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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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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.

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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.

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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.

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

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

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

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

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

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

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

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

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

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

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

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

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

Promises broken.

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

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The article by Virginia Fallon makes this extraordinary revelation;

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

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

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

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

We bought them off Housing Corp…”?!

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

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

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

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

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

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

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

The sound of a train-wreck hurtling toward you

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

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

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

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

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

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

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

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

English’s prediction has eerily come to fruition;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[…]

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

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

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

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

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

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

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

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

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References

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

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

Accessible Properties:  What is happening?

Fairfax media:  Salvation Army says no to state houses

Bay of Plenty Times:  Accessible Properties takes over state homes

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

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

Sunlive: Housing crisis under the spotlight

Radio NZ:  Housing situation critical – Tauranga principal

Tauranga Budget Advisory:  City’s Rental Housing In Crisis

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

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Beehive:  State houses available to buy from today

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

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

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

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

Otago Daily Times:  Auckland housing crisis expected to drag on

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

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

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

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

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

IRD: Residential property

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

Additional

NZ Herald: Key admits underclass still growing

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

Previous related blogposts

Budget 2013: State Housing and the War on Poor

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

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

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

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

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

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

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

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

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

[…]

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

Good questions, Mr Key

Got any answers, Mr Joyce?

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

Home ownership continues to fall

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

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

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

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

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

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

Poorer families are fairing no better.

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

From the Guardian;

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From Al Jazeera;

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

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

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

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

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

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

He kept denying it – until he didn’t;

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

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

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

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

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

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

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Bennett went on to make this extraordinary statement;

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

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

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

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

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

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

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

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

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

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

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

Parting thought

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

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

Especially when they caused it.

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References

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

NZ Herald: Housing shortage growing by 40 homes a day

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

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

Radio NZ: Lessons for NZ in Australia’s Budget

NZ Herald: John Key – State of the Nation speech

Statistics NZ: 2013 Census QuickStats about national highlights

Statistics NZ: Owner-Occupied Households

Radio NZ: Homeless family faces $100k WINZ debt

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

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

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

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

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

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

Radio NZ: Key denies Auckland housing crisis

Radio NZ: No housing crisis in NZ – Paula Bennett

Beehive: Budget 2016 – 3000 emergency housing places funded

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

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

Radio NZ: Ngaro apologises for govt criticism

TV3: The Nation – Patrick Gower interviews Bill English

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Previous related blogposts

Can we do it? Bloody oath we can!

Budget 2013: State Housing and the War on Poor

Budget 2013: State Housing and the War on Poor

National recycles Housing Policy and produces good manure!

Our growing housing problem

National Housing propaganda – McGehan Close Revisited

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

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

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

Government Minister sees history repeat – responsible for death

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

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

National under attack – defaults to Deflection #1

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

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Problem…

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Solution.

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

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When Life is a Lottery

20 November 2016 2 comments

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american-gothic-homelessness

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

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

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

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

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tv3-news-housing-poll

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

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

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

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

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

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

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

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

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

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

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The Radio NZ story further reported;

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

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

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

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

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

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

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

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

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

Note what the woman said here;

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

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

Remember Dear Leader Key’s own words;

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

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

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

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

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

Most telling was this criticism by

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

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

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

[…]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Depressingly, economist Shamubeel Eaqub has predicted;

“The workplace is likely to be further casualised. “

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

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

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

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

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

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

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

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

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

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

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

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

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

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lotto-ticket

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Home ownership should not be a Lottery.

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References

Otago Daily Times: Homelessness increasing in NZ

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

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

TV3 News: Government gets thumbs down on housing

Scoop: Key – Speech to New Zealand Contractors Federation

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

Radio NZ: Claimed – $44 million lotto prize

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

Huffington Post: America’s Half-Forgotten Housing Crisis

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

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

Fairfax media: Shamubeel Eaqub – Job casualisation a global phenomenon

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

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

TV3 News: Govt to help fund Auckland homeless to move

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

Previous related blogposts

Can we do it? Bloody oath we can!

Budget 2013: State Housing and the War on Poor

Budget 2013: State Housing and the War on Poor

National recycles Housing Policy and produces good manure!

Government Minister sees history repeat – responsible for death

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

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

National under attack – defaults to Deflection #1

National Housing propaganda – McGehan Close Revisited

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

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

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

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

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

National and the Reserve Bank – at War!

The seductiveness of Trumpism

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wheel-estate

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

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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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Letter to the editor – When 41% of houses are bought by speculators

26 August 2015 6 comments

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Dominion Post <letters@dompost.co.nz>
date: Mon, Aug 24, 2015
subject: Letter to the editor

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The editor
Dominion Post

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If what Deputy Governor, Grant Spencer, says is true that investor-speculators are buying up to 41% of Auckland house purchases – then we have a major problem on our hands.

No matter how many houses are built; no matter how far Auckland spawls; no matter how many parks are swallowed up; no matter what kind of LVR restrictions the Reserve Bank implements; no matter how much money is thrown at the problem – nearly half of all houses will be snapped up by speculators.

Whether those speculators come from Berlin, Boston, or Beijing – or even just north of the Bombay Hills – does not matter one jot.

This government has shown itself to be utterly hopeless at controlling speculation, and the horrendous fact that housing prices have risen 24% over the last year in Auckland is evidence of their incompetance.

Meanwhile young couples wanting to buy their first home are locked out of the market because of the relentless greed of a few.

This is not what I thought New Zealand would look like in the 21st century.

It is not the flag we should be looking at changing – but our blase attitude to something very wrong with our society.

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-Frank Macskasy

[address and phone number supplied]

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References

TVNZ News: The Reserve Bank has again raised concerns about investors driving up the Auckland housing market

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

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Like a rolling juggernaut, our housing crisis has rolled over National, crushing it’s Dear Leader’s protestations that  no problem exists in our country;

“No, I don’t think you can call it a crisis. What you can say though is that Auckland house prices have been rising, and rising too quickly actually.” – John Key, 13 April 2015

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John Key no housing crisis in Auckland

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Phil Twyford’s appearance on TV3’s ‘The Nation‘ on 11 July has finally put the problem of foreign ownership of property into a context that even the most dumbed-down, Reality-TV-watching New Zealander could understand.

It is mind-numbingly simple: with the most liberal foreign ownership laws in the world, foreign investors are pouring billions into our housing (and agricultural sector), hoping to make tax-free gains. In the process, prices are pushed up, out of reach of young, first-home buyers.

As I  wrote on 11 July;

Our parents and grandparents never had to compete with buyers from Berlin, Beijing, or Boston. So it baffles me why we have saddled our children with this colossal hurdle. The only reasons that come to mind is greed and a misguided ideolological view of an unfettered right to sell to whomever.

Some are now proposing a “solution” to this mounting problem. BNZ chief economist Tony Alexander suggests;

“We should as soon as possible adopt Australia’s rules restricting foreign buying of anything other than new housing unless resident for 12 months.”

This is a “Clayton’s Solution” and merely shifts the problem from existing properties to new properties being built. It beggars belief how any seemingly well-educated, intelligent person can proffer this as a “solution”.

How is it a “solution” when, for example, 1,800 new homes are permitted to be snapped up by overseas investors, and in the process side-lining first-home buyers;

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Up to 1800 new homes for Auckland

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This is not a “solution”. This is more of the same stupidity that has allowed our country to find itself in this mess in the first place.

Allowing foreign investors to buy new homes instead of existing homes simply transfers pressure on to new developments. It will also inevitably put pressure on existing, older homes being bought up by developers; demolished; and replaced by new houses or apartments. Consequence: Restriction avoided.

There is only one, clear, guaranteed way to stop our housing stock from becoming more and more the privilege of offshore investors:

1. Ban all sales of land to non-NZ residents or citizens. No exceptions.

Other policies that should also be enacted immediatly;

2. Implement an immediate stock-take of land-ownership, both agricultural and residential properties, so we know precisely how far the problem extends.

3. Implement a Capital Gains Tax on all properties (including the family home if sold within, say, five years).

4. Implement a law that foreign land owners are allowed to on-sell only to New Zealand permanent residents or citizens.

Half-measures such as National’s requirement for foreign investors to acquire an IRD number and bank account, or Tony Alexander’s naive suggestion will not do. The problem will continue to grow.

This is not ‘xenophobia’ or any other label bandied about by misguided individuals from the Left or Right. This is a matter of economic common sense.

I have no problem with citizens from Berlin, Boston, or Beijing wanting to buy New Zealand farms, houses, businesses, etc.

Just take up Permanent Residency or Citizenship first.

Sorted.

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References

Radio NZ: Key denies Auckland housing crisis

TV3: The Nation – Interview – Labour’s housing spokesman Phil Twyford

NZ Herald:  Auckland’s property crisis – Foreigners should build, not buy – economist

Radio NZ: Up to 1800 new homes for Auckland


 

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This blogpost was first published on The Daily Blog on 14 July 2015.

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Witnessing the slow decay of a government past it’s Use-By date

6 February 2015 7 comments

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There is something unpleasantly familiar about the recent appalling events surrounding the current National government and it’s embattled leader, John Key and his strange relationship with Cameron Slater.

Searching my memory, it dawned on me: I am witnessing a replay of the closing years of the Shipley Administration, before it was eventually turfed out of office in November 1999.

The Shipley-led minority-National government was racked with crises.

One such was the Saatchi Affair, where then-PM, Jenny Shipley, was found to have lied about a dinner engagement with Saatchi & Saatchi boss, Kevin Roberts. Shipley’s recall of that dinner engagement – and the topics of discussion – were at variance with what Roberts had claimed took place.

Shipley had misled public; the media; and the public. The headlines at the time pilloried her;

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Sound familiar?

To call the National government of that time a “decaying government” would be a gross under-statement. As well as beset with scandal after scandal; cuts to the budgets for police, health, education,  etc; deeply unpopular measures such as state house sales, and a crazy, hundred-million-dollar  plan to move/demolish the Beehive (and extend the original Parliament Building); there were other events which drew a rising chorus of criticism and condemnation from a wide sector of society.

On 27 November, 1999, New Zealanders had had a gutsful and threw out the National government.

The recent “txt-gate” scandal is simply the most recent scandal to envelope the current Prime Minister, John Key.

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key-claims-confusion-over-texts-with-slater-fairfax-media-28-november-2014

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In terms of past events; past scandals; and past instances where the PM has been caught out – it is by no means the worst.

This time, however, matters have reached a critical flash-point. The media has awoken to a smell of a government on the defensive and where Dear Leader has pushed the envelope once too often. Journalists and media commentators are no longer as tolerant;  no longer awed; and no longer willing to be mollified by a popular prime minister.

The Shipley Factor has kicked in.

At this point, nothing that National does will counter the  same style of growing clamour of criticism it’s predecessor faced in the late ’90s.

Even the distractions of a costly flag referendum; growing ‘softening’ of the public for a New Zealand  presence in Iraq; or another bout of bene-bashing will not work to deflect attention from an increasingly embattled PM. Such distractions will be quickly revealed, and dismissed,  for what they are.

If National’s current problems translate into public odium, the upcoming flag referendum may well become a referendum on Key’s administration – much like the  September 1997 referendum on compulsory retirement savings became a referendum on the National-NZ First Coalition government.

An extraordinary 80.3% of voter turn-out resulted in 91.8% voting “No”. However, the wisdom at the time suggested that the massive “No” vote was more of a reflection on the National-led government of the day, rather than the actual issue of superannuation.

Perhaps the clearest indication that the tide has turned against Key (and his government) is that the most trenchant criticism has come – not from the Left; nor from the Parliamentary Opposition; nor even from Key’s nemesis, Kim Dotcom – but from the Right and a previously compliant media.

On 25 November last year (2014), John Armstrong, from the NZ Herald wrote;

The Key administration has plumbed new depths of arrogance and contempt for the notion of politicians being accountable for their actions in its response to today’s hugely embarrassing report by the independent watchdog who maintains oversight over the Security Intelligence Service.

Rather than take the findings of the report by the Inspector-General of Intelligence and Security Cheryl Gwyn on the chin, National sought to bury the report.

[…]

John Key may have effectively been cleared by Gwyn for having only a “very limited” involvement in the disgraceful release of information by the SIS to Whale Oil blogger Cameron Slater.

That gets Key personally off the hook. But that does not absolve him of ministerial responsibility. In fact. he is doubly responsible both as the the minister-in-charge of the intelligence agencies and as the person responsible for the behaviour of his Beehive office.

This morning’s statement by the Prime Minister in reaction to the Gwyn report places all the blame for this shoddy affair on the SIS.

Key’s statement unsurprisingly makes no mention of an email revealed in the report from one of his political advisers, Jason Ede, the man who Hager cites as central to the dirty tricks campaign being run out of Key’s office. In the email to Slater, Ede said that “he might be in the shit” over the way he has used SIS information. Slater replied that he would simply state he had a source within the SIS – a statement Gwyn took to mean that Slater was seeking to protect Ede.

No heads will roll. Most of the participants in this unsavoury episode have since moved on or retired, while Key gives assurances that lessons have been learned and a more effective oversight regime is now in place.

That is not good enough. The public need an assurance that nothing like this will ever happen again…

Four days later, Armstrong offered yet more trenchant criticism of Key’s administration;

The subsequent fibs, half-truths, memory blanks and – worst of all – the misleading of Parliament on the Prime Minister’s part in the wake of the report’s release has so far not seen the electoral ground that Key has so successfully occupied for so long shifting from under him.

Key has been his own worst enemy in seeming to be in denial of Gwyn’s confirmation of the dirty tricks operation run out of his office and first exposed by Nicky Hager in his book Dirty Politics.

[…]

Key then topped that by misleading Parliament by not fessing up to his text conversation when specifically asked whether there had been any such contact.

Such reckless and consequently self-incriminating behaviour left most observers and voters completely gob-smacked. So gob-smacked that the torrent of criticism raining down on Key went into temporary abeyance.

When it came to trashing his credibility, Key seemed to be doing enough on his own without assistance from outside.

Armstrong continued by really putting the boot firmly into Key’s backside;

But the absence – so far – of any public backlash against the Prime Minister bar those who already detest him is a source of of intense frustration for Opposition parties. And more so the more Key’s memory lapses impede on serious matters of state.

What began with a failure to recall whether he was for or against the 1981 Springbok Tour was followed by forgetfulness over how many Tranz Rail shares he owned.

Then there was the inability to remember how he voted on the drinking age, along with the sudden case of amnesia surrounding the identity of the passengers who flew to New Zealand aboard a mystery CIA jet.

Things started to get even more worrying when Key confessed to being unsure if and when he was briefed on Dotcom by the Government Communications Security Bureau.

They got even more dodgy when Key professed he could not remember whether he had phoned the brother of an old school pal urging him to apply to become the director of the GCSB.

This is the power and collective memory of the media at work. Citing past instances which paint a consistently negative picture of a political figure is something usually left to bloggers these days. One of the best examples was a list of lies, half-truths, broken promises, etc made by Key and compiled by a writer-known-only-as “BLiP”.

No doubt that list will be much lengthier, nearly two years later.

It will prove to be a valuable resource for any journalist digging back into Key’s track record since 2008.

Meanwhile, the media are running stories openly questioning Key’s integrity, such as this piece by Hamish Rutherford, in November last year;

Prime Minister John Key is fighting off accusations of lying, claiming confusion about his contact with WhaleOil blogger Cameron Slater stemmed from wanting to give a “general” answer to reporters rather than a specific one.

Yesterday he was forced to admit he had corresponded with Slater on several occasions since Nicky Hager’s book, Dirty Politics, was published.

On Tuesday, Key told reporters that Slater “sent me a text one time, but I can’t remember when that was”.

It later transpired that Key and Slater had corresponded by text message the previous evening, in what Key has now described as a “gossipy” exchange.

The details emerged after Key admitted he had misled Parliament on Wednesday, when he denied having corresponded with Slater about a report by Justice Lester Chisholm into the conduct of former justice minister Judith Collins and the intelligence watchdog report on disclosures of SIS information.

Key claimed he misunderstood the question, citing noise in the debating chamber, leading him to believe Labour MP Megan Woods was referring only to one report.

In fact, Woods asked two consecutive questions about both reports.

This editorial in Rotorua’s Daily Post, was unequivocal;

 You would think that with the stench of Dirty Politics still lingering in the corridors of power after this year’s madcap election build-up, Mr Key would know better than to conduct a text conversation with the figure at the centre of the controversy.

Mr Key, who gave Mr Slater his new cellphone number after he changed it during the election campaign, says he is “fundamentally not” in contact with Mr Slater, and hadn’t rung him or “proactively texted” him.

Though according to at least one report he also said he phoned Mr Slater on Wednesday to confirm his recollection of what they discussed in their text exchange on Monday night as he’d deleted the texts.

On Wednesday night he had to back down on his earlier claims he’d had no contact with Mr Slater ahead of the release of Inspector-General of Intelligence and Security Cheryl Gwyn’s report into the SIS’s role in Slater’s 2011 political attack on former Labour leader Phil Goff.

[…]

Earlier news reports say Mr Key refused to answer questions about his contact with Mr Slater, saying it was in his capacity as National Party leader, not as Prime Minister.

That really doesn’t cut it. When you’re Prime Minister, everything, even dropping your kids off at school, is done in your capacity as Prime Minister.

Fran O’Sullivan was equally scathing;

There is considerable angst that Key is continuing to engage with a high-profile blogger at the expense of his own reputation as Prime Minister. The texting bout episode when he responded to a communication from that particular blogger when prudence would have dictated that he should have just blanked Whale Oil is a case in point.

Key’s failure to realise he would be likely to be filleted when it was inevitably leaked defies credibility.

But trying to mask the obvious backtracking was a step too far.

[…]

There are many inconsistencies in the Prime Minister’s response to the inquiry by the Inspector-General of Intelligence and Security into the release of information by the Security Intelligence Service to a blogger.

A simple apology on behalf of his office for the obvious black ops would have done a great deal to defuse the issue.

But Key has simply resorted to semantics and tried to hold his ground.

NZ Newswire political columnist, Peter Wilson, described Key’s actions as “causing more trouble than the dubious tactic was worth“, and wrote;

Key’s assertion that he was acting in his capacity as leader of the National Party when he spoke to or texted Slater is raising issues as well.

Radio New Zealand pointed out that the High Court has ruled Slater is a journalist.

That being the case, in what capacity does Key interact with press gallery journalists?

Winston Peters is wondering whether Richard Nixon would have been allowed to escape responsibility for Watergate if he’d argued that he was acting in his capacity as leader of the Republican Party.

And Slater suggests Maurice Williamson should ask for his ministerial job back, because surely he was acting in his capacity as an electorate MP when he called the police to ask about a court case.

Brent Edwards, from Radio NZ, injected a large measure of sarcasm into Key’s denials of reality;

The Inspector-General of Intelligence and Security, Cheryl Gwyn, apparently wrote two reports into the way the SIS released information embarrassing to former Labour Party leader Phil Goff in 2011.

There is the report Ms Gwyn released publicly on Tuesday which found the Security Intelligence Service had released inaccurate and misleading information leading to unfounded criticism of Mr Goff.

This report also found that staff in Prime Minister John Key’s office had passed on information to right-wing blogger Cameron Slater about briefings the then SIS director, Warren Tucker, had said he had given to Mr Goff about speculation Israeli spies had been caught up in the February 22 earthquake in Christchurch in 2011.

The other report – the one Mr Key apparently received – does not find that his staff played any part in feeding Mr Slater information or in helping the blogger make his Official Information Act request to the SIS.

John Key is adamant the report finds no such thing. It’s a line repeated by his ministers, including the Attorney-General Chris Finlayson.

Yet on page 63 of the report Ms Gwyn states: “I did, however, find that Mr Ede provided the details of relevant documents to Mr Slater and was in fact speaking to Mr Slater by phone at the exact time that Mr Slater submitted his OIA request.”

When not publishing pieces by right-wing columnist, or editorials, all attacking this government that they are supposedly friendly to – there are other stories appearing which also paint a less-than-rosy picture of Key’s administration.

This op-ed by Bruce Bisset, last September in Hawkes Bay Today,  outlined hard facts that have rarely been published in msm papers – and usually more the province of  political blogs. Bisset wrote;

Back when Labour was in power we had constant carping about Clarke’s “nanny state” and how welfare and social reforms were running up debt like there was no tomorrow.

Still we hear that mantra repeated – and surprisingly, most of the time it goes unchallenged.

But it’s pure myth. New Zealand’s national debt was less after nine years of Labour than when they were elected. The Clarke government was fiscally ultra-conservative, because the books really did balance.

Contrast that with debt under Key’s government. Starting at around $18 billion, it has blossomed to a staggering $86 billion today. That’s a five-fold increase, in just six years.

Yes, we’ve had the global financial crisis and Canterbury earthquakes and tax cuts for the wealthy that have to be paid for somehow. We’ve also had record commodity prices, significant departmental cost-cutting, and the sell-off of major state-owned assets. Plus very little new spending.

Yet we’re running up debt at more than $13 billion per year – to merely tread water.

It doesn’t add up. These guys are supposedly the whizz-bang flash moneymen. So how come we’re so indebted it now costs over $4 billion per year just to service the interest?

Truth is, the economic recovery is itself a myth.

Since last year,  the noise surrounding Slater/txt-gate/SIS report  all but died down. They have become largely forgotten by the public who are fed a daily diet of dumbed down “news” on TV1 and TV3; puerile garbage as entertainment, but precious little serious current affairs analysis; and a dazzling, mesmerising, cornucopia of ever-increasing consumer-goods dangled in front of their slack-jawed faces.

Radio NZ temporarily joined the mind-numbing dumbness of commercial radio’s ranks from December 24 to January 19. Insight, analysis, and commentary were on temporary hiatus for nearly a month.

If the last six years have shown us one thing, it is that the next scandal and revelations of dodgy ministerial practices and inept Prime Ministerial behaviour is not too far away.

The media are alerted. The public now have some awareness of dirty politics behind the scenes. And journalists are starting to exercise a form of collective memory.

It is said that the public no longer care about politics, and that Key has “de-politicised” it. But, like the continuing bad stories that finally destroyed Jenny Shipley’s government, continuing negatives stories can have a corrosive effect on this government.

The more times Key is caught out lying or being tricky with the truth or breaking promises – the more that the public will slowly but surely distrust his “brand”.

Even four years ago, a sizeable ‘chunk’ of the public were suspicious of Key’s honesty;
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John Key - Safe hands, forked tongue
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It will only get worse for Key and his cronies. Especially as social issues continue to dog this government.

Housing is fast becoming a real problem in this country as more and more New Zealanders find themselves locked out of the market and forced into a lifetime of renting.

Housing was also a critical issue during the dying days of Shipley’s government, as they enacted an unpopular policy of selling state houses.

New Zealanders may have surrendered their Citizenship in preference to becoming zombified Consumers – but housing is a commodity, and Consumers will not be denied the opportunity to acquire said commodity.

Even if it means a change of government

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References

NZ Herald: Shipley on the run

MKiwi: Beehive Parliament Buildings Wellington

Wikipedia: 1999 General Election

Fairfax media:  Key claims confusion over texts with Slater

NZ Herald: John Key defends cost of flag referendums

Radio NZ: PM spells out IS deployment dangers

Wikipedia: Referendums in NZ

NZ Herald: John Armstrong – National’s response not good enough

NZ Herald: John Armstrong – Outrageous behaviour leaves Key on the edge

The Standard: An Honest Man?

Fairfax media: Key claims confusion over texts with Slater

The Daily Post:  Editorial – Key’s whale of a tale

NZ Herald: Fran O’Sullivan – Key’s choice: bloggers or business community

NZN: Key’s question time tactic goes wrong

Radio NZ: POWER PLAY with Brent Edwards – PM’s over-sight not very intelligent

Hawkes Bay Today: Bruce Bisset – Nats have buried us in debt

Dominion Post: John Key – Safe hands, forked tongue?

NZ History: The state steps in and out – State housing

Previous related blogposts

Are Cameron Slater and Judith Collins bare-faced liars?

Doing ‘the business’ with John Key – Here’s How (Part # Rua)

Teflon Man No More

When the teflon is stripped away

Letter to the editor – Witches, foreign fighters, and other bogeymen

Associated groups

Facebook:  Housing NZ Tenants Forum

Facebook:  Tamaki Housing Group- Defend Glen Innes


 

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Key Moment cartoon memory fade.

This blogpost was first published on The Daily Blog on 1 February 2015.

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Letter to the editor – A “clayton’s” government?

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https://fmacskasy.files.wordpress.com/2014/04/old-paper-with-quill-pen-vector_34-14879.jpg

 

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Dominion Post <letters@dompost.co.nz>
date: Sun, Feb 1, 2015
subject: letter to the editor
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The editor
Dominion Post

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National’s track record thus far… Key has out-sourced his ministerial responsibilities as Minister in Charge of the SIS and GCSB…

His government tried outsourcing paying teachers to an Aussie company (but that crashed and burned in a spectacular stuff-up)…

He’s now planning to outsource state  housing to charities – a policy that will not add one single extra house for those most in need.

And when things go wrong, Key’s earnest response is it was never his responsibility and instead shifts the blame onto his Prime Minister’s Department, or that he wasn’t acting as the PM at the time.

So much for taking responsibility, which I thought was a central tenet for his party’s beliefs.

One has to wonder what we’re paying him and his cronies for? To appear on Breakfast TV for tame “interviews”? Photo-ops with kittens, puppies, and kiddies?

At least kittens, puppies, and kiddies have a useful function.

-Frank Macskasy

[address and phone number supplied]
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= fs =

 

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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I have seen one future, and it is bleak

31 October 2014 3 comments

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nz national party magazine cover

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Way back in March, 2012,  I wrote this story regarding a march to support striking workers at Ports of Auckland. It appears there was some prescience about some of my observations at the time…

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18 March 2012 – I was looking at several images taken from the March 10 rally and the port picket lines, and for some reason, this one stuck in my mind. The more I look at the image of this young Kiwi girl (I hope I haven’t got that wrong!),  it eventually came to me.

In my mind, I was wondering; what will be her future?

Depending very much on what my generation (“Baby Boomers”) and Gen X does now, in the Present, she probably has three likely futures ahead of her…

Future 1

More of the same. Casualisation of jobs; wages driven downward as businesses compete with each other, and overseas providers of goods and services;  few job opportunities except in  low-paid fast food, care-sector, cleaning, and suchlike. A wealth/income gap that has become so vast that even the Middle Class are now designated as the Shrinking Class. Top earners and asset-holders – the Privileged Class – are paying less and less tax; low income earners having to pay more and more; with fewer social services  readily available. More user-pays; more alienation; less engagement with the electoral process.

This young lass cannot escape to Australia as she is either unemployed or under-employed. She is part of a growing Struggling Class that is resented by the Shrinking Class, and viewed with disdain by the Privileged Class, though grudgingly accepted as a useful pool of cheap labour.

The Shrinking Class know in their heart-of-hearts that they are living under a failed economic system that benefits only a few. But they are too frightened to vote for an alternative centre-left Party; they fear the back-lash from an angry under-class only too happy to exact revenge.

Meanwhile, the Baby Boomer generation has hit retirement – but there are few skilled care-workers left in New Zealand. So the government imports migrant workers from Third World countries under a bonded-system (so they cannot, in turn, escape to Australia). Taxation levels are now so low that government subsidies have ceased and  full user-pays is now in effect for Rest homes. Baby boomers are selling up their residences and investment properties; the market is flooded with cheaper and cheaper houses – but with incomes so low, few can afford to buy them. Those that are sold reap less and less capital gains.

Future 2

More of the same, but she has been fortunate enough to be able to find resources and support from whanau over-seas – and she is of to Australia.

In Australia, she finds a relatively good job with decent pay. Her work conditions are protected by a strong Union; she has access to decent social services; and the government assists her and her new partner to build a house. They are both working; earning higher and higher incomes; and contributing to Australia’s economy and tax-base.

In a year or two, she helps other members of her family escape from New Zealand.

They leave behind a no-longer-smiling Prime Minister who is promising to “revitalise the economy” to “entice overseas Kiwis to come back” – then cuts another  1,000 workers from the State Sector and sells the last remaining profitable State Owned Enterprise.

Future 3

New Zealanders’ appetite for New Right, minimalist government, that has produced very few gains or benefits – has come to an end. The Smile & Wave Prime Minister is thrown out at the next election where he retires to his Hawaiian beach house, and is forgotten.

Meanwhile, a new centre-Left government takes stock and adopts a Scandinavian model of governance, taxation, and social services. The new government starts off with a crash programme of building 10,000 new state houses.  Free school meals for breakfast and lunch starts in the first year. Free doctor’s visits and boosting immunisation rates up to 99% follows. New Zealand returns to a system of free education. (Howls of protest from a few remaining New Right supporters are either ignored or ridiculed. Some are offered a free plane flight to a Libertarian-run state of their own choosing – if they can find one.)

Amongst this “radical” social democratic reform, the young girl above is supported by well-resourced local community groups and by strengthened state social services to journey through the education system. A new “Social Contract” requires that all young people will be in education; a job; or serving in a new New Zealand Civic Corp, which involves fair pay for working on major  infra-structure projects and ongoing tertiary/polytech education.

A Capital Gains Tax and Financial Transactions Tax,  is a first step toward capturing heretofore un-taxed wealth and assets. As returns from these taxes kick in, the government makes the first $11,000 of income tax free. As incomes increase, government looks at Gareth Morgan’s “negative tax” system.

The young girl has grown, graduated, and is now working in the community in the children’s health sector. Her education is on-going, as the State encourages workers to undertake further tertiary education. This increases her productivity and value to society, and she is paying more in tax as her income rises. She is a saving some of her pay in an expanded Kiwisaver Account;  spending more; and local businesses are benefitting from her expenditure. She meets a young man who is finishing his Builder’s Certificate through the NZ Civic Corp.

Together, they have a family.  One stays at home to care for the family, the other remains in paid work. The negative taxation system advocated by Gareth Morgan has been implemented and the stay-at-home parent still recieves an income from the State. People are not disincentivised to have children; raise a family;  who then grow up to be the next generation of tax-paying citizens.

With none of the pressures that young families are currently facing, their home is not stressed because of financial pressures and job uncertainty/insecurity, and the children are raised in a stable, relaxed environment. The children’s future ahead of them is reassured; early childhood education; schooling; tertiary education; and finally tax-paying citizens.

In this reformed society, children are number one on the list and will always have first recourse to resources. The Prime Minister is Minister for Children.

In school, civics is part of the curriculum, and young people are taught recent history of our country; the mistakes we have made; and how they can hold politicians to account.

Meanwhile, she has persuaded some of her whanau to return to New Zealand. They like what they see and can feel themselves ready to become a part of a true, inclusive New Zealand Society.

The best thing about the three futures I’ve described above? The power to choose which one we’ll have is entirely in our hands. No one else can give or take it away from us.

Which is it to be, I wonder?

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Perhaps nothing better illustrates the three possible futures for the toddler pictured above than the all-too real – and thought-provoking – story of Aroha Ireland, formerly of low-income area, McGehan Close.

In February 2007, Key shamelessly exploited Aroha’s situation to attack the then-Labour-led government;

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Aroha Ireland, John Key, McGehan Close, Waitangi Day

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As I further reported on 23 November 2012 on Key’s cynical publicity stunt,

It’s somewhat disturbing to note that National list MP Jackie Blue, who had a close personal  relationship with Aroha’s family, played along with the photo-op. That was despite reservations expressed by some,

“Labour list MP Dover Samuels was the only one publicly labelling Mr Key’s invitation a stunt yesterday, but others quietly voiced similar concerns.”

The family, though, seemed blissfully unaware that they were little more than pawns in National’s pre-election grand strategy and expressed their comfort with events,

“…Mrs Nathan told Close Up last night that the invitation had given her daughter a good opportunity.

She continued to disagree with some of Mr Key’s views on McGehan Close, but she believed he was trying to push for positive changes.”

The 2007 episode ended badly for Aroha and her mother, as the NZ Herald reported on 10 February 2010,

The mother of the 12-year-old girl John Key took to Waitangi three years ago says she has been let down by the Prime Minister, and her daughter now wants nothing to do with him.

Joan Nathan said she and her family were worse off since National won the election.

She’d lost her job with National list MP Jackie Blue, arranged by Key, and a training allowance she received had been cut.

“They gave me the job to sweeten the deal, and then as soon as they got elected I got the sack,” she said.

“I’m pretty anti-Mr Key at the moment”..

[…]

“He’s just made everything worse for us and made it easier for ones that are higher up. I’m struggling every week.”

 

On 7 September this year, Fairfax Media published this up-dated story on  Aroha Ireland, formerly of  McGehan Close, and now residing comfortably in Australia;

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Aroha of McGehan Close flees NZ

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In his story above, Fairfax reporter Simon Day wrote,

Three years later Aroha, now 20, feels she was used by Key – and the Prime Minister won’t be getting her vote.

“The last time I spoke to him was when he took me to Waitangi Day. After that I have never heard from him again. I absolutely believe that I was used as a publicity stunt,” she says. “I wouldn’t vote for National.”

[…]

Now, she says, the opportunities she has in Australia just aren’t available here.

“I have a full time job that pays good, $38 an hour,” she says. “I have a house, rent is cheap, about $265 a week for 3 bedrooms, 2 bathrooms, double garage, me and my husband are close to buying our own house. Life couldn’t be any better. There was nothing left in New Zealand.

“All this from someone who came from a ‘dead end’ street, right?”

She recently returned home to visit her mother. She couldn’t believe how expensive the price of living in New Zealand was compared to Australia.

“Petrol has shot up – $2 for petrol, really? I also brought about seven or eight items from one of the supermarkets and it came to a total of $78. No wonder people can’t fill their fridges. I’m glad I got out of New Zealand when I did.”

Over the past four years she has seen her mother’s financial situation worsen. “My mum works full time and she is still struggling really bad,” she says. “It is like she is worse off.”

“I have everything that I would never ever have in New Zealand. I would probably still be on the benefit if I lived in NZ right now.”

It seems that for Ms Ireland, of the three possible futures I outlined in 2012 – voters have chosen this path to follow;

Future 2

More of the same, but she has been fortunate enough to be able to find resources and support from whanau over-seas – and she is of to Australia.

In Australia, she finds a relatively good job with decent pay. Her work conditions are protected by a strong Union; she has access to decent social services; and the government assists her and her new partner to build a house. They are both working; earning higher and higher incomes; and contributing to Australia’s economy and tax-base.

In a year or two, she helps other members of her family escape from New Zealand.

They leave behind a no-longer-smiling Prime Minister who is promising to “revitalise the economy” to “entice overseas Kiwis to come back” – then cuts another  1,000 workers from the State Sector and sells the last remaining profitable State Owned Enterprise.

The economy in Australia may be slowing – but it still offers job prospects, housing opportunities, and social services that we here in New Zealand seem to be losing on a daily basis.

Especially when our housing crisis is worsening; child poverty continues to be a blight on our society; wages and wealth disparity continues to widen; social services are being pared back; and government is planning to introduce so-called “labour market reforms” that will further drive down wages, conditions, safety, etc.

This is what voters chose on 20 September.

However, be that as it may, there is one thing that every student of Quantum Theory understands – the future is never set in concrete.

The future can be changed.

Because it must.

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References

Fairfax media:  Aroha of McGehan Close flees NZ

NZ Herald: A Day Out with Friends In High Places

NZ Herald: Family still on struggle street after Key leaves

Scoop Media: Employment Relations Amendment Bill

Additional

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

Acknowledgements

Election Commission: Orange Guy

Previous related blogposts

John Key: When propaganda photo-ops go wrong

National Housing propaganda – McGehan Close Revisited

What will be her future?

Other Blogs

The Daily Blog: Chocolate milk shortage and creepy Santa? Let’s talk about real news

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This blogpost was first published on The Daily Blog on 27 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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This blogpost was first published on The Daily Blog on 12 October 2014

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National Housing propaganda – McGehan Close Revisited

29 August 2014 5 comments

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20-september

 

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Housing has become a major, defining issue in New Zealand. We have critical shortages and escalating prices in  in the main centres and falling house values in the regions. The National government has addressed the supply & demand problem not by increasing supply – but by attempting to suppress demand. Hence the 20% LVR restriction, which has resulted in a fall in demand.

In other words, instead of building new homes for first home owners – National’s policies have simply raised barriers to chase them away from the housing market.

Which seems to contradict Dear Leader’s famous speech in 2008, when he attacked then-Prime Minister Helen Clark’s government, in January 2008;

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

  • Why, under Labour, is the gap between our wages, and wages in Australia and other parts of the world, getting bigger and bigger?

  • Why, under Labour, do we only get a tax cut in election year, when we really needed it years ago?

  • Why are grocery and petrol prices going through the roof?

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

Of course, the first point – interest rates – doesn’t apply in this situation. Key has deftly  escaped over-seeing a massive rise in interest rates by simply making it harder for people to buy a house. (Though prices are still rising – and massively so  in Auckland.

Key and his hopeless government have done nothing to address this country’s housing shortage – they’ve simply tried to stifle demand, in a very Muldoonesque way. Shades of price and wage freeze in 1982!

It seems that National is shortly to  reprise  a variant of a  previous propaganda campaign from it’s 2008 election strategy.  According to Selwyn Manning, who wrote recently in The Daily Blog,

On Monday morning, National will visit the Weymouth housing development in South Auckland. On Monday afternoon, National will visit the Hobsonville housing development north of Auckland. Its message will be to connect housing policy to the economy and squeeze out the opposition parties.

This was National’s housing campaign in 2008,and which four years later came to a messy conclusion. The following was a story I wrote, in  November 2012…

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Desperate measures…

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Desperate to seize power from Labour, and faced with strong, experienced leadership in the form of Helen Clark and Michael Cullen, National and it’s fresh,  new leader – John Key – launched a series of public-relations  media/propaganda initiatives. One of those propaganda exercises, a photo-op with a schoolgirl, would come back to haunt  Dear Leader and ridicule one of his major pledges…

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Opening shots…

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The campaign to mark out National’s “human face of neo-liberalism” was launched  on  30 January 2007, when Key made his speech  “The Kiwi Way: A Fair Go For All” at the Burnside Rugby Clubrooms, Christchurch.

See: The Kiwi Way: A Fair Go For All

It had all the nice, warm, fuzzy sound-bites; “good Kiwi upbringing“; “betterment of all New Zealanders“, “proud of our culture and society“; “opportunity and hope“; “giving people a fair go”; “egalitarian society“; “The Kiwi Way” (mentioned ten times); “born into a struggling household“, etc, etc, etc…

Whoever wrote that speech really mined the  handbook of the Kiwi Psyche.

But the real opening shots in the political battle for the hearts and minds of New Zealanders began in the opening months of 2007 – two full years leading up to the November 2008 general elections.

Reading many of Key’s speeches and policy announcements,  was almost like tapping into a Scandinavian model of a social democratic society. Michael Joseph Savage would have nodded in approval to many of Key’s utterances.

Especially when, on 3 February 2007, Key announced the launching of National’s “Food in Schools programme“. It was pure 1930s Labour stuff,

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National Party Leader John Key has announced the first initiative in what will be a National Food in Schools programme.

“National is committed to providing practical solutions to the problems which Helen Clark says don’t exist,” says Mr Key.

During his State of the Nation speech on Tuesday, Mr Key indicated National would seek to introduce a food in schools programme at our poorest schools in partnership with the business community.

Mr Key has since received an approach from Auckland-based company Tasti foods.

“I approached Wesley Primary School yesterday, a decile 1 school near McGehan Close, a street that has had more than its fair share of problems in recent times. I am told Wesley Primary, like so many schools in New Zealand, has too many kids turning up hungry.”

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See: National launches its Food in Schools programme

Of course once National came to power twentyone months later, on 8 November 2008,  Key’s  quasi-socialistic policy of  ”  providing practical solutions to the problems which Helen Clark says don’t exist “, quietly slipped beneath the waves and disappeared from public sight.

It had achieved it’s purpose.

In fact, National’s policy stance  on any suggestion of  Food in Schools programmes, is now somewhat more hostile,

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Organisations working with the poor and opposition parties say Prime Minister John Key is in ”la la land” if he thinks fruit is enough to get a hungry child through a school day.

Labour yesterday unveiled a $10 million policy to provide free food to 650 of the country’s lowest decile primary and intermediate schools.

Key immediately rejected the idea, saying free fruit was already provided in the ”vast bulk” of low-decile schools and there was often a breakfast programme.

”Not every school wants every child to be provided a lunch,” he told reporters in Russia before leaving for Japan. ”There are many families that can provide those lunches’.”‘

See: Key in poverty ‘la la land’

And in case anyone missed the point that National was not about to follow the Scandinavian model of  helping  children living in poverty,

Prime Minister John Key says beneficiaries who resort to food banks do so out of their own “poor choices” rather than because they cannot afford food.

Mr Key made the comment when asked in Parliament yesterday about poverty levels.

When Labour’s social development spokeswoman Annette King asked about Salvation Army reports of high demand for food parcels, Mr Key responded by saying it was true that the global recession meant more people were on benefits.

“But it is also true that anyone on a benefit actually has a lifestyle choice. If one budgets properly, one can pay one’s bills.

“And that is true because the bulk of New Zealanders on a benefit do actually pay for food, their rent and other things. Now some make poor choices and they don’t have money left.”

See: Food parcel families made poor choices, says Key

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Not only has National’s  “Food in Schools programme” vanished, and subsequently replaced with naked antipathy, but this blogger’s emails to the Prime Minister’s office on the issue have gone unanswered.

Too embarressing, no doubt.

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Firing Photo ops missiles…

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On 6 February 2007, National’s tax-payer funded spin-doctors organised this photo-op for Dear Leader,

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Aroha Ireland, John Key, McGehan Close, Waitangi Day

Full story

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Key was attempting to re-play  a much earlier scene on Waitangi Day in 1973, when then-Prime Minister, Norman Kirk walked onto the grounds on Waitangi, with then-ten year old, Moana Priest,

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prime-minister-norman-kirk-and-moana-priest-waitangi-day-1973

Acknowledgement:  Life and career of the late Prime Minister Norman Kirk, Herald Book

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However, it can safely be stated that the  difference between Kirk and Key was/is monumental. It was a  distance between two men that can only be measured in interstellar terms.

Kirk believed deeply  in what he was doing.

Key simply exploited a naive young girl and her family for a photo-op –  which we all now by now is something he cannot pass by.

In the Herald, on 6 November 2007, Aroha and her family expressed delight at attending Waitangi Day celebrations with the leader of the Opposition (as he was then),

Yesterday morning, Mr Key picked Aroha up in a Crown limousine and took her to Waitangi with him, discussing, among other things, her favourite band, Panic at the Disco.

She described the trip – one of the few she’s made outside Auckland and which included her first stay in a hotel – as “exciting”.

She said her family were also rapt with the visit, and felt much more comfortable when they realised National list MP Jackie Blue, who accompanied Mr Key to McGehan Close, would be with her for the trip.

Dr Blue was Aroha’s grandmother’s doctor and also attended to her mother, Joan Nathan, so “Mum said I’d be in good hands”.

The pair spent part of the day with Mr Key but slipped away for lunch at the Copthorne Hotel, where Aroha described the chips as great but said she didn’t think the fish was fresh.

“Dad always says if it doesn’t fall apart it’s not fresh.”

Aroha said she knew little about events at Waitangi on Waitangi Day, but was looking forward to finding out.

See: A day out with friends in high places

It’s somewhat disturbing to note that National list MP Jackie Blue, who had a close personal  relationship with Aroha’s family, played along with the photo-op. That was despite reservations expressed by some,

Labour list MP Dover Samuels was the only one publicly labelling Mr Key’s invitation a stunt yesterday, but others quietly voiced similar concerns.

See: Ibid

The family, though, seemed blissfully unaware that they were little more than pawns in National’s pre-election grand strategy and expressed their comfort with events,

Mrs Nathan told Close Up last night that the invitation had given her daughter a good opportunity.

She continued to disagree with some of Mr Key’s views on McGehan Close, but she believed he was trying to push for positive changes.

See: Ibid

Three months later, on 27 May 2007, Key referred to Aroha Ireland in a speech strangely entitled, “Tough on Crime”. His reference to Aroha was fleeting (as was his brief intervention in her life), barely rating a mention,

For the past six months, I’ve had the privilege of travelling New Zealand from city to town talking to the people who make our country tick. I’ve been to places like McGehan Close and met people like Aroha Ireland, a young girl with big dreams for her future. I’ve milked cows in Horowhenua. I’ve visited primary schools in Canterbury. I’ve met with iwi in Ruatoria. ”

See: John Key’s speech  – Tough on Crime

Cows weren’t the only thing he milked

In the same speech, Key ramped up the aspirational rhetoric,

The first ‘E’ is the economy. National will emphasise this theme because we are committed to delivering New Zealanders the fruits of a wealthier country. Make no mistake – Labour’s policies are seeing us fall further and further behind the rest of the world. The recent Budget did absolutely nothing to alleviate that slide.

Michael Cullen has given up on growing our economy, instead he’s preparing for retirement: Labour’s retirement.

Well, National is a lot more ambitious than that. We think Kiwis deserve higher wages and lower taxes during their working lives,as well as a good retirement. That’s why we will pursue economic policies and infrastructure development that will keep New Zealand competitive on the world stage. Make no mistake – Bill English’s first Budget will include tax cuts.

See: Ibid

The rest of Key’s speech was pure knee-jerk, tough-on-crime, BS – so beloved by National’s fearful aging middle classes.

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Shots that re-bound and ricochet

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Three Years later, and Key’s visit to McGehan Close had lost it’s gloss, as the NZ Herald reported on 10 February 2010,

The mother of the 12-year-old girl John Key took to Waitangi three years ago says she has been let down by the Prime Minister, and her daughter now wants nothing to do with him.

Joan Nathan said she and her family were worse off since National won the election.

She’d lost her job with National list MP Jackie Blue, arranged by Key, and a training allowance she received had been cut.

“They gave me the job to sweeten the deal, and then as soon as they got elected I got the sack,” she said.

“I’m pretty anti-Mr Key at the moment”..

[…]

“He’s just made everything worse for us and made it easier for ones that are higher up. I’m struggling every week.”

See: Family still on struggle street after Key leaves

The NZ Herald story went on to state,

A spokesman for Key said he had visited her home last year to try to help resolve the housing issue, and had spoken to her on the phone several times since the election. Key didn’t wish to make any further comment.

See: Ibid

Yeah. I’ll bet he didn’t want to comment.

Why should he? Aroha Ireland had served her purpose for the 2008 general election, and like some Bond Villain, Key was now disposing of his ‘puppets’ – they were no longer useful for his grand Master Plan for World New Zealand Domination.

And  Key’s crony, National MP Jackie Blue’s,  response was even more insightful,

Jackie Blue said Nathan worked 10 hours a week doing administration for Mt Roskill office up until the 2008 election.

She wasn’t re-employed because Blue merged her office with Lotu-Iiga, and didn’t need to rehire staff.

Blue said she had tried to keep in touch, but Nathan’s phone had been disconnected.

See: Ibid

Irony heaped upon grim irony… made redundant from a faux-job created specifically by the Nats as an enticing  “lolly” for Joan Nathan (Aroha’s mother)… phone disconnected as a sign of lowered income and encroaching poverty… Ms Nathan’s loss of employment symptomatic of National’s do-nothing approach to the country’s growing unemployment crisis…

Little wonder that Aroha Ireland no longer wanted to talk about Key’s visit three years ago. One cannot feel any measure of   pride in  being used.

John Key’s photo-op had gone full-circle, and was lining up to tear big chunks from Dear Leader’s arse.

If anything, Aroha’s situation was now a prime example of National’s policies (or lack thereof) – but not as the Nat’s politburo had intended.

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Shot himself in the foot…

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By November of last year, Key’s photo-op with Aroha Ireland had jumped from expressions of disgust, by her family at being exploited, to one of high farce for the Nats – and a measure of  hope for Aroha.

Ms Ireland was joining the flood of New Zealanders escaping over the Berlin Wall Tasman Sea to a Brighter Futurein Australia,

National leader John Key says the teenager he took to Waitangi Day three years ago is not leaving for Australia because life is better there.

Aroha Ireland, 16, became the face of National’s campaign to close the gap with Australia and help struggling families during the last election campaign.

Now it has been reported that Miss Ireland is headed across the Tasman.

See: PM denies teen leaving for good life

Dear Leader sez  “the teenager he took to Waitangi Day three years ago is not leaving for Australia because life is better there ” ?!

Oh yeah, spin it, John Boy, spin it!

Key went on to state (with a straight face, I hope) that  he did not think she was going because of the yawning wage gap, between our two countries,

I’m proud of the Government’s record – in difficult times, we’ve closed that wage gap with Australia. We’ve grown after-tax wages by 10 per cent in the last three years, Australia by six.”

Except… well… Yeah, nah. John Key is now piling the BS on top of his previous outrageous spin. The facts speak otherwise – the wage gap is growing, not reducing, despite what Key and his spinmeisters might want us to believe.

In fact, Key should be fully aware that he was being less than truthful by suggesting that the wages gap was closing. As right wing politician, and  ex-Reserve bank governor, Don Brash stated only two weeks earlier,

In 2008 we estimated the gap was 35% currently it’s nearer 40%.”

See: Aussie wage gap now 40% – Brash

(Unfortunately, Brash’s brief moment of lucidity was short-lived, and he thereafter  descended into right wing nuttery to solve the growing wage gap. In essence, more of the same of the last thirty years. What’s that definition of craziness; doing the same thing over and over again and expecting a different outcome?)

It was little wonder that Key claimed he had “no idea” why Aroha was escaping to Australia,

Lots of young people decide to go for an OE – I don’t know how long she’ll last. I’m not in a position to go into too much; hope she comes back.

I’m disappointed she’s going for her, because I think New Zealand has got a great future in front of it and I’d like her to be part of it.

See: PM denies teen leaving for good life

Of course Dear Leader knows why Aroha left New Zealand. But to admit it would be a colossal admission of National’s failure to address critical economic and social problems in our country.

Key’s comments are lame by any standards. We simply laugh harder and louder at his moronic utterances.

A year later, all doubt was removed why Aroha Ireland – like thousands of other New Zealanders, before and since, her voting with her feet – had moved to Australia…

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And the photo-op blows up in Key’s face…

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According to a NZ Herald report this year, Aroha’s move to Australia held no great mystery,

… Aroha Ireland has given up on New Zealand, is engaged to be married and earning good money with no plans to return to her homeland.

The 17-year-old bailed for the lucky country last year, disillusioned with her prospects in Auckland.

Miss Ireland, who is engaged to Stuart Spashett also of Auckland, did not return the Herald’s calls.

She has told family members and friends she is embarrassed by the publicity that followed her since her visit to Waitangi in 2008.

Lisa Spashett, who calls herself Aroha’s second mum, said the Government had failed people like her future daughter-in-law.

She said there was nothing for them in New Zealand to look forward to or return to.

See: Key’s poster girl finds life much better in Australia

Ms Spashett went on to say, with drilling, laser-beam, accuracy,

As far as they are concerned, no, they [the National Government] hadn’t done anything for them. I can tell you that straight up and that’s why they are in Australia.”

See: Ibid

From 6 February 2007,

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Aroha Ireland, John Key, McGehan Close, Waitangi Day

Full story

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… to 13 November 2012,

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Full story

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From self-serving exploitation by a cynical multi-millionaire-cum-politician – to an embarressing example of  National’s failure.

And the best thing about this? National has shot itself in it’s own foot, with no help from it’s political opponants whatsoever.

They did it to themselves.

Classic.

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Fast forward to 2014 and a new election and a new propaganda campaign.

If anyone believes that National will be addressing our growing housing shorting, they need only stop, pause, and think: what has Key been doing sincve 2008?

And perhaps they should ask Aroha Ireland. How did things pan out with the Prime Minister?

She’s only a phone call away. In Australia.

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Sources

National Party Speech – The Kiwi Way: A Fair Go For All (30 Jan 2007)

National Press Release – National launches its Food in Schools programme (4 Feb 2007)

A day out with friends in high places (6 Feb 2007)

Aroha is missing her Key friend (10 Feb 2007)

National Party Speech  – Tough on Crime (27 May 2007)

Family still on struggle street after Key leaves (7 Feb 2010)

Aussie wage gap now 40% – Brash (7 Nov 2011)

PM denies teen leaving for good life (21 Nov 2011)

Key’s poster girl finds life much better in Australia (13 Nov 2012)

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References

Fairfax media:  RBNZ cracks down on mortgage lending

ODT: LVR ‘working well’ as housing market slows

National Party: 2008: A Fresh Start for New Zealand

NZ Herald: Auckland’s property values jump 33pc

Te Ara – Encyclopedia of New Zealand: The wage and price freeze, 1982–1984

Previous related blogposts

John Key: When propaganda photo-ops go wrong…


 

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housing endangered

Above image acknowledgment: Francis Owen/Lurch Left Memes

This blogpost was first published on The Daily Blog on 25 August 2014

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Radio NZ Debate: Bill English vs David Parker

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20-september

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Check out this excellent debate between National’s Bill English and Labour’s David Parker. Well worth listening to;

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Election Issues debate - Economy - bill english - david parker - radio nz - housing - 2014 election - debate

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Alternative link: Listen to Bill English and David Parker debate the economy on Nine to Noon

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john key is scared of your vote

Above image acknowledgment: Francis Owen/Lurch Left Memes

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A fair go in New Zealand?

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equality - inequality

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A very insightful piece by Dr Deborah Russell, lecturer in taxation at Massey University, and Labour candidate for Rangitikei, raised  a clear picture of the difference between equality and inequality;

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Deborah Russell - We all deserve to get a fair go

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There is little doubt that inequality has increased over the last thirty years. In  February this year, a bungle by Treasury resulted in  child poverty numbers being  underestimated by twenty thousand. Income inequality  was also underestimated.

Part of the reason has been one aspect of the neo-liberal “revolution”: tax cuts and increased user pays.

New Zealanders could do well to reflect that, since 1986, we have had no less than seven tax cuts;

1 October 1986 – Labour

1 October 1988 – Labour

1 July 1996 – National

1 July 1998 – National

1 October 2008 – Labour

1 April 2009 – National

1 October 2010 – National

At the same time we have had less revenue from SOEs as they were privatised or partially-sold off.

So it’s little wonder that more and more User Pays has crept into our economy/society, such as $357 million in “voluntary” donations for ‘free’ schooling, that parents have to cough up each year. That’s on top of school uniforms, text books, shoes, personal equipment, etc.

The neo-liberal revolution of the 1980s and 1990s didn’t stop, it just became more covert, with incremental increases, so we barely noticed. And when we did notice – such as the increase of prescriptions from $3 to $5 – public opposition was muted. Yet, once upon a time, prescriptions cost 50 cents each, and before that, were free.

An indicator of growing inequality is the level of home ownership in this country. This is a core statistic that cannot be fudged by National’s spin-doctors and their right-wing wannabes/sycophants.

According to the 1986 Census, home ownerships rates in New Zealand was  74.1%, with 23.1% renting.

By 2013, according to last year’s census, the figures had changed radically;

» 49.9% owned their own home  (54.5% in 2006)

» 14.8% homes were owned by a Trust (12.3% in 2006)

» A total of 64.8% of households owned their home or held it in a family trust (66.9% in 2006)

» 35.2% were renting/did not own their own home (33.1% in 2006)

As the Census 2006 Housing in New Zealand report stated,

“Over the 2001 to 2006 period the incomes of the majority of private-renter households have for the first time since 1986 increased more quickly than owner-occupier households. This supports the contention that an increasing number of working households on what would previously be considered ‘reasonable’ incomes can no longer access home ownership.

The decline in home ownership rates over the 1991 to 2001 period was significantly greater for younger households than it was for older households. This trend would appear to have continued over the 2001 to 2006 period. The gap between the home ownership rates of couple-with-children households, who have historically had the highest home ownership rates, and other types of households, narrowed over the 1991 and 2001 period, and has continued to narrow over the 2001 to 2006 period. Conversely, the home ownership rate gap between couple-only households and other types of households has widened over both periods, in favour of couple-only households. Home ownership rates as would be expected increase with household income. There are, however, differences between regions, based we suspect, on differences in average house prices by region.”

The upshot is that whilst home ownership rates are in free-fall –  unsurprisingly renting is steadily increasing.

National’s response to address our critical housing? To reduce demand – not by building more houses – but  by restricting first home owners with a 20% Loan To Value Ratio (LVR). This measure forced a sizeable chunk of house-buyers from the market, whilst local and offshore speculators were allowed free reign.

This is most definitely not what was promised to this nation in the late 1980s, when “trickle down” was supposed to increase our wealth. To the contrary, as the decades slide by, it is more and more apparent that we’ve been cruelly hoaxed.

I am reminded of something John Key said in a speech, when he scathingly condemned the previous Labour government in an election speech on 29 January 2008;

 

 

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John Key wanking on about some crap
“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?”

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Good question, Dear Leader. Good question.

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Postscript – A tale of denial

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#1 – Crisis

NZ housing market most overpriced - report

 

#2 – Denial

PM denies OECD figures reflect housing crisis

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#3 – Blame others

Housing crisis worse under Clark's Government - Key

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#4 – Revelation

Key 'out of touch' over housing crisis

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#5 – Toughlove

You’re wrong John, there is a housing crisis in NZ

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# 6 – Acceptance?

 

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References

NZ Herald: Deborah Russell: We all deserve to get a fair go

Radio NZ: Govt disappointed by stats bungle

Fairfax media: Children in poverty vastly underestimated

NZ Herald: Parents fundraise $357m for ‘free’ schooling

NZ 1987-88 Official Yearbook: Table 6.4. TENURE OF DWELLINGS (6.1 Households and dwellings)

Statistics NZ: 2013 Census QuickStats about national highlights – Home ownership continues to fall

Statistics NZ: 2006 Census – Dwelling ownership

Centre for Housing Research:  Census 2006 Housing in New Zealand

John  Key.co.nz: A Fresh Start for New Zealand

Radio NZ: NZ housing market most overpriced – report

Radio NZ: PM denies OECD figures reflect housing crisis

NZ Herald: Housing crisis worse under Clark’s Government – Key

TV3: Key ‘out of touch’ over housing crisis

Scoop media: You’re wrong John, there is a housing crisis in NZ

Additional

Fairfax media: Housing affordability getting worse

Closer Together-Whakatata Mai: New Zealand’s income inequality problem

 


 

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selling housing

This blogpost was first published on The Daily Blog on 21 May 2014.

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Journalists encouraging irresponsible government policy?

6 January 2014 3 comments

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John Armstrong - Cutting tax tempting for National

Source

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Sorry, John, but precisely WHO is talking about tax cuts?

Because so far, all I’m hearing is a couple of journos putting the question to Dear Leader and his faithful little side-kick, Lassie Bill English. No one else is seriously contemplating cutting taxes – not when New Zealand’s sovereign debt is now $60 billion as at 9 November this year – and  increasing by $27 million every day since Key’s hopelessly  incompetent government came to power in 2008.

According to Hamish Rutherford, writing for Fairfax Media, this equates to $13,000 for every man, woman, and child in New Zealand – and expected to increase by another $10 billion by 2017.

We need to address this problem – not fuel it by increasing consumption of imported goods, thereby worsening our balance of payments.

For god sakes, stop encouraging National to engage in any further irresponsible slashing of revenue.  National’s two previous tax cuts in 2009 and 2010 did nothing to  help stem the growth in our sovereign debt. Not when revenue fell by up to $4 billion after those tax cuts.

We have other priorities.

For example, why is the Wellington City Mission short of $2 million to carry out it’s valuable work to assist the poorest in our society? It is obscene that the Mission will have to consider reducing some services, as Chief executive Michelle Branney recently suggested.

Why are New Zealand’s poorest families unable to afford basic  medicines since this government-for-the-rich increased prescription charges in January 2013? When National cut taxes, it attempted to make up for the revenue shortfall by raising GST (despite promising in 2008 not to) and increasing government charges such as for prescriptions, Court fees, etc.

Why are New Zealanders needlessly suffering from rare diseases because PHARMAC cannot afford life-giving medication?

Why are poverty-related diseases making a come-back with such a vengeance?

Children’s Commissioner Dr Russell Wills…

… report is expected to reveal a 12 per cent rise from 2007 to 2011 in hospital admissions for poverty-related illnesses such as acute bronchiolitis, gastroenteritis, asthma, acute upper respiratory infections and skin infections.

“Most New Zealanders will find the numbers of children affected by disease shocking,” Wills told the Herald on Sunday, “but for those of us working clinically with families in poverty it is not surprising.”

Wills also works as a paediatrician in Hawke’s Bay. He said hospital wards were now full of poor, sick children every month of the year – not just in winter. There was no longer a “summer lull” in diseases.

English found himself so cash-strapped after their tax cut profligacy that, by 2012, he was even reaching into the meagre pay-packets of newspaper delivery boys and girls to grab extra tax revenue.

Instead of frittering away taxes, we need to be looking at the real problems confronting us;

  • Address child poverty problems

When children go to school hungry because families cannot afford sufficient food after paying high rents, electricity bills, etc. then there is something seriously wrong with our country.

Especially when we are now seeing children eating out of rubbish bins because there is no food at home for them. I refuse to believe that most New Zealanders want this kind of society for their children.

This is not the New Zealand I grew up in.

The next Prime Minister must make this a #1 priority, and begin with taking on the role of Minister for Children and implementing a comprehensive Food In Schools programme (not the shonkey half-measures undertaken by National earlier this year).

Next on the agenda; returning welfare payments to pre-1991-slash levels (inflation indexed); reduce prescription prices for medicine;  and implement a massive job creation programme.

  • Pay down debt

From 2000 to 2008, Clark’s administration not only paid down debt, but also posted Budget surpluses,

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Government Debt

New Zealand Government Debt To GDP

Source

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Government Budgets

New Zealand Government Budget

Source

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To be fair, Labour’s Finance Minister, Michael Cullen did not have the Global Financial Crisis to contend with. But by exercising fiscal prudence –  instead of  tax-cut lolly-scrambles demanded by the then-National opposition – he left the country in a fit state to weather the on-coming financial storm that was about to envelope the planet.

By the time National came to power in 2008, the global financial crisis was well and truly upon us, with the collapse of Lehman Bros on 15 September 2008. The GFC had started earlier, and signs were apparent to all but the most intransigent optimist that dark storm clouds were on the horizon.

As unemployment rose and economic activity slowed, National persevered stubbornly with it’s tax-cut programme – a move that would further indebt this country and put our government’s books back into the red again. At one stage, National was  borrowing $380 million  a week to make up for the shortfall.

This despite the fact that it was common knowledge that we were facing a dire crisis, as Tracy Watkin and Vernon Small reported on 23 April 2009,

The recession was expected to blow a $50b hole in the economy during the next three years, plunging the Government further into the red as costs climb and tax revenues fall.

“That’s $50 billion we will not recover as a nation, and $50 billion that cannot be taxed by the Government,” Mr English told a business audience in Auckland.

And yet, despite his own candid admission, English went ahead with tax cuts that we could ill afford, and had to make up with massive borrowings; cuts to government services; increased user-pays; mass sackings of state sector worker, and eventual partial asset sales. Even welfare was targetted for “reforms” (read; cost cutting) to claw back government spending.

Little wonder that by September 2011, credit rating agencies Fitch and Standard & Poors had downgraded us.

  • Invest in upskilling the unemployed

Why are we importing tradespeople from overseas when we have 7.1% (153,210) unemployment in this country?

National’s response to the skills shortage was this ideological fob-off from Bill English, in June 2011,

In the first place, it is the responsibility of the companies that expect to rebuild Christchurch to ensure that they have the skills.

And to ensure that everyone understood that National was maintaining it’s long-held tradition of shirking responsibility, he added,

Of course it will be tight, because they are competing with very, very large salaries, particularly those in Western Australia where something like $250 billion worth of capital projects are in the pipeline.”

IBID

That’s the problem with a government that places it’s faith in a free market solution to everything (except corporate welfare) – nothing happens.

Wouldn’t it have made more sense to offer free skills training to every unemployed person in New Zealand, along with subsidised accomodation in Christchurch for workers moving from other towns and cities to take up work offers?

There would have been a cost, to be certain. But that would have been off-set by (a) reduced welfare payments; (b) upskilled workers who would continue to use their new training for subsequent building projects; (c) more taxes paid by more employed workers;  and (d) a flow-on effect to other businesses as income-earning workers spent their wages.

The $4 billion frittered away in tax cuts would have made a considerable dent in our unemployment and given a much needed boost to our economy. And by providing work to the unemployed, the government would have saved millions in welfare.

But by sitting on it’s hands and doing nothing, National has maintained the status quo; 160,000 unemployed wasting their time, and requiring more of our taxes to be paid for the dole.

Is this crazy or what?

Hopefully an incoming Labour-Green-Mana(-NZ First?)  will have more sensible policies than what we’ve seen thus far from National. (Which won’t be hard to achieve.)

And other areas which desperately require State intervention,

  • A fairer taxation system, including reducing (or even eliminating) GST; introducing a comprehensive Capital Gains Tax;  looking at a Financial Transactions Tax (or “Robin Hood” tax, as Mana refers to it); making the first $20,000 tax free; and increasing tax for the top 1%.
  • A sensible pricing system for electricity especially for low/fixed-income earners.
  • Increase funding for early childhood education.
  • More state housing, so our fellow New Zealanders have a decent roof  over their heads.
  • Invest in public transport, especially in Auckland, before the city grinds to a stop.

Those are the things we need to look at. Not cutting taxes for the well off (which is usually what the Nats end up doing).

These should be the priorities of a sensible government. Anything, everything,  else is grossly irresponsible.

Otherwise, what the hell are we leaving our children?

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debt-mountain-cartoon.

May I have some food, a home, parents

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Postscript

Armstrong’s article on tax cuts features a large image of a smiling David Cunliffe. Note; Cunliffe. Not English, nor John Key.

Is there a subtle sub-text being conveyed here that I’m missing? Perhaps I’m getting the wrong ‘message’ from Armstrong’s piece, especially when he finishes with this intriguing comment,

Overall, English will not want to tie himself to future tax cuts without more solid evidence they can be sustained.”

My… that almost sounds like a veiled warning, doesn’t it?

This blogpost was first published on The Daily Blog on 30 December 2013.

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References

Bill English: Dr Cullen maintains tradition of tax-cut denial

Wikipedia: Bankruptcy of Lehman Brothers

NZ Herald: Govt borrowing $380m a week

Fairfax media: $50b hole in economy

TV3 News: Double credit downgrade a double blow for NZ economy

Fairfax media: Key ‘no GST rise’ video emerges

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

The Press: Irish rush for quake jobs

NBR: Chch rebuild companies will have to find skilled workers – English

TV1 News: Rise in prescription charges ‘not fair’ – Labour

NZ Herald: Tax cuts: High earners set to benefit most

NZ Herald: Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour

Fairfax media: $4b in tax cuts coming

Dominion Post: Bennett expects welfare reform to save $1.6b

Fairfax media: Public debt climbs by $27m a day

Radio NZ: Pharmacies ‘carry cost’ of increases

NZ Herald: Child poverty ills rising

Fairfax media: Hungry kids scavenge pig slops

Fairfax media: Mum Not Prepared To Wait And Die

Radio NZ: PM defends record of helping poor families

Radio NZ: 5th year in deficit at City Mission

Radio NZ: Funding declined for housing project

NZ Herald: John Armstrong: Cutting tax tempting for National

The Atlantic: Tax Cuts Don’t Lead to Economic Growth, a New 65-Year Study Finds

Sources

Trading Economics:  New Zealand Government Debt To GDP

Trading Economics: New Zealand Government Budget

Statistics NZ: Household Labour Force Survey: September 2013 quarter (6 Nov 2013)

Roy Morgan: New Zealand real unemployment down 0.3% to 8.5% and a further 8.6% (down 1%) of workforce are under-employed (5 Dec 2013)

Statistics NZ: 2006 Census

Statistics NZ: 2013 Census

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National guts Kiwisaver

13 August 2013 4 comments

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Released today at the National Party annual conference in nelson;

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National tackles first home affordability

Source: NZ Herald – National tackles first home affordability

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Kiwisaver was set up in July 2007 by Labour Finance Minister, Michael Cullen, to motivate New Zealanders to save for their retirement. Our Aussie cuzzies already have about A$1.3 trillion saved in their compulsory super schemes – we are lagging way behind.

“After more than a decade of compulsory contributions, Australian workers have over $1.28 trillion in superannuation assets. Australians now have more money invested in managed funds per capita than any other economy.” Source

A similar scheme, implemented by the Norman Kirk-led Labour government in 1973, was scrapped by National’s then-Prime minister, Robert Muldoon, in 1975. National has a horrendous track record when it comes to planning and motivating New Zealanders to save for retirement.

Instead of saving for retirement, we tend to invest in “bricks and mortar” – rental properties. This is not saving as it relies heavily on borrowing from overseas lenders to finance. Those borrowings are other peoples’ savings.

So in effect we are borrowing other peoples’ savings to invest in rental properties which we are using for our retirement “savings” – other peoples’ savings being used to build up our own “savings”.

This is not just “false wealth” and damaging to our economy (those borrowings have to be re-paid eventually) – it is sheer economic lunacy on a grand scale. Note the green line in the chart below – it is private debt incurred from overseas;

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Source

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And the National Party turns a blind eye to it.

As a result, our savings is meagre enough as it is.

The ANZ and ASB summed it up with brutal reality,

ASB’s executive general manager wealth and insurance Blair Turnball said someone who wanted to live off $40,000 a year needed to retire with a pool of around $600,000 if they wanted to make it last for 25 years – the timeframe in which people felt they could live beyond the retirement age.

“This [$70,000] is $530,000 less than the average respondent in our survey aspired to, and only 55 per cent of the aspiration annual $40,000 income. It is alarming how big the gap is.”

Source: NZ Herald – Kiwis ‘not saving enough to retire on’

John Body, managing director ANZ Wealth and Private Banking New Zealand, said New Zealanders were saving around 2 to 3 per cent of their take-home pay whereas Australians were saving 9 per cent and many in Asia were saving 12 per cent.

“We are just not saving enough.”

Source: IBID

For Key and his incompetant  government to allow New Zealanders to tap into their Kiwisaver funds undermines the very purpose for it. In fact, he’s made the situation, as outlined by the ANZ and ASB, even worse.

We’re back to square one; people investing in bricks and mortar instead of saving for their retirement.

There are other ways to get Kiwis into their first homes without subverting Kiwisaver. National apparently chooses not to consider any of them.

In July 2008, Key made this public pledge,

“There won’t be radical changes. There will be some modest changes to KiwiSaver.”

Source: NBR –  Key signals ‘modest changes’ to KiwiSaver

This most certainly constitutes a radical departure from Kiwisaver’s original intent.

Allowing people to withdraw from their Kiwisaver savings account to invest in housing may work for the very short term; Key has “solved” a potential election nightmare for himself and his Party.

But for the future of this country, and the hundreds of thousands of baby-boomers soon to hit retirement – he has left us a ticking time-bomb.

Political expediency wins out again.

This blogpost was first published on The Daily Blog on 12 August 2013.

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Radio NZ: Politics with Matthew Hooton and Mike Williams

5 August 2013 4 comments

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– Politics on Nine To Noon –

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– Monday 5 August 2013 –

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– Kathryn Ryan, with Matthew Hooton & Mike Williams –

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Today on Politics on Nine To Noon,

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Radio NZ logo - Politics on nine to noon

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Click to Listen: Politics with Matthew Hooton and Mike Williams (27′ 40″ )

  • Discuss the current Fonterra food safety scare;
  • the continuing scandal surrounding the GCSB emails;
  • Labour’s affordable housing policy,
  • and recent positive poll results.

Acknowledgement: Radio NZ

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Citizen A: With Martyn Bradbury, Marama Davidson, & Colin Craig

2 August 2013 3 comments

– Citizen A –

– 1 August 2013 –

– Marama Davidson, & Colin Craig –

This week on Citizen A host Martyn Bradbury, Marama Davidson, and Colin Craig debate the following issues:

  • What do the revelations about possible spying on journalists Andrea Vance & Jon Stephenson tell us about the state of NZ Democracy in the week the GCSB Bill passes its second reading?
  • Should foreigners be able to buy land in NZ?
  • Should religious education be part of State schools?

Citizen A broadcasts weekly on FaceTV and webcasts on The Daily Blog,   and  LiveNews.co.nz

Citizen A broadcasts weekly on FaceTV and webcasts on The Daily Blog, Live.TheDailyBlog.co.nz & LiveNews.co.nz. – See more at: http://thedailyblog.co.nz/2013/07/19/citizen-a-with-chris-trotter-selwyn-manning/#sthash.wbOjqgy3.dpuf

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Acknowledgement (republished with kind permission)

The Daily Blog

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Our growing housing problem…

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Muldoon and Key

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“Ministers have signalled that changes could include widening access to KiwiSaver contributions and subsidies, as well as boosting the government-guaranteed Welcome Home Loan scheme that is exempt from LVR calculations. “

Source: Fairfax Media – Few first home buyer details in PM speech

Well, so much for saving for our retirement instead of investing in property and thus fuelling an unsustainable, speculative housing bubble. The whole point of Kiwisaver was twofold,

  1. To create a local investment fund from which business could borrow, so we were not so desperately reliant on foreign capital. Our Aussie cuzzies currently have A$1.3 trillion-dollars invested in their  compulsory savings funds.
  2. To give New Zealanders – especially baby-boomers – a better standard of living upon their retirement.

In July 2008, Key promised not to interfere with Kiwisaver –  “there won’t be radical changes…there will be some modest changes to KiwiSaver”   – and like most of his promises, they are blown in the wind.

Source: NBR – Key signals ‘modest changes’ to KiwiSaver
All because Key and his cronies are unable to address the housing crisis directly;

  1. Introduce a capital gains tax (my preference is that it matches the company tax, and not GST)
  2. Restrict ownership to New Zealand citizens and permanent residents
  3. Begin a programme of home construction – including 10,000 state houses per year
  4. Pay the Unemployment Benefit as an incentive to employers to employ more apprentices
  5. Reduce/eliminate all fees for trades training course
  6. And long term: promote regional development to take pressure of Auckland and other highly urbanised areas.

But the Nats won’t do any of this. That would involve systematic State planning on a level that Key and his cronies would never countenance. It would fly in the face of their right wing ideology for minimal State involvement in housing and other economic activities.

(Unless you are Warner Bros or Skycity, in which case the Nats have an open chequebook to throw taxpayers’ money at corporate welfare.)

The only thing National is capable of is short term, self-serving policy-changes. Never mind that such changes create long term harm to our economy and social fabric.

Gutting Kiwisaver is economic sabotage – much like Muldoon did in 1975 (see:  Brian Gaynor: How Muldoon threw away NZ’s wealth).

Meanwhile, people desperate to get into their own homes are raiding their Kiwisaver accounts – effectively “stealing” from their own future;

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Hot property Home-buyers rush to cash in KiwiSaver

Source: Dominion Post – Hot property: Home-buyers rush to cash in KiwiSaver

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Never let it be said that the Nats learn from history…

*pfffft!*

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Previous related blogposts

Can we do it? Bloody oath we can!

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Budget 2013: State Housing and the War on Poor

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state housing new zealand

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Housing NZ Current waiting list

As at 30 April 2013 there were 4,568 people on the waiting list. Of this:

  • 1,172 were Priority Eligible – A

  • 2,207 were Priority Eligible – B

  • 728 were C (assessed before 30 June 2011)

  • 461 were D (assessed before 30 June 2011)

Acknowledgment: Housing NZ – Waiting list

Some facts;

  1. As at 30 April this year, Housing NZ had 3,379 people on it’s Category A and B waiting lists (Categories C and D are so low priority that their chances of getting into a state house are next to nil). (see:  IBID)
  2. According to Housing NZ, they had 69,400 properties in the 2011/12 financial year (see: HNZ –Addressing housing demand).  This has probably reduced significantly as many rental properties – such as in Pomare, Lower Hutt – were demolished in June 2011 (see: Pomare housing demolition begins).
  3. Child poverty in New Zealand has increased;
    In 2006/07 230,000, or 22 percent, of New Zealand children were still living in poverty. That is, in households with incomes below the 60 percent median income poverty line, after taking housing costs into account. This is more than the entire population of North Shore City (205,605) or the Manawatu-Wanganui region (222,423) and means one adult and one child were living on $430 a week before housing costs. (see:  Brief Statistics on Child Poverty in New Zealand 2004-2008)By 2011/12, approximately 270,000, or 25%, of New Zealand children were living in poverty. (see: Solutions to Child Poverty)
  4.  A recent UNICEF report placed New Zealand amongst the worst in developed countries for child wellbeing, ranking us 25th out of 34 developed countries.  We are  now behind Australia and Britain also for homicide rates, child health, and safety.  (See: NZ ranked poorly on child welfare)

In the past, one of the principle means by which  New Zealand has attempted to ameliorate the  destructive effects of poverty is for the provision of State housing, where tenants pay 25% of their household’s net income (See:  HNZ –Income-related rent)

For thousand of low-income New Zealanders, this has meant the difference between this,

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state house new zealand nz

Acknowledgment: NZ History Online – Inside a state house

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Or this,

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homelessWoman

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Unfortunately, too many New Zealanders have a narrow view of life and society in general, and cannot accept that in a civilised society there is a dire need for the State to provide housing for those who cannot manage, or, have fallen on hard times – especially during the Global Financial Crisis. But that need exists, and it is the price we pay for living in a decent society where beggars do not line the streets.

Even those who grudingly admit that social housing is a necessity still  hold to the belief that State housing is for “short term emergencies”, and not for any longer period.

This writer thoroughly disagrees and disputes that notion.

The principle of  housing is not just to provide a roof  over people’s heads and give them warm shelter from cold and rain.

Social housing – as the name ‘social‘ implies – is  where those on the lower socio-economic scale (ie, the poor)  can  create communities; offer mutual support; perhaps grow food for themselves in their backyards; and where children can put down roots and attend their local school on a steady, uninterupted basis.

The last thing we need now is those on low incomes (or vulnerable in other ways) being evicted from their state homes and  forced into a life of transience – or trapped in high-cost rental accomodation, leaving little aside for food, medicines, clothing, etc.

This is precisely what National appears to be planning;

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State tenants face 'high need' review

Acknowledgment: State tenants face ‘high need’ review

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National’s 2013 Budget proposes;

Reviews of state housing tenants will be phased in from next year. Housing New Zealand estimates the reviews will lead to 1000 tenants moving out of state houses in 2015-16 and a further 2000 in 2016-17. About 10,000 tenants are already subject to reviews, if they signed an agreement after July 2011.

Assessment for housing will also be carried out by the Ministry of Social Development and integrated with other services.

Acknowledgment: IBID

Bill English described it with words that belied the misery that such a policy could create,

It can become a trap for those whose circumstances could improve.  We want to ensure people are in the most appropriate houses for them.

We will be looking at when tenants’ circumstances change and when they no longer have higher needs and will help to move them into other housing.”

Acknowledgment: Budget 2013: All state house tenancies to be reviewed

Only a Tory who has never know deprivation, hunger, and hopelessness could call a decent chance for a warm home as a “trap”.

It’s the same weasel words that National uses for welfare payments that can put food in unemployed person’s belly.

It’s not a “trap” – it’s a lifeline for survival.

English refers to “moving tenants into other housing“.

What housing? There is a critical shortage of low-cost rental housing in this country.

Moving a tenant on a low or fixed income into a $300-$400/week rental will achieve nothing except push the poor further into poverty.

It will also inevitably  increase transience, as tenants fall behind in market rents and have to move on a regular basis. This uproots children from their school.

And it eventually leads to shocking incidents like this;

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child poverty - social housing

Acknowledgment:  CYF lost track of neglected children

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Welfare minister, Paula Bennett acknowledged the obvious,

Because of the family’s transience, living in a number of regions, I am unable to give detailed information and an actual number [of social worker visits] at this time.

What I can say is there has been previous Child, Youth and Family involvement and notifications over many years, but Child, Youth and Family was unaware that they were at that [Lower Hutt] residence until January 4, when the police were involved.”

Acknowledgment: IBID

So, let’s be clear about this: forcing low income people from their homes is a pointless excercise in futility that achieves nothing except exacerbate poverty.

It creates unnecessary stress in already stressed families.

We will see ghastly consequences of families pushed further into poverty and unable to cope with financial pressures.

And, as usual, it will be the children who suffer the most.

All for what? What possible purpose or benefit is there in pushing people out of their homes and out of their local community?

Remember the stats above?

As at 30 April 2013 there were 4,568 people on the waiting list. Of this:

  • 1,172 were Priority Eligible – A

  • 2,207 were Priority Eligible – B

National has never been a Party to promote  socially proactive programmes. At best they tolerate what Labour governments have built up over decades (like social housing).

The waiting list – 3,379 people on it’s Category A and B waiting lists – is obviously an embarressment to National ministers.

But instead of building an extra 3,400 houses or flats (which is doable), National has tackled the waiting list in a novel way; displace existing tenants into private accomodation, and re-tenant with those 3,379 in Caregories A and B.

It is a cynical manipulation of people’s lives so National ministers can, at next year’s election, claim that they have “eliminated” the state housing waiting list.

A “revolving door” of poor tenants is National’s cunning plan to solve the state housing shortage.

In the meantime, we will see more and more stories like this in our media,

The parents, a 25-year-old man and a 23-year-old woman, have pleaded guilty to failing to provide medical care, food and nutrition to the children, aged 4, 3, 2, and 7 months.

Social Development Minister Paula Bennett said in Parliament yesterday that her staff had been aware of the family for many years, but the agency lost track of them when they moved from Whanganui towards the end of last year.

Acknowledgment: CYF lost track of neglected children

A Message to John Key & other National clowns

In an op-ed piece in the Dominion Post on  17 May, former-Labour President, Mike Williams wrote that National policies – especially relating to poverty and housing – would hand “the Labour Party a golden opportunity to win the general election next year“. (see  Budget: Stirring state house voters)

Williams further stated,

Budget 2013 gives a very large group who don’t turn out to vote on a regular basis a very good reason to cast their ballots next year. These are state house tenants.

What we all know is that there are just under 70,000 state rental houses in this country. What Labour discovered in 2004 was that there are between three and four enrolled voters per household and that a large majority of these potential electors do not bother to cast a ballot on a regular basis.

The threat to state house tenants planned for election year by National is a gift to Labour in a tight contest. Nearly everyone in a state house will have their tenancy reviewed and 10 per cent of these people will be moved on. That nice Mr Key has grown teeth.

On September 17, 2005, Don Brash was denied victory at the last moment by increased participation in South and West Auckland, north Wellington and east Christchurch – just where you find lots of state houses.

Acknowledgment: IBID

A bit of simple arithmetic: nearly 70,000 state homes times three or four enrolled voters per household equals 210,000 voters (conservative estimate).

Considering that the 2011 election yielded the following voting results,

National: 1,058,638

Labour: 614,936

Greens: 247,370

Add 200,000 votes to Labour and the Greens – and National will be  out of office. And Key is out of a job.

Make no mistake, Mr Key; Labour, the Greens, and Mana will work in concert to target every single state house and flat  at the next election.  Every person will be made aware of National’s intentions. Every single state house tenant will be warned that their continuing tenancy will depend on National being voted out of office.

National has just made 200,000 new enemies.

Nicely done, Mr English – a political suicide note dressed up as a “budget”.

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References

Fairfax Media: Parents accused of neglecting kids (11 Jan 2013)

Fairfax Media: Neglected kids back home in days (15 May 2013)

Fairfax Media: CYF lost track of neglected children (16 May 2013)

NZ Herald:  Budget 2013: All state house tenancies to be reviewed (16 May 2013)

Dominion Post: State tenants face ‘high need’ review (17 May 2013)

Dominion Post: Budget: Stirring state house voters (17 May 2013)

Additional

Previous related blogposts

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More dispatches from Planet Key

17 March 2013 4 comments

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planet key

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Planet Key’s #3 Moon “Brownlee”; Largest of the Moons, it tends to disturb other bodies through it’s presence. “Brownlee” has a rough surface and highly abrasive atmosphere that many find obnoxious. “Brownlee’s” gravitational influence has a negative, perturbing,  influence on nearby bodies such as Planet Christchurch.

Brownlee recently let rip at Christchurch City Council for not carrying out repairs to council-owned community housing fast enough,

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Brownlee says housing councillor should go

Acknowledgement: Radio NZ

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Consider for a moment that Brownlee, as the Canterbury Earthquake Recovery  Minister, is in constant contact with CERA, Christchurch’s mayor, and anyone else remotely connected with that city and it’s re-build.

Brownlee has channels of communications that are open to him that allows him to discuss issues and problems as they arise.

So what was the purpose of this display of public excoriation of the Christchurch Council and especially the vilification of one Councillor, Yani Johanson?!

Does Mr Johanson not have a telephone?

Email? Skype? A paper letter? Smoke signals? (The latter seems to work well for the Vatican.)

Could Brownlee not have sat down around a table and asked the most basic of questions,

How can we help?”

Or is the public display of testosterone-fuelled machismo Minister Brownlee’s new modus operandi when dealing with those who fall within his ministerial orbit?

This kind of authoritarianism may be the norm in Zimbabwe, Burma, or North Korea – but here in New Zealand it comes across as the cries and foot-stamping of a petulant child.

Meanwhile, National ministers should look in their own backyard when it comes to housing,

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Pomare housing demolition begins

Acknowledgement: Dominion Post

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Christchurch has been wracked by two massive earthquakes and thousands more quakes since. Every aspect of their basic infra-structure was damaged or ruined to varying degrees.

I think we can cut them some slack when it comes to re-building an entire city, from beneath ground-up.

Meanwhile, nearly eighteen months later, with no earthquakes or any other major disasters (unless one  calls a National Government a major disaster), one wonders why National ministers have not progressed any further to re-build Pomare’s state housing?

After nearly a year and a half, all we’re seeing is a vast vacant lot, where once peoples’  homes existed,

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Pomare state housing_vacant lot_farmers cres

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Pomare state housing_vacant lot_farmers cres

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Any ideas, Mr Brownlee?

(More on this issue in an up-coming blog-story)

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Planet Key’s #4 Moon “Dunne”; covered in a dense, white atmosphere; “Dunne” is known to move from Planet Key to Planet Labour depending on which mass is greatest. The largest surface object on “Dunne” is the ‘Make Me a Minister’ volcano, which erupts whenever there is a nearby power-source.

As Minister of Revenue and Flashy Hairstyles, Peter Dunne is charged with taxation issues in this country.

No doubt his job was made considerably harder with two tax cuts (2009 and 2010) which considerably reduced taxation revenue for the State. (see:  Govt’s 2010 tax cuts costing $2 billion and counting, see:  Outlook slashes tax-take by $8b) Indeed, English was forced to tax children and their paper-rounds. (see:  Key rejects criticism of ‘paperboy tax’)

Taxing kid’s meagre earnings. That’s how low and desperate National ministers have gone, to make up for the 2009/10 ‘lolly scrambles’ when the Nats  gave away billions in unaffordable tax cuts.

To try to fill the fiscal hole that Bill English, Peter Dunne, et al, have put themselves into, they’ve been scrambling to raise government charges  and tax everything and anything else that moves. (see: Prescription fees increase, see: Vulnerable children at risk from Family Court fees increase, see: Student fees rise faster than inflation, see: Petrol price rises to balance books)

The latest attempt to raise new taxes is Peter Dunne’s ‘carpark tax’,

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Business will evade car park tax

Acknowledgement: Fairfax media

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Well, well, well… a new tax?

A new fringe benefit tax?!

This is interesting.

Because John Key has always insisted that his Party cuts taxes and doesn’t increase them. Specifically, way back on 4 April 2005, when National was in Opposition,

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National Party Finance spokesman John Key has signalled an overhaul of the Fringe Benefit Tax, during a speech to the Auckland Rotary Club today.

“The next National Government will cut the red tape and compliance costs that are choking our businesses and preventing them from getting off first base,” he says.

“A practical example of what I am talking about is in the area of Fringe Benefit Tax.

“Today I want to announce that National will revamp Fringe Benefit Tax to remove a substantial amount of the paperwork that currently occupies too much administrative time for many of our businesses, especially the small ones.

[…]

We won’t entertain suggestions of applying FBT to on-premises car parks.” 

Acknowledgement: Scoop.co.nz

And again in 2010, when a video was uncovered where Dear Leader was quoted as saying,

National is not going to be raising GST. National wants to cut taxes, not raise taxes.

See: Key ‘no GST rise’ video emerges

When challenged on this in the House, just recently,  Minister for Everything, Steven Joyce, responded with this bit of bovine faecal material,

I would say that I think a fair amount has changed since that statement was made back in April 2005, which was when Don Brash was leader of the National Party. Since that time we have had three leaders of the Labour Party, and maybe a fourth leader of the Labour Party—”

Source: Parliament Hansards – 9. Tax System Changes—Employee Car-parks

Yeah. Lot’s of things have changed. Like, for example, the difference between being in Opposition and Promising the Moon – and being in Government and having to explain why the Moon is still out of reach.

And when the Nats have to make smart-arse comments about Labour’s leaders, then you know they’re really on the ropes. Defensive much, Mr Joyce?

Like Key’s broken promise on GST, the “carpark” tax is another instance of National breaking it’s election promises. Which indicates, mainly, that National’s tax-cuts were never as affordable as they made out in 2008.

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Special Edition Tax cuts today - John Key

Acknowledgement: National Party

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Planet Key’s #5 Moon “Bennett”; “Bennett” originated from the asteroid belt, where many poorer dwarf-planets with low mass; minimal mineral wealth; and mostly invisible, are locked in orbits that will take them nowhere. “Bennett” gravitated to the National Zone where her mass and mineral wealth increased by close association with  Planet Key and it’s many  moons.

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To repeat and quote Bennett, when she stated on TVNZ’s Q+A on 29 April 2012,,

There’s not a job for everyone that would want one right now, or else we wouldn’t have the unemployment figures that we do. “

See:  TVNZ  Q+A: Transcript of Paula Bennett interview

To quote Minister Bennett’s latest utterances on this issue, on 12 March 2013, when hundreds of  people recently queued for just seven jobs at Carter Holt Harvey in Auckland,

“Well I am absolutely thrilled that 200 turned up quite frankly we’ve got more than 50,000 on the unemployment benefit but work expectations of them I think the fact that they are lining up that they want those jobs um speaks for itself and about peoples’ motivation to get work.”
 

“There’s always a lot of people going for certain types of jobs and if in particular if they are lower skilled they feel they can do them, they don’t have a lot of work experience, they have been out of work for some time.”

 
“No I don’t feel there is a job for everyone and I think it’s damn tough but I am incredibly proud of New Zealanders and their  motivation and the fact that they want them and I know that the economy is improving and we are going to see more happening.”

See: TV3  – Campbell Live:  Sign of the times: hundreds queue for 7 jobs

Acknowledgement for transcript:  Waitakere News – Don Elder, Paula Bennett and the rest of us

Ok, so the lightbulb has finally clicked in Bennett’s head. New Zealand has a problem. We do not have enough jobs for the number of unemployed and solo-parents who want to work.

It’s not often that a politician acknowledges the bleedin’ obvious – so kudos to her for having the  courage to do so. (John Key might learn a thing from Bennett in terms of not ducking  issues.)

However, if there are not sufficient jobs to go around – what is the point in wasting taxpayers’ money and Parliament’s time on this exercise in futility,

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Welfare reform bill passed into law

Acknowledgement: NZ Herald

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And why is language like this used by Bennett,

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Reforms to help beneficiaries out of 'trap'

Acknowledgement: NZ Herald

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If there are insufficient jobs – as Bennett herself has now acknowledged on at least two occassions, then ipso facto, the following must be true;

  1. The only ‘trap’ is a lack of work – not welfare
  2. Why “reform” the welfare system  when welfare itself is not broke – it’s the economy that is not working (as are 170,000 people)
  3. Why muddy the waters with  rhetoric like  “trap of benefit dependency“; “introduce expectations for partners of beneficiaries and make beneficiaries prepare for work“; or that welfare had “become a bit of a trap for quite a few people“?

What does “a bit of a trap for quite a few people” mean? That it’s a “little” trap as opposed to a “big” trap? Or is she attempting to minimise the impact of her beneficiary-bashing by trying to soften her rhetoric?

So the “dog whistle” rhetoric filters down to the right wing; the ill-informed; and other welfare-hating cliques in our society – but the message is watered-down for the Middle Classes who are uncomfortable with victimising the unemployed, or who may even know someone who recently lost their jobs.

That’s the trouble with beneficiary bashing during times of high unemployment. Most of us know someone who has lost their job through no fault of their own. Bennett is walking a tight-rope here.

Eventually, people will be asking; why are National ministers  wasting time on pointless welfare “reform” when it’s jobs we need?

Once that message percolates into the collective consciousness of the masses, National will be left standing naked – their corrupt, bene-bashing, dog-whistle politics exposed for all to see.

A few questions for Ms Bennett,

Why are you messing around with welform “reform”, when it’s jobs that we need?

Why aren’t you and your well-paid ministerial colleagues reforming the economy to create more jobs?

How much are these “reforms”  costing us, the tax-payer?

How many extra jobs will welfare “reforms” create?

I don’t expect answers to these questions because, really, they are unanswerable.

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Links

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All self-made images are freely available to be used, with following provisos,

  •     Use must be for non-commercial purposes.
  •     At all times, images must be used only in context, and not to denigrate individuals.
  •     Acknowledgement of source is requested.

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Is this really the solution to our housing problem?

28 February 2013 4 comments

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Illustration by Tim Denee – www.timdenee.com

Illustration by Tim Denee – http://www.timdenee.com

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Our housing problem is getting worse with each passing year and each successive government.

In 1991, 73.8% of  households in New Zealand lived in their own home. By 1996, this figure had dropped to 70.7%.

By 2001 home-ownership rate was 67.8%, and by 2006, this had dropped below the half-way mark to 44%

(see: Stats NZ – Owner-Occupied Households, Home-ownership falls dramatically)

As with so many other indicators, the “free market” reforms of the late 1980s and 1990s were creating a flow-on effect that very few had foreseen.

The drop in home ownership was perhaps worsened after the 1987 share-market crash when  investors – many of them ordinary folk – were burned and lost theire lidfe savings, and often their homes.

Part of the problem is that the housing stock is insufficient to meet demand of New Zealanders wanting to buy their own home. Far from being a Local body council or RMA problem, this blogger sheets home responsibility on successive governments who have failed to,

  1. Introduce a comprehensive capital gains tax to stifle speculation,
  2. Speculation drove up property prices as investors played an out-bidding war against each other,
  3. Uncontrolled capital flowing into the country allowed prices to rise as vendor’s expectations grew for higher and higher sale prices (much like in the 1970s and ’80s when wage spirals led to price-rise spirals)

During the  2011 Election, Labour campaigned to introduce a Capital Gains Tax (CGT).  A CGT, Labour (and others) maintained, would put a dampener on housing speculation by removing it’s near total  tax-free status. As well as driving up house prices, speculation of this sort took investment away from more productive industry.

Speculation also relies on using overseas borrowings, pushing up the amount we owe to offshore lenders,

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Treasury

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Predictably, the “genuises” at National – and especially John Key – trashed the idea immediatly,

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New property tax would send NZ 'screaming backwards' - Key

Source

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Key’s criticism ranged from “complexity” (it is not more complex than other tax laws) to “when you put more taxes on the economy you slow things down” (the economy can’t be any slower than it is now).

A few days later, Key went one step further,

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Labour's capital gains tax aims misguided - Key

Source

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According to Dear Dear, in one of his LSD-inspired moments of alternate-reality,

Labour are trying to put up, as a stalking horse if you like, a problem that existed when they were in government but doesn’t exist now.”

Source: IBID

That was Key being his usual mendacious self, of course. Despite his assertion that National had “solved the problem”, our housing crisis was worsening.

In fact, less than  two years later,  the headlines were screaming the problem from Bluff to Kaitaia,

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NZ housing 'seriously unaffordable'

Source

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As per usual, National Ministers were pointing the finger at everyone except themselves (see:  Dear Leader Key blames everyone else for Solid Energy’s financial crisis) and English was quick to point the finger at the RMA ands local body councils.

Of course, the last time National interfered with home-building processes, they de-regulated the building industry; loosened the Building Act 1991; and gave New Zealand a legacy of thousands of rotting houses.

National’s most recent pronouncements are vapid and will do nothing except put  superficial band-aids over a deep cancer in our society and economy,

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House buyers may need bigger deposit

Source

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Restrict high-loan-to-value ration lending in the housing sector”  translates to requiring first home owners – usually young couples – to have to save tens of thousands of dollars, whilst at the same time paying high rents and other out-goings.

Let’s be crystal clear what National is advocating here;

1. Without a capital gains tax, National is allowing the older generation (sometimes referred to as “Baby Boomers”) to;

  • keep their rental investments,
  • use the equity in their currents investments to buy more properties,
  • eventually ‘flick off’ their investmental properties for a tax-free profit

2. New home owners will have to;

  • build up a large savings deposit (returning us to a 1970s-style era),
  • create a demand for more expensive, second mortgages,
  • push up rents as more and more young people are forced to rent for longer,
  • compete with property investors who will continue to drive up prices,  to buy a home

In effect, young New Zealanders will find it harder and harder to get into their own home whilst Baby Boomers will continue  to make the most from increasing rents and a tax-free regime for property  (house) investments.

It will be young New Zealanders being penalised for high house prices – a situation not of their making.

And worse still – and this is truly salt in the wound for young New Zealanders – the money they will be forced, by National’s decree, to save, will be used by Banks to on-lend to housing speculators to buy more investment properties.

The sheer obscene unfairness of this scenario cannot be under-stated.

By what logic, or concept of justice, is it fair to make it harder for young New Zealanders to buy a home whilst older generations continue to enjoy their tax-free investments – which contributed to driving up house prices and our overseas borrowings in the first place???

If this country wants to send another 500,000 New Zealanders to Australia, I can think of no better policy with which  to achieve this enforced emigration. National is practically screaming at our kids to “bugger off !”.

Good on you, John Key, Bill English, Steven Joyce, et al. Another dumb idea.

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Previous related blogposts

A Capital Gains Tax?  (3 Aug 2011)

Blood from a stone? (27 Jan 2012)

Regret at dumping compulsory super – only 37 years too late (21 Jan 2013)

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