirable – if they were not self-serving hypocrisy.

In 2008, Housing NZ’s stock comprised of  69,000 rental properties.

By 2016, that number had fallen to 61,600 (plus a further 2,700 leased).

In eight years, National has managed to sell-off 7,400 properties.

No wonder English admitted “we set out three or four years ago, to rebuild the state housing stock“. His administration was responsible for selling  off over ten percent of much-needed state housing.

No wonder families are forced into over-crowding; into garages and sheds; and into cars and vans.

Confronted by social problems, National ministers duck for cover. Especially when those same social problems are a direct consequence of their own ideologically-driven and ill-considered policies.

National ministers English, Bennett, Joyce, Nick Smith, et al are responsible for our current homelessness.

Parting thought

Left-wing parties and movement are generally proactive in identifying and resolving critical social problems and inequalities. It is the raison d’etre of the Left.

The Right seem only able to belatedly react to social problem and inequalities.

Especially when they caused it.

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References

Interest.co.nz: PM says no housing crisis in Auckland

NZ Herald: Housing shortage growing by 40 homes a day

Fairfax media: House prices rise at an ‘eye-popping’ rate for 6 NZ regions – Trade Me

Interest.co.nz: Median rents up $50 a week over last 12 months in parts of Auckland

Radio NZ: Lessons for NZ in Australia’s Budget

NZ Herald: John Key – State of the Nation speech

Statistics NZ: 2013 Census QuickStats about national highlights

Statistics NZ: Owner-Occupied Households

Radio NZ: Homeless family faces $100k WINZ debt

Interest.co.nz: New official Reserve Bank figures definitively show that investors accounted for nearly 46% of all Auckland mortgages

Simpson Grierson: New “bright-line” test for sales of residential land

Property Club: First buyers still missing out in Auckland’s most affordable properties

The Guardian: New Zealand housing crisis forces hundreds to live in tents and garages

Al Jazeera: New Zealand’s homeless – Living in cars and garages

NZ Herald: No house, not even a motel, for homeless family

Radio NZ: Key denies Auckland housing crisis

Radio NZ: No housing crisis in NZ – Paula Bennett

Beehive: Budget 2016 – 3000 emergency housing places funded

Mediaworks: Homeless crisis costing Govt $100,000 a day for motels

Radio NZ: Emergency housing providers instructed not to talk to media

Radio NZ: Ngaro apologises for govt criticism

TV3: The Nation – Patrick Gower interviews Bill English

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Previous related blogposts

Can we do it? Bloody oath we can!

Budget 2013: State Housing and the War on Poor

Budget 2013: State Housing and the War on Poor

National recycles Housing Policy and produces good manure!

Our growing housing problem

National Housing propaganda – McGehan Close Revisited

Housing; broken promises, families in cars, and ideological idiocy (Part Tahi)

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

Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?

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

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

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Problem…

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Solution.

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This blogpost was first published on The Daily Blog on 21 May 2017.

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When Life is a Lottery

20 November 2016 2 comments

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Fun Fact #1: Between 2006 and 2013,  the number of homeless grew by 25%. Based on Census data;  one in 100 were homeless in 2013; one in 120 in 2006, and one in 130 in 2001.

Fun Fact #2: In 1986, home ownership in New Zealand stood at 73.5%. By 2013, Census data showed home-ownership had fallen to 64.8%.

Fun Fact #3: In August this year, Auckland’s average house price reached – and passed – the $1,000,000 mark.

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Make no mistake, housing has become a crisis in New Zealand as this May poll for  a TV3/Reid Research Poll highlighted;

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tv3-news-housing-poll

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Even 61% of National voters accepted the new reality in our once-egalitarian nation. Housing unaffordability (for the middle classes) and homelessness (for beneficiaries and the working poor)  could no longer be ignored.

Stepping back to 20 August 2007, National’s newly-elected leader, John Key, made an impassioned speech to the  Auckland branch of the New Zealand Contractors Federation. In it, he excoriated the then-Clark-led Labour government;

“Over the past few years a consensus has developed in New Zealand. We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse.

This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.

The good news is that we can turn the situation around. We can deal with the fundamental issues driving the home affordability crisis. Not just with rinky-dink schemes, but with sound long-term solutions to an issue that has long-term implications for New Zealand’s economy and society.

National has a plan for doing this and we will be resolute in our commitment to the goal of ensuring more young Kiwis can aspire to buy their own home.”

Nine years later, Key’s description of New Zealand’s housing crisis has changed markedly. It is now a “challenge“, as he painfully tried to explain on TVNZ’s Breakfast programme;

“I don’t think it’s a crisis, but prices are going up too quickly. There are plenty of challenges in housing, and there have been for quite some time.”

On 9  November, a Hibiscus Coast couple were the incredibly lucky couple to win the latest multi-million dollar Lotto prize;

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claimed-44-million-lotto-prize-radio-nz

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The Radio NZ story further reported;

The man’s wife said at first she thought her husband was joking about the win.

“My head started spinning, my heart was racing and I got the shakes.”

The couple claimed their prize at Lotto’s head office on Thursday afternoon.

“As we sat in the winner’s room, he kept turning to me and saying ‘Am I in a dream?’ and I kept turning to him and saying ‘is this real?'” the woman said.

“We’ve been busting our guts trying to buy our first home,” the winner said.

“We just went to the mortgage broker earlier this week to see what they could do to help. But they just couldn’t make anything work for us.

“We were absolutely gutted and I just said ‘maybe that ship has sailed’.

“But my wife tried to stay positive and said ‘don’t worry, something good will happen for us’.

“I don’t think either of us thought that the something good would be $44 million.”

Note what the woman said here;

“We’ve been busting our guts trying to buy our first home. We just went to the mortgage broker earlier this week to see what they could do to help. But they just couldn’t make anything work for us. We were absolutely gutted and I just said ‘maybe that ship has sailed’.”

When couples have to rely on winning Lotto to be able to afford to buy their first home,  there is something seriously askew in society.

Remember Dear Leader Key’s own words;

“We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse. This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.”

In the United States, commentators from the msm, politics, dissident community; and further afield, have rapidly come to the realisation that Donald Trump’s unlikely, unforeseen, and up-till-now improbable victory in the 2016 Presidential  race was predicated on the belated understanding that globalisation and neo-liberalism  have left behind millions of people.

In the Voting Booths across the United States, Consumers became Citizens again, and cast their ultimate sanction against the political establishment and those who supported the neo-liberal orthodoxy. The status quo of Margaret Thatcher and Ronald Reagan (the latter, ironically a Republican like Trump) was utterly repudiated.

The disenchantment and alienation of the Working and Middle classes germinated during the 2008 Global Financial crisis and resulting Great Recession – the effects of which are still with us, eight years late. In the United States, millions of Americans lost their homes.

More than four million Americans have lost their homes since the housing bubble began bursting six years ago. An additional 3.5 million homeowners are in the foreclosure process or are so delinquent on payments that they will be soon. With 13.5 million homeowners underwater — they owe more than their home is now worth — the odds are high that many millions more will lose their homes.

Most telling was this criticism by

Housing remains the biggest impediment to economic recovery, yet Washington seems paralyzed. While the Obama administration’s housing policies have fallen short, Mitt Romney hasn’t offered any meaningful new proposals to aid distressed or underwater homeowners.

Writing for the Huffington Post a year later, David Coates pointed out

“… the vast majority of those four million lost their homes because they lost their jobs, not because they had in better times taken out mortgages that they could not afford.

[…]

It is not the rich who are being foreclosed. It is those on the margin of the core middle class. It is particularly middle class minorities who have taken the greatest hit on both their personal wealth and their associated credit scores. Falling house prices since 2008 have pulled median white net-worth down by 27 percent but median black net-worth down by anywhere between 40 percent and 53 percent.”

All the promises of neo-liberalism had come to nought. Instead millions had lost their jobs and those lucky enough found new work in low-paid service industries. Take-home pay was cut – and Humiliation applied in abundance as ‘compensation’.

The Working and Middle Classes not only lost their job and homes – their new status in low-paid work was precarious.

Events post-2008 hastened the  demise  of the American Dream and the rise of the Precariat, as Richard  McCormack wrote, in February of this year for the Manufacturing and Technology News;

The effects on the U.S. economy caused by 30 years of offshore outsourcing of production and jobs is starting to drive major changes in the American political system. The rise of a “precariat” class of Americans — those who are living “precarious” lives — has created a populist movement that shows no sign of acquiescing to the “establishment” in both the Democratic and Republican parties.

The new precariat comprises a growing class of people who are going nowhere in their jobs, who are insecure and unstable. The group is “experiencing the breaking apart of the American Dream, which is what historically held the country together — the rise of the middle class, with everyone doing better,” notes visiting scholar John Russo of Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor. “It’s not working that way any more.”

Driving the rise of the precariat is a society that is not generating enough wealth. De-industrialization, the shift of major goods-producing industries to foreign nations, and both the Republican and Democratic establishment’s embrace of free trade, are leading to a populist uprising.

The precariat is becoming one of the largest classes of Americans, encompassing far more than blue-collar workers who have been slammed by economic forces outside of their control. It now includes millions of Americans with college degrees who are under compensated or can’t find full-time employment with benefits.

As white-collar jobs have been outsourced, Americans with more than high-school degrees are starting to see their prospects “mirror those of the working class,” says Russo. “That insecurity and instability is now part of their life. That is why this new group is not yet a class in itself. It hasn’t defined what it is going to be.”

It is fragmented, but it is big, and much of it is angry.

In his article, McCormack quotes John Russo from the Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor;

“As steady formal work has been disappearing over time, informal work began to move beyond traditional concepts such as consulting, internships, subcontracting, privatization and intermittent employment,” Russo explains. “Rather than the continued rise of the formal economy, it is the informal economy that is growing.”

The precariat is “potentially all of us united by the fear of insecurity,” he notes. It is made up of “individuals living precarious and insecure existences lacking employment security, job security, income security, skill security, occupational security and labor market security.”

This is no longer the underground economy, but includes displaced individuals from the public and private sectors, millennials dealing with mountains of student debt, and baby boomers forced into early retirement without enough savings to support themselves.

There is little public assistance for the precariat class and “they’re not making demands to get better wages or improved benefits [because they] are replaced easily,” Russo notes.

Three years after Coates’ story,  and nine months after McCormack’s insightful analysis of the public mood, Trump’ ascendance as America’s 45th President was complete. Trump won the States where blue-collar workers had suffered the most.

The story of globalisation and neo-liberal “reforms” of our own economy has followed a familiar story; loss of long-term employment; ever-increasing need for re-training; the rise casualisation and contract piece-work; and the increase of lower-paid service-work.

Depressingly, economist Shamubeel Eaqub has predicted;

“The workplace is likely to be further casualised. “

Which adds further hopelessness to New Zealanders increasingly locked out of what was once known as the Great Kiwi Dream of home-ownership.

The National government ostensibly understands the notion of aspiration, as Dear Leader Key said six years ago;

“I want New Zealanders to be aspirational – to want more for themselves and their families, and to know that they have opportunities to do that.”

Those words ring hollow as National scrambles frantically to make itself  “look busy”, trying to alleviate the dual crisis of  worsening home ownership and homelessness.

Bennett’s suddenly-announced  policy of bribing state house tenants with (up to) $5,000 was widely seen as a panic-driven, ad hoc policy. It certainly caught Finance Minister Bill English by surprise, having no forewarning of Bennett’s media announcement on the issue.

The twin tsunami-waves of homelessness and housing unaffordability appears to have utterly over-whelmed National Ministers.

As Trump’s victory in the US Presidential election has demonstrated with crystal clarity, Consumers can easily become  Citizens again, re-discovering the power of their Vote. When Citizens’ anger becomes focused, and a perceived solution (or even just an opportunity to say “FUCK YOU!” to the Establishment) is put before them – they will vote for it.

Especially when they have lost so much, and have little left to lose.

Such was the case of  the US presidential elections, and before that, the ‘Brexit’ Vote.

As New Zealanders become more and more conscious of how much they have lost in the last thirty years, they too, will find themselves pissed off.

The opening lines of the song  from ‘Les Miserables’ – Do You Hear The People Sing? – should serve as a reminder to the political establishment in this country;

“Do you hear the people sing?
Singing the song of angry men?”

The Great Kiwi Dream of home ownership was never predicated on the long-odds offered by  a little yellow piece of paper;

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lotto-ticket

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Home ownership should not be a Lottery.

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References

Otago Daily Times: Homelessness increasing in NZ

Fairfax media: NZ home ownership at lowest level in more than 60 years

Radio NZ: Auckland’s average house value tops $1 million

TV3 News: Government gets thumbs down on housing

Scoop: Key – Speech to New Zealand Contractors Federation

TVNZ: Is there a housing crisis? John Key fails to say yes or no after being put on the spot

Radio NZ: Claimed – $44 million lotto prize

NY Times: The One Housing Solution Left – Mass Mortgage Refinancing

Huffington Post: America’s Half-Forgotten Housing Crisis

Manufacturing and Technology News: The Rise Of The American ‘Precariat’ – Globalization And Outsourcing Have Created A Combustible Political Culture

Chicago Tribune: How Trump won the presidential election – Revenge of working-class whites

Fairfax media: Shamubeel Eaqub – Job casualisation a global phenomenon

NZ Herald: John Key’s speech to the National Party convention

Interest.co.nz: Paula Bennett announces plan to offer $5,000 to homeless Aucklanders and state house tenants to leave Auckland

TV3 News: Govt to help fund Auckland homeless to move

Metrolyrics: Les Miserables – Do You Hear The People Sing?

Previous related blogposts

Can we do it? Bloody oath we can!

Budget 2013: State Housing and the War on Poor

Budget 2013: State Housing and the War on Poor

National recycles Housing Policy and produces good manure!

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

National Housing propaganda – McGehan Close Revisited

Housing; broken promises, families in cars, and ideological idiocy (Part Tahi)

Housing; broken promises, families in cars, and ideological idiocy (Part Rua)

Housing; broken promises, families in cars, and ideological idiocy (Part Toru)

Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?

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

National and the Reserve Bank – at War!

The seductiveness of Trumpism

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wheel-estate

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This blogpost was first published on The Daily Blog on 15 November 2016.

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