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Posts Tagged ‘Housing NZ’

Twelve fun facts about National’s failed housing policies for Parmjeet Parmar to consider

15 January 2019 2 comments

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A recent story by Daily Blogger, Martyn Bradbury, raises serious questions about National’s questionable track record around state housing.

National’s List MP, Dr Parmjeet Parmar, has launched a scathing attack on Housing NZ on social media and in a story in the NZ Herald;

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The family was living in a HNZ property that was obviously sub-standard;

The toilet floor had sunk into the ground, making it difficult for Sheraz to use, given his condition.

The shower is also problematic for him as it’s inside a deep bathtub and he needs his wife’s help to use it.

The family has also complained about bugs coming through a hole in the wall of the bathroom.

The hole has been plugged by toilet paper, while a piece of wood was placed to cover the bathroom floor.

Ms Parmar lambasted Housing NZ for “inaction” and called the situation “unbelievable”. Her social media statements were linked to the NZ Herald story,  ensuring maximum exposure gained from the Loun family’s dire circumstances.

But Ms Parmar noticeably glossed over a salient point regarding the state of the NZH property;

Around 8 months of repeated contact and no action.” – Twitter

The Loun family, two parents and three kids, have been complaining to HNZ about rats, fleas, bugs, an unsafe bathroom and an unsuitable shower at the property for eight months.” – NZ Herald

“… they were chasing them for nearly 8 months, yes nearly 8 months and there was no action…” – Facebook

Eight months?

Fun Fact 1: That suggests this problem has been ongoing since before the election of the current government. In essence, the rot set in (literally!) during National’s term in office.

This brings back memories of Emma-Lita Bourne, who was two years old in 2014, when she perished from a brain haemorrhage resulting from a clot. She had been suffering from a pneumonia-like illness. The toddler and her family had also been living in a sub-standard HNZ property that was cold, damp, had mould on the walls and floor, and the roof leaked.

The coroner, Brandt Shortland, said matter-of-factly;

“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.”

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Fun Fact 2: Ms Parmar was a Member of Parliament at the time of the Coroner’s findings into Emma-Lita’s death.

In October 2015, Labour’s Phil Twyford introduced the Healthy Homes Guarantee Bill to Parliament. That Bill  – eventually passed in November 2017 – would create a “warrant of fitness” for rental properties.

Fun Fact 3: Ms Parmar was one of National and ACT Party MPs who voted against the Healthy Homes Guarantee Bill. The Healthy Homes Guarantee Bill would have “changed the current law to ensure that every rental home in New Zealand meets minimum standards of heating and insulation“.

Ms Parmar voted against the very thing she was railing against on social media and the Herald.

Fun Fact 4: In 2008, Housing NZ’s state housing stock comprised of  69,000 rental properties.

By 2014 – when Ms Paramar entered Parliament, the number of state houses had dropped to 68,229 – a loss of 771 potential homes for the most needy families and individuals in this country.

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

And by 2017, Housing NZ’s stock of owned or managed properties had fallen to “approximately” 63,000 homes. The 2017 Annual Report  does not differentiate the number of owned rental properties from “managed” assets. However, the number is still 1,300 owned/managed properties fewer than the previous year (see above).

National’s policy of selling state housing was obviously proceeding at pace despite Housing NZ posting a loss on the sale of properties of $10,781,000 for the financial year (Annual Report, p108);

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National’s ideological mania for selling state assets was proceeding unchecked, incurring significant losses for the taxpayer.

By 2018, the new Coalition Government had staunched the loss of properties. According to their 2017/18 Annual Report, Housing NZ owned 61,500 properties, with a further 2,500 leased – 64,000 in total and an increase of about a thousand homes.

This is still a far cry from the 69,000 properties owned by Housing NZ when National took office.

Fun Fact 5: Ms Parmar was part of a government that sold/disposed of 7,500 properties.

Fun Fact 6: During her four year tenure in Parliament, Housing NZ lost 5,229 homes from it’s stock

Fun Fact 7: Whilst the National government – of which Ms Parmar was an eagerly participating member – was busily selling off state housing, the waiting list for people needing a home was steadily rising;

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Fun Fact 8: When Ms Parmar entered Parliament in September 2014, there were 4,189 people on Housing NZ’s waiting list.  By the time voters threw out the National government in late 2017, that number had risen to 6,182.

Alongside a covert mass-sell-off of state housing, National was also raiding Housing NZ’s coffers.

Fun Fact 9: The government department tasked with looking after some of the most vulnerable, poverty-stricken families and individuals was stripped of “dividends” of $532 million from 2010 to 2015 – over half a billion dollars. The dividends did not include gst and interest payments from Housing NZ to central government;

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2010: $71 million

2011: $68 million

2012: $77 million

 2013: $90 million

2014: $108 million

2015: $118 million

Total: $532 million

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At a time when thousands were on a waiting list for a home and entire families were living in over-crowded houses; garages, and cars and vans – National was helping itself to cash that could have alleviated a large measure of homelessness.

(Note: Labour, under the Clark/Cullen leadership, also demanded dividends from Housing NZ. It is nothing to be proud of that Budget surpluses were achieved – in part – off the backs of the poor. At least Labour did not cut taxes, as National did in 2009 and 2010, thereby transferring wealth from the poor/HNZ tenants – to the wealthy/high-income earners.)

Fun Fact 10: Ms Paramar voted for successive National government Budgets  which rapaciously extracted millions from Housing NZ.

The Loun family’s HNZ home could have been properly maintained and ongoing faults repaired with that $532 million.

If Ms Parmar wants to vent her anger, she should direct it at herself and her colleagues. It is National (and it’s minor support parties) that are solely to blame for our growing homeless crisis. At a time when New Zealand most needed state houses, National was disposing of them as fast as they thought they could get away with it, as well as bleeding the corporation of it’s money.

So much for John Key promising no further asset sales in February 2014;

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But former Dear Leader Key was not the only one “flexible” with the truth.

Fun Fact 11: A year after entering Parliament, Ms Parmar was caught out attempting to mis-use taxpayer’s money by exploiting an official government housing “roadshow” to promote her personal political profile in the Mt Roskill electorate. The Mt Roskill electorate would shortly be vacated by then-sitting MP,  Phil Goff, who was planning to run for mayor of Auckland.

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According to documents released under the OIA, NZ Herald  journalists discovered that Housing NZ officials were attempting to cover up for Ms Parmar;

Housing officials tried to hide a National MP’s attempt to use a Government housing roadshow to raise her own public profile, documents show.

The Labour Party said National list MP Parmjeet Parmar was guilty of trying to use taxpayer money for political campaigning, and officials had been caught red-handed trying to cover it up.

Documents released to Labour MP Kris Faafoi revealed Dr Parmar wanted to co-host a meeting for the Government’s HomeStart programme near Mt Roskill, where a by-election will be triggered when current MP Phil Goff runs for the Auckland Mayoralty.

Parmjeet Parmar has … expressed a keen interest in hosting a roadshow as she is keen to raise local profile in Mt Roskill in case of a by-election,” an email from Housing Minister Nick Smith’s private secretary said.

Supposedly “neutral” civil servants were caught out attempting to suppress Ms Parmar’s plans to use the housing roadshow for her own benefit;

There was also a further twist. The key passages which revealed that Dr Parmar wanted to use the roadshow for campaigning were redacted by housing officials in three other versions of the email released to Labour.

The passages were redacted by officials on the grounds that they were “out of scope” and to preserve “the free and frank expression of opinions by or between or to Ministers of the Crown”, their employees, or departments.

Fun Fact 12: Despite protestations, Ms Parmar did indeed contest the 2016 by-election when Phil Goff resigned from Parliament. She came second to Labour’s candidate, Michael Woodhouse – a result Ms Parmar richly deserved.

It is unknown if any of the Housing officials who attempted to cover for Ms Parmar were asked to resign. It would be surprising if there were any ensuing job losses from this scandal.

If  Ms Parmar wants to use her taxpayer-funded time lambasting Housing NZ, that is her prerogative.

But at the very least, it would be helpful for New Zealanders to understand the fullness of National’s woeful under-performance in the state housing sector and the role Ms Parmar played. At the very least she exhibited no moral courage on behalf on HNZ tenants whilst she was in government.

There is something repellent about a previous government that actively sabotaged and crippled a vital state housing service – only for former Finance minister Bill English to lament about that very same service unable to fulfill it’s duty to house the most vulnerable families in our society;

“Housing Corp has done its best with the policy settings governments have given them over the last twenty or thirty years.

But you’ve just got to drive round the countryside, or round the cities and suburbs to see that it hasn’t always had the best results. So we just want to get more people helping us to solve the problem of serious housing need.”

This is the legacy Ms Parmar shares.

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References

The Daily Blog: I’m sorry, National had the audacity to say WHAT about State Housing?

Parliament: Dr Parmjeet Parmar

Twitter: Parmjeet Parmar – Housing NZ – 4 Jan 2019

Facebook: Parmjeet Parmar – Housing NZ – 3 Jan 2019

NZ Herald: National says HNZ failed the Loun family after ignoring repeated requests to fix safety issues

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

Parliament: Healthy Homes Bill – Setting new standards for rental homes

The Daily blog: The MPs who voted against Warrants of Fitness for all rental properties

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2013/14

Housing NZ: Annual Report 2015/16

Housing NZ: Annual Report 2016/17

Housing NZ: Annual Report 2017/18

Ministry of Social Development: Housing Register

Scoop media: State rental housing milked for dividends while tenants die

Radio NZ: Housing NZ readied for sale – Labour

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

NZ Herald: PM – no more SOEs to sell after Genesis

NZ Herald: National MP busted ‘trying to use taxpayer money for political campaigning’

Radio NZ: Govt pushes on with state house sales

Additional

Radio NZ: State housing plan ‘not an asset sale’

Labour Party: Nats still planning to take Housing NZ dividend

Housing NZ: Our statement of performance expectations (deleted from HNZ website)

Previous related blogposts

The housing crisis: NZers deliver their verdict

The Mendacities of Mr Key # 12: No More Asset Sales (Kind of)

 

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This blogpost was first published on The Daily Blog on 10 January 2019.

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= fs =

The Free-market, Hyper-individualism… and a Culture of Cruelty?

15 July 2018 3 comments

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Up till recently, I had believed that there were two facets comprising to create a  neo-liberal economy (not “society” – neo-liberalism does not recognise community or society where individuals organise for a greater collective good).

The first was a free market predicated on minimal regulation; reduced government; greater reliance of private enterprise to deliver services; and a lower tax-take which forces future left-leaning governments to curtail vital infra-structure and social-spending.

As Coalition Finance Minister, Grant Robertson clearly told the told the country in March this year;

“We’ve put aside $42bn over the next four years for capital investment but you know what? It won’t be enough. We understand that we need to take a more innovative approach to the financing of infrastructure.”

Which was well understood by National’s former Finance Minister, Steven Joyce,  when he accused Labour of a so-called “$11.7 billion fiscal hole” in their pre-election costings.

National’s tax cuts of 2009 and 2010 were not just an election bribe at a time the country could ill afford them – they were a strategic move to constrain a future Labour-led government in a tight fiscal straight-jacket.

Then-Finance Minister, Bill English, said that the 2009 tax cut represented a $1 billion loss of revenue to the National government;

“About 1.5 million workers will receive a personal tax cut, injecting an extra $1 billion into the economy in the coming year.”

The following year, National’s tax would be estimated to cost the State at least $2 billion in lost revenue.

This was well-under-stood by commentators, analysts, politicians. National-leaning John Armstrong explained this in straight-forward terms;

The message is Labour – if it wins – is not going to spend money the new Government will not have…

… is not going to make promises in advance he cannot keep.

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The yawning chasm of the Budget deficit meant there was no new money to spend. Some cherished policies would have to be introduced progressively – rather than in one go. Savings would have to be found; sacrifices would have to be made. And so on.

That was penned by Mr Armstrong in 2011. It still holds true today.

The second facet of neo-liberalism is promulgation and amplification of the Cult of the Individual. Whether this means cheaper imported goods at the expense of local industry and jobs; doing away with retailing restrictions (or even planned, deliberate breaking of the law); easier access to alcohol and subsequent social impacts; the primacy of the Individual’s rights for self-interest and gratification would trump communities expectations of collective  responsibility; social cohesion; the health and wellbeing of the population, and the greater good.

For example, attempts by communities to restrict and reign in plentiful availability of cheap alcohol is usually  met with a predictable vocal chorus of indignant outrage from people for whom the Right To Buy When/Where-ever supercedes any societal problems. The most spurious arguments are presented, attempting to portray consumers as hapless “victims” of “bureaucracy-gone-made”. Or “Nanny statism”.

Yet, the cost of alcohol abuse was estimated to be approximately $5.3 billion in 2016. That’s $5.3 billion that could have been invested in education, health, public transport,  housing, conservation and pest control, increased research in green technologies, etc.

The heavy  costs of alcohol abuse is socialised, whilst profits are privatised to business and their shareholders. For many, it is more important to be able to buy a drink at 4am in the morning than social problems arising from easy availability.  For some individuals, that convenience outstrips whatever harm is occurring elsewhere. “It’s not my problem”, is the thought that often runs through the minds of many who demand their rights – regardless of consequences.

But there is a third aspect – like a third leg to a three-legged stool – that must exist if neo-liberalism is to thrive: Cruelty.

A certain amount of callousness; disdain; and outright hatred must replace  compassion, egalitarianism, and a sense of community cohesion if the neo-liberal version of “society” is to operate successfully.

It is the reason why neo-liberalism never took hold in Scandinavian countries.

It is the reason why – once a foothold was gained in the late 1980s – successive governments ensured the neo-liberal model was maintained in this country.

Almost by definition, neo-liberalism cannot operate in a society which has values diametrically opposed to it. It took an “economic crisis” in 1984/85 for the Lange-led Labour government to impose Rogernomics.

In 1991, Ruth Richardson used the “BNZ Crisis” to implement drastic cuts to health, education and welfare. Housing NZ tenants were forced to pay market rents. User-pays was introduced for hospitals and schools – though the public resisted and ignored the $50/nightly charge for public hospitals.

Neo-liberalism could not have been introduced so easily without the convenient constructs of various so-called “economic crises”. The mainstream media at the time was complicit in the “reforms” sweeping every aspect of New Zealand’s cultural, social, and economic activity.

But once introduced, the speed of so-called “reforms” accelerated and opposition became harder. Mass protests seemingly had little or no effect. The change of government in 1990 from Labour to National only made matters worse – Richardson’s “Mother of All Budgets” plunged the country further into recession.

For the following thirty years, the neo-liberal paradigm ruled unchallenged, with perhaps the rear-guard action from the now-defunct Alliance, and a few stubborn media commentators who still asked uncomfortable questions where we were heading as a country.

By 2002, the Alliance was crippled and forced out of Parliament.

The remaining critical voices of media commentators grew fewer and fewer.

The “revolution” was all but complete. Neo-liberalism was bedded-in, supported by a propertied Middle Class feeling “wealthy” with bloated house-values and bribed with seven tax cuts since 1986.

But all was not well in Neo-liberal Nirvana.

There were embarrassing reminders that the notion of “trickle down” – now repudiated by the New Right as an ‘invention’ by the Left – was not working as per expectations of devotees of the Chicago School model. As Budget Director for the Reagan Administration, David Stockman, said;

“It’s kind of hard to sell ‘trickle down, so the supply-side formula was the only way to get a tax policy that was really ‘trickle down.’ Supply-side is ‘trickle-down’ theory.”

It became apparent that the promises of neo-liberalism were largely faith-based. Enormous social problems were being caused as corporate power increased;  union power waned; wages stagnated; wealth drained away to a tiny minority; and simple things like home ownership rates were falling dramatically.

Tellingly, it was the gradual loss of the great Kiwi Dream of home ownership that was a litmus test-paper for the toxicity of neo-liberalism’s false premises and empty promises.

Ironically, this was happening at a time when mortgage money was easier and cheaper to obtain from the banks. But only if you earned a high income or already owned property to borrow against. Or could rely on the Bank of Mum and Dad.

Those who already had the assets could hope to get more.

Those at the bottom, or struggling middle classes, would miss out.

For many, they discovered that hitting rock-bottom wasn’t as low as you could go. For growing numbers of New Zealanders, “bottom” meant a shredded welfare safety-net  that had gaping holes in it under the National government;

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Added to a mounting housing crisis, various National ministers exploited every opportunity to portray the poor; the homeless; the chronically sick; unemployed; young people; in the worst possible light. They were authors of their own misfortune, according to former PM, John Key;

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National’s Bill English disdain for young unemployed was made abundantly clear on several occasions;

In 2016;

“ A lot of the Kiwis that are meant to be available [for farm work] are pretty damned hopeless. They won’t show up. You can’t rely on them and that is one of the reasons why immigration’s a bit permissive, to fill that gap… a cohort of Kiwis who now can’t get a license because they can’t read and write properly and don’t look to be employable, you know, basically young males.”

Last year;

“ One of the hurdles these days is just passing a drug test. Under workplace safety you can’t have people on your premises under the influence of drugs and a lot of our younger people can’t pass that test.”

And again in December this year;

Government’s fees-free policy will ‘soak up staff out of McDonald’s’...”

English’s demonisation of unemployed and young New Zealander’s appeared at complete variance with those same people desperate for paid work. But that did not make him pause in his attacks.

Housing for the poor, the homeless, and vulnerable was also on National’s “hit list”, as they pursued their agenda to down-size state activity in housing.

First came the “reviews” and people’s live upended as National ended tenancies based on an ideological notion that state houses were not for life. The social problems resulting would be euphemistically known later as “unintended consequences”;

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National’s response was predictable,

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Therein lay their own seeds for electoral  defeat three years later.

In the years that followed, National portrayed welfare beneficiaries and Housing NZ tenants as negatively as they could possibly get away with.

The meth-hysteria portrayed HNZ tenants as hopeless, lazy drug fiends. National was only too happy to fan the flames of demonisation, as it allowed National to evict tenants and sell off state houses.  Their policy in September last year was unequivocal, and linked gangs and drugs, with Housing NZ tenants;

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The press statement above was issued by former welfare beneficiary-turned-National Minister, Paula Bennett. The same Paula Bennett who, only eight months later, lamented on Radio NZ;

“I’ve always had concerns… I just didn’t think that the 0.5 [microgram limit] sounded right. I questioned [the Health Ministry] in particular who had set that standard, questioned Housing NZ numerous times, got the Standards Authority involved.”

She suggested tenants should be compensated. That was ‘big’ of her.

She also stated,

“[I] was horrified that people might be smoking P in houses, I’m not going to shy away from that.

Then I started seeing reports and I remember one in particular from an expert – he said, ‘You can just about get more P residue off a $5 note than you could have at some of these houses with 0.5 micrograms’ and so that raised alarm bells for me.

But … then who am I to be standing in and saying at what level I felt that [the limit] should be?”

Maybe she could have asked Sir Peter Gluckman. He was the government’s Science Advisor at the time. The one appointed by John Key. Yeah, that one.

Or, she could have paid more attention to a 2014 MSD report which revealed a staggeringly low rate of drug-use amongst welfare beneficiaries;

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Yeah, that one!

But that would have gotten in the way of National’s cunning plan.

Plans that drove thousands of welfare rolls, as Key’s administration struggled to balance the government’s books after two unaffordable tax cuts in 2009 and 2010;

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In September 2017, on TV3’s ‘The Nation‘,  then Welfare Minister, Anne Tolley, described National’s drive to reduce welfare recipients in the most Orwellian way;

“But we do have a significant number of people who are looking for work, who are capable of working, and so most of them, it’s just a light touch to help them along the way.”

In the same interview, Lisa Owen challenged Minister Tolley on the fate of welfare beneficiaries who had been pushed off welfare. Minister Tolley admitted that she and the National government had no idea what had happened to the thousands of people, including families with children;

Lisa Owen: How do you know that they’re going on to a better life?

Tolley: Look, there’s a whole lot of people that don’t want the state in their lives. Tracking people is awful. They go off the benefit—

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Anne Tolley: They go off the benefit for a whole variety of reasons.

Lisa Owen: How can you claim success, though, for that when you don’t actually know if they’re earning more money than they were on the benefit—?

Anne Tolley: We do track if they come back on to benefit, and we do have a close look at what has happened. As I say, we do do a lot of training. We do provide a lot of opportunities for people to retrain.

Lisa Owen: But you don’t know what’s happening to those people. You’ve got no idea.

Anne Tolley: We have 44% who self-identify to us that they’re going off into work. You know, people go overseas. They age into superannuation. There’s a whole lot of reasons why.

Lisa Owen: All right, so you don’t know.

Thankfully, former PM John Key was more forthcoming in 2011 that New Zealand’s “under class” was growing.

As National ramped up it’s campaign of  denigration and punitive action against welfare beneficiaries and Housing NZ tenants, compliant State organisations were reaping their victims.

One was forced to suicide;

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One was a victim of damp housing and poverty-related disease;

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One was chased for a welfare debt she could have no chance of repaying – but MSD pursued it “in case she won Lotto“;

MSD was trying to recover approximately $120,000 from a chronically-ill beneficiary in her 50s who will never be able to work again. The Ministry has pursued her for years and spent a large amount on the case, even though it is plain the woman has no money and her health will never allow her to work again.

The judge asked the Crown lawyer whether it was worth continuing to pursue the beneficiary.

The lawyer responded that it was, as the beneficiary might win Lotto and would then be able to repay the money.

And the most recent example of victimising the homeless simply defies comprension;

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Homeless men at the “drop-in centre” were shaken awake through the night every half hour.

All because the facility was not compliant with fire and building consents. To it’s credit the Rotorua Lakes Council said “fire and building consents were being rushed through so people could sleep at the shelter“.

But Mr Deane – the organisor of the facility ” was told yesterday [5 July] that they had to remain awake until the necessary  consents were granted”.

The common term for this is sleep deprivation.

It should not be forgotten that the practice of sleep deprivation was one of the five techniques used by the British government against Northern Irish citizens arrested in 1971. Subsequently, in January 1978, in a case taken by the government of Ireland against Great Britain, in the the European Court of Human Rights, ruled that the five techniques – including sleep deprivation – “did not occasion suffering of the particular intensity and cruelty implied by the word torture … [but] amounted to a practice of inhuman and degrading treatment“.

Sleep deprivation was determined to be a breach of the European Convention on Human Rights.

In 2010, the British government lost a Court appeal to prevent public release of a report revealing the practice of sleep deprivation torture had been used against British resident, Binyam Mohamed. The Court judgement stated;

“The treatment reported, if it had been administered on behalf of the United Kingdom would clearly have been in breach of  [a ban on torture].

Although it is not necessary for us to categorise the treatment reported, it could be readily contended to be at the very least cruel, inhuman and degrading treatment of BM by the United States authorities.”

In 2014, the UN committee against torture condemned the United States for allowing sleep deprivation to be used as a torture technique against prisoners at Guantanamo Bay. The United States governments calls such practices “enhanced interrogation”.

To discover that sleep deprivation is being used against homeless men in New Zealand is disturbing.

To realise that a practice considered torture by various international organisations has barely been reported by the mainstream media – is deeply troubling.

We have reached rock-bottom as a society when people are being subjected to “a practice of inhuman and degrading treatment” – simply because they are homeless.

This is the definition of  abuse against the vulnerable: they are unable to fight back because they are utterly powerless.

If this practice of sleep deprivation was carried out in our prisons, there would be a major Royal Commission of Inquiry.

But not when the subject of this abuse is the homeless. Their powerlessness is worse than men and women incarcerated in our prisons, despite being “free”.

The cruelty shown to our welfare beneficiaries; to Housing NZ tenants; and to the homeless, has been sanctioned by a sizeable ‘chunk’ of our population;

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(2008) (2011) (2014) (2017)

Fully a quarter of the country’s population has continued to endorse the National Party at four consecutive general elections.

What does this say about a quarter of the population’s attitude to what has amounted to a campaign of vilification and  denigration against those at the bottom of our social-economic ‘ladder’ – a campaign that has been skillfully carried out to facilitate pushing people off welfare and selling off state houses.

This degree of callous cruelty has been led by various  ministers in the previous National government who have mis-used information; misled the public; and made derogatory comments against those whose sole ‘crime’ was to be poor.

This was bullying from the highest level of power, toward those at the lowest level of powerlessness.

National’s subtle and graduated vilification of the poor made cruelty permissable in a country which once valued tolerance, fairness, and egalitarianism.

When depriving homeless men barely merits a mention in our media, and few bat an eyelid, what other possible conclusion can be made?

This Coalition government is constrained fiscally when it comes to welfare and state housing.

It suffers no such constraints when it comes to showing strong moral leadership to reject State-sanctioned cruelty.There is no fiscal cost to compassionate leadership that lifts up the powerless.

There are good men and women in Labour, the Greens, and NZ First. That is perhaps their strongest common bond between all three; a rejection of the culture of callousness that has seduced and poisoned the hearts and minds of so many New Zealanders.

Every Minister in this coalition government can reject decades of a culture of cruelty by reaffirming the humanity of the unemployed; solo-mums; youth; sickness beneficiaries; state house tenants; the drug and alcohol addicted; and the homeless.

Every Minister in this coalition government can use their position of power to speak on behalf of the powerless.

Every Minister in this coalition government can remind all New Zealanders that we are not bullies; we are better than that. If we cannot look after the powerless in our own society – then what possible hope is there for us and our children’s future, to be a compassionate society?

This will be the defining point of difference between what we have been – and what we hope to become.

This is what will inspire New Zealanders to choose what we aspire to be, and what kind of leadership will take us there.

Cruelty or compassion? Hopefully that will be the true point of difference in 2020.

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~ In Memory ~

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~ Emma-Lita Bourne ~

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~ Wendy Shoebridge ~

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References

Radio NZ: Robertson on infrastructure – $42bn ‘won’t be enough’

Fairfax media: Steven Joyce sticks to $11.7 billion hole in Government budget

Scoop media: Government delivers April 1 tax cuts, SME changes

Scoop media: Govt’s 2010 tax cuts costing $2 billion and counting

NZ Herald: John Armstrong – Labour confined to a fiscal straitjacket

Dominion Post: ‘Pressure valve’ medics patch up night’s drunks

Fairfax media: Alcohol – How can we reduce the harm it causes?

RBNZ: Banking crises in New Zealand – an historical perspective

NZ Herald: July 1984 – When life in NZ turned upside down

The Encyclopedia of New Zealand – Te Ara: The ‘mother of all budgets’

Wikipedia: The Alliance

NZ Initiative: Defeating the trickle-down straw man

The Atlantic: The Education of David Stockman

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

Interest.co.nz: Housing mortgage rates are more likely to go down rather than up

Fairfax media: Bank of mum and dad could be NZ’s sixth largest first-home mortgage lender

NZ Herald: Auckland teen couple face sleeping in car

TVNZ: More homeless people sleeping in cars

Mediaworks/Newshub: The hidden homeless – Families forced to live in cars

NZ Herald: Minister spells out $43,000 ‘salary’ claim for solo mum

NZ Herald: Benefit cuts for drug users defended by PM

NZ Herald: Bennett increases pursuit of welfare ‘rorts

Fairfax media: Key – Mums of one-year-olds better off working

NZ Herald: Food parcel families made poor choices, says Key

NZ Herald: Beneficiary birth control ‘common sense’ – Key

Fairfax media: House call plan to nab benefit fraudsters

NZ Herald:  Unions demand Bill English apologise for describing jobseekers as ‘pretty damned hopeless’

Fairfax media:  Bill English says employers are regularly telling him that Kiwis can’t pass drug tests

Twitter: Newshub – Bill English “soak up staff out of McDonalds”

Frankly Speaking:  Fact Sheet – Employment-Unemployment and Queues for Vacancies

Dominion Post: State tenants face ‘high need’ review

Fairfax media: Nearly 600 state house tenants removed after end of ‘house for life’ policy

Fairfax media: Housing policy will destabilise life for children

NZ Herald: State housing shake-up – Lease up on idea of ‘house for life’

Fairfax media: Housing policy will destabilise life for children

NZ Herald: ‘No point’ in new state houses – Bill English

National: New crack down on gangs and drugs

Radio NZ: Paula Bennett: HNZ too cautious on meth testing

Beehive: PM appoints Chief Science Advisor

NZ Herald: Minister claims low drug result as victory

NZ Herald: Bennett trumpets 5000 fewer on DPB

Fairfax media: Number on benefits drops, reaction mixed

NZ Herald: Over 5300 benefits cut due to info sharing

NZ Herald: Benefits cut for 13,000 parents in new regime

NZ Herald: 11,000 disabled children lose welfare benefit

Radio NZ: About 2000 children hit when parents lose benefits

Radio NZ: Thousands losing benefits due to paperwork

Mediaworks/TV3: The Nation – Welfare Debate

NZ Herald: Key admits underclass still growing

Fairfax media: Aggressive prosecution focus at MSD preceded woman’s death, inquest told

NZ Herald: Damp house led to toddler’s death

Catriona Maclennan: Loans to feed kids are income and disqualify benefit, says MSD

Radio NZ: Homeless shaken awake as Rotorua shelter awaits consents

European Court of Human Rights: Case of Ireland v. The United Kingdom

BBC: Binyam Mohamed torture appeal lost by UK government

The Guardian: UN torture report condemns sleep deprivation among US detainees

Wikipedia: New Zealand general election, 2008

Wikipedia: New Zealand general election, 2011

Wikipedia: New Zealand general election, 2014

Wikipedia: New Zealand general election, 2017

Additional

Gordon Campbell:  Ten Myths About Welfare – The politics behind the government’s welfare reform process

Other Blogposts

Public Address: We are, at last, navigating out of the “meth contamination” debacle

Pundit:  Beneficiary ‘impact’ highlights poverty of social policies

The Daily Blog: A Fair suck of the sauce bottle!

The Daily Blog: New Government response to MSD sadism is just not good enough

The Standard: Loans to feed kids are income and disqualify benefit, says MSD

Previous related blogposts

Week Watch – 7 June

Easter Trading – A “victimless crime”?

Professor Bill English lectures young New Zealanders on free education

The Mendacities of Ms Amy Adams – “hidden borrowing”?!

Tracy Watkins – Getting it half right on the “Decade of Deficits”

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This blogpost was first published on The Daily Blog on 10 July 2018.

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The Many Mendacities of Mr Bridges – The ‘Claytons’ Apology

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On 5 June, Simon Bridges presented himself on Radio NZ’s Morning Report to address the meth-hysteria that led to three hundred state house tenants being evicted over the  last three years where “P” had been detected in a property.  The evictions took place during National’s term in office.

He apologised for National’s part in the hysteria and wrongful evictions;

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“I’m sorry that the advice we got was wrong and has made this situation what it is. We got the wrong advice, we’re not technical experts, we thought we were asking the hard questions.”

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Or, did he…?!?

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Listener <letters@listener.co.nz>
date: 18 June 2018
subject: Letter to the editor

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The Editor
The Listener

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When National’s Simon Bridges, fronted up on Radio NZ on 5 June, he apparently apologised for his role in the unjust evictions of 300 state house tenants for meth-testing results that have been shown by Chief Science Advisor, Sir Peter Gluckman, as bogus.

Bridges said;

“I’m sorry that the advice we got was wrong and has made this situation what it is.”

Except – it’s not an apology for the wrongful evictions at all. It’s a lamentation that “the advice we got was wrong”.

He hasn’t expressed regret for 300 people and their families being evicted. He is sorry that the so-called “evidence” no longer backs up National’s policy of ridding itself of pesky state house tenants so that they could sell six thousand properties between 2008/09 and 2016/17.

In August 2016, then Housing NZ Minister, Bill English, admitted on that the meth-testing standards were unsound;

“Now, the test as I understand it, indicates the presence of any P at all which may be a very low health risk.

According to that guideline they should not be moving people into houses where there is P contamination.

It would certainly help housing New Zealand if the scientists applied themselves to coming up with a new guideline.

We would hope that within a few months there will be a standard that all the scientists regard as more appropriate. In the meantime, Housing New Zealand are doing their best to ensure that they don’t inconvenience tenants any more than is necessary.”

Housing NZ tenants weren’t just ” inconvenienced”. They lost their homes; had their possessions illegally destroyed; and were forced to pay reparations for unnecessary clean-up costs.

This was the full force of the State used against the most vulnerable people in our society.

Mr Bridges should try apologising again. This time, not for “the advice we got was wrong”.

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-Frank Macskasy

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(Address and phone number supplied)

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The “Clayton’s Apology”

The apology you’re giving when you’re not giving an apology.

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References

Radio NZ: ‘I’m sorry the advice we got was wrong’ – Simon Bridges

NZ Herald: HNZ boss Andrew McKenzie apologises to tenants evicted because of wrong meth guidelines

Radio NZ: English calls for more specific housing meth tests

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2016/17

Wikipedia: Claytons

Acknowledgement for cartoon

The Spinoff: The Side Eye – Renting in NZ means always moving out and never moving up

Additional

Radio NZ: Meth house contamination debunked by PM’s science advisor

Previous related blogposts

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 23 June 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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What I want for Christmas…

29 December 2017 Leave a comment

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Now is the time of the year when we send in  requests to that mysterious red-garbed being at the north pole for ‘goodies’ of one sort or another.

This is my belated wish-list of gifts. But not gifts for myself. These are gifts for the whole of New Zealand…

Housing for all

As the Coalition’s Associate Finance Minister, David Parker recently stated;

“I have a pretty simple view of this. I don’t think that it should be an international market for houses. I think local homes are to live in.

They shouldn’t be commodities that we trade internationally. I think just about everyone who’s a foreign person buying into New Zealand – they’re a very, very wealthy one-percenter if you like. And I think that’s one of the excesses of global capital when you allow those sorts of interests to influence your local housing market.”

The majority of New Zealanders would agree with him.

Even our former pony-tail-pulling Dear Leader, John Key, was moved to lament seven years ago;

“Now, that’s a challenging issue given the state of the current law and quite clearly it’s evidentially possible and has been achieved that individual farms can be sold. Looking four, five, ten years into the future I’d hate to see New Zealanders as tenants in their own country and that is a risk I think if we sell out our entire productive base, so that’s something the Government will have to consider.”

Granted that he was referring to selling farms to foreign investors, but the same holds equally true for residential property. We literally could become “tenants in our own country” if housing is allowed to be a commodity traded by investor-speculators. Especially without hindrances such as Stamp Duty or Capital Gains Tax. In effect, our housing becomes the plaything of the wealthy, with our children becoming increasingly locked out of ever owning their own home.

Even domestic investor-speculators are having a deleterious effect on home ownership. As recently as March this year (2017) the Property Investors Club revealed that “Auckland investors account for a 43% share of all sales [and] first home buyers have dropped back to a low of 19%“.

When I open up the Christmas gift labelled “Housing”, I find;

  • A capital gains tax, excluding the family home, set at the corporate tax rate of 28%. Rentals are a business; we should tax them as such.
  • An increase of State Housing of at least ten thousand units.
  • Labour’s “Kiwibuild” policy taking off  like a rocket and providing affordable homes for all first-home buyers.
  • Entrenching Housing NZ  in legislation as a public service rather than an SOE; banning dividends or any other transfers from HNZ to central government; reinvest any gst paid by HNZ back into HNZ; banning sales of existing housing; guaranteeing tenancy for all families where children and/or young adults under 21 reside in the home.

Free education for all

One of the greatest scams sold to New Zealanders is that education is a “private benefit” and therefore should be paid for (at least in part) by young people.

This was never the case for Tories such as John Key, Steven Joyce, Paula Bennett, Judith Collins, Bill English, et al. Their university tuition was mostly free, courtesy of the State.

An educated population presented solely as a “private benefit” ignores the counter-factual; an un-educated population would be severely handicapped economically, socially, technologically and marked with deprivation on every level.

As a mind-experiment, imagine if every doctor, nurse,  and dentist remained in New Zealand after graduation, and in doing so, their debt was wiped. Who would benefit? Answer:

(a) doctors, nurses, and dentists,who would have no massive debts hanging over them

(b) the public, who would  enjoy their services

(c) central government, which would receive  doctors, nurses, and dentists’ taxation.

Now imagine if those same doctors, nurses, and dentists, all emigrated. Imagine if we were left with not one doctor, nurse,  and dentist in the country. Who would benefit? Who would lose out? Answer:

(a)  Losing out: the public, which would be deprived of their services

(b)  Losing out: central government, deprived of their taxation

(c)  Losing out: the entire country, as the economy, life-expectancies, child mortality, etc, all took a giant leap backwards

(d) Doctors, nurses, and dentists, who would still have massive debts hanging over them.

It’s abundantly clear that an educated population is not primarily a private benefit. It is a collective benefit that allows an entire society and nation to progress.

We used to have (near-)free tertiary education for those who wanted it – with a student allowance thrown in.

Then we had Rogernomics; seven tax cuts; and ended up with over $15 billion in student debt. High student debt has forced many graduates to go overseas. The previous National regime even implemented a policy arresting so-called “loan defaulters” at the border;

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This is the craziness  we have arrived at: making criminals of young people for not paying for a service that John Key, Steven Joyce, Paula Bennett, Judith Collins, Bill English, et al, enjoyed for free.

And like a frog in a steadily heating pan of water, this craziness has grown incrementally until New Zealanders have have accepted this state of craziness as “the norm”.

It is not normal. It is as far removed from normal as one can get without permanent residency in the local psych unit.

I open the second Christmas gift. This one is labelled “Education”. In it, I find;

  • Fully funded Early Childhood Education; Primary Schools, and Secondary Schools. All school “donations” are dropped.
  • Increases to Vote Education funding is tagged to inflation/cost-of-living increases.
  • The mandate for  salary increases for teachers is handed to the Remuneration Authority, and is automatically double that of MP salary increases.
  • All university and polytech education is free-to-user.
  • All current student debt is wiped.
  • All criminal convictions for loan defaulters are wiped and their legal fees reimbursed.
  • All student debt amounts paid by graduates become a tax credit. Eg; a graduate having paid $30,000  in debt (including interest) will have a tax credit of the same amount. (An exception being those graduates who voted National and/or ACT. Their debt will be doubled. After all, they support user-pays. Let’s not disappoint them.)

Free breakfasts and lunches in schools

Europe does it. Sweden, Finland, Estonia, UK, Scotland,  and even India does it. They provide varying levels of free meals  for children at school.

The benefits are obvious; healthy meals are provide to all children regardless of social status or class origins. There is no stigmatisation as “coming from a poor family” when everyone is provided with the same service.

Child Poverty Action Group (CPAG) wrote in their 2011 report, “Hunger for Learning“;

Yet despite the ubiquity of food insecurity among students at Auckland’s decile 1 and 2 schools, children’s hunger is often portrayed as one of individual moral failure and stigmatised accordingly. (p17)

In all cases breakfasts were provided on a universal basis to all children who wanted one. Principals were very conscious of the stigma attached to targeted provision of meals, even in younger children. For schools working to build trust between themselves and the community principals felt that universal provision sent a message that children and parents would not be judged. (p24)

Anscombe (2009) notes that in the New Zealand context some schools  do not want to be seen as needing to feed children because of the stigma attached to low-decile schools. (p28)

The key argument against free provision is that it takes away parents’ responsibility to provide basics for children. Yet, as this report makes clear,  many families cannot afford to provide adequate nutrition for their children, and also, targeting risks stigmatisation, and it is clear from the interviews conducted for this report that this becomes evident in children well before they leave primary school. Stigmatisation risks missing children that need help (Sheridan, 2001). (p29)

In its estimate of the cost of food in schools in Scotland, the Scottish parliament made a number of observations pertinent to New Zealand. Among them were that a deregulated system led to poorer quality food, something the Scottish legislation sought to address; a universal system removes the stigma attached to targeted provision, improves take up and is cheaper to administer; universal provision helps build a healthy nation, and this was viewed as contributing to the economic, social and healthy wellbeing of Scotland as a whole; and nutritious school meals were recognised as lowering Scotland’s high rates of coronary heart disease, some cancers, and diabetes, and were seen as being of key importance for development and growth in childhood and adolescence (Sheridan, 2001, pp. 2-3). Other, more direct, savings included teacher time (teachers spend time teaching rather than trying to deal with disruptive behaviour) and savings associated with improved attendance. (p36)

One fact we are all fully cognisant of is that the moralising Right are only too willing and quick to jump on a soapbox and judge poor families for not feeding their children. The constantly parroted rhetoric is “can’t afford to feed them, don’t have them” – a subtle code  advocating class eugenics, and attempting to deflect from the real social problems we face.

Make school meals – like superannuation and hospitals – universally free, and that stigma vanishes because everyone’s children is treated equally.

After all, if it was good enough for former Social Welfare Minister, Paula Bennett,  to refuse to  measure poverty

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…then it should be good enough not to measure which children should or should not qualify for free breakfasts and lunches in our Primary and Secondary schools.

I open my third gift, and it contains;

  • Free healthy, nutritious breakfast and lunch for every child in New Zealand.

Orphan medicines for all who need them

In the last few years I have reported on a small number of New Zealanders who have been denied life-saving medication because PHARMAC has insifficient funding to pay for these expensive drugs. Medication for diseases such as Acid Maltase deficiency, or Pompe Disease, are not funded and sufferers either have to pay huge sums – or slowly perish.

NZORD, the New Zealand Organisation for Rare Disorders, has repeatedly called for PHARMAC to fully-funded orphan drugs for rare conditions.

In August 2013, this blogger reported;

At a seminar in Wellington, Labour’s Health spokesperson, Annette King, announced her Party’s new policy to create a new fund for purchasing so-called “orphan drugs” – medicines – for rare diseases.

Labour’s new policy marks a turning point in the critical problem of “orphan drugs” which are not funded by PHARMAC, but which are a matter of life and death for people suffering rare diseases.

Ms King announced Labour Party policy on the issue of orphan drugs and the problem of lack of funding;

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Annette King orphan drugs NZORD seminar

Health Spokesperson, Annette King, Wellington, 1 August 2013 – NZORD seminar

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“So one of the things that would need to happen soon after an election would be the establishment of on implementation working group, which could be made up of clinicians; of patients; of community representations, and others,  to put in place the details and work on the criteria for access. I do believe that in separating the funding and operation of the orphan drugs policy from PHARMAC. It will let them get on with doing what they do really well, and I think in some ways it will free them to get the best they can for the most of us who don’t need special medicines. But it will mean that for those who have rare disorders, that there will be a fund around that.”

Ms King was advocating a separately-funded body that would over-see orphan drugs for rare diseases.

However, it has become apparent that budgetary constraints and fiscal time-bombs left by the previous, incompetant National government have put Labour’s policy in doubt.

Instead, the new Coalition government is faced with unfunded budget-blow-outs such as new frigates for the NZ Navy;

The cost of upgrading two of the navy’s frigates has blown out again – this time by $148 million. The project – originally estimated to cost $374-million – will now cost $639 million.

This, on top of an eye-watering, jaw-dropping $20 billion “investment plan”  for New Zealand’s military. The Fairfax article appeared to parrot the previous government’s spin with these opening paragraphs;

The Government for the first time has confirmed New Zealand is capable of launching its own cyber attacks as a deterrent to cyber terrorism.

It’s unveiled a $20 billion investment plan in defence force capability, which will see the military establish a new cyber support capability, bolster intelligence units and digitise the army on the battlefield, giving it network enabled navigation and communications systems.

Only further down the story was it revealed that the $20 billion would be spent on new warships, aircraft, and other military paraphernalia.

Meanwhile, health budgets are stretched with PHARMAC unable to afford life-saving medicines.

The next gift to be opened;

  • “orphan drugs” funded for all who desperately need them

There are many other gifts to be opened, but one particular one caught my eye. This one had no cost to it. It was totally, utterly free-of-charge…

Kiwi fairness

Wrapped up in plain brown paper,  and put away in a dusty attic somewhere for the past thirty years, is a little box. It appears unassuming and unremarkable.

Except…

It contains the most precious gift of all; our notion of Kiwi fairness; our identity of caring for others. We had it once, in abundance. We even used to march for it in our streets, for fairness, justice, and peace in far away countries.

In South Africa;

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In South East Asia;

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Even in our own backyard;

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Wouldn’t it be refreshing if those 1,152,075 New Zealanders who voted for National in September this year, thought more of homelessness; child poverty; polluted rivers and lakes; under-funded hospitals, medicines, and mental health services; mounting student debt on our children, etc  – than for their bloated property values?

Wouldn’t it be better for us as a society if our distorted sense of hyper-Individualism – that bratty spoiled ‘child’ of  neo-liberalism and globalisation,  was pared back, and the needs of our communities put first and foremost?

The last gift I open;

  • The Kiwi identity of a fair go for all.

Without it, nothing else can be achieved. Perhaps that one is the most important of all.

A very Merry Christmas, festive season, happy new year, and family time for all,

irrespective of how you may choose to celebrate it.

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References

NBR: Foreign Buyer Ban – it’s the enforcement, stupid

NZ Herald:  PM warns against Kiwis becoming ‘tenants’

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

Labour Party:  Our plan to start fixing the housing crisis

NZ Herald:  Student loan debt – 728,000 people owe nearly $15 billion

Fairfax media:  Kiwi lawyer comes home from UK to find $16,000 student loan grown to $85,000

NZ Herald:  Woman arrested at airport over student loan debt

NZ Herald:  Third person arrested at the border over student loan debt, as Govt ramps up crackdown on borrowers

NZ Herald:  Student loan debtor arrested at border, more warrants sought

Radio NZ: Two dozen prosecuted for defaulting on student loans

Child Poverty Action Group: Hunger for Learning

NZ Herald:  Bennett slammed over child poverty claim

National Party:  29 fiscal time-bombs waiting to blow

Radio NZ:  Navy budget blowout – ‘Our sailors aren’t safe’ – Ron Mark (audio)

Fairfax media:  Defence White Paper – Government unveils $20b defence plan for new planes, boats and cyber security

Electoral Commission:  2017 General Election – Official Result

Additional

Bay of Plenty Times:  Inside Story – The student loan effect

Previous related blogposts

Terminal disease sufferer appeals to John Key (12 Nov 2012)

Terminal disease sufferer appeals to John Key – Update & more questions (28 Nov 2012)

Health Minister circumvents law to fulfill 2008 election bribe? (18 Dec 2012)

Johnny’s Report Card – National Standards Assessment – Compassion (9 Jan 2013)

“There’s always an issue of money but we can find money for the right projects” – John Key (20 Jan 2013)

“One should judge a society by how it looks after the sick and vulnerable” – part tahi (4 March 2013)

“One should judge a society by how it looks after the sick and vulnerable” – part rua (4 March 2013)

“One should judge a society by how it looks after the sick and vulnerable” – part toru (4 March 2013)

Opposition parties work together on “orphan drugs” (part wha) (10 Aug 2013)

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homeless families living in a car cartoon

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This blogpost was first published on The Daily Blog on 24 December 2017.

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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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= fs =

“Spinning” in a post-truth era

18 August 2016 3 comments

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ministry-of-truth-update

 

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Two recent media stories, on two utterly disparate issues, were clear examples of how tax-payer funded media “spin doctors” were guiding government ministers to respond to questions in a certain way.

Two interviews; two ministers; both on Radio New Zealand’s ‘Morning Report‘ – and both interviews left the audience none-the-wiser afterwards.

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“Guidelines”

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The first, on 5 August, featured Finance  and Social Housing Minister, Bill English, defending Housing NZ’s use of flawed testing regimes for methamphetamine-use in state housing.

On 20 June this year, Housing NZ admitted that the current testing for methamphetamine use (smoking)  was flawed;

“…The current standard guidelines were written to address meth ‘cooking’ and not use, meaning they are not entirely suitable for the contamination that occurs through use of meth.

The Ministry of Health guidelines were written a while ago. At that time it wasn’t perceived that consumption would be at the levels that it has reached. For this reason the guidelines do not cover all they need to.”

Drug Foundation executive director, Ross Bell, was scathing;

“I think they’re out of control…

[…]

I don’t know how they can justify that. Housing New Zealand has spent over $20 million in the last financial year doing these tests and these cleanups. Knowing that these are flawed the minister should step in and stop taxpayers’ money being wasted and vulnerable people being punished.”

Despite the testing regime  – which TVNZ’s  ‘Fair Go‘ programme used to “detect” methamphetamine on bank-notes – “not fit for purpose”, Housing NZ has continued to use the flawed guidelines to evict tenants;

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Expert questions meth contamination evictions

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Housing NZ Minister, Bill English, agreed that the testing for methamphetamine was flawed;

“They’re operating to a Ministry of Health guideline which I understand is internationally standard, but is regarded as not quite appropriate, particularly for dealing for use of P in houses…

[…]

Now, the test as I understand it, indicates the presence of any P at all which may be a very low health risk.”

The interesting aspect to Radio NZ’s Susie Ferguson’s interview with Minister English was not that he disagreed with the premise that the P testing regime  was flawed. He gave a straight answer to Ms Ferguson’s question;

Susie Ferguson: “Are these tests fit for purpose?”

Bill English: “Ah, no. And Housing NZ have said that.”

English then spent the next seven minutes defending the flawed testing regime.

In part of his interview, the “g”-word became glaringly  prominent;

“Housing New Zealand is in the position where there is currently a moh guideline, you can’t just wish that away – Housing New Zealand are not health experts.

Ministry of Health stand by the guideline, and the Ministry of Health are the statutory organisation that promulgates the guideline.

I think everyone involved with this is frustrated, I suppose except for the scientists that gave us the guideline in the first place.”

It is obvious what phrase English’s media spin-doctors told him to stay “on-message”.

He referred to “guidelines” no less than sixteen times within those seven minutes.

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“Technical matters”

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On 8 August, in an unrelated matter, our esteemed Dear Leader, John Key, was interviewed over  China’s threats to launch a trade war if New Zealand investigated cheap imports/dumping of sub-standard Chinese steel.

As Vernon Small described the situation on 4 August, in the Dominion Post;

Now let’s see if we’ve got this right.

In early June Chinese officials find a type of fungus (Neofabraea actinidiae) on board a bunch of kiwifruit heading into the country.

Nothing much happens.

Then in early July a message is passed, through back channels, to Zespri and Fonterra (and potentially other primary producers) that China is extremely peeved that a complaint has been laid about the potential dumping of cheap Chinese steel in our market.

A steel inquiry by regulators here could lead to the imposition of non-tariff barriers that could slow down our exports, the warning suggests. And, what’s more, China is angry that the complaint was even accepted for consideration by the Ministry of Business, Innovation and Employment (MBIE).

After some to-ing and fro-ing, China officially denies it draws a link between a potential steel-dumping inquiry and sales of our food products. The various New Zealand agencies and exporters chant in unison that it is an “unsubstantiated rumour” that such a link had been made.

Trade Minister Todd McClay at first tries to dismiss media reports as reflecting a single low-level source talking to Zespri. But he later back tracks and apologises to Prime Minister John Key and concedes the Zespri warning was not all. In fact, there had been “discussions and limited correspondence over the past few months as the Ministry of Foreign Affairs and Trade has endeavoured to assess the veracity of these reports”. But in the end they were not verified.

[…]

On July 22, Zespri said it had experienced no problems. 

But on July 29, just a few weeks after the initial “warning” – and right in sync with that warning –  Chinese border agencies impose non-tariff barriers, involving a risk notification and strengthened inspection and quarantine processes, on our kiwifruit.

Zespri says their unwelcome fungal friend does not affect food safety and is not a pathogen. It exists in several countries, including New Zealand, Australia, Holland, the United States and Ecuador – and potentially China itself, the home of the chinese gooseberry to which the noble kiwifruit is whakapapa.

But in contrast with Zespri’s relatively sanguine view, the Chinese notice from the AQSIQ, the General Administration of Quality Supervision, Inspection and Quarantine, describes Mr and Mrs Neofabraea actinidiae in very unflattering terms as a “rot pathogen” and a “major disease” that could infect other fruit such as apples and persimmons, thus inflicting “serious economic loss”.

It saying the fungus hails from New Zealand and Australia – the targets of Chinese suspicions that we are acting in league with Uncle Sam.

And through it all ministers and Zespri are ruling out any link to the “unsubstantiated” trade threat.  “China throws up these non-tariff barriers all the time” is the tenor of the message emanating from the Beehive. Nothing to see here.

(The full text of Vernon Small’s analysis is worth reading, and reminiscent of the sort of critical journalistic insights that we used to have in abundance in the Fourth Estate, and which could ultimately do great harm to an encumbent government’s reputation.)

On Radio NZ’s Morning Report, on 8 August, Guyon Espiner interviewed our esteemed Dear Leader on China’s blocking of our kiwifruit exports.

Key’s responses to Espiner’s questions were a tribute to the Prime Minister’s media spin-doctors. Throughout the entire four and a half minutes interview, Key stayed on-message, referring to the blocking of Zespri’s export as “a technical issue“.

The phrase “technical issue” was used three times.

Other answers given were verbose – but not very enlightening for the listener;

Espiner: “Did he [Todd McClay] tell the truth about that, though?

Key: “Yeah, he did, but he was-“

Espiner: “You said he was dancing on the head of a pin.”

Key: “He was very specific in the answer that he gave to a very specific question.”

Espiner: “He was misleading, wasn’t he?”

Key: “Well, I just think, in our business the problem is that even though often a journalist will ask me a direct and specific question, you really know they’re  asking a broader question. And it’s kind of tidier if you can at least give a, give them [a] more fulsome answer.”

So according to Key, if “a journalist will ask… a direct and specific question, you really know they’re  asking a broader question“?

This was quintessential Key silly-speak for “Yes, Todd McClay lied”.

The curious aspect to Key’s “spun” answers is that Guyon Espiner – a seasoned journalist of the calibre of Lisa Owen, Kim Hill, Simon Walker, et al – allowed Key to make his specious drivel unchallenged.

At the very least, Espiner should have challenged Key of his references to “technical matters” with the simple question,

“Prime Minister, is the phrase “technical matters” the on-message phrase you’ve been told to use?”

Key would have responded with a resounding “No, of course not!”.

But that would have blown that phrase out of the water from that point on in the interview. The carefully ‘spun’ message crafted by his spin-doctors would have been rendered neutralised, and Key would have had to rely on other answers to Espiner’s probing. Perhaps even something approaching the truth.

The best way to counter “spin” is to clearly identify it as such.

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Shades of Bill Birch

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In 1991, when former Finance Minister, Bill Birch, was promoting the Employment Contracts Bill to the New Zealand public and media, his constant mantra was that it would “raise real wages”;

” The challenge New Zealand faces in industrial relations is to create an environment that delivers high productivity, high income and high employment.”

The promise of “higher wages” was an attempt to justify  the de-unionised, laissez-faire bargaining aspects of the Employment Contracts Act (later passed into law as an Act of Parliament).

But such was not to be. As economist, Andrew Morrison, reported for the  Parliamentary Library in 1996;

“The content of employment contracts has also changed. There are more flexible work practices, greater multi-skilling and increased use of performance pay. Rates for overtime and penal rates have dropped.

[…]

Econometric work shows the ECA as having had no significant effect on the aggregate level of wages. There may have been some deterioration in working conditions, however evidence is not clear-cut.”

Birch’s claims of the ECA “raising wages” were utterly bogus of course.

In reality, the Act increased wages for a few – but either froze or reduced wages for the majority, as Morrison pointed out.

It was the first occassion when this blogger noticed an oft-repeated phrase used by a politician to promote a wildly unpopular piece of legislation. It may have been one of the first (?) uses of ‘spin’ in such a context (as opposed to mis-use of information or outright lies).

In 1991, the “raising wages” mantra was not challenged in any meaningful way (that this blogger can recall).

A quarter of a century later, we still seem to have a problem with political ‘spin’.

The scary thing is, that our elected representatives don’t really seem perturbed that we recognise their ‘spin’ for what it is. In a post-truth environment, it seems to be the “new norm”.

As Andrea Vance wrote in an opinion piece on 1 July;

Politicians are now playing a game in which it’s up to their opponents to fact-check, to catch out their lies. (“People have had enough of experts,” as British Tory leadership hopeful Michael Gove put it.)

They presume media and the voters should accept what they say as fact.

Earlier this week, Trump’s supporter Jeffrey Lord dismissed this “fact-checking business” as an “elitist, media-type thing”.

People only care about “what the candidates say”, he added.

But if what the candidates say are bare-faced lies…then where does that leave us?

Indeed, where does that leave us?

Perhaps needing new standards for political honesty?

We can call them “guidelines“.

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References

Radio NZ: Drug Foundation critical of meth contamination evictions

Housing NZ: HNZ supports new meth standards committee

Radio NZ: English calls for more specific housing meth tests

Radio NZ: Expert questions meth contamination evictions

Radio NZ: NZ braces for effects on Zespri’s halt of kiwifruit exports

Fairfax media: China’s attack on kiwifruit after trade reprisal warning ‘just a coincidence’

Radio NZ: NZ braces for effects on Zespri’s halt of kiwifruit exports

Parliamentary Library: The Employment Contracts Act and its Economic Impact – Andrew Morrison, Economist (November 1996)

Otago.ac.nz: Labour’s Labour Relations

Additional

TV1 News: A post-truth era in politics

TV1 News: Perhaps the Government might want to say sorry

Radio NZ: Is a ‘post-truth’ era upon us?

Radio NZ: Give facts a chance

Previous related blogposts

Military ‘spin-doctoring’ – the media catch-up

The Art of ‘Spin’

Paula Bennett on unemployment: spin baby, spin!

The Dark Art of ‘Spin’ – How It’s Done

The Dark Art of ‘Spin’ – How It’s Done (Part #Rua)

When spin doctors go bad

“Spin me a conspiracy”, said Dear Leader!

“Spin me a brain exchange”, said Dear Leader!

National Party spin on Aaron Gilmore and MMP

National spins BS to undermine Labour’s Capital Gains Tax

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

The Mendacities of Mr English – Fibbing from Finance Minister confirmed

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quick it's an emergency - spin doctors

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This blogpost was first published on The Daily Blog on 13 August 2016.

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Rebuilding the Country we grew up in – Little’s Big Task ahead

17 July 2016 1 comment

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1949-state-house-in-taita b

 

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2007: John Key says Housing is in crisis

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On 20 August 2007, National’s new leader, John Key, made a stirring speech to the  Auckland branch of the New Zealand Contractors Federation. In it, he lambasted 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.”

(Hat-tip: Bert)

In 2007, Key described “home affordability and ownership” as a “crisis”.

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2016: John Key says Housing is a more like a “challenge”

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Almost exactly five years, one of my first blogposts involved the looming housing crisis. On 3 August, 2011, I wrote;

The shortage of state housing is a serious matter, though. This critical problem of decent, affordable housing is not helped by the fact that the Fourth National government (1996-1999) sold around 13,000 State Houses in the 1990s.  These properties were supposedly made available to tenants – but actually went mostly to property speculators (who later sold them for tax-free capital gains).

When Labour was elected to power in November 1999, they immediatly placed a moratorium on the sale of state housing. According to HNZ, they currently ” own or manage more than 66,000 properties throughout the country, including about 1,500 homes used by community groups”

This government has re-instated the sale of state houses.  It does not take rocket science to work out that selling of state housing reduces the availability of housing stock.   Housing Minister Phil Heatley said that,

“… about 40,000 of the 69,000 state house stock will be available for sale,”  but then added,  “that the vast majority of tenants do not earn enough to be required to pay market rent means relatively few will be in a position to buy“. (Source.)

There seems to be nothing stopping tenants from buying their state house and immediatly on-selling it to a Third Party.

Is it any wonder that the shortage of state housing is not being addressed in any meaningful way?

That was five years ago.

The housing crisis appears to have only recent dawned on National ministers. As Social Housing Minister, Paula Bennett  said on 25 May this year;

“Certainly what we’ve seen is it has been more acute in the last two years.”

It is most certainly not a recent problem.  It is only “new” if you are a well-paid National minister, living in a tax-payer-funded residence.

In my blogpost five years ago, I offered a solution to the housing crisis confronting this country;

Solution: build more houses.

This may seem like a ‘flippant’ answer to a desperate problem – but it is not.

The building of 10,000 new state houses may seem an outrageously expensive idea.  But it would address at least three pressing problems in our economy and society;

1. Persistantly high unemployment.

2. Low growth.

3. Inadequate housing for the poorest of our fellow New Zealanders.

At an average housing cost of $257,085 (calculated at DBH website @ $1,773/m for a 145 square metre, small house), the cost (excluding land) is $2.57 billion dollars,  including GST (approximate estimate).

By contrast, the October 2010 tax cuts gave $2.5 billion to the top 10% of income earners.

For roughly the cost of last year’s tax cuts, we could have embarked on a crash building-programme to construct ten thousand new dwellings in this country. …]

It would be a boom-time, as two and a half billion dollars was spent on products and services.

Would it actually end up costing taxpayers $2.57 billion dollars? The answer is ‘no’.  Government would actually re-coup much of that initial outlay through;

  • gst
  • paye
  • other taxes
  • reduced spending on welfare for unemployed
  • and investment re-couped by rent paid for new rentals

Would it work?

Yes, it would.  An NZIER survey expects a strong pick-up in 2013 when the rebuilding phase hits full-flight, with 3.9% annual growth predicted from a previous forecast of 2.6%.

[…]

There is no reason why a determined government cannot adopt a bold programme for economic growth.

Instead of borrowing to pay for tax cuts we can ill afford, we should be investing in jobs.  The rest will almost invariably take care of itself.

We have the resources. We have the money. We have the demand for new housing. What else is missing?

The will to do it.

National has been half-hearted in it’s will to address this crisis. It has implemented a few lukewarm, ad hoc measures, but they are five years too late and too little.

Some of National’s announcements have been panic-driven;

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Paula Bennett announces plan to offer $5,000 to homeless Aucklanders - interest

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At other times, National has indulged in it’s favourite past-time of “blame-gaming”;

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housing crisis - national - blame game

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By 2016, under Key’s watch, homelessness has increased; housing affordability has worsened, and home ownership has plummeted. Our esteemed Dear Leader no longer calls it a “crisis“. It is now just a “challenge“;

“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.”

Make no mistake, this is a direct consequence of National’s laissez-faire approach and an opportunistic reliance on mass immigration to keep the economy afloat at a time when dairying is no longer the main driver of economic growth.

By any definition, National’s “hands off” approach to housing – whether social housing for the poor or affordable housing for the Middle Classes – has been an abject failure.

The mood for change has never been as palpable since the dying days of the Shipley-led National government in 1999.

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The Labour Response

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On 10 July, Labour leader Andrew Little congratulated Labour on it’s 100th year birthday. He also put the boot firmly and fairly up National’s backside for it’s hopeless track record on housing.

If the supply of food were in short-supply and expensive as is housing for poor and middle-class New Zealanders, there would be rioting in the streets by now. By morning there would be a revolutionary government sitting in the Ninth Floor of the Beehive and Key and his ministerial cronies would be in hiding, exile, or under arrest.

Little began with a brief, but accurate refresher course in New Zealand history;

“We’re here to celebrate Labour’s creation of the welfare state, the achievements of widespread home ownership and the creation of state housing, a free health system and a free education system.

In short, we celebrate the building of a nation.

We celebrate and we remember the image of Michael Joseph Savage carrying the very first furniture into the very first state house.

Offering hope to people that the years of depression were over and there were brighter days ahead.

We’re here to celebrate the beginning of the reconciliation between Maori and Pakeha and the restoration of the mana of the Treaty of Waitangi.

We’re celebrating the decision to make New Zealand nuclear free. We celebrate the courage shown by thousands of New Zealanders who marched against the Springbok Tour.

We’re celebrating KiwiBank. Kiwisaver. Working for Families. The Cullen Fund.

We celebrate Homosexual Law Reform and we remember the scene of the packed galleries in Parliament rising in song after we passed Marriage Equality.

These are Labour achievements.

This is the legacy of our party.”

Little omitted Labour’s de-railing in the 1980s at the hands of a small cadre of Neo-liberal fifth columnists. They who delivered our country into the hands of  global finance. They who were the  authors of a failed economic experiment that caused generations of misery, and rewarded the top 10% with unearned wealth. They whose names will pass into history and be quietly forgotten.

This was a moment where Little – like his predecessor David Cunliffe –   turned his back on neo-liberalism and announced to the country that the experiment was over. Labour would take back the reigns of responsibility for ensuring housing for all;

“After eight years, this government’s lost touch.

And nowhere, nowhere, is this government more out of touch and out of ideas than on housing.

Housing is at the core of a good life.

It provides security and stability.

It helps families put down roots in their communities and save for retirement

It is one of the most common sources of capital for people setting up their own small business.

The ambition of widespread homeownership sits at the heart of our social contract. It is at the heart of the Kiwi Dream.

The promise that if you work hard and do the right thing, you can earn a place of your own.”

A few salient statistics drove home the worsening crisis to anyone who needed convincing;

“Since 2008, when this government came to office, the average house price in Auckland has nearly doubled.

But over the same period, incomes have increased by only 24%.

In the last year, house prices in Auckland have increased by $2600 a week.

Twenty six hundred dollars a week.

It’s crazy. How on earth do you save enough to keep up with that?

[…]

The proportion of Auckland houses being bought by investors has now reached 46% – around twice the level of first home buyers.”

Little went on to explain how the housing crisis went in tandem with other worsening social indicators;

“And then there is the hard edge of the crisis.

The rising poverty and homelessness that National turns a blind eye to.

We’ve all heard the stories of Kiwi kids admitted to hospitals with respiratory illnesses because the cold damp homes they have to live in are making them sick.

We’ve all seen the awful media reports in the last few weeks about what life is like for those who can’t find any home at all.

Of the 42,000 people living in overcrowded conditions or in garages or in cars.

Of children sleeping under bushes in South Auckland.

We’ve seen the story of the 11 year old girl, whose mother has a job, but whose family spent months living in a van before they were taken in by Te Puea Marae.

She said that the hardest part is actually not being able to read in the van, because you don’t have space. And there’s not much light because it would waste the battery.”

These are matters raised that Labour’s opponants on the Right cannot easily dismiss or explain away. These are real events from real New Zealanders living under the currently all-too-real neo-liberal system.

Increasing child poverty; income/wealth disparity; and a worsening housing crisis – all of which are the spawn of thirty years of neo-liberalism.

Those who maintain that poverty has deepened because the “market” has not been sufficiently de-regulated, nor government reduced, nor taxes sufficiently cut, need to ask themselves; “At what point does an experiment that is showing no signs of positive improvement have to be concluded as an abject failure”?

As Little demanded from the party-faithful;

“When did this become the New Zealand we lived in?”

Little then laid out what he called Labour’s comprehensive plan to take to the  election next year. He said that a Labour government would;

 

  • …urgently address the shortage of emergency housing – with $60 million to provide 1400 new beds in emergency accommodation – enough for 5100 extra people a year. With the existing support that will take the number of people helped each year to over 8,000.

 

  • …reform housing New Zealand – so that instead of being run like a corporation making a profit off the most vulnerable, we can invest hundreds of millions of dollars in building thousands of new, modern, high quality state houses instead.

 

  • …will build 100,000 new affordable homes to be on sold to first home buyers.

 

  • …will set up an Affordable Housing Authority to deliver ambitious new urban development projects, at scale and at pace. We are going to change the face of our towns and cities, and fix this housing crisis. The Authority will have a target to meet: 50% across all of the homes in its developments will have to be affordable. The Authority will look after the Government’s urban land holdings, and will make sure there is a pipeline of land for future needs – for housing, business, schools, parks and hospitals.

 

  • …ban offshore buyers from the market unless they are willing to build a new home and add to the stock..

 

  • …will extend the bright line test so that if you sell an investment property within five years, you’ll pay the full tax on it. That means the short term speculators won’t be able to get away tax free anymore. It means ending the tax incentives to speculate in short term property gains at the expense of families trying to get into a home.

 

  • …will begin consulting on how to end the loop hole of negative gearing.

 

Perhaps Labour’s most audacious plan is to set up a new “Affordable Housing Authority”.

If one reads his speech a certain way, he is planning on reviving a newer, 21st century version of the old Ministry of Works (which was privatised by National in late 1996.) If so, it could be the most direct  way to build houses for people in desperate need.

Considering that most of this country’s infra-structure was built by the old Ministry of Works (or similar state bodies), including the telecommunications systems being used to upload this blogpost onto this website, it would not be a far-stretch of the imagination that it could be done again.

If so, this wasn’t just a speech – it was a Manifesto for the Last Rites of Neo-liberalism.

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Property Investors throw their toys out of the cot

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The reactionary response from the NZ Property Investors Federation was utterly predictable. They were miffed. All of a sudden, their tax-free pot of gold was about to be denied to them

The Federation’s executive officer, Andrew King, bleated like a spoiled brat who had just been told to share his toys;

“In one part of his speech, he said there were homeless people and people living in overcrowded conditions and they wanted to do something about that.  How does making it harder to provide rental homes to these people achieve it? Unbelievable.”

It may have escaped King’s somewhat narrow-attention, but homelessness and over-crowding has worsened during the time that his members have enjoyed spectacular tax-free gains. What were they doing in the last eight years?

He also compared businesses, shares, and farms with housing;

“No other investment is like that. If you do the same with a farm, with shares, with a business, all of those wouldn’t be affected, just rental properties – it’s just wrong.”

Generally speaking, people do not live in “shares”,  “businesses”, or farm paddocks (yet). People live in houses. That is the critical difference.

On top of which, astronomical rents are directly contributing to homelessness and over-crowding;

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High Auckland rents forcing people onto the streets - Sallies

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So to whine that, all of a sudden, Labour’s housing policies will “ make it harder to provide rental homes to these [homeless] people” is contemptible.

His members should be held to account for their part in our housing crisis. The sooner that a capital gains tax is introduced at the same rate as New Zealand’s company tax (28 cents in the dollar), the better.

Mr King’s absurd “pity me” comments have crossed the borderline into territory commonly known as;

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hypocrisy definition

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National discovers Problem & Solution!

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Last year, as stories of homelessness; over-crowding; fewer available  Housing NZ homes; and worsening housing affordability began to make headlines around the country,  National was grabbing money from a government department tasked with caring for the most vulnerable people in our society;

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Housing NZ to pay Crown $118m dividend

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In all, National has raked in over half a billion dollars from Housing NZ;

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)

See more here: National’s blatant lies on Housing NZ dividends – The truth uncovered!

Labour took dividends as well, around a third of National’s figure. The difference between the two is that Labour builds State housing, whilst National continually flogs them off.

This amounts to looting a critical government organisation that is akin to thieving from a charity.

This year’s 2016 Budget indicated that Housing NZ would pay a  dividend  of $38 million  and $54 million next year, for 2017.

Twenty four hours after Andrew Little gave his speech to the country, Housing NZ suddenly announced no dividends would be paid for the next two years;

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RNZ - Housing NZ confirms it will not pay govt dividend

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Labour’s Grant Robertson offered his rationale for National’s policy U-Turn;

“The first we hear from National that they suddenly believe Housing New Zealand needs to retain that money to invest in state houses is the morning after an announcement by the Labour Party that Housing New Zealand will never be required [by Labour] to provide a dividend to the government.

This is not a coincidence, this is a panicked, desperate response from the government.

What we know is that National has extracted dividends from Housing New Zealand over recent years and it’s quite clear that National has seen Housing New Zealand as a cash cow in the past.”

Bill English refuted allegations that National was panicking over Labour’s housing announcement only 24 hours previously;

“It’s nothing to do with Labour and the Greens. This is a $20 billion entity – you don’t come up with capital plans for the next five years because Labour puts out a press release.”

He also denied that National was  looting Housing NZ;

“We don’t accept that taking the dividend is stealing from state housing, because the dividend is not the constraint on what gets built…

…If there was less dividend, we’d just put in more capital – it’s not driven by the availability of the cash.”

National takes money in the form of dividends and taxes  from Housing NZ – whilst non-government charities are tax-free? And he earnestly claims it is not “stealing”?!

English then issued the most ridiculous explanation ever heard, that the figures in this year’s May 26 Budget “appear to be based on older HNZ numbers dating from almost a year ago“.

Yeah, right, Bill.

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Is the Finance Minister really expecting New Zealanders to believe that the government’s May 2016 budget was full of inaccurate figures?

What is really galling is that Bill English, Steven Joyce, and other National Ministers expect us – the public – to believe this rubbish. It is revealing just how stupid they think we are.

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Who is in charge anyway?!

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Whenever National implements unpopular legislative changes, they often point to Labour having carried out similar policies.

In 2014, National “borrowed” Labour’s policy by implementing free health-care for children under 13.

Last year, National raised benefits by $25 (to take effect this year) for people on welfare.

This year, having their ‘hand forced’ by Labour’s housing policy, the Nats have cancelled dividends from Housing NZ for the next two years.

National seems to be highly influence by Labour.

Which  raises the question; who is actually setting policy and governing the country? Because it appears we almost have a de facto Labour Government pulling the strings.

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A Cautionary Note for Labour

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On TVNZ’s Q+A on 10 July, Corin Dann quizzed Andrew Little on Labour’s policy toward Housing NZ tenants. Corin  Dann specifically asked Little about whether or not tenants should have state houses for life;

Corin Dann: You talk about state houses – an extra thousand state houses. Does Labour believe that someone should have a state house for life?

Andrew Little: I think we think when people are in circumstances where they can’t afford to buy their own home, can’t afford to rent, they’ve got to have a home. They’ve got to have a home, get their life on track, underway.

Corin Dann: Do they have it for life?

Andrew Little: If they’re at a point in their life where their circumstances have changed, and actually, they can afford to buy, my view is I would rather work with them to get them to buy that house so we could then release some funds to build the next state house.

Corin Dann: So you keen National’s policy? They don’t keep them for life?

Andrew Little: Well, I don’t agree with the policy that says we’ll target elderly people on fixed incomes in a state house and see if we can toss them out. That’s not a solution to anything. But what I would say is people who have gone into a state house early, got their lives sorted out,…

Corin Dann: They should move on if they can.

Andrew Little: …the circumstances are right, if we can sell that house to them, why wouldn’t we? And use the funds then to build the next state house for the next vulnerable person.

Selling State houses to tenants is text-book privatisation policy for National, and was a prime plank for the Bolger and  Shipley-led governments in the  1990s.

It is a dangerous road for a Labour government to go down.

Selling a state house to a tenant may seem a kindly gesture from a  benevolent left-wing government.

But eventually a National-led government will be elected back into power. Their track record on selling State houses is evident and they would have no hesitation in taking a Labour policy of selling State housing to tenants and expanding on it.

This is thin-edge-of-the-wedge, slippery-slope stuff.

This is mis-guided to the extreme, and will provide a future right-wing government a ready-made policy to act upon. And not in a nice way.

If Labour is serious in returning to it’s social democratic roots, it would do well to think carefully before embarking on such a naive policy.

Instead, it should consider the following;

[1] Transience

Transience is one of the greatest problems affecting low-income, poverty-stricken families. Moving from one house to another is debilitating to such families – especially for children.

A government report states that transience for children can have extreme, negative impact on  their learning;

Nearly 3,700 students were recognised as transient during the 2014 year. Māori students were more likely to be transient than students in other ethnic groups.

[…]

Students need stability in their schooling in order to experience continuity, belonging and support so that they stay interested and engaged in learning.

All schools face the constant challenge of ensuring that students feel they belong and are encouraged to participate at school. When students arrive at a school part-way through a term or school year, having been at another school with different routines, this challenge may become greater.

Students have better outcomes if they do not move school regularly. There is good evidence that student transience has a negative impact on student outcomes, both in New Zealand and overseas. Research suggests that students who move home or school frequently are more likely to underachieve in formal education when compared with students that have a more stable school life. A recent study found that school movement had an even stronger effect on educational success than residential movement.

There is also evidence that transience can have negative effects on student behaviour, and on short term social and health experience

Encouraging families to stay long-term in State housing not only creates a sense of community amongst tenants; stability for fragile, vulnerable families,  but assists in the long-term stability and education of children.

Not only is a state house “for-life” fair, it provides real, tangible, long-term benefits.

[2] Guaranteed Tenancy

Low-income, vulnerable families in State housing must be given guaranteed, protected security-of-tenure.

Currently, tenants are exposed to the winds-of-change whenever there is a change in government. Their tenure is at the pleasure of right-wing governments, and mass-evictions have been commonplace under John Key’s administration;

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state housing insecurity

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A progressive government must do all within it’s power to protect such vulnerable families. Otherwise what is the point of throwing out right-wing regimes when their ideologically-driven policies no longer palatable, and well past their Use-By date?

Tenancies must be secured. Either by the use of long-term contracts, enforceable in Courts of law, or by some other means such as entrenched legislation.

Labour-led governments come and go.

But tenancies for our most vulnerable must be protected from the whims of others.

[3] State Housing Protected

As well as protection for tenants of state housing, state houses themselves must be entrenched and protected from the rapaciousness of right-wing governments.

In modern, First World societies, the power of contract is supposedly sacrosanct.

It should not be beyond a progressive government to use some means of contract-law to safe-guard state housing. Once this is accomplished, it should make it near-impossible for a right-wing regime to wreak havoc with the lives of the poor.

Perhaps it is time to look at how we can make the concept of contract-law work in the favour of those who have least wealth to lose.

There is much more work to be done.

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References

Scoop media: Key – Speech to New Zealand Contractors Federation

theyworkforyou.co.nz: State Houses—Sale and Disposal

NZ History: Construction and sale of state houses, 1938-2002

Housing NZ Corporation: Rent, Buy or Own – overview (archived page)

Beehive: State houses available to buy from today

TV1 News: First home buyers set to be disappointed with Budget

Department of Building & Housing: Estimated building costs (archived page)

Dominion Post: Inequality report ignores tax cuts for rich – Goff

NZIER: Home

TVNZ News: NZ economic outlook grim until 2013 – NZIER (archived page)

Interest.co.nz: Paula Bennett announces plan to offer $5,000 to homeless Aucklanders

Hive News: Hive News Tuesday – Key blames ‘Dirty Politics’ for lack of state house sale debate

Reuters: NZ Prime Minister says central bank should get on with housing measures

Parliament Today: Housing NZ’s Woes Blamed on Labour

TV3 News: Housing blame game flares up in Parliament

NewstalkZB: Govt accused of blaming Auckland Council for its own failings on housing

Sharechat: Key blames Labour for barrier to foreign buyer ban

Youtube: Bill English Blames Greens for Housing Crisis

Otago Daily Times: Homelessness increasing in NZ

NZ Herald: Auckland has the fifth least-affordable houses in the world

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

TV3 News: Key – No housing crisis, foreign buyers’ influence ‘minor’

Labour Party: Andrew Little’s Centenary policy speech

Treasury: Income from State Asset Sales as at May 2014

Fairfax media: Labour’s plan to tax property investors slammed as ‘attack’ on rental property providers

Radio NZ: High Auckland rents forcing people onto the streets – Sallies

IRD: Company Tax Rate

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

Radio NZ: Housing NZ confirms it will not pay govt dividend

Fairfax media: Bill English denies U-turn after Steven Joyce reveals Housing NZ won’t pay dividend

National Business Review:  Govt blames outdated Budget figures for Housing NZ dividend U-turn

Metro mag: Opinion – Is John Key the finest actor of his generation?

NZDoctor.co.nz: Free care for the under-13s features in growth Budget

Radio NZ: Welfare increases – what $25 buys you

TVNZ: Q+A – Corin Dann and Andrew Little (video)

TVNZ: Q+A – Corin Dann and Andrew Little (transcript)

Te Ara NZ Encyclopedia: Housing and government – Total Housing Stock

Education Counts: Transient students

Dominion Post: Housing policy will destabilise life for children

Fairfax media: State tenants face ‘high need’ review

NZ Herald: Elderly, disabled included in state house review

NZ Herald: State tenants to make way for workers

Previous related blogposts

Can we do it? Bloody oath we can!

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; 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?

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!

State house sell-off in Tauranga unravelling?

Upper Hutt residents mobilise to fight State House sell-off

Park-up in Wellington – People speaking against the scourge of homelessness

National and the Reserve Bank – at War!

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wheel estate

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This blogpost was first published on The Daily Blog on 12 July 2016.

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Upper Hutt residents mobilise to fight State House sell-off

10 June 2016 6 comments

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Upper Hutt, NZ, 4 June – Residents in a State housing community in Upper Hutt are continuing to mobilise to strengthen opposition to planned sell-off of Housing NZ vacant land, and planned further demolition of so-called “un-safe, earthquake-prone” State houses.

Following from previous meetings organised by local community worker and activist, Teresa Homan (pictured on right);

.housing nz - state house sell off - upper hutt (4)

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– read out a petition to Bill English that has been launched calling on the withdraw of public-owned land in Trentham, Upper Hutt, from sale to private developers.

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petition to bill english

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[A full copy of the petition form can be downloaded here]

Ms Homan said she had already been gathering signatures and was “pleasantly surprised” that only a few people had refused to sign it.

Ms Homan represents the St Joseph Parish Justice, Peace, and Development Group. She said that the vacant land they were standing on had recently been filled with State housing that were homes to several families. She said some of families may have been relocated to other State houses further away in Timberlea, or private rentals elsewhere, up-rooting children from their local schools and disrupting their established education and local connections to the community.

Transience is a well-recognised problem for low-income families, as they do not have guaranteed security-of-tenure. A 2010 Ministry of Justice “working document” referred to hardship for vulnerable families, including transience;

Barriers to engagement in services by “hard-to-reach” groups include service level or structural barriers (e.g. location, hours of operation, cost, lack of awareness about availability, lack of cultural responsiveness, and poor coordination between services), and barriers specific to families and their situations (e.g. transience, low literacy, physical or mental health issues, domestic violence, lack of transport, low income, negative perceptions of services, and generally chaotic lives).

There is good evidence about how policy-makers and service providers can address these barriers and improve engagement by those who are hard-to-reach.

Ms Homan said the buildings had been torn down, ostensibly because they were “earthquake prone”. She added that that bulldozers and other wrecking machinary had had difficulty in tearing down the structures.

The land was now for sale to private developers. There is no guarantee that social housing will be built on the site. Ms Homan said she was fearful that Housing NZ would be moving fast to sell the land. She said,

“This is about this local community, but it’s also about land that we own as the public of New Zealand. So, once it’s [public land] sold, it’s gone. And it’s not about not allowing people to have private ownership of land, but this land’s owned by the New Zealand public.

…I think we need to hold onto the land we have for those families that can’t afford private [rental] homes.”

Ms Homan said she had been in contact with Housing NZ and when asked if they had claimed the demolished houses were the “wrong size, wrong place”, she agreed that statement had been used. She said she had lodged an Official Information Act (OIA) request  seeking an explanation why the houses had been deemed “wrong size, wrong place”.

[See related story: State houses – “wrong place, wrong size”?]

One State house tenant, Wayne (pictured below,  in wheelchair) has been waiting for a new state house for four and a half years that is better suited to his disability and use of a wheelchair;

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housing nz - state house sell off - upper hutt (8)

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Wayne said that whilst he had ramped access to his home, and a wet-area in the bathroom, that the rooms in his house and doorways  were too small to accomodate his frame and wheelchair. He said he was waiting for an appointment with Upper Hutt mayor, Wayne Guppy, to discuss his case.

About twenty people from the local  community turned up for the petition launch;

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housing nz - state house sell off - upper hutt (2)

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Their signs publicised the concerns they felt at how Housing NZ and the National government were impacting on their lives;

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housing nz - state house sell off - upper hutt (5)

 

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One particular sign, bearing three simple words,  was hammered into the ground – a symbolic statement from the community to the National government and Housing NZ;

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housing nz - state house sell off - upper hutt (3)

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The size of the now-vacant land is considerable;

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housing nz - state house sell off - upper hutt (10)

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– especially when seen in conjunction with near-by properties;

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housing nz - state house sell off - upper hutt (11)

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Contrasting National Minister Paula Bennett’s recent announcement offering State house tenants $5,000 to leave Auckland, with the steady decline of state houses in the Hutt Valley, Rimutaka’s Labour MP, Chris Hipkins voiced his exasperation,

“So while the number of state houses in the Hutt Valley is shrinking, and people are being bumped off waiting lists because there aren’t enough houses available, the government have a genius idea to increase demand even further. This is just nuts.”

At a time of rising homelessness and on-going sell-off of Housing NZ homes and land, there is no indication that the National government is changing it’s policy-course. This is despite a recent public opinion poll which condemned National’s inaction of the worsening housing crisis;

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tv3-news-housing-poll

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Upper Hutt is just another community enjoying  National’s “Brighter Future”.

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References

Fairfax media: Answer to school transience needed

Ministry of Justice: Who is vulnerable or hard-to-reach in the provision of maternity, Well Child, and early parenting support services?

Radio NZ: $5000 moving grant ‘laughable’ without work

Upper Hutt Leader: HNZ land sell-off resisted

TV3 News: Government gets thumbs down on housing

Websites

Facebook: Upper Hutt State Houses 4 U

Facebook: Housing NZ Tenants Forum

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

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

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

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

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

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

Letter to Radio NZ – Homelessness, Poverty, and the Final Solution

State houses – “wrong place, wrong size”?

State house sell-off in Tauranga unravelling?

Other blogs

TangataWhenua.com: Veteran Activist hospitalised during removal of state houses (2012)

Copyright (c) Notice

All images stamped ‘fmacskasy.wordpress.com’ are freely available to be used, with following provisos,

» Use must be for non-commercial purposes.
» Where purpose of use is commercial, a donation to Child Poverty Action Group is requested.
» At all times, images must be used only in context, and not to denigrate individuals or groups.
» Acknowledgement of source is requested.

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This blogpost was first published on The Daily Blog on 5 June 2016.

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State house sell-off in Tauranga unravelling?

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State Houses – “Wrong place/wrong size”?

Last year (2015), National confirmed it’s intention to sell-off thousands of state houses to “community groups”;

Hundreds of state houses in Tauranga and Invercargill could be sold to independent providers in the first phase of the Government’s plans.

In January Prime Minister John Key announced that state house reforms would see up to 2000 state homes sold to “community housing providers” this year, as it cuts the number of state houses it owns by 8000 over three years.

Although the Government was marketing the process as “transfer” the houses would be sold to community groups, generally charity based providers. Because the houses would have to be kept as social housing rather than private sales, the houses were expected to be sold at a discount to the market value.

After nationwide consultation, Housing New Zealand Minister Bill English and Social Housing Minister Paula Bennett said that the first sales were likely to take place in Invercargill and Tauranga.

In a blogpost in November last year, I pointed out the oft-repeated phrase used by our esteemed dear Leader and various Ministers;

Various ministers, including our esteemed Dear Leader,  have indicated that up to “a third” of state houses are “in the wrong place or wrong size (or ‘type’).

The “wrong size/wrong place” claim is the argument used by National to advance a major sell-off of Housing NZ properties.

On 1 November, 2014, Social Housing Minister Paula Bennett said on TV3’s ‘The Nation’,

“It’s about being smart in what we’re doing. So you just look at us having the wrong houses, in the wrong place, of the wrong size..”

On 2 December, 2014, the Minister responsible for Housing NZ, Bill English expressed his agreement with the proposition of one third of Housing NZ homes being in the “wrong size/wrong place” ;

“Yes. As recently as just last month Housing New Zealand issued a press release that said: ‘around one third of our housing stock is in the wrong place, wrong configuration or is mismatched with future demand’.

[…]

… in fact, a third of them are the wrong size, in the wrong place, and in poor condition.”

On 28 January this year, John Key announced in his “state of the nation” speech;

 “Around a third of Housing New Zealand properties are in the wrong place, or are the wrong type to meet existing and future demand.”

After lodging an OIA request with relevant Ministers late last year information released under the  Act suggests that National’s oft-repeated claim that around “one third” ( or 22,000)  of  state houses are in the “wrong place and wrong size” was not wholly supported by Housing NZ’s own figures. As I reported last November;

Housing NZ currently  “manages 67,245 homes” (as at 30 June 2015). When Key, and other National ministers refer to “around a third of Housing NZ properties”, simple arithmetic translates that fraction into 22,190 homes being the “wrong size/wrong place” .

[…]

In a response eventually received on  29 October 2015,  information in the form of a  chart -“Stock reconciliation taking into account impaired properties as at 31 January 2013” – was attached;

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minister english oia response 29 october 2015 - HNZ housing stock - wrong place wrong size

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In two columns headed “Right Place, wrong home” and “Wrong Place“, the respective figures add up to 13,560. This constitutes a little over half of the “22,000” that is being bandied about by National.

Like much of National’s “facts”,  the numbers did not stack up.

Which led to the last question I put to the Minister; “If HNZ houses that are in the “wrong place” are sold/given away to community organisations – what will make those houses suddenly become in the “right place”?

Because if it’s in the “wrong place” when owned by Housing NZ – why would it suddenly be in the “right place” owned by someone else?

The Minister’s response was baffling. In his 29 October 2015 letter to me he said;

“The Government has no plans to offer Housing New Zealand properties that have been
identified as being in the ‘wrong place’ to community housing providers. In Tauranga and
Invercargill for example, the areas identified for initial potential transfers of social
housing properties from Housing New Zealand to community housing providers, MSD’s purchasing
intentions anticipate stable demand. Following a transfer, any new provider would receive
both the properties and a contract with MSD to continue to provide social housing.”

[See full text of letter here]

English’s response seemed to cast a distinction between State housing “in the wrong place/size” and properties to be sold/transferred to community organisations.

Yet, his statement above would appear to contradict a statement issued by English and Bennett earlier on 6 May last year, which is explained further below under the heading, “The Great Invercargill and Tauranga Sell-Off”.

See: State houses – “wrong place, wrong size”?

State Houses, “Wrong place/wrong size”? – Up-date

English’s responses to my questions were vague and offered little in the way of specific detail. In a follow-up letter to the Minister, I repeated two of my questions;

I refer you to two questions which you have not answered in my OIA request;

4. Where are they situated that are considered the “wrong place”?

5. How many areas have been designated “wrong places”?

His response arrived too late to be included in my November 2015 blogpost, but is still highly relevant to the growing housing crisis in this country. On 9 December 2015, English said;

“The analysis produced by Housing New Zealand  in 2013 and provided to you with my previous response [see table here – FM] identifies  the number of houses as being in the wrong place on a regional basis. No specific locations have been designated ‘wrong places’ and, based on this analysis, each region has some properties assessed as being in the wrong place. These will generally be in provincial  areas away from the main centres.”

[See full text of letter here]

In none of the Minister’s correspondence was he able to provide specifics as to where State houses were in the “wrong place”. The ‘best’ he could do was list five regions; Auckland East & South; Auckland North West & Central; South Island, Central North Island, and Lower North Island.

Surprisingly, Auckland was deemed to have  8,180 houses  that are supposedly “Right Place, wrong home”  and a further 420 that are in the “Wrong Place” – 8,600 in total.

However, the Minister’s data was contradicted by the 2014/15 Housing NZ Annual Report which confirmed the on-going high demand for housing in Auckland;

“Across the country we also have too many three-
bedroom properties, while demand has grown for smaller
one- or two-bedroom homes or for much bigger homes.
Demand for homes in the Auckland region is high and
more Housing New Zealand homes are needed.” (p22)

English did, however, point out that “these will generally be in provincial  areas away from the main centres“.

Even that has proven to be a mis-leading assertion from the Minister. Tauranga is certainly a “main centre” by most definitions, and the choice of that city would  prove to be embarrassing to National, as the next chapter below showed.

The Great Invercargill and Tauranga Sell-Off

As National began to roll  out it’s sale of State houses, Bill English specifically referred to State houses being sold in  Tauranga and Invercargill. On 6 May last year, Bennett and English released this statement;

“This is another important step to creating a more effective and efficient social housing sector with more housing providers supporting tenants and their needs.” – Housing New Zealand Minister Bill English.

As announced by the Prime Minister in January, the Government’s Social Housing Reform Programme includes plans to transfer 1000 – 2000 HNZC houses to registered CHPs over the next year.

“We’ve gone through a robust process to identify the first areas for potential transactions. Tauranga and Invercargill have been chosen because they have stable demand for social housing, and active community housing providers keen to consider the next steps. Providers in other regions are also interested.” – Social Housing Minister Paula Bennett

The same media statement referenced;

The Social Housing Reform Programme (SHRP) is designed to get more people in need into quality social housing – either through Housing New Zealand Corporation (HNZC) or registered Community Housing Providers (CHPs). The objectives of the Social Housing Reform Programme are to:

  • […]

  • Ensure social housing is the right design and size and is in the right places for people who need it.

English and Bennett continued to exploit the “wrong size/wrong place” spin that National was using to disguise the privatisation of State housing.

Bear in mind English’s statement in his 29 October 2015 letter to me, where he said;

“The Government has no plans to offer Housing New Zealand properties that have been
identified as being in the ‘wrong place’ to community housing providers. In Tauranga and
Invercargill for example, the areas identified for initial potential transfers of social
housing properties from Housing New Zealand to community housing providers, MSD’s purchasing
intentions anticipate stable demand. Following a transfer, any new provider would receive
both the properties and a contract with MSD to continue to provide social housing.”

Obviously the Ministers find it difficult to keep their “story” straight.

In March this year, potential buyers for State houses in Tauranga and Invercargill had been lined up;

Four potential buyers have made the final shortlist to buy over 1400 state houses being sold in Tauranga and Invercargill.

[…]

In Tauranga, Accessible Properties, Hapori Connect Tauranga, and Kaiana Community Housing Partners made the shortlist to take over 1124 properties or tenancies.

However, even as National’s English and Bennett were prepping State houses for sale, the country’s housing crisis began to be reported elsewhere throughout New Zealand.

Tauranga was one of them;

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Housing situation critical - Tauranga principal - radio nz

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Tauranga gripped by housing crisis - sunlive

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Housing crisis hits Tauranga, forcing families into garages and cars - TVNZ TV1 News

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Community leaders, social agencies call for urgency on 'housing crisis' - bay of plenty times

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People living in caravan parks while waiting for a rental - bay of plenty times

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Campsites for emergency housing debate - bay of plenty times

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People resorting to living in camping sites and caravan parks?

Is that what this country has come to after thirty years of neo-liberal “reforms”? To become a South Pacific version of America’s trailer-park “communities”?

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trailer park community USA

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If, by shuffling ownership of State houses from Housing NZ to “community groups”, National believes it will solve our housing crisis and growing homelessness – they are far more out of touch than I ever thought possible.

This is not just a stubborn pursuit of a free market dogma that has failed to meet basic social needs – this is pseudo-religious self-delusional behaviour from our elected representatives. English, Key, Bennett, Smith, et al, appear to be paralysed into inaction, like possums caught in the headlights of an approaching truck.

Nowhere is this better illustrated than Social Housing Minister Paula Bennett floundering around like a beached cetacean. She first denied that a housing crisis existed in New  Zealand on 20 May;

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No housing crisis in NZ - Paula Bennett - radio nz

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Five days later, she was willing to bribe homeless and State housing tenants up to $5,000 to quit Auckland, making  a sudden announcement that caught Finance Minister Bill English off-guard;

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Paula Bennett announces plan to offer $5,000 to homeless Aucklanders and state house tenants to leave Auckland

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I have said it before and will repeat my conclusions that National is incapable of resolving this crisis. Considerable State intervention is required, and that is anathema to a political party whose very DNA is based on the free market; reducing State involvement in commercial and social activities; and promoting private good over community benefit.

It will take a collective anger from New Zealanders to take notice of what is happening in their own society. At the moment, so many New Zealanders seem insulated from the  growing social problems that are worsening with each passing day.

As Shamubeel Eaqub said on Radio NZ’s Checkpoint, on 26 May, there is an absence of empathy amongst many New Zealanders – a moral-disconnect with the poor; the homeless; those who have been left behind after thirty years of failed neo-liberal theory.

Remarkably, Eaqub invoked the name of Michael Savage, when New Zealanders were capable of building and solving social ills. For an economist,  Eaqub has deep insight where we have arrived in the year 2016;

The only thing that’s missing now is aspiration and leadership,” he said.

Perhaps our economist friend has nailed the problem perfectly; 21st century New Zealand is not just suffering from economic poverty. There is a poverty much, much worse.

A poverty of spirit.

And that affects us all, regardless of wealth and income.

 

 

 

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References

Fairfax media: Invercargill and Tauranga chosen for first state house sales

TV3: The Nation – Social Housing Minister Paula Bennett

Parliament: 6. State Housing—Suitability of Housing Stock

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

Letter from Bill English, 9 December 2015

Housing NZ: 2014/15 Annual Report

Beehive.govt.nz: Next steps in social housing reform announced

Fairfax media: Invercargill state houses may survive sell-off as Government reveals short-list

Radio NZ: Housing situation critical – Tauranga principal

Sunlive: Tauranga gripped by housing crisis

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

Bay of Plenty Times: Community leaders, social agencies call for urgency on ‘housing crisis’

Bay of Plenty Times: People living in caravan parks while waiting for a rental

Bay of Plenty Times: Campsites for emergency housing debate

Radio NZ: No housing crisis in NZ – Paula Bennett

Interest.co.nz: Paula Bennett announces plan to offer $5,000 to homeless Aucklanders

Radio NZ: Airport CEO, health leader & economist look at the Budget

Additional

Dominion Post: Housing MPs cost taxpayers more

Treasury: Social Housing Transactions

Other bloggers

The Daily Blog: Paula Bennett blindsides her own Finance Minister in desperate scramble to respond to housing crisis

The Standard: Newshub poll – Key’s government has failed on housing

The Standard: Bennett’s housing “announcement” is a re-announcement and a lie

Previous related blogposts

Can we do it? Bloody oath we can!

State houses – “wrong place, wrong size”?

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emmerson - homeless - National govt housing

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This blogpost was first published on The Daily Blog on 27 May 2016.

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Wellingtonians say; “Everyone deserves a home – no more homelessness!”

28 November 2015 3 comments

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“Housing is a basic human need and access to decent quality, affordable and safe housing should be seen a human right. This means that our society and more specifically the State has an obligation to ensure that everyone living in New Zealand always has access to adequate and secure housing. We further believe that this obligation means that housing needs to be considered as more than a commodity whose allocation is decided entirely by markets and the profit motive.” – Hikoi for Homes/Child Poverty Action Group

Wellington, NZ, 21 November – Around two hundred people gathered in Cuba Mall, central Wellington, as part of a nationwide day of protest at growing homelessness; poor standards of housing; state house privatisation, and lack of long-term stability in rental accomodation;

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After safety instructions were issued by Ian Harcourt, one of CPAG’s march organisers, the protesters set off through the streets of Wellington, headed to the Civic Square;

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Throughout the entire event, there was only a brief, sole police presence as one lone police car halted traffic to allow marchers to cross a busy intersection;

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Greeting the marchers at Civic Square, Nigel Parry and Ruth Prentice,  sang a song dedicated to Emma-Lita Bourne, who perished  in August 2014 whilst living in a damp, cold house infected with toxic mould. Nigel and Ruth page tribute to Emma-Lita, and to the coroner, who had the guts to speak the truth as to why Emma-Lita died needlessly;

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The number of protesters had swelled to around 300 people and constituted  a wide cross representation from the community, including many families with children. These were citizens concerned at the direction New Zealand was heading toward;

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Banners flew from the various groups involved with the day’s event, including UNICEF, one of the  organisers;

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Labour’s Grant Robertson was present;

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The first speaker, Dr Nikki Turner, from Child Poverty Action Group (CPAG), addressed the crowd;

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Dr Turner reminded people that twenty years ago, New Zealand signed the UN covenant on the rights of children. She said this included a duty of care to ensure safe, decent housing for children. She asked, “so why are we here today?

She said that this is a national shame that New Zealand are not providing basic human rights for families in need.

Dr Turner said that as a General Practitioner she was seeing people turning up at her clinic daily, sick, from unsafe houses. They were “sick and recurrently sick, because the houses were not adequate“.

Dr Turner listed poverty-related diseases that were common to people living in damp, cold houses; asthma, colds, chest infections, pneumonia, rheumatic fever, chronic lung diseases, saying that  “our housing makes our children sick“. She said cold affects our immune systems, making people more vulnerable to moulds  and diseases shared through over-crowding.

If we fix our housing, we’re going to go a long way to improving our health in New Zealand,” said Dr Turner.

Dr Turner then listed seven issues necessary for government to implement, saying they were achievable;

  1. To stop the sale of all state and council houses,
  2. A one billion dollar provision to build more public and social housing,
  3. Minimum standards for all rental houses,
  4. Greater tenure protection for all tenants,
  5. A rent freeze for five years,
  6. A statutory right to be housed, as a human right,
  7. State subsidies for modest income-earners for home-ownership, as New Zealanders had a right to a home.

Dr Turner said that the current situation was unfair; costly; and affecting our children. She said that many of the medical problems caused by inadequate housing led to permanent, on-going crippling that would last throughout their lives.  “We need to fix this for the future of our community.”

Dr Turner was followed by Dr Philipa Howden-Chapman, from Otago University’s Department of Public Health;

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Dr Howden-Chapman pointed out that about a third of New Zealanders lived in rental accomodation. She said that many rental homes were cold and damp, far colder than what was recommended by the UN. She said “they were built in another age, when someone was home most of the time, ventilating the house, and keeping the fires going“.

Dr Howden-Chapman said many homes were between 12 to 16 degrees, making them no warmer inside than outside. She said babies were particularly susceptible, being unable to shiver, and losing heat much faster than an adult. Older people also got colder faster than fit, younger people.

Dr Howden-Chapman said that around a third of houses had mould growing in them. She said that mould at certain times of the year release spores and toxins, some of which were the most dangerous substances known.

According to Dr Howden-Chapman, New Zealand spends $3 billion per annum maintaining the roading network.  But there were no equivalent regulations  required to maintain rentals at a set standard or provide adequate heating or ventilation. She said Emma-Lita Bourne‘s family had an insulated house, but could not afford heating. By contrast, Europe had solar-heating on houses that constantly prevented  homes from dropping below 18 degrees.

“But we don’t do any of that.”

Dr Howden-Chapman asked why we have Health officials going around coffee-bars to check on hygiene or WoF mechanics to check the brakes on our cars, but no one is responsible to check on the quality of rental housing.

It was pointed out that a third of housing-related ACC costs could be saved if unsafe steps and other parts of houses were fixed.

She asked  “does this government care”?

Dr Howden-Chapman said it was disgraceful that Bill English admitted that the National government was the biggest slumlord in the country and could “dismiss the whole housing stock”.

She said that a small country of 4.4 million people should be able to work together, with government, local bodies, and NGOs co-operating so  that everyone had access to warm, dry, safe housing.

Dr Howden-Chapman decried New Zealand in the 21st century where children were found to be living in cars, camping grounds, homeless in the streets, or containers, or crowded houses. She said it was no accident that children regularly  miss school and fall behind in their studies, or end up in hospital Intensive Care, where many die.

She said “we can do better, we must do better“.

Dr Howden-Chapman demanded security of tenure for tenants so that the problem of transient families could be reduced. She said families in Housing NZ homes should be able to stay in one house for as long as their children were at school. Dr Howden-Chapman said it was vital that families moved from a state house be re-housed in the same neighbourhood so that their community links with other people could be maintained, as well as allowing children to remain in the same school.

She acknowledged that many New Zealanders cared about this pressing social problem and asked the government, “do you care?

Ian Harcourt introduced a musical group, ‘Choir, Choir, Pants On Fire‘. He said that while this protest was about speaking truth to power, that they the singers he was introducing were here to “sing truth to power”;

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One of the group’s “novel” acts was to engage the audience with participation; to ask us to raise our hands; extend two fingers; and wave it in the direction of Parliament;

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Choir, Choir, Pants On Fire‘ was followed by Ariana, from the State Housing Action Network;

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Ariana spoke of the formation of the State Housing Action Network as a response to Bill English’s announcement that National was looking at selling up to eight thousand state houses. She called the move despicable, given that there was a critical shortage of state  housing in New Zealand.

Ariana announced a petition calling for a halt to forced evictions from state houses, calling it a form of social cleansing. She described the privatisation of state housing as National’s determination to make a profit from the sales. Ariana warned that if National had their way, they would sell the entire housing stock, worth around $15 billion.

Ariana described National’s rationale for the sale, based on the properties being “run down” as just an excuse and nothing more. She said that National had a “track record of selling state houses”. She also pointed out that lack of maintenance of state housing had been caused by successive governments.

Ariana said that it was important that not only new state houses were built, but that the current stock should be brought up to standard.

Ariana congratulated the good work done by CPAG and UNICEF, as well as political parties like Labour, Greens, and Mana giving support. She said we have to work together on this problem by forming a strong coalition to oppose the neo-liberal agenda.

Ariana further stated that when market rents for state houses were introduced in the 1990s, it was predicted that it would be the single biggest cause of poverty increasing. She said that current policies by National were an extension of  the 1990s.

She condemned taking money from those at the bottom of the socio-economic heap, and transferred to those who were already wealthy.

Ariana called for an introduction of a capital gain tax instead of taking money from those who could least afford it. She said National agenda would eventually lead to charities taking over the role of providing for the poor, as in Victorian times.

Ariana said that the State Housing Action Network strongly endorsed the seven points put forward by Dr Nikki Turner (see above).

Ariana then led a chant,

“Everybody deserves a home!”

Following Ariana, was Martin, a state house tenant, with Kyrie in his arms (who seemed totally fascinated by the microphone in front of him);

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Martin described  a state house with nine people living in it’s three bedrooms. He said there was now seven people living in that house, including five adults. Of those people, Kyrie, the little boy in his arms, had athsma. He said such over-crowding was not conducive to good health.

He said he contacted Social Housing Minister, Paula Bennett, to complain of an open drain that was outside the property; the rotting windows inside; and the general state of disrepair. He said Paula Bennett passed him on to Building and Housing Minister, Nick Smith. Martin said Nick Smith advised him to take his case back to Paula Bennett.

Martin invited Paula Bennett to visit Kyrie’s delapidated state house to look at the problems herself. Martin said she refused. (Though this blogger can report that Bennett is not averse to visiting state or social housing when there is a photo-op involving a “good news” story.)

Martin said he had to phone his local MP, Annette King, to try resolve the problem. He said that remedial work was undertaken, but that it was “cheap and shoddy, and they’ve done repairs that are of no fit standard for people to live in“.

He said this was happening all over New Zealand and would be our future. He said Kyrie deserves better.

He encouraged people to stand together; stand strong, and to hold this government to account.

Following Martin, ‘The Ruths‘, entertained  the crowd with some beautiful singing. The songs were delightful, as well as political in flavour, in the best tradition of 1960s singer-activists such as Joan Baez. Ruth Mundy on guitar, with Ruth Prentice on violin;

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Following ‘The Two Ruths‘, Paul Barton, from the Christian Council of Social Services addressed the crowd;

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Paul spoke on behalf on the Living Wage movement, describing it as a response to the growing gap in our society between the rich and the poor. He spoke of the top 10% over the last thirty years having enriched themselves at the expense of the rest of us who have been told “we can’t afford higher wages“.

He said that the wealth gap is shown in the  housing crisis where “literally, this hits home”.

Paul said that the Kiwi dream of home ownership is fast evaporating with house prices rising and a growing number of the population resorting to renting. He pointed out that half the population now lives in rented housing. He said renters tended to be younger, poorer, and families.

It was pointed  out that the housing and wealth inequality problem was not due to “mysterious forces beyond our control”.  He said it has been a direct result of decisions our society has made how we share the bountiful wealth we have in this country. He said we needed to find ways to do things differently.

Otherwise, Paul said, we run the risk of a generation left behind in sub-standard housing.

Paul said the living wage was one response to this problem, where employers paid an income to live, not just “get by”. He said a Living Wage would not only allow people to pay their rent, but also save to buy their own home.

“And that way, paying a living wage overcomes part of the housing affordability problem.”

Paul congratulated the Wellington City Council for having the courage to pay it’s staff and security contractors the Living Wage. He said over 500 workers had had their wages increased from just above the minimum wage, to the Living Wage. He hoped that soon cleaning and recycling-collection contractors would also soon be covered by the Living Wage.

Paul related how workers and their families who had their wages lifted to a Living Wage were motivated to persist to make their lives better.

He added that the Living Wage has not happened “by chance” and that it was the result of a building movement for change. He pointed to the “wonderful support from you people here in Wellington” and said,

“We can achieve change but we need to work together.”

Paul said that people and organisations can work together to make a difference and reduce inequality, and that we did not need to wait for a change of  government or change the law.

He said that local authorities like the Wellington City Council played a major part in the Living Wage movement, and were an important part of our daily lives.  Paul said that Wellington City Council had a role in the kind of housing that we live in. He said that at the last 2013 local body election it was the Living Wage and building warrant of fitness that were the main political issues.

Paul encouraged Wellingtonians that next year’s local body elections also made housing, warrant of fitness, and social housing a major political issue. He encourage people to  get involved in “overcoming this awful housing problem“.

“Don’t say we can’t do something, because we know we’ve already proved we can make a difference.”

Deborah Morris-Travers from UNICEF and ‘Make our Future Fair‘ was the last speaker;

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The former Parliamentarian and currently National Advocacy Manager at UNICEF NZ, told the crowd that, as part of the United Nations, her organisation was mandated to stand up for children’s rights all around the world

Deborah stated that New Zealand Aotearoa was currently breaching the rights of its children by not providing an adequate standard of living, of which housing playing a major part.

She said that we all have a part to play in creating a nation that grants all New Zealanders safe and adequate housing, that lays the foundation for our communities and our society. She encouraged people to keep working together on these issues.

Deborah revealed that “the government is madly polling and running focus groups. They’re sensitive to the mood of the public.”

She said we have to keep building the public mood to ensure that our families are kept safe.

Deborah announced that UNICEF was launching the Fair Future Campaign and said that Radio NZ would be airing a story on children’s rights. She said that UNICEF would be working hard on this issue as National was about to start work on it’s next Budget.

“We have got to keep the message upfront in the news media, in social media, in our families, in our communities, that we will not tolerate our children being left behind.”

She said that every year $10 billion was spent on  “picking up the cost of child maltreatment and child poverty.” Deborah said this was unsustainable as well as being unjust.

Deborah asked, “What do we value in Aotearoa-New Zealand? What do we stand for? Surely it is be a fairer future.”

She said, “Housing is a fundamental human right. This about rights, not favours!”

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As the event concluded, a reporter from Radio NZ interviewed one of the  participants;

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As far as could be determined, Radio NZ was the only msm that sent a reporter to cover the event. Apparently TV1, TV3, print media, commercial radio, et al, were too busy still dealing with the global fall-out from Ritchie McCaw’s resignation from the All Blacks.

As the protest event came to it’s conclusion, this blogger turned to look up at the sky which had darkened with ominous grey clouds. Fluttering atop the Wellington Civic Building were the five flag-options for the present Flag Referendum;

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It was a sobering moment when one considered the symbolism of those five flags.

Notably the $26 million price tag that went with the Referendum.

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References

Fairfax media: Toddler’s death in damp state house a ‘broken promise’, says Labour

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

Interest.co.nz: Finance Minister English says govt… wants to reform state’s role as ‘biggest slum landlord’

Fairfax media: Social housing rollout opens doors for the disabled

UNICEF: UNICEF NZ calls on PM to make good on promise to children

Radio NZ: Hundreds march to demand action on housing

Radio NZ: Insight for 22 November 2015 – What More Can be Done for Children?

Additional

Radio NZ: Community interest sought for state housing

Child Poverty Action Group (CPAG)

State Housing Action Network

Living Wage Movement

NZ Herald: New bill to give Government control over state houses

NZ Herald: Editorial – Housing hikoi sign of rising social unrest

Other blogs

The Standard: Hikoi for Homes

Previous related blogposts

Can we do it? Bloody oath we can!

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)

The cupboard is bare, says Dear Leader

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!

Copyright (c) Notice

All images stamped ‘fmacskasy.wordpress.com’ are freely available to be used, with following provisos,

» Use must be for non-commercial purposes.
» Where purpose of use is commercial, a donation to Child Poverty Action Group is requested.
» At all times, images must be used only in context, and not to denigrate individuals or groups.
» Acknowledgement of source is requested.

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Salvation army - bill english - sale o=f state housing

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This blogpost was first published on The Daily Blog on 23 November 2015.

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State houses – “wrong place, wrong size”?

6 November 2015 5 comments

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1949 state house in Taita

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Information released under the Official Information Act (OIA) suggests that National’s oft-repeated claim that around “one third” ( or 22,000)  of  state houses are in the “wrong place and wrong size” is not supported by Housing NZ’s own figures.

Various ministers, including our esteemed Dear Leader,  have indicated that up to “a third” of state houses are “in the wrong place or wrong size (or ‘type’)“.

The “wrong size/wrong place” claim is the argument being used by National to advance a major sell-off of Housing NZ properties.

On 1 November, 2014, Social Housing Minister Paula Bennett said on TV3’s ‘The Nation’,

“It’s about being smart in what we’re doing. So you just look at us having the wrong houses, in the wrong place, of the wrong size..”

On 2 December, 2014, the Minister responsible for Housing NZ, Bill English expressed his agreement with the proposition of one third of Housing NZ homes being in the “wrong size/wrong place” ;

“Yes. As recently as just last month Housing New Zealand issued a press release that said: ‘around one third of our housing stock is in the wrong place, wrong configuration or is mismatched with future demand’.

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… in fact, a third of them are the wrong size, in the wrong place, and in poor condition.”

On 28 January this year, John Key announced in his “state of the nation” speech;

 “Around a third of Housing New Zealand properties are in the wrong place, or are the wrong type to meet existing and future demand.”

Housing NZ currently  “manages 67,245 homes” (as at 30 June 2015). When Key, and other National ministers refer to “around a third of Housing NZ properties”, simple arithmetic translates that fraction into 22,190 homes being the “wrong size/wrong place” .

On 17 September I lodged OIA requests to Ministers Nick Smith, Paula Bennet, and Bill English. Only English was prepared to answer – and even that took  42 days (30 working days) to eventuate after a reminder was emailed to the Minister’s office.

In a response eventually received on  29 October,  information in the form of a  chart -“Stock reconciliation taking into account impaired properties as at 31 January 2013” – was attached;

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minister english oia response 29 october 2015 - HNZ housing stock - wrong place wrong size

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In two columns headed “Right Place, wrong home” and “Wrong Place“, the respective figures add up to 13,560. This constitutes a little over half of the “22,000” that is being bandied about by National.

I  specifically asked Bill English;  “How many [state houses] are the “wrong size and in what manner are they the “wrong size“? “Do they have too many rooms; too few rooms?

English replied;

“In general terms, Housing New Zealand has a shortage of smaller two bedroom homes and
larger family homes and a surplus of three bedroom homes, with the exception of Auckland
where there is a demand for homes of all sizes. The type or configuration of particular
properties may also affect demand making them difficult to let.”

English totally ignored the direct question “How many [state houses] are the “wrong size“. He either does not know, or is unwilling to admit the number. “In General terms” is not a specific quantity.

Furthermore, English says that “Housing New Zealand has a shortage of smaller two bedroom homes and larger family homes and a surplus of three bedroom homes, with the exception of Auckland where there is a demand for homes of all sizes.”

Unsurprisingly, the 2014/15 Housing NZ Annual Report confirms the high demand for housing in Auckland;

“Across the country we also have too many three-
bedroom properties, while demand has grown for smaller
one- or two-bedroom homes or for much bigger homes.
Demand for homes in the Auckland region is high and
more Housing New Zealand homes are needed.” (p22)

Yet, the chart referred above (“Stock reconciliation taking into account impaired properties as at 31 January 2013“) states that there are 8,180 houses in the Auckland region that are supposedly “Right Place, wrong home”  and a further 420 that are in the “Wrong Place” – 8,600 in total.

This would appear to contradict the Minister’s assertion that “there is a demand for homes of all sizes” throughout Auckland.  Both cannot be right.

This contradiction is further compounded by the fact that, as of 30 June, there were 2,267 people on the waiting list in the Auckland City area;

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auckland city housing nz waiting list 30 june 2015.

Even where houses have been the wrong size, Housing NZ has been undertaking a programme to add extensions, or entire new, smaller dwellings on larger sections;

Overcrowding is an issue that affects many of our
tenants’ health and wellbeing, especially in Auckland,
where there is high demand for larger homes. Our
bedroom extensions programme is helping to meet
demand from the social housing register in Auckland
by converting three-bedroom homes into four- and
five-bedroom homes. Adding an extra one or two
bedrooms (and another bathroom where necessary)
means more of our tenants are living in appropriately
sized and healthier homes. During 2014/15 we
completed bedroom extensions to 247 homes.

Our existing land in Auckland will also house more small
families, couples and single people in need. We are
building new two-bedroom homes on Auckland sections
that are big enough to have another dwelling. During
2014/15 we built an additional 107 two-bedroom units
on existing Housing New Zealand sections, which also
included making improvements to the existing homes
where these were required.“(p23)

If we substract the 8,600 homes in the Auckland region, from Housing NZ’s original estimate of 13,560 (see above chart), this leaves 4,960 houses “wrong place/wrong size”.

Nearly five thousand homes supposedly in the “wrong place/wrong size” category in Auckland – and there are still 2,267 people on Housing NZ’s waiting list in Auckland City. How is that feasible?

I further enquired from English; “Could you please explain what the term “wrong size, in the wrong place” actually refers to? Where are they situated that are considered the “wrong place“?”

English replied;

In 2011 Housing NZ carried out an assessment of it’s future projected stock
requirements for the purpose of forward planning, based on its future use of intention of its
properties and informed by demand forecasting. This assessment was not intended to reflect
current demand at a point in time…

[..]

The analysis identifies some properties as being the wrong home, not specifically the wrong
size.”

It is worthwhile noting English’s comment that “Housing NZ carried out an assessment of it’s future projected stock  requirements for the purpose of forward planning,  [but] this assessment was not intended to reflect current demand at a point in time”.

The apparent purpose? According to English’s 29 October statement to me;

This relates to the number of bedrooms that a property has and also includes
properties that are wrongly configured to meet demand for social housing.

“Social housing” is National’s code for private providers.

The 2011 Housing NZ  assessment of it’s “future projected stock” appears to have been designed to meet the needs of “social housing”, aka private providers.

In respect to answering my question “Where are they situated that are considered the “wrong place”?”, English’s response was vague and lacked any informative value (as did many of his answers);

“A property being in the wrong place refers to the location of the property in relation
to demand. On a regional basis, there are areas of general low demand. However, some of
Housing New Zealand’s properties may be in locations with high concentrations of state
housing or existing social issues that may contribute to them being difficult to let or
result in a high turnover of tenants.”

There were no geographical locations; no cities or towns; no suburbs given. The statement in itself is meaningless twaddle with a vague reference to “some of  Housing New Zealand’s properties may be in locations with high concentrations of state housing or existing social issues”.

Where these “wrong places” might be is anyone’s guess.

My follow-up question – “How many areas have been designated “wrong places”?” – was ignored entirely.

In an effort to drill down and assess where houses might be in the “wrong place”, I asked English; “where houses are in a particular “wrong place”, how many people are on HNZ waiting lists in those same “wrong places”?

The purpose of this question was straight-forward. Where demand for housing is high in a given region, it seems inconceivable that any properties in that same region would be in the “wrong place”. Auckland being a prime example.

I wanted to know how many other regions had high numbers on their waiting lists – whilst also having houses in the “wrong place”.

According to the above chart, the following regions designated as having houses in the “wrong places” have the following numbers of houses attached to them;

Auckland: 420

South Island: 740

Central North Island: 870

Lower North Island: 1,740

“Community Group Housing”: 100

Total: 3,870

Because of the (deliberate?) vagueness of English’s response, we have no way of knowing where, for example, the South Island’s supposed 740 houses are located in the “wrong place”.

It is difficult to understand why the Minister could not be more precise.

If the “wrong size/wrong place” issue is real, then National must have hard data, with supporting numbers, identifying where state houses are located  in the “wrong place”. This information should be on-file; readily accessible; and easily released to interested parties.  Then again, my OIA lodgement to Minister English took 30 working days (including one “request” for an extension) to complete.

Perhaps such data does not exist.

According to Housing NZ itself, every district within it’s authority has people on their waiting list;

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Housing NZ waiting list - by region - by bedrooms needed

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Source

Source

There is no district recording zero-need.

I asked English; “What replacement houses are being built to replace those that are the “wrong size”, and how many rooms will they have? More? Less?” andWhere Housing NZ houses are in the “wrong place” – will new State houses be built in exactly the same place?”.

The Minister responded;

Housing New Zealand’s Asset Management Strategy provides for the redevelopment of its
land holdings in order to align the typology, location and size of its portfolio with demand.
As a result, it is building more two, four and five bedroom properties. Where there is low
demand, Housing New Zealand will look to sell surplus properties and reinvest the proceeds
into providing homes in areas of high demand.

As outlined above, Housing NZ has a current programme of adding bedrooms to existing three bedroomed houses, and, where the land is big enough, adding two bedroom houses onto an existing built-up section.

English’s reference to selling “surplus properties” is troubling, as we are still none-the-wiser where such properties exist. Especially when all Housing NZ districts have people on waiting lists.

As for English’s assertion that “Housing New Zealand will look to sell surplus properties and reinvest the proceeds  into providing homes in areas of high demand” – Paula Bennett was not willing to give that assurance on 1 November last year, speaking on Q+A.

Which leads on to the last question I put to the Minister; “If HNZ houses that are in the “wrong place” are sold/given away to community organisations – what will make those houses suddenly become in the “right place”?”

Because if it’s in the “wrong place” when owned by Housing NZ – why would it suddenly be in the “right place” owned by someone else?

The Minister’s response was baffling;

The Government has no plans to offer Housing New Zealand properties that have been
identified as being in the ‘wrong place’ to community housing providers. In Tauranga and
Invercargill for example, the areas identified for initial potential transfers of social
housing properties from Housing New Zealand to community housing providers, MSD’s purchasing
intentions anticipate stable demand. Following a transfer, any new provider would receive
both the properties and a contract with MSD to continue to provide social housing.”

That statement appears to be at complete variance with this undated Beehive document, headed “Social Housing Reform Programme – Media Qs and As“;

SOCIAL HOUSING REFORM PROGRAMME – Media Qs and As

“Around one third of the $18.7 billion Housing New Zealand portfolio is in
the wrong place or of the wrong type to meet this need.”

[…]

“To help community housing providers grow, there will be sales of
Housing New Zealand properties and we will involve these providers
in the redevelopment of Crown land…”

[…]

“Details will be determined after national engagement, including
with community housing providers and iwi,over coming months.
Providing we can achieve better services for tenants and fair
and reasonable value for taxpayers, we will look to sell
between 1,000 and 2,000 Housing New Zealand properties over
the next year.”

[…]

“15. Will properties being sold be tenanted, and if so what
happens to the tenants?

In most cases where houses transfer to a community housing
provider, the properties will have tenants. The new owners
will continue providing social housing with the income-
related rent subsidy.”

[…]

“Look at selling between 1,000 and 2,000 Housing New Zealand
properties for continued use as social housing, run by approved
community housing providers. These providers might buy
properties on their own or go into partnership with other
organisations lending them money, contributing equity, or
providing other services.”

The document specifically refers to the sale of state housing, that are “the wrong place or of the wrong type“,  to community service providers.

And in Parliament, on 24 March, Bill English himself made reference to the sale of “wrong place” Housing NZ properties to Community providers;

“In the first place, Housing New Zealand has an ongoing sales
policy, and often it is selling houses that we do not need or
that are in the wrong place, or some of them have just become
unsuitable to be lived in and cannot be upgraded at reasonable
cost. In respect of the transactions that are coming up over
the next 6 months or so, there is a process of testing what
the real values of those houses are. For instance, many
community providers believe those houses are not up to date
on maintenance, and therefore are overvalued when they are
valued as if they can be sold for the best price on the day
in the location that they are in. Those are exactly the things
we are having discussions about over the next few months.”

[…]

“Neither property developers nor community housing providers
are compelled to buy houses off the Government. If they do
not want to do that—if they do not want to manage the tenants
or own the stock, which may be the wrong size in the wrong
place—then they certainly do not have to do that.”

Which creates doubt over English’s assertion that  “the Government has no plans to offer Housing New Zealand properties that have been
identified as being in the ‘wrong place’ to community housing providers”.

So if Housing NZ properties that are in the “wrong place” are sold to community housing providers – as confirmed by Minister English on at least two occassions – what will transform those “wrong place” houses into “right place” houses?

Very little of National’s “wrong size/wrong place” proposition makes sense – unless viewed through the lens of raising revenue by way of partial asset-sales.

That is the only thing that makes any sense of this issue.

The only reason that the “wrong size/wrong place” meme has worked for National thus far is that very few (if anyone) has delved behind the phrase to check it’s validity.

Perhaps it is time this issue was scrutinised more carefully?

The apparent fudging of Bill English’s response to my OIA request, in itself, speaks volumes.

Postscript

On 29 October, I wrote to Bill English expressing my dissatisfaction with his response to my OIA lodgement;

from: Frank Macskasy <fmacskasy@gmail.com>
to: “B English (MIN)” <B.English@ministers.govt.nz>
date: Thu, Oct 29, 2015 at 8:01 PM
subject: Re: State houses – wrong place, wrong size

 

Thank you for your letter dated 29 October.

I refer you to two questions which you have not answered in my OIA request;

4. Where are they situated that are considered the “wrong place”?

5. How many areas have been designated “wrong places”?

Please advise if you do not intend to answer those questions, and I will lodge a formal complaint with the Office of the OImbudsman.

Regards,

-Frank Macskasy

Appendix1

In 2014/15 Housing NZ “returned” $321 million to the government’s Consolidated Fund. This comprised of $118 million in tax; $96 million in interest costs, and $107 million as a dividend. (2014/15 Annual Report, p24)

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References

TV3: The Nation – Social Housing Minister Paula Bennett

Parliament: 6. State Housing—Suitability of Housing Stock

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

Housing NZ: 2014/15 Annual Report

Housing NZ: Register by priority and Auckland local board – 30 June 2015

Beehive.govt.nz: Social Housing Reform Programme – Media Qs and As

Parliament Today: Social Housing Reform — Objectives

Other Blogs

The Jackal: More homelessness under National

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

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

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

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

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

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Housing NZ - state housing - over crowding

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This blogpost was first published on The Daily Blog on 1 November 2015.

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

18 September 2015 18 comments

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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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Letter to the Editor – Just how witless is our PM?!?!

30 June 2015 5 comments

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Frank Macskasy - letters to the editor - Frankly Speaking

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Dominion Post <letters@dompost.co.nz>
date: Mon, Jun 29, 2015
subject: Letter to the Editor

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The Editor

Dominion Post

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When National recently announced that it will consider selling State houses to overseas buyers – I had to check the calendar, just to ensure it wasn’t April 1.

This has to be the most bizarre and ill-considered policy announcement, in the annals of New Zealand’s political history.

When interviewed by Guyon Espiner on Radio NZ’s “Morning Report”,  on 29 June, Key admitted;

“I don’t know a huge amount about them…but they’re a charity, I think,  in Queensland.”

And,

“I don’t know a tremendous amount about them…”

Just what our most poor and vulnerable families need – a Prime Minister who seems to be utterly clueless about who will be buying taxpayer-built State houses.

The most curious thing is that Key’s government plans to sell houses that are – allegedly – “in the wrong place and wrong size” for Housing NZ’s requirements.

In which case, why would a  charitable organisation, from another country, with little knowledge of our local community needs – be buying up such properties? How would they know what we needed?

Very little of this makes any sense. One can only assume that this is yet another money-raising venture from Bill English, who desperately needs a budget surplus next year.

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-Frank Macskasy

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[Address and phone number supplied]

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References

Radio NZ: Morning Report – Foreign buyers eyeing up state house sell-off


 

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1623616_704918519553325_1013129092_n

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

Another broken promise from National…

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National Party - 2014 election - social housing policy - Housing NZ

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On 12 June, Social Housing Minister, Paula Bennet was interviewed on Radio NZ’s ‘Nine to Noon‘ programme. Kathryn Ryan asked why there were so many  thousands of State houses in desperate need on maintenance.

In the interview, Bennett claimed that money was not a problem in Housing NZ’s maintenance programme;

@ 4.29

“What I will say is that it’s not a money problem. So there is enough money there for us to get that stock up. It is a big programme of work that is constantly ongoing…

[…]

…So it’s not a matter of neglect.”

And again @ 5.41

“Which is really my point. So we’re saying it’s not actually about the money. The money is there to be spent for maintenance.”

Bennett’s statements were a parroting of  Bill English’s previous claim, made on 5 June  on Radio NZ’s ‘Morning Report‘, who also denied  money was the core problem of run-down Housing NZ properties;

“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.”

Bennett and English have both blamed lack of tradesmen and other spurious excuses for rundown houses.

But according to Housing NZ, the reason for our run-down State housing stock is very much a matter of lack of money, as I pointed out to Kathryn Ryan in an email I sent to her during her interview with Bennett;
from: Frank Macskasy <fmacskasy@gmail.com>
to: Nine To Noon RNZ <ninetonoon@radionz.co.nz>
date: Fri, Jun 12, 2015
subject: Paula Bennet on Housing maintenance funding
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Kia ora Kathryn,Paula Bennett’s assertion that Housing NZ has plenty of funds for maintenance is at variance with this statement from Housing NZ’s 2013/14 Annual Report;

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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]

Furthermore, on page 36 of the 2013/14 Annual Report, Repairs and Maintenance is given as $220 million for the period.This is $1 billion less than the $1.2 billion quoted by Bill English to TVNZ’s Corin Dann on 24 March, this year.

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Either Bennett is ignorant, or she is spinning.

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Either way, not a good look.

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-Frank Macskasy

Ms Ryan read out my email, on air, subsequent to the interview.

Hopefully, the media will pick up on what is obviously a gross distortion from National’s spin doctors. By asserting that  there is no lack of money available, this shifts responsibility from  government to blaming others for lack of maintenance.

It also deflects attention from the fact that National has used Housing NZ as a cash cow by demanding dividends, in a futile attempt by Bill English to balance the government books and post a surplus (which he has also failed at spectacularly), as this ‘Dominion Post‘ editorial highlighted;

This year the Government expects to get $220m in tax and dividends from the corporation. It wants profits as well as social services. And it is also in thrall to its ideology of semi-privatisation.

Housing NZ was explicit in it’s 2013/14 Annual Report;

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]

It is up to the media to challenge Ministers when they make assertions that are patently untrue.

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References

Radio NZ: The state of state housing

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

Radio NZ: State housing criticism valid, says English

Government Minister sees history repeat – responsible for death

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CGw9SZjUgAA0Shw.

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

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Government Minister sees history repeat – responsible for death

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a-country-of-opportunity

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The last few weeks have produced some curious stories from the media, relating to the current government that, at first glance, have no common thread linking them.

Closer scrutiny yields a different perspective…

1 April 2009

National implements first round of tax cuts.

According to Dear Leader Key, the 2009 tax cuts cost the government $1 billion;

“…The tax cuts we have delivered today will inject an extra $1 billion into the economy over the coming year, thereby helping to stimulate the economy during this recession. More important, over the longer term these tax cuts will reward hard work and help to encourage people to invest in their own skills, in order to earn and keep more money.”

1 October 2010

National carries out second round of tax cuts.

According to information obtained from Parliamentary Library in May 2012, and released by the Greens, the 2010 tax cuts cost the country an additional $2 billion;

The Green Party has today revealed that the National Government has so far had to borrow an additional $2 billion dollars to fund their 2010 tax cut package for upper income earners.

New information prepared for the Green Party by the Parliamentary Library show that the estimated lost tax revenues from National’s 2010 tax cut package are between $1.6–$2.2 billion. The lost revenue calculation includes company and personal income tax revenues offset by increases in GST.

Cost of both tax cuts, in terms of lost revenue: $2.6 billion – $3.2 billion, per annum.

8 May 2014

Then-Minister for Housing, Nick Smith confirms in Parliament that National has been demanding multi-million dollar dividends from Housing New Zealand;

“The average dividend under the 5 years so far of this Government has been $88 million. The dividend this year is $90 million.”

The dividend payable does not include taxes paid by Housing NZ.

24 September 2014

Fonterra cuts payout to farmers for dairy milk solids  by 70 cents to $5.30/kg milk solids.

6 October 2014

Dear Leader Key reveals that the international fall in dairy prices will affect the government’ tax revenue. Key states;

It can have some impact because if that’s the final payout, the impact would be as large as $5 billion for the economy overall, and you would expect that to flow through to the tax revenue, both for the 14/15 year and the 15/16 year...”

Reported by TV3’s Brook Sabin on the same day;

“A big state-house sell-off is on the way, and up to $5 billion-worth of homes could be put on the block.

The shake-up of the Government’s housing stock will be a key focus for the next three years, with Finance Minister Bill English to lead it.

On the block is everything from a tiny 75 square metre two-bedroom state house in Auckland’s Remuera, on the market for $740,000, to a three-bedroom home in Taumarunui for just $38,000. Thousands more properties will soon hit the market.”

10 December 2014

Fonterra announced that payouts to farmers would drop from $5.30/kg of milk solids to $4.70/kg. A Fairfax report states;

The predicted payout could hurt the national economy for a couple of years, including tax revenue.

28 January

Dear Leader Key announced the sale of 1,000 to 2,000 state houses within the year, and suggested there might be further sales later.

30 April

Fonterra announces further reduction of milk solid payout to farmers from $4.70/kg milk solids to $4.50/kg of milk solids.

6 May

National announced that it’s entire stock of 370 state houses in Invercargill, and 1,250 in Tauranga, would be put on the market to be sold off.

22 May

National’s 2015 Budget included;

  • Dumping the $1,000 Kiwisaver ‘kick-start’ government contribution
  • $684 million deficit for 2014/2015
  • a new travel tax on arriving/departing airport travellers
  • extension of a telecommunications tax to fund government’s rural broadband expansion programme

31 May

A story in the NZ Herald by Lynley Bilby reported that schools throughout the country were cutting back on their activities due to funding constraints;

Financially strapped secondary schools are cutting back on classroom activities, dropping field trips, ditching science experiments and even removing courses after a crackdown on parent donation rules.

[…]

In one case a secondary school had to abandon an NCEA Level 2 biology field trip to the beach because it could not afford to hire a bus.

The science teacher had to apply to the New Zealand Qualifications Authority to alter the data collection assessment so the students would not fail.

Another school was forced to alter its science curriculum by reducing experiments to trim costs.

One school said it had done away with activities outside the school gates, including a sea kayaking standard for year 12 physical education students.

Principals reported outdoor education programmes, food, hospitality and technology courses could be affected by the funding guidelines.

[…]

The recently released Budget saw the Government fund school operational grants to the tune of $1.32 billion for the 2015/16 financial year.

But the NZSPC  [New Zealand Secondary Principals’ Council] said that was not enough to meet costs, particularly for low decile schools.

It is apparent that state funding of education  is inadequate, and schools are either having to make drastic cuts to  “classroom activities, dropping field trips, ditching science experiments and even removing courses” – or raise “voluntary donations” from parents. Those “donations” and fundraising events by parents and teachers raised more than $357 million in  2012, an increase of  $16 million from 2011.

Nearly a third of a billion dollars – that is the shortfall of full funding of education in this country.

1 June

National announced the launch of so-called “social bonds“, where;

…the Government will pay a return to investors, determined by whether or not agreed social targets have been achieved.

The Government said social bonds were about the private and public sector organisations operating together to fund and deliver services.

This year’s Budget set aside $28.8 million to fund what is essentially contracting  out some mental-health services to private investors. As Health Minister, Dr Jonathan Coleman explained in Parliament the next day;

” One of the benefits of social bonds is that they protect service providers by shifting financial risk away from the providers and on to investors who provide the funding and who are better placed to absorb risk…

[…]

…social bonds are an exciting financial instrument with the potential to revitalise social policy delivery and inject private sector funding and innovation into the sector.”

Note the term used by Dr Coleman (quoting from a Dept of Internal Affairs report); “financial instruments”. According to investopedia.com, a “financial instrument is defined as;

A real or virtual document representing a legal agreement involving some sort of monetary value. In today’s financial marketplace, financial instruments can be classified generally as equity based, representing ownership of the asset, or debt based, representing a loan made by an investor to the owner of the asset.

[…]

Financial instruments can be thought of as easily tradeable packages of capital, each having their own unique characteristics and structure. The wide array of financial instruments in today’s marketplace allows for the efficient flow of capital amongst the world’s investors.

In effect, funding for mental health services is being transferred from the State – the traditional source – to private investors. Plainly put – National is seeking investment funding for mental health services.

These so-called “social bonds” appear to be a continuation of privatisation-by-stealth.

Interestingly, the right-wing think-tank, ‘New Zealand Initiative‘ (formerly the Business Roundtable and NZ Institute) published a report in March advocating the use of  social  bonds, and calling for the government to implement them. Three months later, National did precisely that.

As the government’s tax revenue was slashed by between $2.6 billion – $3.2 billion, per annum, after the 2009 and 2010 tax cuts, National’s tax-take and expenditure was further put under pressure by the 2007/08 Global Financial Crisis; the resulting Great Recession; rising unemployment; tumbling dairy pay-outs; and the Christchurch re-build.

National’s much heralded prediction of a  $372 million Budget surplus this year collapsed into a massive $684 million deficit – a turn-around of nearly a billion dollars.

A billion dollars – the cost of the 2009 tax cuts.

But added to the fiscal deficit is another deficit; the hidden social costs which New Zealanders are slowly, belatedly, waking up to.

Community organisations are winding back, or closing down completely;

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womens-refuge-cuts-may-lead-to-waiting-lists

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nz-herald-govt-funding-cuts-reduce-rape-crisis-support-hours-government-funding-cuts

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Relationships Aortearoa - funding cuts - Anne Tolley - budget 2015

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State assets such as housing and schools are suffering a lack of maintenance, the likes of which we have seen only in Third World nations. The recent case of Northland College in Kaikohe revealed a badly run-down facility that was so delapidated that police  asked to use them for training simulations because they represented the closest thing available to a “ghetto environment”, according to school principal, Jim Luders.

Luders’ description of his school is hard to believe in 21st century New Zealand;

“The conditions are appalling. They’re unsafe. There’s water leaks, mould, asbestos in parts. It’s without doubt the worst school stock in New Zealand.

I would challenge any school to send in photos that are worse.”

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Northland College students stuck with 'worst classrooms in New Zealand'

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Back in 2008, an ERO report highlighted the poor state of Northland College. Seven years later, the problem remains unchanged.

New Zealand’s State housing does not fare better. TVNZ’s Corin Dann wrote this piece on 24 March, which should have raised alarm bells throughout the nation (it did not);

The Finance Minister is signalling a deferred maintenance bill for the country’s state houses of $1.2 billion will have to be met by the government in future.

Community housing providers looking to buy state houses off the government say they believe Housing New Zealand has failed to carry around $1.2 billion in maintenance on state houses.

[…]

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.

[…]

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.

However, when pressed he conceded that “looking back everyone could have performed better”.

$1.2 billion dollars. Half the cost of the 2010 tax cuts.

Which, in part, explained why the Salvation Army assessed National’s offer to buy some State houses – and promptly ran a mile. As the SA’s spokesperson, Major Campbell Roberts stated, with crystal clarity;

“We would be faced with significant maintenance issues, houses which have got the wrong tenants … we would also need to do extensive development.

We would be putting so much resource into this that we could not actually put resource into anything else.

We can’t guarantee that we would be able to improve things for the state tenants, which is exactly what we would want to do by taking [the properties] over at this stage, on our own.”

Community Housing Aotearoa director, Scott Figenshow, was even more to the point;

“Our members are very concerned about the families they work with, and are only interested if they can do a better job than Housing New Zealand. At the moment the sums simply don’t stack up.

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?” 

Figenshow suggested, instead, that Government reinvest the $220 million it was forecast to receive in tax and dividends from Housing NZ, back into much needed maintenance and upgrades.

For two year old Emma-Lita Bourne, tenant of a State house in Otara, South Auckland, the situation is academic. She died last August living in an environment that was clearly not conducive for human health and well-being;

Two-year-old Emma-Lita Bourne died in Auckland’s Starship Hospital in August last year following a brain haemorrhage.

She had been taken to hospital with a fever, which turned out to be a form of pneumonia.

In his findings, released on Thursday, coroner Brandt Shortland said pneumonia played a part in Emma-Lita’s death and the Housing New Zealand home in Otara where her family lived may have been to blame for her ill-health.

Other children in the family also became sick while the family was living there, with one suffering from rheumatic fever.

[…]

In May 2014, Emma-Lita’s family had been fast-tracked up the waiting list to be transferred to a better state house, because of the rheumatic fever risk.

Although they’re now living in a different home, the move didn’t happen before Emma-Lita’s death.

Housing Minister Nick Smith said the government’s policy to fast-track those at risk of rheumatic fever into better homes has helped 270 families.

As Radio NZ reported Coroner Brandt Shortland’s findings;

“In my view, the house unfortunately was unhealthy for this family.

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.”

Housing NZ’s general manager of tenancy services, Kay Read,  accepted the likelihood of a link;

“Our responsibility is to provide warm, safe and dry housing and, from the reports in this situation, it appears that we’ve failed.”

The above Radio NZ story features photos of another Housing NZ property also in a delapidated condition, with mould and condensation streaming down the walls. The property is tenanted.

Interviewed on Radio NZ’s ‘Morning Report‘, Minister for Housing, Bill English,  denied that money was the core problem of run-down Housing NZ properties;

“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.”

English’s assurance that Housing NZ “not short of money to do the job” appears to be contradicted by Housing NZ’s  2013/14 Annual Report;

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]

Furthermore, on page 36 of the 2013/14 Annual Report, Repairs and Maintenance is given as $220 million for the period.

This is $1 billion less than the $1.2 billion quoted by Bill English to TVNZ’s Corin Dann on 24 March, this year.

Whilst clouded in waffle, English admitted that “the system” (ie; government and Housing NZ) was responsible for this little girl’s death;

“Regardless of the cause it’s a tragedy for this family. It appears that while the system worked to some extent, we’ve got to test whether it was responsive enough quickly enough to the very real needs of this family.

They didn’t really have the option of ordering a higher grade of insulation for the house.

We’ve got a strong focus on organising the government services around vulnerable families – and this is a vulnerable family – rather than expecting those vulnerable families to find their way around various government departments.

This type of case should illustrate I think to the people making public policy, including us, that we’ve got some way to go yet to be as responsive as we should be when there’s serious issues going on in this family.”

. English responds to criticism of state houses - radio nz - morning report - audio.

Unfortunately, this is not the first time that New Zealanders have died for lack of adequate state funding of social services. For Minister Bill English, this is no doubt a matter of déjà vu, bringing back memories of late Northlander, Rau Williams, and late Southland farmer, Colin Morrison;

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Died waiting for by-pass - Otago Daily Times, 6 April  1998  (1)

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The 6 April 1998 ‘Otago Daily Times’ story stated;

Riverton dairy farmer Colin Morrison (42) has lost his race for a triple heart by-pass, dying of complications and leaving his widow, Christine, and his doctor blaming Health Minister Bill English and the health system for his death.

[…]

Mrs Morrison last night did not want to speak to Mr English, who is also her local MP. She said the minister and the health system had  failed her family and her husband.

“I don’t think I could cope. I know I can’t blame one person but I have got to have something or someone to blame. I wrote him a letter saying I blamed him [Mr English] but I blame the system as well”, she said.

His GP, Dr Russell Pridgeon, of Riverton, last night called on Mr English to resign, saying he held him morally responsible for Mr Morrison’s death.

A month later, then-Health Minister Bill English conceded that his government’s “booking system” was a failure – but not before others died on his watch as Health Minister;

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four-forced-off-waiting-list-die-the-press-15-march-1999

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Bill English did not resign, though National were swept from office the following year by Helen Clark’s Labour-led coalition.

English is now Minister for Housing.

And once again, people are dying.

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Addendum1

The National government does not have money to spend on refurbishing state housing, but it does have money for other projects;

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Government accused of wasting $11.5 million on wealthy Saudi farmer

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Addendum2

The National government does not have money to spend on refurbishing state housing, but it does have money for other projects;

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pm-defends-30m-payout-to-rio-tinto

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Addendum3

The National government does not have money to spend on refurbishing state housing, but it does have money for other projects;

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john-key-defends-cost-of-flag-referendums

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References

Parliament: Hansards – Tax Cuts – Implementation

Scoop media: Govt’s 2010 tax cuts costing $2 billion and counting

Parliament: Hansards – Housing, Affordable—Progress and Management of Housing New Zealand

Agrimoney.com: Dairy rout spurs $4bn cut to Fonterra milk payout

Hive News: Treasury re-crunching Budget numbers for low Fonterra payout

TV3 News: State housing sell-off worth $5B

Fairfax media: Slashed Fonterra payout will affect all NZers

Radio NZ: PM states housing intentions

Otago Daily Times: Fonterra cuts dairy payout forecast

Radio NZ: Tauranga, Invercargill state houses to be sold

Radio NZ: Budget 2015 – What you need to know

Fairfax media: International airfares will rise new departure tax

Radio NZ: Telecommunications tax will hit consumers

NZ Herald:  Secondary schools to slash spending

Radio NZ: Social bond system to target mental health

Parliament: Hansards – 5. Mental Health Services—Social Bonds

Investopedia.com:  Financial Instrument

NBR:  Roundtable and NZ Institute morph into new libertarian think tank

NZ Intiative: Social Impact Bonds

Government Economics Networks: The case for social bonds: A new way of financing and delivering social services

Fairfax media: Budget 2014 – The essential guide

Dominion Post: Women’s Refuge cuts may lead to waiting lists

NZ Herald: Govt funding cuts reduce rape crisis support hours

TV1 News: ‘Devastating news for vulnerable Kiwis’ – Relationships Aotearoa struggling to stay afloat

Fairfax media: Government may let Relationships Aotearoa fold

TV1 News: Relationships Aotearoa hanging on at ‘awful’ 11th hour

Radio NZ: Counselling service rejects claim it’s badly run

NZ Herald: Northland College students stuck with ‘worst classrooms in New Zealand’

Radio NZ: Northland ‘slum’ school fix-up very slow

TV1 News: English concerned by State House deferred maintenance bill

Radio NZ: Salvation Army won’t buy state houses

Fairfax media: Salvation Army says no to state houses

NZCity:  Girl’s death should spur action – Greens

Radio NZ: Damp state house linked to child death

Radio NZ: State housing criticism valid, says English

Housing NZ: 2013/14 Annual Report

Radio NZ: English responds to criticism of state houses (Alt. Link) (audio)

Dunedin Star: Death – the Northland Way

NZPA: English agrees system flawed

TV1 News:  Government accused of wasting $11.5 million on wealthy Saudi farmer

NZ Herald: PM defends $30m payout to Rio Tinto

NZ Herald: John Key defends cost of flag referendums

Additional information

Mana News: Housing under neoliberalism

NBR: Matthew Hooton – Gulf games fail to deliver

NBR: Matthew Hooton – Flying sheep endanger McCully

NZ Herald: Bryce Edwards – Political roundup – The bizarre ‘bribery’ and flying sheep scandal

NZ Herald: Dita De Boni – Kiwis hoodwinked over state housing

Radio NZ: Demand increasing on schools to fund out classroom activities

Radio NZ: Government hikes up Housing NZ dividend almost 20 percent (audio)

Previous related blogposts

That was Then, this is Now #6

Budget 2013: petrol taxes

“It’s fundamentally a fairness issue”- Peter Dunne

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)

The cupboard is bare, says Dear Leader

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200000-abandoned-for-national-tax-cuts-ht-william-joyce.

This blogpost was first published on The Daily Blog on 6 June 2015.

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The Mendacities of Mr Key # 12: No More Asset Sales (Kind of)

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Lying National lying john key

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On 25 February 2014, Dear Leader John Key announced to the nation that his government’s asset sales programme was over;

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“Just as we did before the last election we’re making our position on share sales clear to New Zealanders before we go to the polls later this year. We’ve achieved what we wanted with the share offers in energy companies and Air NZ. We’re now returning to a business-as-usual approach when it comes to  [state-owned enterprises]. The truth is there aren’t a lot of other assets that would fit in the category where they would be either appealing to take to the market or of a size that would warrant a further programme, or they sit in the category that they are very large like Transpower but are monopoly assets so aren’t suited.”

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Like so many of  the Prime Minister’s promises, that “Key Committment” did not last long. Not even a year.

As Fonterra’s payout to farmers collapsed and weakening exports to China’s slowing economy began to impact on the government’s tax-take,   Bill English’s much-heralded promise of a Budget surplus sank deeper than the m.v. Rena in 2011. English promised almost exactly a year ago on 16 May 2014;

It’s a real surplus and it follows a string of improvements in deficits starting at $18 billion four years ago, this year about $2.5b and next year a surplus of $370 [million], and then bigger surpluses after that.

Barely three months after the 2014 elections, Treasury had bad news for English and the National government;

Treasury this morning delivered a body blow to the Government’s hopes of returning to surplus, saying it now expects a deficit of over half a billion dollars for the June financial year.

At this morning’s Half Year Economic and Fiscal Update, Acting Treasury Secretary Vicky Robertson said despite solid growth in the economy, the Crown’s finances would take a hit from lower than previously forecast tax take.

That had seen Treasury change its forecast operating balance before gains and losses (Obegal) for the 2014-15 year from a slim surplus of $297 million to a deficit of $572 million.

Treasury said softer outlook for economic drivers of the tax such as lower dairy prices and interest rates had seen the expected tax take for the year fall by $600 million.

In the same Herald report, English and Key  were both frantically doing their best King Canute impersonations since King Canute took a day to go to the beach;

But Finance Minister Bill English was this morning still clinging to the hope Treasury is wrong and the books will indeed be back in black this year as he and Mr Key have promised for some years.

I’m hopeful we will,” Mr Key told reporters this afternoon.

The view of the Minister of Finance is that we can still achieve that surplus. There’s a lot of different factors moving around here at the moment.

By 2 May of this year, even  National’s spin-meisters had run out of steam, and on TV3’s ‘The Nation‘, English was forced to admit that the world was indeed round and not flat; money-printing pixies did not exist; and dreams of a budget surplus were a Tory fantasy;

No, I don’t call it a failure. It is what it is, and that is for the 14/15 year, we budgeted $370 million surplus. It looks like it will be a $500 or $600 million deficit, and the surplus will be the next year. So we’re on track.”

So “the surplus will be the next year“?

The Minister had better be hoping that the Christchurch re-build; the Auckland housing boom; and renewed growth in China’s economy,  will continue to stimulate the economy. Otherwise, that “500 or $600 million deficit” will balloon into $1 billion or $2 billion or…

National’s expensive, multi-billion dollar 2009 and 2010 tax cuts may not have been such a clever move after all.

English, though, is not about to surrender. His government’s policies may be predicated on tax revenue from re-building a semi-destroyed city; an unsustainable housing boom in Auckland; and waning dairy exports – but National’s Finance Minister has other ideas up his sleeve.

In his 2 May interview on ‘The Nation‘, English committed the government not to cut spending;

Lisa Owen: Okay. Well, before on The Nation, you said that the Government would not make any cuts to reach surplus. Is that still your plan?

Bill English: That’s right. We’re not going to make any specific extra decisions now just because our tax revenue’s a percentage point – 1 percent down.

If past experience has taught us one thing about this government; if they promise you one thing, you can be sure that somewhere, in some back room; they are planning something completely different.

English has committed the government not to “make any specific extra decisions now just because our tax revenue’s a percentage point – 1 percent down”.

It’s just a shame we can’t believe a word of what he says. The cuts had begun long before English uttered his lies to Lisa Owen.

The story unfolds…

16 May 2014…

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Budget 2014 - Surplus real, says English .

National’s “economic whizz-kid” had promised the country a “$372 million surplus” – as well as “an increase to paid parental leave from 14 weeks to 18, free doctors’ visits and prescriptions for children under 13,  extra money to ease the cost of early-childhood education, eligibility for paid parental leave extended, and the existing parental tax credit to  rise“.

Labour’s social policies had been nicked by National. English basked in political glory. Sceptics were ignored. The country went to the polls four months later.

20 September 2014…

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National Party wins third term

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And then reality began to reassert itself.

16 December 2014…

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No surplus this year - Treasury

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National’s core policy; it’s raison d’être; it’s reputation amongst New Zealanders who are only vaguely politically conscious – is it’s so-called “reputation for fiscal prudence and responsible economic manager”, and it was rapidly being sucked down a flushing toilet of indebtedness. If it couldn’t deliver on it’s promise of returning the books to surplus – as Labour’s Finance Minister, Michael Cullen, had done between 2000 and 2008 – then what good was it?

English looked at his options to cut spending, and to raise money without creating headlines that shrieked “panic” or “broken promises”.

28 January 2015…

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Up to 8,000 state houses could be sold under John Key's radical plan - asset sales

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So much for Key’s assertion that “the truth is there aren’t a lot of other assets that would fit in the category where they would be either appealing to take to the market or of a size that would warrant a further programme”.

Truth and John Key parted company a long time ago. Key’s announcement that up to 8,000 State houses could be sold came only eleven months after his earlier committment to New Zealanders that no further state assets would be sold.

13 April 2015…

John Key denies there is a housing crisis in New Zealand;

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.

21 April 2015…

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No free GP visits for all children - Government - broken promises - health cuts - National - under 13s

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National’s broken promise flew in the face of committments made prior to last year’s general election, as then-Health Minister, Tony Ryall said;

Free doctors’ visits and prescriptions for children aged under six will be extended to all children aged under 13 from July next year, Health Minister Tony Ryall says.

Budget 2014 is investing $90 million over three years from 1 July 2015 so primary school-aged children can go to a doctor for free, any time of the day or night, and get their prescriptions free as well, he says.

“National brought in the policy of free GP visits and prescriptions for children under six, including free after-hours visits. Thanks to our prudent management of the health budget, we are extending this policy to all children under 13.

This is what careful financial management can deliver to Kiwi families.

Interestingly, there was a very minor – but all-important word missing between two otherwise identical Facebook postings by John Key and the National Party;

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Facebook - free GP visits for all children - Government - broken promises - health cuts - John Key - under 13s

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Facebook - free GP visits for all children - Government - broken promises - health cuts - National Party - under 13s

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Note the one missing word – “all” – from Key’s Facebook statement.  Otherwise, the statement is identical to the National Party Facebook page. Someone in the National Party’s politburo obviously wasn’t keeping track of re-writing their election promises.

Green Party Health and ACC spokesperson, Kevin Hague, hit the nail on the head when he demanded;

If one in ten kids have to pay up to $38 to go to the doctor when they have an accident, then that visit is not free and that’s a broken promise. It begs the question: what other promises are the Government going to renege on this year in a bid to save a bit more money?  This shows how desperate the Government is to reach a surplus that it’s trying to pinch pennies from injured children.”

30 April 2015…

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Government offloads 2800 state houses to Auckland development company

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Attempting to justify the transfer, English announced;

Over half of the new houses will be sold to help offset construction costs, and the remainder will be retained as social housing. Our bottom line is that there will be at least as many social houses in Tāmaki as the 2800 there now.

As with previous promises, National’s assurances cannot be relied upon. Ministers will utter soothing reassurances one day – and weeks, months, or years later will find justification why they had to retract.

National ministers simply cannot be trusted to keep their word. Even if 7,500 new homes are built, there is no guarantee that “half of the new houses will be … retained as social housing“. National will find a reason to sell them.

English further stated;

The Government owns one in 16 houses in Auckland and we need to do a better job with them for the sake of tenants and aspiring homeowners, as well as for the neighbourhoods they live in and the wider city…

…This transfer of ownership of HNZC properties and the responsibility for tenancy management to TRC will enable faster construction of warm, dry and safe houses that better meet people’s needs.”

His comments are a repetition of National’s spin that NZ Housing properties are ‘badly run down and in dire need of maintenance’;

Finance Minister Bill English has confirmed the Government will need to spend $1.5 billion upgrading state houses as they are sold to social housing providers.

Mr English conceded many state houses were not up to standard and had not been properly maintained.

He said the cost of deferred maintenance had risen to $1.5 billion and that the matter had been raised during discussions with social agencies considering buying state houses.

“They’ve highlighted that. So part of the benefit of the process we’re going through is that these agencies are going to apply a very tight scrutiny to the state of the houses that maybe they might be looking at buying.”

Mr English blamed the former Labour-led Government, saying it had focused more on building new state houses than on maintaining existing homes.

English’s apportioning of blame to the previous Labour government is disingenuous.

The sole reason why Housing NZ has not been able to maintain it’s properties is that it has had to pay dividends from income (rent paid by low-income/beneficiary tenants) to successive governments. According to National’s Building and Housing Minister, Dr Nick Smith;

The average dividend under the 5 years so far of this Government has been $88 million. The dividend this year [2014] is $90 million…

Fairfax reported Nick Smith as stating;

Smith said the dividend had been been fairly consistent in the past several years – $71m in 2010, $68m in 2011, $77m in 2012 and $90m in 2013.

Four years worth of dividends – $306 million – were paid to the government’s Consolidated Fund. No wonder Housing NZ is unable to maintain it’s properties.

National was brutal in it’s expectations of huge windfalls from Housing NZ;

The letters reveal that on six occasions ministers asked for dividends to be hiked, or paid faster. In March 2010, Maurice Williamson wrote: “I expect . . . a significantly higher annual return to the Crown.”

Phil Heatley, when he was housing minister, asked that in 2011-12 and 2012-13 the dividend be $45m higher than that forecast in the 2011 Budget. Later he revised expectations upwards, to $251m over three years.

In July last year, Smith said “dividend levels should be significant enough to represent a challenge”.

These demands from National ministers were placed on a government department charged with housing the poorest and most vulnerable in our society. Williamson, Heatley, and Smith were content to bleed Housing NZ and let tenants live in cold, damp, miserable conditions.

Williamson, Heatley, and Smith – National’s 21st century slumlords.

As with Solid Energy, National exploited government departments and SOEs such as ACC, as “cash cows”, with which to balance their books to return to Budget surplus. (see: Solid Energy – A solid drama of facts, fibs, and fall-guys )

It is also worthy to note that National Ministers are employing spin when it comes to state house  sales. English and other ministers use the term “transfer” and not sale.

On 6 May, Bill English stated that  houses would not be sold “unless tenants get better services and taxpayers get fair and reasonable value“.

On TVNZ’s Q+A on 10 May, Minister for Social Housing, Paula Bennett, admitted that her government was selling state housing;

@ 2.13

Corin Dann: “But the point is, they are going to get these houses, they’re going to be sold these houses, aren’t they? You say transfer but it’s a sale of houses at a discount, right?

Paula Bennett: “Well, I’m sure it’ll be less than the market value, yes.

These are sales, not a transfer. “Transfer” implies a change of ownership without cost or exchange of money. There is Big Money involved in state house sales.

[Incorrect information deleted. – FM]

6 May 2015…

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 Invercargill and Tauranga chosen for first state house sales

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The Great Sell-off of Housing continues under National – with the government disposing of all state housing in Tauranga and Invercargill. Radio NZ reported;

The Government has announced it will begin selling off up to 1600 state houses in Tauranga and Invercargill to social housing groups.

There are 370 state houses in Invercargill and 1250 in Tauranga and it’s understood all of them could be sold if buyers come forward.

Only vetted and registered community housing providers will be able to buy them and, depending on their negotiations with the Government, they may not have to pay the market price.

There is nothing to stop private developers from acquiring state houses through back-door means, as this report on a landlords website explained;

The state houses will only be available for sale to registered Community Housing Providers (CHPs).

However, Housing NZ Minister Bill English said that registered CHPs can partner with other organisations to acquire and develop social housing.

Any transfer of houses will not affect the rent tenants pay or their eligibility for subsidised housing, and properties transferred as social houses will also have to stay as social housing unless the Government agrees otherwise.  In both Tauranga and Invercargill, Housing New Zealand owns a significant number of houses so there is potential for more than one organisation to acquire houses for community ownership.

This means there could be scope for private investors to get involved in the provision of social housing – either by becoming a registered CHP or by partnering with a registered CHP.

Speaking on TVNZ’s Q+A on 10 May, Minister for Social Housing, Paula Bennett confirmed that private investors could “partner” with Community Housing Providers to purchase state houses; re-develop the properties; and sell new residences at a profit.

On 6 May, English assured the public;

Any transfer of houses will not affect the rent tenants pay or their eligibility for subsidised housing, and properties transferred as social houses will also have to stay as social housing unless the Government agrees otherwise.”

Of course National will agree. This is a wholesale sell-off of state housing. Why wouldn’t they agree to new owners on-selling these properties for a profit? Otherwise new owners would be stuck with old, dilapidated properties, requiring expensive repairs, and soon getting into deep debt.

This is privatisation, by stealth,  through the back-door, using intermediaries. This is a whole new level of government subterfuge.

It also exposes John Key’s assurance – that state assert sales have ended – as a lie.

Conclusion

Finance Minister Bill English is desperately scrabbling for every dollar he can claw back. Miserly does not even begin to aptly describe this government’s actions.

It seems that the tax cuts of 2009 and 2010 are being paid for by paperboys and girls; sick children; welfare beneficiaries; and Housing NZ tenants.

It remains to be seen what further cuts in social spending Bill English has planned. His reassurances on 2 May 2015 – that there would be no cuts to social spending – are to be treated with the same contempt as other promises, assurances, and committments that have been made, and broken, by John Key, Bill English, et al.

Governments are at their worst and most dangerous, when desperate. And this is a desperate government.

Addendum1

Karol, writing for The Standard, has more on this issue. See: “Key Govt asset stripping state housing‘.

Addendum2

Registered community housing provider, Habitat for Humanity Invercargill-branch  chairman, Stephen Falconer, is an enthusiastic cheerleader for National’s covert privatisation programme. He told the Otago Daily Times on 7 May;

We’re a private organisation, essentially, and we think that private enterprise can actually do a better job than Government on most things.

Because private enterprise has done such a stirling job thus far in meeting demand for housing in Auckland, Christchurch, and elsewhere?

It is disappointing that an ostensibly community organisation like Habitat for Humanity has bought into the government narrative, complete with parroting neo-liberal cliches that “private enterprise can actually do a better job than Government“.

If it were true that “private enterprise can actually do a better job than Government“, then why does Habitat for Humanity exist?

Addendum3

Social Housing Minister Paula Bennett is interviewed by Corin Dann on TVNZ’s Q+A. Along with Bill English’s admissions, her comments are a disturbing indication where National is going with state housing.  See:  Govt social housing target 3000 homes

 

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References

NZ Herald: PM – no more SOEs to sell after Genesis

John Key: My key commitments to you

NBR: Weak dairy prices prompt analysts to pull back Fonterra forecast payout for next season

The Independent: How China’s slowing GDP growth could drag down the global economy

TV3 News: National Party wins third term

NZ Herald: No surplus this year – Treasury

Fairfax media: Budget 2014 – Surplus real, says English

TV3: The Nation – Bill English

Fairfax media: Budget 2014 – Surplus real, says English

TV1 News: Up to 8,000 state houses could be sold under John Key’s radical plan

Radio NZ: Key denies Auckland housing crisis

NZ Herald:  No free GP visits for all children – Government

National Party: Free doctors’ visits, prescriptions for under 13s

Facebook: John Key

Facebook: National Party

Scoop media: Govt breaks free doctors visit promise to kids

Fairfax media: Government offloads 2800 state houses to Auckland development company

Radio NZ: Govt to spend $1.5b fixing up state houses

Parliament: Hansards – Questions for Oral Answer — Questions to Ministers – 8 May 2014

Fairfax media: Nats milking Housing NZ – Labour

Fairfax media: Not much in the cupboard for English to dine on

NZ Herald: State houses in Tauranga and Invercargill to go on the market

TVNZ Q+A: Govt social housing target 3000 homes

Landlords – For Kiwi Property Investors: State houses to go on sale in Tauranga & Invercargill

NZ Herald: Budget 2012 – ‘Paper boy tax’ on small earnings stuns Labour

Fairfax media: Invercargill and Tauranga chosen for first state house sales

Radio NZ: Tauranga, Invercargill state houses to be sold

Otago Daily Times: Invercargill among first state house transfer sites

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

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

“It’s fundamentally a fairness issue”- Peter Dunne

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

The Mendacities of Mr Key #11: Sorry, Prime Minister, what ‘mandate’ were you referring to?!

Other blogs

Polity: Housing horrors

The Jackal: Nationals housing failure

The Standard: Key Govt asset stripping state housing

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I will never turn my back on the poor

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This blogpost was first published on The Daily Blog on 10 May 2015.

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The closure of three prisons and loss of 262 jobs – five issues for the National govt

18 April 2015 10 comments

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justice-for-sale-600x337

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The closure of three prisons and loss of 262 jobs

The closure of units in Waikeria, Tongariro-Rangipo, and Rimutaka Prisons, and the subsequent estimated loss of 262 jobs has been openly conceded as a re-distribution of inmates to the new, privately run prison at Wiri.  Corrections chief executive, Ray Smith, stated on 9 April;

I am also proposing to close units at three prisons – Rimutaka, Waikeria and Tongariro/Rangipo…

… With the opening of Auckland South Corrections Facility (at Wiri), and the subsequent reduction in pressure on prison capacity, we can now look at closing these end of life facilities.

The Wiri facility will be managed by multi-national corporation, Serco, as a profit-making venture, paid by the tax-payer.

Smith has blamed the closures and redundancies on the Waikeria, Tongariro-Rangipo, and Rimutaka Prisons being  “50 years old, surrounded by facilities that are 100 years old“. He claims “it would be uneconomic to bring them up to scratch“.

The closure of units at Waikeria, Tongariro-Rangipo, and Rimutaka is estimated to save the National government $165 million. This will be a godsend to Finance Minister Bill English, who admitted on 10 April that National’s much heralded promise of a budget surplus was looking more and more unlikely;

We’re (the Government) is continuing to manage the books carefully but lower inflation, while good for consumers, is making it less likely that the final accounts in October will show a surplus for the whole year.

With the  planned sale of state houses to the  Salvation Army, and other social services, having collapsed, English’s expectation of reaping big cash dividends from the housing sell-of has evaporated.

As I wrote in October 2014;

Meanwhile, Bill English was outlining National’s true agenda, whilst Key was putting on his benign face to the New Zealand public.  As TV3’s Brook Sabin reported,

A big state-house sell-off is on the way, and up to $5 billion-worth of homes could be put on the block.

The shake-up of the Government’s housing stock will be a key focus for the next three years, with Finance Minister Bill English to lead it.

On the block is everything from a tiny 75 square metre two-bedroom state house in Auckland’s Remuera, on the market for $740,000, to a three-bedroom home in Taumarunui for just $38,000. Thousands more properties will soon hit the market.

The reason for putting up to  $5 billion-worth of homes  on the block?

Crashing dairy prices had left a gaping hole in the National Government’s books, and their much-vaunted Budget surplus next year was under threat. Remember that  Key was candid in the implications for the economy and the  government’s tax-take; when he stated – also on 6 October;

It can have some impact because if that’s the final payout, the impact would be as large as NZ$5 billion for the economy overall, and you would expect that to flow through to the tax revenue, both for the 14/15 year and the 15/16 year. My understanding is Treasury is working on those numbers for the incoming Minister of Finance, which fortunately is the same as the outgoing Minister of Finance as well.”

Faced with the imminent sinking of one of National’s cornerstone election promises – a return to surplus by 2014/15 – $165 million saved by the closure of prison units will be  a relief to an increasingly frustrated Bill English.

Key and English couldn’t flog of $5 billion of state housing to social services. So now they are looking at what is effectively privatisation-by-stealth with our prison services.

And bugger the inevitable consequences…

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Justice not for sale logo

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Five issues for the National govt

The closure of units at Waikeria, Tongariro-Rangipo, and Rimutaka Prisons will not be without dire consequences that impact on nearly every aspect of New Zealand society, regions, and the economy.  Even the political landscape may be altered if this ill-considered plan goes ahead.

1. Sending “clients” to a private facility

There is something decidely immoral about up-rooting hundreds of prisoners whose freedom of movement and freedom of choice has been curtailed by State sanctions, and handed over into the hands of a private corporation – Serco – where the prime motivator is making a profit for shareholders. (Overseas shareholders, to be precise.)

In no way can this dystopian scenario be considered part of the “free market”, as all forms of choice have been removed from the prison “clients”.

Serco have been handed “clients” into their “care” whether wanted or not by the prisoners. Not since the slave trade from the 16th to 19th centuries have human being been treated as commodities by Western nations.

Make no mistake; private prisons turn human beings into “things”, to be used by business as investment commodities.

How long before prisoners are sold, bought, and traded by competing corporatised prisons? How long before their labour is sold to other businesses, for profit?

2. Regional economies and job losses

The loss of 262 jobs in Upper Hutt (Rimutaka),  Waikeria, and Tongariro-Rangipo will impact considerably on those regional economies already badly hit by loss of industries, closed businesses, population moving away, and continuing down-turn in the dairy industry.

It is this sort of regional neglect that resulted in Northland voters abandoning the National Party and electing NZ First leader, Winston Peters, as their electorate MP.

Waipa District mayor, Jim Mylchreest, was frustrated and angry at National’s further under-mining of what remained of regional economies;

Here they are with a major change and not even bothering to let us know plans are afoot.

I assume that they’ve done their sums and it’s more efficient for them but they’re not looking at New Zealand in terms of what are the benefits to try and keep employment in the regions.”

Mayor Mylchreest has every right to be angry – closure of a high-security wing at Waikeria Prison will  result in the loss of 148 jobs – creating considerable impact on nearby Te Awamutu (pop: 10,305), only sixteen kilometers away.

Is this how the National Party “supports” the regions?!

It seems that National has not learned a single thing from the Northland by-election.

Rimutaka may well be a safe Labour seat. But it also delivered 15,352 Party Votes for National – now at risk as Upper Hutt will be hard hit by job losses at Rimutaka Prison.

National may have mis-calculated the political fall-out from this move.

3. NZ First/Country Party

A loss of 262 jobs. Millions lost from regional economies. Small towns losing more people. Businesses closing, through lack of turn-over. Which, in a vicious circle leads to more job losses…

A recipe to increase NZ First’s re-positioning on the politicalk spectrum as a de facto “Country-Regional Party”?

It certainly sounds like it.

National may have handed Peters an early Christmas gift to campaign on. Disaffected voters seeing hundreds of jobs lost in their communities – with  subsequent closures of down-stream businesses in their town Main Streets – may wonder why on Earth they should keep voting for National? What’s in it for them?

Not much it would seem.

“Vote National – Lose Your Job” would appear to be the new slogan for National for the 2017 elections.

I have no doubt that even as I write this, and you the reader are reading my words, that Winston Peters and his NZ First strategists are already working on how to maximise these events for their own political gain.

I have no doubt whatsoever; the “Northland Experience” will be repeated throughout the country – much to Winston Peters’ delight.

4. Prisoner’s families

National’s Corrections Minister Peseta Sam Lotu-Iiga has stated;

I understand that this proposal may be unsettling for affected staff but Corrections will have extensive support and assistance in place should the proposal go ahead. I also believe that the proposal reflects our commitment to providing safe and secure working conditions for staff and a safe and productive environment for prisoners.

Prisoners have a much better chance of successful rehabilitation in modern facilities where they have access to education, training and employment opportunities.

Being close to their families is an important factor in rehabilitation for some prisoners.”

However, transferring several hundred prisoners from as far afield as Rimutaka, to Auckland – a distance of some 650kms – is hardly “being close to their families”  and one can only imagine how increasing isolation from family and community will give  “prisoners […] a much better chance of successful rehabilitation”.

The distances involved are considerable, as this Corrections Department map illustrates;

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[6] Waikeria Prison [8] Tongariro/Rangipo Prison [13] Rimutaka Prison

[6] Waikeria Prison
[8] Tongariro/Rangipo Prison
[13] Rimutaka Prison

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Minister Lotu-Iiga needs to explain why he thinks that isolating prisoners in this manner, can possibly assist in their rehabilitation and reintergration back into their communities?

It seems that transferring prisoners out of their communities flies in the face of the Minister’s assertions.

It may also prove more expensive, as prisoner’s families make increased calls upon the Child Travel Fund;

The Child Travel Fund provides financial support to eligible children traveling to visit a parent in prison. The fund also supports parents traveling to visit a child who is under 18 years of age and in prison.

Does National even care?

They should. Increasing prisoner’s alienation from family and communities undermines every effort made by the judicial/corrections system to rehabilitate prisoners.

It should definitely be cause for concern for  the corporate managers of Wiri, for whom rehabilitation and reduced re-offending is part of their contract, according to Corrections chief executive, Ray Smith;

They can earn up to $1.5 million in incentive payments if they can reduce the rate of reoffending by up to 10 percent more than the department can do.”

According to Derek Cheng at the Herald, writing three years ago;

For Wiri, Serco will face stiff financial penalties if it does not meet rehabilitation targets – which will be set at 10 per cent lower than public prisons.

The Corrections Department has a target to reduce re-offending by 10 per cent. If that is achieved, Wiri would have to achieve a rate 20 below the current rates or face fines, which have yet to be set.

Though Finance Minister Bill English – quoted in Scoop at around the same time – was more cautious;

It will also face financial penalties if it fails to meet short-term rehabilitation and reintegration measures including prisoner health and employment targets, and safe, secure and humane custodial standards.”

However, speaking to Paul Henry on Radio Live, Corrections chief executive, Ray Smith, was more circumspect when asked directly what penalties were involved in prisoners re-offended after release;

(@ 7:35)

Henry: “If rehabitation rates, if recidivism rates deteriorate, is there a penalty?”

Smith: “Well they just can’t earn the incentive payment if they can’t [meet the targets(muffled)].”

Henry: “So there isn’t actually a penalty?”

Smith: “[Stuttered words]...the penalties are associated with failure on security. The incentives are geared towards having to actually achieve better outcomes than the Department.”

So unlike penalties associated with prisoner escapes, where Serco actually has to pay the government, the only “penalty” associated with not meeting rehabilitation targets is foregoing $1.5 million in incentive payments?

Under Serco’s contract to manage Mt Eden Remand Prison, it is fined $150,000 each and every time a prisoner escapes, as happened in 2011 and 2012.

Under the contract to manage Wiri, it appears that the “penalty” is foregoing incentive payments.

The two “penalties” are not exactly the same and Minister English was being less than clear when he referred to Serco facing “financial penalties“.

Repeating the question – does National care? Not in the least, one may rightly guess. After all, chances are that National will no longer be in government when the ‘chickens come home to roost’ on this little social time bomb, and John Key will be writing his memoirs somewhere on an idyllic Hawaiian beach.

5. Relocating staff?

There seems to be confusion as to what will happen to the 262 staff who will lose their jobs from  Waikeria, Tongariro-Rangipo, and Rimutaka Prisons.

In his interview with Paul Henry on Radio Live on 10 April, Corrections CEO Ray Smith offered to do his best to find replacement jobs at other facilities for 262 redundant staff.

Suggestions that staff would be relocated to Auckland, with a “$20,000 relocation assistance-payment” appears to be farcical for two reason;

1. $20,000 payment to a Corrections staffmember living in a small town, where properties are worth considerably less than the over-heated Auckland housing market, is unhelpful. There is a worsening housing shortage in Auckland, and it seems to be verging on incompetence for this government to be adding to the housing problem by encouraging more workers and their families to move to the the city, thereby adding to congestion.

2. According to various media reports, the new Wiri facility is already fully staffed;

And unfortunately for staff who will be laid off, the opening of a large new prison in South Auckland next month is no consolation as all jobs are already filled. – TV1 News

A new prison in south Auckland will pick up the relocated inmates, but it is already fully staffed.TV3 News

So where are the jobs? Certainly not at Wiri.

Which makes this statement from Corrections Minister Lotu-Iiga unconvincing;

It should also be noted that the number of prisoner places is not reducing and will in fact increase with the opening of [Wiri]. We will have a net increase of 433 beds.”

The closure of three facilities; 262 redundancies; and contracting out to a private provider all reeks of National’s mania for cost-cutting.

As with many other cost-cutting exercises, it is New Zealanders; their families; and economically-fragile regions and small towns, that are having to pay the price. Treating prisoners as commercial commodities adds a particularly nasty aspect to this exercise.

Meanwhile, foreign-owned Serco stands to gain $30 million of tax-payer’s money, per year, from managing the new Wiri prison.

Someone is benefitting, and it is not us.

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Justice not for sale logo

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Prison facts and statistics – December 2014

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Number of prisoners in each prison - nz prisons

Source

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Justice not for sale logo
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References

Fairfax media: Up to 262 prison jobs may be cut in major Corrections restructure

TV3 News: Union – Prison staff can’t afford to move to Auckland

TV1 News: Budget surplus looking increasingly unlikely this year, Bill English admits

TV3 News: State housing sell-off worth $5B

Hive News: Treasury re-crunching Budget numbers for low Fonterra payout

National Party: Remaining on track to Budget surplus in 2014/15

Wikipedia: Serco

TV1 News: Town’s fury at being left in dark over prison closure

Wikipedia: Te Awamutu

Election Results 2014: Official Count Results — Rimutaka

Department of Corrections:  Sustainable Development Framework

Department of Corrections:  Travel assistance for visits

TV3 News: Union – Prison staff can’t afford to move to Auckland

NZ Herald: New private prison at Wiri given green light

Auckland Scoop media: Amazing promises for new Wiri prison: less offending, better safety, superior service

RadioLive: Around 260 staff face redundancy at Waikeria, Rangipo and Rimutaka prisons (audio)

Auckland Scoop media: Private operator of Mt Eden fined $150,000 for prison escape; security improvements made

Radio NZ: Serco fined after another prisoner escape

TV3 News: Govt criticised over prison job cuts

Radio NZ: Serco expects $30m revenue from Wiri prison

Department of Corrections:  Prison facts and statistics – December 2014

Previous related blogposts

The lunatics are running the Asylum

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

 


 

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140105 Housing in prisons

 

 

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

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

1 November 2014 11 comments

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1949 state house in Taita

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

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Bill English comes clean on National’s intentions for HNZ privatisation

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On 14 October, in a report on The Daily Blog, I wrote,

In his story, TV3’s Brooke Sabin raised the question,

“So a big cull of state houses is about to get underway, but the crucial question is: Will all that money make its way back into social housing or will some be pocketed by the Government? The official response is that hasn’t been worked out yet.”

Yes, it has, Mr Sabin.

The money will indeed be “pocketed by the government”.

For no other reason than their re-election in 2017 depends on it.

The TV3 story reported that up to 22,000 homes worth an estimated $5 billion could be sold off. This would make it one of the biggest asset sales in recent history – when John Key himself promised an end to state asset sales in February this year.

It is also a time when 5,563 are on Housing NZ’s ever-growing waiting list.

Three days later, on 17 October, Brook Sabin’s question was answered in full, and my prediction (once again) proved to be correct. A quote from our esteemed Deputy Prime Minister, Bill English,

‘No point’ in new state houses – Bill English

Finance Minister Bill English says the proceeds from selling state houses are unlikely to be spent on new state houses and may go into the Consolidated Account.

“I mean, if we want less stock, there’s not much point in rebuilding stock with it” …

Hat-tip: Anthony Robins

Whilst National “made noises” about some  Housing NZ properties being sold, or transferred to social organisations early in the year, there were no pre-election policy announcements  remotely resembling those made public by Bill English two weeks after the election. (See: National’s pre-election policy: 2014)

This was a radical, unannounced, policy that has taken the country by surprise.

In the Herald, columnist Dita De Boni was scathing in her condemnation of Key’s heretofore secret plan to sell  state houses,

Those conditions gave the Labour Government – elected in 1935 – a mandate to make the provision of state housing a top priority. Then Minister of Housing Walter Nash told New Zealand it could not prosper or progress with a population that “lack[s] the conditions necessary for a ‘home’ and ‘home life’, in the best and fullest meaning of those words”. It was a popular sentiment at the time, but look how far we have since regressed. We again have children and their parents living in cars and sheds. We have thousands of homeless; old diseases and ingrained misery have returned as sections of the population struggle to keep pace with the rising cost of living.

And at this critical juncture in our history, our Government is looking, instead, to offload state housing. It is the absolute, ultimate irony: a public welfare system that bridges the gap left by market failure, that, when starved, denigrated and under-resourced, as it is now, can only, apparently, be saved by the market.

[…]

The Government has tried to slip the sell-off of state housing under the radar: I guess they don’t want to be seen to be contradicting their pre-election promise not to sell any more state assets. They focus instead on “first home affordability” – a much more pressing concern for their supporters (as long as it does not affect their other supporters, who don’t want too much new housing to depress the capital value of their property).

[…]

It is hard to understand how reverting to the Victorian solution of seeing churches and social agencies haphazardly tackle this gaping social wound will work. They don’t have the resources, for one thing. They are also not plugged into the bigger picture – the social needs of the tenants, the transport and logistics needs of new housing and so forth, all things a clever, committed government can oversee. Not ours then, which is trying desperately to shift the immediate costs of social housing elsewhere, and the benefits to a crony cohort.

One method they’ve used is to seed the idea with the public that state housing is all let to gang members and chronic social misfits who trash their properties and refuse to move out. Of course, that does describe a percentage of state house tenants – or any tenants.

Call me old-fashioned, but I tend to think that housing is one of the core concerns of Government, and that the provision of state housing – as well as its proper management and upkeep – is fundamental. It is astonishing that a Prime Minister who grew up in a state house, and has gained huge political advantage from being able to trumpet that fact, can’t see why it is wrong to pull up the ladder after him.

I encourage the reader to read Ms De Boni’s full piece. It is a savage indictment of John Key’s miserable agenda to get the State out of social housing.

New Zealanders should be under no illusion:  housing in this country is about to get a whole lot worse before it improves. We can expect to see more over-crowding;  entire families living in cars, under bridges;  the rise of  the first squatter camps since the Great Depression; more poverty; and more spreading disease.

Bill English has made it abundantly clear: this government will be selling state houses. It will not be “rebuilding stock” (houses).

This may not be what New Zealanders voted for on 20 September – but did 1,131,501 voters who ticked the box for National expect better?

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References – Part 3

TV3 News: State housing sell-off worth $5B

Radio NZ: PM rules out more asset sales

Fairfax media: Housing NZ waiting lists swamped

NZ Herald: ‘No point’ in new state houses – Bill English

NZ Herald: State housing shake-up: Lease up on idea of ‘house for life’

NZ Herald: Dita De Boni – State house poster boy callous to pull up ladder

Wikipedia: New Zealand general election, 2014

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

Other blogs

The Jackal: More homelessness under National (30 July 2012)

The Standard: Unaffordable housing & the culture of greed

No Right Turn:  A surprise policy

Social Groups

Facebook: Affordable Housing For All

Facebook: Housing NZ Tenants Forum

Facebook: Tamaki Housing Group- Defend Glen Innes


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Irony of ironies, a National Party 1938 election poster

Irony of ironies, a National Party 1938 election poster

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This blogpost was first published on The Daily Blog on 28 October 2014

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

18 October 2014 17 comments

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1949 state house in Taita

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

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National’s housing development project: ‘Gateway’ to confusion

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Perhaps nothing better illustrates National’s lack of a coherent housing programme than the ‘circus’ that is their “Gateway” policy. The history of this project has to be seen to be believed. As I reported in November 2012;

October 2010: Gateway Project ON!

On 10 August 2010,  the resignation of  former Labour Pacific Island Affairs Minister, Winnie Laban,  triggered a by-election in the Mana electorate. National stood Hekia Parata, a List MP, as their candidate.

As part of National’s campaign to win Mana from Labour, Housing Minister Phil Heatley announced a new housing programme called the “Gateway Housing Assistance“. According to their press release,

Housing Minister Phil Heatley has today launched a new programme which will make it easier for first-time buyers and those on lower incomes to build or purchase their own homes.

Gateway Housing Assistance allows purchasers to build or buy a property but defer payment on the land.

“It is important the Government provides opportunities for people to move into home ownership. Affordable homes schemes such as Gateway is another way we can assist more people into a home of their own,” says Mr Heatley.

“Under Gateway full and final payment for the land can be deferred for up to ten years. This ten year period allows people on lower incomes to concentrate on designing and building, or buying, their homes before they assume the additional burden of paying for the land,” says Mr Heatley.”

It was an election stunt, of course. Much like National’s “sudden interest” in upgrading State housing in the Porirua area.

Three months, the by-election was won by  Kris Faafoi.

May 2012: Gateway Project OFF!

Having lost the 2010 Mana by-election, and as National scrambled to cut  state services; close schools; and scrap any  projects it could get away with (avoiding any public backlash in the process)  the “Gateway Housing Assistanceprogramme became a casualty,

John Key has defended a decision to cancel sales of affordable housing in an Auckland development, saying low interest rates are making it easier for first-time buyers and people on low incomes to afford their own homes.

The Hobsonville Point development, started in 2009, allocated up to 100 of 3000 houses under the Gateway scheme, a helping hand for lower-income first-home buyers who could not afford to buy in Auckland.

[…]

The Prime Minister defended the decision not to include more of the Hobsonville development in the Gateway scheme.

“The Government has looked at that programme and decided that’s now not the most effective way of going forward”.”

Key added,

He said one of the positive stories at the moment was that mortgage rates had fallen.

“So we think the capacity for lower income New Zealanders to own their own home is greatly enhanced by the fact interest rates are lower.

“If you have a look at the average home owner in New Zealand, they are paying about $200 a week less in interest than they were under the previous Labour Government”.”

November 2012: Gateway Project ON (again)!

On 18 November, Labour Leader David Shearer delivered a speech to  his Party conference, promising to implement a mass-construction project to build 100,000 homes for desperate families.

Having gotten ‘wind’ of Shearer’s plans for “Kiwi Build”, National scrambled to dust off it’s Gateway Project, three days before the Labour leader’s speech,

The Government has reinstated plans to allocate a percentage of the houses at Hobsonville Point in Auckland as affordable homes priced under $485,000.”

Then Housing Minister, Phil Heatley, was keen to reassure the voting public that National would “do it’s bit” to help Kiwi “mums and dads” into their own homes – something that has become a distant dream during National’s term.

Even pro-National columnist, John Armstrong, was less than  impressed at the time,

“…when it comes to increasing the housing stock, there is not a lot central government can do unless it is willing to spend big bikkies.”

As was widely reported at the time, the so-called “Gateway Project” was less than a stirling success;

“In 2009, 100 of the 3000 homes at the development were tagged as affordable under the Gateway scheme, giving lower-income first-home buyers a helping hand.

Only 17 were sold, 14 for less that $400,000.”

As I pointed out two years ago – and not much seems to have changed in the interim under this government –

One aspect to Housing Minister Heatley’s press release (Hobsonville Point a boost for Auckland housing) that is painfully evident, is National’s luke-warm approach to the housing problem in this country.  Having read it, one cannot avoid the conclusion that their heart simply isn’t in it, and each word in their press release must have felt like pulling teeth.

Just by comparing the two releases of housing policies, one could easily gauge which Party was more enthusiatic;

National: a press release

Labour: a major policy speech,  given by the Leader of the Labour Party, at the Party annual conference, and released via television, internet, newspapers, etc.

National was not interested in assisting New Zealanders into their own homes. In this instance, National was more interested in trying to up-stage and undermine Labour’s release of  a major policy initiative.

October 2014: Gateway Project –  Status Unknown

As at this point, the status of Housing NZ’s ‘Gate Way‘ assistance project is uncertain, with a previous page on Housing NZ’s website now apparently a dead-link;

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Housing  NZ - Gateway assistance project - webpage

 

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“We’re sorry, but that page doesn’t exist” – is appropriate. The Gateway Project – after only seventeen homes sold under the scheme – seems to have been quietly canned. But as John Armstrong pointed out in 2012, the purpose of National’s quasi-housing “scheme” was not to build new homes for struggling New Zealanders;

“… the Government has finally steered political debate on to something it wishes to talk about, rather than being hostage to what Opposition parties would prefer to debate.”

High rents; growing unaffordability; a shortage of social housing; and growing homelessness – all impacted on our notion of having a decent roof over one’s head. News that,

“…more than half of New Zealand’s homeless were under 25, and a quarter were children. Most lived temporarily with friends or family, squeezed into living-rooms or garages, rather than on the streets.”

– was not what New Zealanders wanted to hear. Not in a nation that once prided itself on high rate of home ownership and the “quarter acre pavlova paradise” was deeply ingrained in the Kiwi psyche. That Paradise was fast disappearing, according to Richard Long, writing in the Dominion Post in 2012,

“So much for our quarter-acre pavlova paradise. The Government belatedly has come to the conclusion that something needs to be done about the failure of the housing market to provide the necessary land; and for resources, somehow, to be directed to providing low-cost housing instead of the present concentration on the expensive stuff.

All this is hardly new. I recall Helen Clark, when prime minister, lecturing me at a Wellington Cup meeting more than a decade ago about the need for land to be made available – at a reasonable price – to address the crisis. She surmised then that speculators were holding on to the land to gain higher returns. And she fingered, quite prophetically, the absurdity of house construction costing 30 per cent more in New Zealand than in Australia.

As the 2014 Election rolled closer, housing once again became a major election-issue. As Long wrote,

Now the Nats are going to have a go at solving the problem, with Finance Minister Bill English basically admitting the market system has failed.”

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Key’s promise – 25 February

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The sell-down of Air New Zealand, Genesis Energy, Mighty River Power, and Meridian raised approximately  $4.67 billion. This was a far cry from earlier expectations of   between $5 billion and $7 billion – and way below Key’s initial, wildly-optimistic forecast of $7 billion to $10 billion in January 2011,

“If we could do that with those five entities … if we can make some savings in terms of what were looking at in the budget and maybe a little on the upside you’re talking about somewhere in the order of $7 to $10 billion less borrowing that the Government could undertake.”

On 25 February 2014, Key announced an end to National’s asset sales programme,

“The truth is that there aren’t a lot of other assets that would fit in the category where they would be either appealing to take to the market or of a size that would warrant a further programme. Or they sit in the category where they are very large, like Transpower, but are a monopoly asset and so aren’t suited I think.”

He explained,

“Just as we did before the last election we’re making our position on share sales clear to New Zealanders before we go to the polls later this year.

We’ve achieved what we wanted with the share offers in energy companies and Air NZ. We’re now returning to a business-as-usual approach when it comes to [state-owned enterprises].”

Why was Key making such a clear promise to the electorate?

An earlier Roy Morgan Poll on 22 January 2014 – one month before Key announced a cessation of asset sales – would have sent National’s back-room strategists into a screaming tail-spin;

National: 43.5%

Labour: 33.5%

Greens: 12.5%

Those were heady days for National’s opponents, and a change in government seemed inevitable.

By committing National to an end to asset sales, Key was being strategic. He knew state asset sales were deeply unpopular with the public, and National did not want to risk giving opposition parties any further ammunition during what was then considered to be an up-coming, closely-fought election.

The polls (at the time) had forced National’s hand to acquiesce to public pressure. It would prove to be a pre-election promise they would regret later.

National made its panic-driven decision to abandon further asset sales at the same time that Fonterra announced at the end of February this year that it would be boosting it’s payout to dairy farmers,

Fonterra’s 35 cent lift in its milk price for the 2013-14 season to $8.65/kg milk solids means an extra half a billion in revenue for New Zealand.

The new forecast is a record payout from the co-operative and with the 10 cent kg/MS dividend on top, meant potential cash in hand for a fully shared up Fonterra farmer-shareholder of $8.75 kg/MS.

Federated Farmers’ dairy chairperson, Willy Leferink, was ebullient,

”In 2010, the NZIER said a $1 kg/MS rise in Fonterra’s payout makes every New Zealander nearly $300 better off.  Given this latest 35 cent kg/MS uplift, every New Zealander could be $100 better off as a result of what we do.”

It was also no doubt something that National was casting a keen eye over, as an increased Fonterra payout meant more tax revenue. National was ‘banking’ on high dairy prices to get it back to surplus by next year, 2015.

It would be a slim surplus of $372 million.

By 24 September, Fonterra had slashed it’s forecast payout down to $5.30/kg.

Prime Minister John Key was candid in the implications for the economy and the  government’s tax-take;

“It can have some impact because if that’s the final payout, the impact would be as large as NZ$5 billion for the economy overall, and you would expect that to flow through to the tax revenue, both for the 14/15 year and the 15/16 year. My understanding is Treasury is working on those numbers for the incoming Minister of Finance, which fortunately is the same as the outgoing Minister of Finance as well.

They are giving him (English) a bit of an assessment of what impact that might have. There’s a lot of different factors that go into that surplus. We expect it to have some impact and it’s a very narrow surplus. That doesn’t mean that we won’t achieve surplus. It means the Government will have to think through all of the issues here. There may be other options we choose to take.”

Bill English was already working on those “other options“. He needed to find $5 billion dollars to fill a hole left by collapsing international dairy prices.

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National’s pre-election policy: 2014

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National’s housing policies for the 20 September  election were ‘divvied’ up between first home buyers and ‘social’ housing. Note that throughout National’s policy document, they refer to “social housing” and “state housing” is referred to as “state houses”  only in terms of properties, not as a policy term.

For first home buyers, National was prepared to allow Kiwisaver investors to effectively ‘raid’ their savings and use the funds for a deposit for a house purchase. Aside from further pushing up the price of a limited availability of properties, this is hardly what Dr Michael Cullen had in mind when he set up Kiwisaver in July 2007. Saving for home ownership and saving for retirement are not necessarily the same thing.

On 24 August 2014, Key stated in a speech,

“The policy will help tens of thousands more first home buyers achieve their dream of home ownership. It will get young families started building what for most will be their biggest asset.

National backs young Kiwis who are disciplined, save up and want to put a deposit down on a house.  National values home ownership.  That’s because it provides stability for families, strength for communities and security in retirement.”

However, not all New Zealanders  are fortunate enough to be in high-paying jobs where they can afford to “save up and want to put a deposit down on a house” – and pay high rent whilst doing so in rented accomodation.

Whether the houses are actually there to buy is also a moot point.

To date, this country has been woefully short of supplying new, mid-priced homes, to meet demand. Instead, ” the majority of new homes today are upmarket affairs“, as Rebecca Macfie reported for ‘The Listener‘ in July 2012.

The problem, simply, is insufficient supply to meet demand – especially of affordable properties. According to National’s policy, they need to find “ 90,000 lower and middle income first home buyers into their own home over the next five years” – a policy sounding remarkably similar to Labour’s 100,000 new homes over a space of ten years.

National’s social housing policy was more vague, with passing reference only to social housing providers other than Housing NZ;

What we will do next…

Continue helping those in most need

Support a growing role for community housing providers in delivering social housing through the social housing fund and Housing New Zealand.

In case the page mysteriously disappears (as have other National Party policy releases), the relevent section of the  Social Housing page   is posted here;

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National Party - 2014 election - social housing policy - Housing NZ

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There was  no mention of things to come once the election was over. Certainly no mention of a mass housing sell-off,  which could also be described as  a partial asset-sale of Housing NZ.

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English Blames Everyone Else

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On 7 October, as the National government faced increasing pressure over New Zealand’s growing economic and housing problems, Finance Minister Bill English made this bizarre accusation against local bodies;

“The growth in housing costs over time, to the point where you’re seeing families spending 50 or 60 percent of their income on housing – that’s pretty devastating at the low end.

So councils need to understand that when they run these policies that restrict the availability of land and the opportunity for lower value housing they are causing poverty.”

It was an accusation that startled city leaders from one end of the country to the other, from Auckland to Christchurch.

Green co-leader Metiria Turei was speaking for hundreds of local body elected leaders when she quite rightly pointed out,

“Nowhere in any report from any non-government organisation or Government department has urban planning been blamed for child poverty.

What I think is happening is Bill English is trying to divert attention from the fact that the solutions are obvious and within the power of the Government to implement, but they don’t want to.”

Interestingly, as reported in the same Radio NZ story,

ANZ chief economist Cameron Bagrie said restrictions around the availability of land had affected housing affordability but it wasn’t the only factor to blame for poverty.

He said there were a lot of other challenges behind the scenes, and there was no one-size-fits-all solution to make houses more affordable.

Mr Bagrie said housing unaffordability was possibly due to wages being too low.

In essence, if workers’ remuneration is too low, they cannot purchase the consumer goods and services their society produces.

English, though, was not blaming Councils simply because he was having on “off day”. His diatribe was part of a carefully-calculated agenda, and National’s attack on Local Bodies was  part of a slowly unfolding plan.

He was looking for $5 billion, and there was precious little loose change behind the sofa cushions in the Beehive. Also, as Key had promised on 25 February 2014, National’s asset sales programme had been completed, and there would be no further full-scale privatisation of SOEs.

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Key’s promise – 6 October

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On 6 October, both Key and English made public statements that, on the face of things, seemed to be at variance with each other.

Key said that the government would not “you know, go crazy” selling Housing New Zealand homes

Yet, at the same time, he made clear what his interest in Housing NZ was;

“Housing’s a big issue, I think, for the Government; it’s a big issue for New Zealand and there’s specific parts to that.

So what we’ve done there is to have Bill English as the Minister of Finance responsible for what is a very big asset now in the Government’s balance sheet: Housing New Zealand. About NZ$15 billion worth of assets there.”

Now, in theory, with the income related rents there is a cash flow there that should allow them to actually go and build their housing stock. That is at way too slow a rate than what the government would like to see. So if you think NZ$15.5 billion sitting there for Housing New Zealand and NZ$100 million sitting in social housing, that mix is wrong and I think there is a real opportunity here to potentially change that dynamic and I want to see a lot more work done in that area.”

Part of National’s new agenda was Key’s intention to create a ministerial team compromising of Bill English, Paula Bennett and Nick Smith. The three ministers “would work together on housing issues”.  But the crucial, critical appointment was Bill English, who would take responsibility for Housing New Zealand.

Bill English; Finance Minister and now also Minister Responsible for HNZC (Housing New Zealand Corporation)?  What was the connection between the two portfolios?

As well as eying up the multi-billion asset that is Housing NZ and the additional millions in cash-flow, Key padded his speech with a litany of alleged “faults” with the Corporation;

  • too slow “ to actually go and build their housing stock”
  • “the mix is wrong”
  • the asset is often in the wrong place
  • governments of “successive persuasions have struggled with”  State housing flexibility
  • there was too much ” capital tied up in Housing New Zealand stock
  • they are not always terribly flexible
  • the previous government completely ignored the upkeep of those homes

The implications from repeated rhetoric is clear; Housing NZ has allegedly “mis-managed” their stock, and the State “struggles” with being a suitable landlord.

In his speech, Key failed to mention that National (and previous governments) have been using Housing NZ as a “cash cow”, demanding huge cash dividends from the corporation. As Nick Smith admitted in Parliament on 8 May,

“The average dividend under the 5 years so far of this Government has been $88 million. The dividend this year is $90 million.”

Sucking an average $88 million per year from Housing NZ – a government body charged with assisting the poorest people in our communities – was bound to have negative consequences. Key’s “litany of faults” was wholly predictable – a result of government self-interest to balance their books, at the expense of Housing NZ tenants.

It is not the first time National has used a SOE as a cash cow – or perhaps more akin to a lethal parasitic organism – to the  SOE’s eventual detriment (see: Solid Energy – A solid drama of facts, fibs, and fall-guys).

At any rate, Key’s 6 October speech was laying the groundwork for National’s new State housing policy – which Bill English was making public the very same day. After all, as Tom Scott so astutely pointed out in 2012, Key was renowned as “the Great Salesman” for good reason;

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Chairman Key - The Dear Leader

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Who better to “pitch the deal” to the public, than the most trusted, popular, apolitical  Prime Minister since perhaps David Lange?

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Real Reason for sell-off?

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Meanwhile, Bill English was outlining National’s true agenda, whilst Key was putting on his benign face to the New Zealand public.  As TV3’s Brook Sabin reported,

“A big state-house sell-off is on the way, and up to $5 billion-worth of homes could be put on the block.

The shake-up of the Government’s housing stock will be a key focus for the next three years, with Finance Minister Bill English to lead it.

On the block is everything from a tiny 75 square metre two-bedroom state house in Auckland’s Remuera, on the market for $740,000, to a three-bedroom home in Taumarunui for just $38,000. Thousands more properties will soon hit the market.”

The reason for putting up to  $5 billion-worth of homes  on the block?

Crashing dairy prices had left a gaping hole in the National Government’s books, and their much-vaunted Budget surplus next year was under threat. Remember that  Key was candid in the implications for the economy and the  government’s tax-take; when he stated – also on 6 October;

“It can have some impact because if that’s the final payout, the impact would be as large as NZ$5 billion for the economy overall, and you would expect that to flow through to the tax revenue, both for the 14/15 year and the 15/16 year. My understanding is Treasury is working on those numbers for the incoming Minister of Finance, which fortunately is the same as the outgoing Minister of Finance as well.

A day later, on 7 October, Fairfax’s Vernon Small reported on English reiterating the government’s parlous fiscal position;

The Government has posted a Budget deficit of $2.9 billion in the year to June 30, $338m worse than forecast in the pre-election opening of the books.

Finance Minister Bill English said the result was the third consecutive narrowing of the deficit before gains and losses (Obegal) and was further evidence careful fiscal management was producing consistent gains over time.

However it compared with the forecast deficit of $2b in the 2013 Budget.

The major changes since the pre-election picture were a decline in tax revenue, an increase in treaty settlement costs and an increase in earthquake rebuild expenses.

[…]

English said the economy faced some headwinds, including lower dairy prices, uncertain tax revenue, global risks in China and Europe and the impact of the Auckland housing market.

It was therefore rank hypocrisy when English justified the massive sell-of of state housing by linking it to impoverished families’ needs,

“There will be state house sales because we need to move a lot faster if we’re going to provide enough houses for low-income families,” says Mr English.

English’s planned $5 billion sale of State houses is a panic-driven measure by the National Government to plug the gap left by falling dairy prices and concomitant falling taxation revenue.

National’s re-election on 20 September was predicated on it’s undeserved reputation for being a “prudent fiscal manager” of the country’s economy. It was not just their surplus that was at risk – it was their carefully cultivated public perception at being better at managing the economy than Labour.

If National could not deliver a surplus – as it had promised – what good was it as a fiscal steward? It would prove to be a major mill-stone around their neck for the 2017 election.

In the meantime;

Housing New Zealand figures show that at the end of March 5563 people were on the waiting list, compared with 4495 at the same time last year and 4637 the year before.

Our poorest schools are swapping nearly half their pupils a year, as transient families chase work or flee debt.

Some schools say they have taught 7-year-olds who have been through eight schools in their first two years.

Many transient children also have learning difficulties but are often uprooted before schools can bring in extra support.

A decile 1 school will, on average, have twice the student “churn” of a decile 10 school, according to Ministry of Education figures. During the 2013 school year, a typical school in a highly deprived area would have lost and gained the equivalent of nearly half its roll.

A decile 10 school typically has a much more stable roll, with about a quarter coming or going last year. This does not include pupils starting or finishing their schooling.

The transience was even worse in primary schools, hitting children at a time when experts say moving schools is the most harmful.

The figures, released under the Official Information Act, show Russell School, a decile 1 primary in Porirua, had the highest level of pupil turnover in the Wellington region two years ago.

Principal Sose Annandale said a Housing New Zealand shake-up was probably partly responsible for the high turnover that year, but transient families continued to be a big problem.

[…]

The higher level of transience in low-decile schools was not surprising, as deprived families were more likely to move for housing or work.

“Many of these transient families do not have a fixed abode. They are just staying with whanau for a while, until they have to move on again.

As  the Salvation Army’s  Major Campbell Roberts, stated with matter-of-fact bluntness;

“We, at the present in New Zealand, don’t have enough social housing, so to reduce that number further would be a major problem. What there needs to be is an increase in the numbers of social houses.”

In his story, TV3’s Brooke Sabin raised the question,

“So a big cull of state houses is about to get underway, but the crucial question is: Will all that money make its way back into social housing or will some be pocketed by the Government? The official response is that hasn’t been worked out yet.”

Yes, it has, Mr Sabin.

The money will indeed be “pocketed by the government”.

For no other reason than their re-election in 2017 depends on it.

 

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References – Part 2

Scoop media: Gateway to improve housing affordability

Hekia Parata: State housing improved in Porirua

NZ Herald:  Key backs cut-off for cheap homes plan

Labour Party: Speech – New Zealand – A new direction

NZ Herald:  Quota reintroduced for Hobsonville housing development

NZ Herald: John Armstrong – National’s affordable housing package lacks any substantial detail

Housing NZ: Gateway Project

Dominion Post: Richard Long – So much for our quarter-acre paradise

Radio NZ: PM rules out more asset sales

NZ Herald: PM – no more SOEs to sell after Genesis

Fairfax Media: Labour spits over National’s asset sale figures

Fairfax Media: John Key reveals plan for asset sales

Roy Morgan: Poll – January 22 2014

National: Helping first home buyers

National: National to help 90,000 first home buyers

The Listener: Why it’s more expensive to build in NZ than in Australia

Otago Daily Times: Labour – 100,000 more affordable homes

National: Social housing

Radio NZ: Councils reject blame for poverty

Fairfax Media: Fonterra forecast worth an extra $500m to NZ

NBR: BUDGET 2014 – Government surplus meets global rating agency expectations

Interest.co.nz:  Fonterra cuts milk payout forecast for 2014/15 to NZ$5.30/kg

Hive News: Treasury re-crunching Budget numbers for low Fonterra payout

Interest.co.nz:  Key signals big shift towards community-provided social housing from pure state housing in creating ‘super group’ of housing ministers

Radio NZ: John Key reveals new Cabinet lineup

Parliament: Hansards – Housing, Affordable—Progress and Management of Housing New Zealand

TV3 News: State housing sell-off worth $5B

Fairfax Media: Government deficit widens

Fairfax Media: Housing NZ waiting lists swamped

Radio NZ: Govt pushes on with state house sales

Dominion Post: Kids dragged from school to school (See also: Housing policy will destabilise life for children)

Additional references

Dominion Post: Housing policy will destabilise life for children

Fairfax media: Over-crowded house blamed for baby’s death

TVNZ News: Thousands of Kiwi kids homeless

Previous related blogposts

Review: TV3′s The Nation – “Let them eat ice cream!”

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

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

Social Groups

Facebook: Affordable Housing For All

Facebook: Housing NZ Tenants Forum

Facebook: Tamaki Housing Group- Defend Glen Innes

Other blogs

The Jackal: More homelessness under National (30 July 2012)

The Standard: Unaffordable housing & the culture of greed

No Right Turn:  A surprise policy


 

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This blogpost was first published on The Daily Blog on 14 October 2014

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

17 October 2014 23 comments

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1949 state house in Taita

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Intro. Lamp-posts, letterboxes, and liquor outlets

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Barely  three weeks since the election, and Key’s re-elected government is set for one of the biggest state asset sell-offs since… last year.  In line for privatisation; an estimated $5 billion worth of State housing.

State housing is one of the most critical of this country’s social service,  delivering a much-needed roof over the  heads of society’s poorest, most vulnerable, and often most transient. It is fair to say that without state housing – a legacy of enlightened Labour governments and a more sympathetic past public values –  we would have thousands more families living in squalor or on the streets, as currently happens in the richest nation on Earth.

In the US, street homelessness is now as much a feature of the urban landscape as lamp-posts, letterboxes, and liquor outlets;

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Homeslessness

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Here in New Zealand, we seem to be going all-out to emulate our American cuzzies, as our housing situation at all levels is worsening.

Overall home ownership has dropped from 1991, when  73.8% of households own their own home (or held it in a family trust) – compared to last year’s census which now reports 64.8% home ownership (or held in family trust).

In Auckland, home ownership rates are worse, 58% today, compared to 64% in 2001.

Homelessness is a more difficult notion to measure, as the Statistics NZ pointed out for it’s 2013 Census,

In general, people are becoming more difficult to contact in any census or survey collection…

• people having no usual residence (eg homeless people)

However an Otago University study, released in September 2013 concluded,

An estimated 34,000 people, or about one in every 120 New Zealanders, were unable to access housing in 2006, according to the latest available census and emergency housing data.

UOW researcher Dr Kate Amore says very little is known about this population, and the study provides the first ever New Zealand statistics on the problem.

“These 34,000 people were crowding in with family or friends, staying in boarding houses, camping grounds, emergency accommodation, in cars, or on the street. They all had low incomes.

Many of these people are excluded from poverty and unemployment statistics, and are not on social housing waiting lists. They are extremely disadvantaged, and it’s great that we now have a way to produce robust numbers about the size of the problem and who’s affected.”

The tragic nature of homelessness was chillingly spelled out when the report went on to state,

A quarter of severely housing deprived people were children under 15 years, living in these inadequate situations with their family.

The  report went on to reinforce the growing social problem of the working poor,

About a third of the adults in the population were working, but still could not get a house for themselves or their family.

The 10th annual Demographia International Housing Affordability Survey showed housing as severely unaffordable in all eight of New Zealand’s major centres.  Christchurch-based survey author Hugh Pavletic blamed recently centrally-imposed State controls on mortgage loan to value ratio (LVR) restrictions, low mortgage interest rates, and lack of land as reasons for increasing unaffordability.

The same report stated that Auckland house prices were  less affordable than Los Angeles or London.

Meanwhile, the Reserve Bank’s loan to value ratio (LVR) controls – approved by Bill English on 16 May 2013 – has apparently succeeded in not just forcing first home buyers out of the housing market, but into renting, and pushing up rents.  The average weekly rent for a three bedroom home in Auckland  increased by 29%, from $440 in 2005 to $570 in 2013.

Long time property investor, Ollie Newland, has warned of slums developing as over-crowding increases,

Some landlords were capitalising on the desperate market by renting out homes on a room-by-room basis.

“It’s not a good look. We don’t want to go the way of Bangladesh. It’s quite rife. We come across it all the time, especially in the lower socio-economic areas.

So has housing only recently become a critical social problem?

Not according to the Prime Minister…

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National’s pre-election policy: 2008

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In January 2008, then Opposition Leader, John Key attacked Helen Clark’s administration for Labour’s track record on the economy. He said, in part,

“Tomorrow, Helen Clark will tell us what she thinks about the state of our nation.  In all likelihood, she’ll remind us how good she thinks we’ve got it, how grateful she thinks we should be to Labour, and why we need her for another three years. 

Well, I’ve got a challenge for the Prime Minister.  Before she asks for another three years, why doesn’t she answer the questions Kiwis are really asking, like:

[…]

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

Indeed – why can’t our hardworking kids afford to buy their own house?

In the Otago University study (see above) Dr Amore stated,

“We know that housing shortages, poverty, and crowding are very serious problems in New Zealand, so these findings are not surprising. We expect the problem is bigger now than it was in 2006. This study just adds to the evidence that housing is major issue, and we need a lot more quality housing that people on low incomes can afford to live in.”

In the Sydney Morning Herald, when interviewed on the issue of child poverty in this country, John Key was uncharacteristically candid when he admitted,

“Our opponents say more children are living in poverty than when we came into office. And that’s probably right.”

So what is the National government doing about a pressing social problem that is, by the Prime Minister’s own admission, growing?
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Gerry Brownlee – Waiting for Godot, Tomorrow, and Private Enterprise?

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Earthquake Recovery Minister Gerry Brownlee has been made aware of a critical housing shortage in Christchurch, due to the September 2010 and February 2011 earthquakes which devastated much of the inner city. According to a Buddle Findlay report dated February 2012,

The sheer number of buildings up for demolition is significant.  The Canterbury Earthquake Recovery Authority (CERA) currently lists 742 CBD buildings that have been or will be demolished.  In his state of the economy address in Auckland on 25 January, Prime Minister John Key said that of the 1,357 buildings approved for partial or full demolition in greater Christchurch, over two thirds have been demolished.  In addition, the demolition of the up to 7,000 residential red zone homes has recently begun in Bexley.

This has resulted in a massive shortage of rentals in Christchurch, with rents continuing to escalate, and people forced to live in substandard or over-crowded accomodation. A 2013 Ministry of Business Innovation and Employment (MoBIE) report revealed,

No reliable statistics are available on the number of people living in insecure housing. To generate an estimate of the scale of housing insecurity the report starts with a baseline established by a study of homelessness in Christchurch, supplemented by 2006 Census figures on people living in overcrowded housing. Qualitative information from non-government organisations in the area is used to identify plausible increases in the numbers of people living without shelter or in temporary or emergency shelter. Estimates of the housing stock lost due to earthquakes are used to identify the potential increase in numbers of people living in crowded conditions with other households. Through this approach, the report’s initial estimate of the scale of insecure housing is expressed as a broad range. That range runs between 5,510 and 7,405 residents, up from 3,750 before the earthquakes.

The same report updated the decline in housing stock in the quake-ravaged city,

“…it has been estimated that the total housing stock has been reduced by a net 11,500, or 6.2% of the previous housing stock.”

Predictably, as housing stock and rental numbers fell, rents skyrocketed. According to the same MoBIE report,

In the month of February 2013, the average weekly rent from new bonds lodged for the greater Christchurch region was $384. This is a 31% increase compared to the pre-earthquake month of August 2010 when the average rent was $293. The majority of this increase took place in 2012, as shown in Graph 6. Greater Christchurch’s average rent increased $92 per week which is very significant and will have an adverse impact on many tenants’ financial wellbeing. During this same period, Auckland’s average rent increased $50 per week or 13%.

When confronted with this crisis, Minister Brownlee’s response was reported in The Press, on 20 March 2012, offering this “solution” to Christchurch’s housing-shortage;

The Government appears to have ruled out further intervention in Christchurch’s worsening rental housing crisis.

The solution is best left to the market, Earthquake Recovery Minister Gerry Brownlee says.

A month later, Brownlee continued his ‘King Canute-like’ resistance to the problem,

People may be sleeping in cars, sheds and garages, but there is no rental housing crisis in Christchurch, Earthquake Recovery Minister Gerry Brownlee says.

“This is a problem, I’ll accept that, but I don’t think this is a crisis,” he said yesterday.

And incredibly,

Brownlee said the steep increase in rent was “not a problem that has been brought to my attention”.

The Government would not intervene in the issue, he said.

“A rent freeze doesn’t increase supply and will never encourage new stock to come in. We won’t be moving to regulate rents but we most certainly are actively providing new housing.”

Brownlee’s defensiveness is understandable. Nationwide, it is estimated that 20,000 – 23,000 new homes are required per year,  to meet demand.

However, over the last three years, less than 15,000 per year have been built.

So much for “the market”.

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Making Supply “meet” Demand – a sleight-of-hand trick

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When “market” supply doesn’t meet demand, there are three options available,

  1. Increase supply
  2. Dampen demand
  3. Ignore the problem

National chose Option 2 as the fastest, cheapest way to address the problem. As referred above, on 16 May 2013, Finance Minister Bill English approved a “Memorandum of Understanding” with the  Reserve Bank’s loan to implement  Loan to Value Ratio (LVR) controls. In simple terms,

Banks will be required to restrict new residential mortgage lending at LVRs of over 80 percent (deposit of less than 20 percent) to no more than 10 percent of the dollar value of their new residential mortgage lending.

Banks which exceeded the limit (10% of all lending) of low LVR (20% deposits) risked considered reprisals from the RBNZ,

If a bank breaches the speed limit it will be in breach of its conditions of registration. The Reserve Bank would need to consider the reasons for the breach and may impose a range of sanctions.

Again, Key was candid in the plan to address demand-side pressures on housing,

“Even with LVRs introduced, interest rates may ultimately rise anyway, but the intention with these loan-to-value ratios is to provide the Reserve Bank with other tools to dampen demand.”

Not since the Muldoon-led National administration, when price-wage controls froze the economy in 1982 – with dire results – has a government attempted to control a facet of the banking system with such direct, interventionist controls. Again, state intervention was the tool-of-choice, as Key admitted,

“We need to try to help people into their homes but also facilitate an orderly market.”

This was Muldoonism 2.0, and it was coming from a supposed free-market National government, with the blessing of Muldoon’s successor, John Key.

Even before the RBNZ implemented their new, prescriptive LVR regulations, National was pushing for exemptions with  New Zealand Bankers Association chief executive Kirk Hope stating the obvious,

“The Reserve Bank policy will have an impact on low income buyers. It will knock them out of the market.”

By December 2013 the Reserve Bank had “buckled” to government pressure. The government realised that preventing first-home buyers from getting into their first house was not a palatable political option.  The opposition would have a field day at National’s expense, and New Zealanders would begin to notice.

Forcing the RBNZ to implement first-home buyer exemptions for new-build houses ultimately proved fruitless. By 1 October  this year, the damage had been done and the results were wholly predictable;

Experts say the Reserve Bank’s controversial home loan restrictions have achieved the desired effect, but at the expense of first-home buyers.

One year ago today, the central bank introduced limits on high loan-to-value ratio (LVR) loans in an attempt to slow house price growth and reduce risk to the financial system.

The latest bank lending data from the June quarter shows the rules have been highly effective, wiping $5.5 billion worth of high-LVR loans from the balances that were recorded on September 30, last year.

[…]

HSBC chief economist Paul Bloxham said the limits had helped dampen house price inflation, though it was difficult to say by how much.

“It’s still unclear as to whether LVRs were the driver, or the higher interest rates were the driver.”

Bloxham said the limits had worked well in removing risk from the financial system, but not without social consequences.

“Along the way . . . the largest effect it’s had is to cut the first-home buyer out of the market.”

New Zealand Institute of Economic Research economist, Shamubeel Eaqub,  was damning of the government-sanctioned LVR restrictions,  saying that   first-home buyers had been unfairly blamed for  the housing bubble,

“The data we have seen very clearly shows it was investors.  We don’t think there’s any reason to maintain the LVR restrictions any further, especially now [the Reserve Bank] has raised interest rates.”

Bear in  mind’s National’s technique for solving problems. It would set the stage for  New Zealand’s growing shortage of social housing, and National’s ‘Clayton’s‘ response.

To be Concluded: Housing; broken promises, families in cars, and ideological idiocy (Part Rua)


 

References

TV3 News: State housing sell-off worth $5B

Radio NZ:  Home ownership on decrease

Ministry of Business, Innovation, and Employment: Housing key facts

Statistics NZ: Coverage in the 2013 Census based on the New Zealand 2013 Post-enumeration Survey (pdf)

Otago University: 34,000 people missing out on housing, University of Otago research shows

Fairfax media: Housing affordability getting worse

Reserve Bank NZ: RBNZ signs MOU on use of macro-prudential tools

NZ Herald: Rents rise as buyers forced out of market

John Key: A Fresh Start for New Zealand

Sydney Morning Herald: The Key Factor

Buddle Findlay: The Progress of earthquake related demolitions in Christchurch

Ministry of Business, Innovation, and Employment: Housing Pressures in Christchurch (pdf)

The Press: Christchurch rent crisis ‘best left to market’

Fairfax media: No Christchurch rental crisis -‘Pontius’ Brownlee

Reserve Bank:  Loan-to-value ratio restrictions – FAQs

Dominion Post:  Few first home buyer details in PM speech

Te Ara – TheEncyclopedia of New Zealand: Muldoon announces a wage and prize freeze, 1982

TVNZ News: Govt pushes for loan restriction exemption

NZ Herald: Reserve Bank buckles – new homes exempt from loan rules

Fairfax media: LVR works at first-home buyers’ cost

Scoop media: Gateway to improve housing affordability

Hekia Parata: State housing improved in Porirua

Additional references

Dominion Post: Housing policy will destabilise life for children

Fairfax media: Over-crowded house blamed for baby’s death

Previous related blogposts

Review: TV3′s The Nation – “Let them eat ice cream!”

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

Social Groups

Facebook: Affordable Housing For All

Facebook: Housing NZ Tenants Forum

Facebook: Tamaki Housing Group- Defend Glen Innes

Other blogs

The Jackal: More homelessness under National (30 July 2012)

The Standard: Unaffordable housing & the culture of greed

No Right Turn:  A surprise policy


 

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1623616_704918519553325_1013129092_n

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This blogpost was first published on The Daily Blog on 12 October 2014

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Veteran Activist hospitalised during removal of state houses

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The Mana Party has hit out at the destruction of a community in Glen Innes, which saw a veteran activist hospitalised, as he was protesting the removal of state houses in the area.

The elderly activist Jimmy O’Dea, was injured this afternoon and taken to hospital. Mr O’Dea’s ankle was crushed whilst blockading a removal truck a few hours ago in Glen Innes.

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Jimmy O’Dea

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Jimmy is a diamond of a man who put himself in harm’s way in front of the house removal truck to try and protect the state houses of low-income residents of Glen Innes” says MANA Vice President John Minto. “Contracting companies are being used as the front line of attack against a community desperately trying to save their state houses. The government is selling state houses and the land beneath them to private developers for luxury housing on the high ground on the north side of Glen Innes. State house numbers will be reduced and the residents moved into soon-to-be slums in central Glen Innes”.

Comrade Jimmy O Dea has been taken to hospital- his ankle was crushed whilst blockading a removal truck an hour ago in Glen Innes. People are mobilising to defend the community now and tonight. Get out there.

Houses under immediate threat are at 25 Silverton St and 6 Melling Streets.

There are currently Mana supporters on site and coordinating support for the community and opposition to the removals. Protests are planned throughout the night.

 

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Acknowledgement

Reprinted with kind permission. Originally published by TangataWhenua.com.

 

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Housing redevelopment project

Updated at 10:09 am 3 April 2012, Radio New Zealand

A housing group in the Auckland suburb of Glenn Innes says a redevelopment project is tearing the community apart.

Housing New Zealand has begun an urban renewal programme by removing the first of dozens of vacant state houses in the area.

About 40 state houses will be removed over the next two months.

The agency is redeveloping more than 150 properties to create at least 260 new homes in northern Glen Innes.

It says the state houses have been attracting crime and anti-social behaviour and it is removing them to improve safety.

But the Tamaki Action Housing Group says Housing New Zealand is ruining lives and families are being dislocated from the community.

Source

Listen to more on Radio NZ Morning Report

 

 

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Inside Child Poverty – Bryan Bruce asks…

3 April 2012 1 comment

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Fathers in Sweden enjoying 9 months parental leave to look after their daughters.

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“…  Here’s my challenge I will be sending to Housing New Zealand this week .

They own 70,000 properties. Why don’t they bulk buy electricity for those 70,000 properties so that the occupants can get cheaper power? It’s a win win situation.

Drier homes means better health for young kids. Means people won’t huddle together in one room to keep warm.. but it also means a dry house won’t rot and HNZ won’t have such a huge maintenance bill cause by mould and dampness.

I’ll let you know what CEO Lesley Mc Turk and the Minister for Housing Phil Heatley have to say.” – Bryan Bruce, Inside Child Poverty, 3 April 2012

Why not, indeed? If Comalco at Bluff could negotiate an absurdly low tariff for the power that they use to make aluminium, why can’t we – as a nation – do the same for low-income families?

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Bluff aluminium smelter and Meridian in secret deal

The highly profitable Bluff aluminium smelter and Meridian Energy have signed the country’s biggest power contract, in a secret deal thought to be worth more than $5 billion over almost 20 years…

… Latest Companies Office reports show smelter company Rio Tinto Aluminium New Zealand made a $277 million profit last year, more than double the previous year’s gain.

… The new contract – understood to be about 4.7c a unit, about a quarter of the cost to the average home – covers the price New Zealand Aluminium Smelters will pay Meridian from the start of 2013 to the end of 2030, and will involve about 15 per cent of New Zealand’s power. ” – Source

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It is not unusual for many other companies to negotiate bulk-buying deals. From Meridian Energy,

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Rural co-operatives

We’re proud to be associated with New Zealand’s leading rural co-operatives.

We work closely with these groups to establish pricing, services and terms that specifically suit their members. If you belong to one of these co-operatives, you really need to be with us.

CRT

CRT Co-operative exists for one simple reason – to use the collective power of its shareholders to negotiate better deals and improve their individual profitability across all forms of agriculture.

The co-operative has a significant presence in the rural market with more than 25,000 shareholders who transact over $1 billion worth of business through the co-operative annually.

Meridian Mates Rates Pack

If you’re a member of CRT, you’re eligible for our Mates Rates Pack. This special deal includes an increased prompt payment discount of 12 percent (our standard discount is 10 percent) and a choice of variable or fixed term plans. We’ll also work with you to help find ways to reduce your electricity overheads. Source

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As Bryan states, we’d be saving money in the long run, both in house maintenance, and fewer people with cold/damp-related diseases.

Considering how much profit powercos extract from every household and business in the country, we have no excuse not to do this.

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Full Story

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Making vast profits on the backs of society’s poorest is obscene.  This will have to be an issue for the incoming Labour-led government, post2014 (if not earlier). It will be a ‘litmus test’ as to how much Labour is really in touch with the under-class of New Zealand,

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Full Story

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If not, the Greens and Mana Party are waiting in the wings to assume that role. One way or another, this must be done.  Damp homes and sick children cannot be the face of New Zealand in the 21st Century. Not unless our long-term goal is to be the newest addition to the world’s  Third World Club.

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Child with respiratory illness in Wellington Hospital. More than 25,000 NZ Kids are hospitalized year for chest infections spread by overcrowding and damp unhealthy housing.

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Additional

Inside Child Poverty

Children Against Poverty

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John Key: another day, another broken pledge…

28 February 2012 1 comment

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National’s hatchet-job on our state service continues – and appears to be getting worse.

Fresh from news that the Ministry of Foreign Affairs and Trade  about to sack 305 people; and 295 uniformed personnel are to be fired from the Defence Force,  we learn that Key’s government is about to fire at least 70 staff from Housing NZ,

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Full Story

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This is on top of Housing NZ recently announcing that it will no longer assist low-income families with social needs,

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Full Story

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Worse still, on top of the redundancies, is the planned closure of offices; and replacing front-line staff with an 0800 number Call Centre.

The sackings are a direct breach of Key’s promise to New Zealanders that the cutting of the  state sector would not impact on front-line staff – and indeed he has stated that front-line numbers would be strengthened,

It’s time to focus public spending on front-line services that make a real difference in people’s lives, rather than paper-shuffling and report-writing that does not

We are not going to reduce the number of front-line staff. Let me make this absolutely clear – under National the numbers of doctors, nurses, teachers, social workers, police and other front-line staff will grow

In addition, we are not going to radically reorganise the structure of the state sector. Our focus will be on delivering services. Just as Labour has done, we will take opportunities to make changes to some agencies as part of the usual business of government. However, there will be no wholesale reorganisation or restructuring across the state sector… ” – John Key, 12 March 2008

John Key has broken every aspect of his own committments that he made to the nation, nearly four years ago, and which he has been repeating ad nauseum ever since.

Not only is his government sacking front line staff – but they are radically reorganising the state sector. Key’s most bizarre recent proposal was contracting out government services to Google. I kid you not: Rise of the Terminator Keybot!

A proposal to replace 1,000 full time soldiers in the Defence Force with “reservists”, who are “on call”, is a depletion of front-line personnel. This leaves NZ ill-equipped and ill-prepared to meet our international committments for U.N. peacekeeping duties, or local disaster relief operations.

Soldiers are front-line personnel. In fact, the term “front line” is a military term.

For those of us with fairly decent memories, we may recall the 1990s; when a Bolger and Shipley-led National governments cut the state sector until health, housing, social services, etc, were failing to meet the needs of ordinary New Zealanders.

At one stage Prime Minister Jenny Shipley was mooting moving or demolishing the Beehive Building so that an extension to the main Parliamentary Building could be undertaken. The cost to taxpayers was estimated to be in the region of $94 million (1997 dollars).

All whilst rentals for State houses were set at market prices; ex-psychiatric patients were living in public toilets; and on 3 April 1998, Southland dairy farmer Colin Morrison (42) died on a waiting list, awaiting a triple heart bypass surgery. His condition was listed as “life threatening” – but was still on a waiting list when he died.

And all during the 1990s, the wealth/income gap between the top 10%  and the rest of New Zealand widened further and further.

Sound familiar?

By 27 November, 1999, New Zealanders had had a gutsful and threw out the National government.

History is repeating.  The question is, how bad will it get this time?  Perhaps as bad as families living in caravans?

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Additional

‘Broken promise’ claim as frontline Defence jobs slashed

Review suggests more part-time soldiers

Families in caravans, cars as Housing NZ gets tough

Housing NZ proposal poses dangers for staff

HNZ: Housing New Zealand proposes changing how it delivers its services

2500 jobs cut, but only $20m saved

On Colin Morrison 1998)

Widow says little improvement seem

GP hits out at health reforms

Died waiting for by-pass

Word today on heart list

Anger on heart op delay

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Can we do it? Bloody oath we can!

3 August 2011 44 comments

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STATE HOUSE RESIDENTS MOVED

Meanwhile, almost 400 tenants have been kicked out of state houses in the last three years.

Housing Minister Phil Heatley said 241 tenancies were ended in the last year.

Tenancies were ended because people had failed to inform Housing New Zealand about income from employment, business interests, assets, that they lived with a partner of sublet the house.

Since July 2010, 119 tenants were successfully prosecuted for fraud.

Housing New Zealand has also identified $6.6 million from the last 12 months that is owed to the Crown, largely for overpaid rent subsidies.

“The state housing system is designed to help people in their time of need. It’s unfair and unacceptable for people to abuse the system and commit fraud to get benefits they are not entitled to. People who deliberately rip-off the system deprive families in real need,” Heatley said.

The houses were now freed up for those with genuine need, he said.

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On most levels, the mis-use of State assets (ie; owned by us, the People)  is a rort that cannot and should not be tolerated.  Housing Minister, Phil Heatley is correct when he reminds us that,

“The state housing system is designed to help people in their time of need. It’s unfair and unacceptable for people to abuse the system and commit fraud to get benefits they are not entitled to. People who deliberately rip-off the system deprive families in real need.”

Although I note that Mr Heatley’s admonitions did not stop certain Ministers of the Crown from ripping of the tax-payer, when it suited them…

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And similar cases where Members of Parliament used their accomodation allowance in ways in was not intended…

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Defence Minister Wayne Mapp said his previous apartment had been very small and was not suitable for him and his wife, now he was spending more time in Wellington as a minister.

He confirmed the apartment was owned by his superannuation trust and was rented to National MP Bakshi Singh, for $400 a week.

As an MP Mr Singh can claim up to $24,000 year in accommodation costs from Parliamentary Service.

Dr Mapp also collected around $700 a week for his new larger apartment and said he could see why his rental income should be used to offset his expense claims.

“I can see why people have concerns and the review will deal with that,’ Dr Mapp said.

Housing Minister Phil Heatley also said he was renting out his old apartment and claiming a $1000 a week in accommodation expenses in a larger home to accommodate his wife and young children.

Mr Heatley would not say whether this was rented to an MP.  – Source

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It seems that rules are different for some folk.

The shortage of state housing is a serious matter, though. This critical problem of decent, affordable housing is not helped by the fact that the Fourth National government (1996-1999) sold around 13,000 State Houses in the 1990s.  These properties were supposedly made available to tenants – but actually went mostly to property speculators (who later sold them for tax-free capital gains).

When Labour was elected to power in November 1999, they immediatly placed a moratorium on the sale of state housing. According to HNZ, they currently ” own or manage more than 66,000 properties throughout the country, including about 1,500 homes used by community groups”

This government has re-instated the sale of state houses.  It does not take rocket science to work out that selling of state housing reduces the availability of housing stock.   Housing Minister Phil Heatley said that,

“… about 40,000 of the 69,000 state house stock will be available for sale,”  but then added,  “that the vast majority of tenants do not earn enough to be required to pay market rent means relatively few will be in a position to buy“. (Source.)

There seems to be nothing stopping tenants from buying their state house and immediatly on-selling it to a Third Party.

Is it any wonder that the shortage of state housing is not being addressed in any meaningful way? It certainly does help those on the current waiting list (as of 30 June);

  • 402 were Priority Eligible — A
  • 3,352 were Priority Eligible — B

Plus a further 5,132 in categories “C” and “D”.

Problem:  there are currently 8,886 people on the HNZ waiting-list.

Solution: build more houses.

This may seem like a ‘flippant’ answer to a desperate problem – but it is not.

The building of 10,000 new state houses may seem an outrageously expensive idea.  But it would address at least three pressing problems in our economy and society;

1. Persistantly high unemployment.

2. Low growth.

3. Inadequate housing for the poorest of our fellow New Zealanders.

At an average housing cost of $257,085 (calculated at DBH website @ $1,773/m for a 145 square metre, small house), the cost (excluding land) is $2.57 billion dollars,  including GST (approximate estimate).

By contrast, the October 2010 tax cuts gave $2.5 billion to the top 10% of income earners.

For roughly the cost of last year’s tax cuts, we could have embarked on a crash building-programme to construct ten thousand new dwellings in this country. The immediate effects would have been profound for the building industry and would have created work for;

  • architects
  • builders
  • glaziers
  • roofers
  • electricians
  • plumbers
  • drain layers
  • painters
  • plasterers
  • tilers
  • landscapers
  • bricklayers
  • concreting contractors
  • insulation installers
  • home-heating installers
  • carpet layers
  • etc, etc.

Work would flow through to associated contractors;

  • truck drivers
  • building waste disposal

Turnover would increase for timber and framing suppliers as well as other building supplies outlets.

In turn, those in the building and associated industries would enjoy massive increase in demand for their products.

And equally important, those on the unemployment queue would suddenly be in high demand, as we needed to train more tradespeople. Which would mean a flow-on effect to polytechnics as they suddenly needed to train hundreds more tradespeople.

A further flow-on effect would impact positively on service industries, as money flowed into the economy, into supermarkets; entertainment; clothing; and elsewhere into the retail sector. As Bill Kaye-Blake of  NZIER, said in April of this year;

The economy is sluggish because people are not spending.

It would be a boom-time, as two and a half billion dollars was spent on products and services.

Would it actually end up costing taxpayers $2.57 billion dollars? The answer is ‘no’.  Government would actually re-coup much of that initial outlay through;

  • gst
  • paye
  • other taxes
  • reduced spending on welfare for unemployed
  • and investment re-couped by rent paid for new rentals

Would it work?

Yes, it would.  An NZIER survey expects a strong pick-up in 2013 when the rebuilding phase hits full-flight, with 3.9% annual growth predicted from a previous forecast of 2.6%.

The government has a strong role to play in tough economic times. A “hands off” approach will achieve nothing except unnecessarily drawing out an already painful recession, and prompting more frustrated  New Zealanders to “cross the Ditch” to Australia, where their government has announced a  programme aimed at 500,000 new jobs.

There is no reason why a determined government cannot adopt a bold programme for economic growth.

Instead of borrowing to pay for tax cuts we can ill afford, we should be investing in jobs.  The rest will almost invariably take care of itself.

We have the resources. We have the money. We have the demand for new housing. What else is missing?

The will to do it.

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Updates

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Fletcher shares at 2-year low after warning

Wellington rental market tough for tenants

Major housing shortage looms

Business NZ sees no economic plan

Downturn in building sector ideal timing for state house build

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