Posts Tagged ‘leaky homes’

Is this really the solution to our housing problem?

28 February 2013 4 comments


Illustration by Tim Denee –

Illustration by Tim Denee –


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,




Predictably, the “genuises” at National – and especially John Key – trashed the idea immediatly,


New property tax would send NZ 'screaming backwards' - Key



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,


Labour's capital gains tax aims misguided - Key



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,


NZ housing 'seriously unaffordable'



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,


House buyers may need bigger deposit



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.



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)



= fs =

This will end in tears…


Union upset at new meat inspection rules

Newstalk ZB May 19, 2012, 10:17 am

The union for public servants is unhappy at new rules allowing meat companies to inspect their own produce.

The Ministry for Primary Industries is going ahead with the scheme, after consulting our main trading partners.

Until now, meat inspections have been done by government officials employed by AsureQuality.

The PSA’s Richard Wagstaff says inspectors are telling him there’s already pressure on them to speed the process up.

“They think that if they didn’t have an independent warrant and didn’t work for a separate company, the pressure that would come to bear on them would be impossible to resist.”

The union is also worried about the inspectors’ jobs.




Where have we heard this before…?

As it happened: Pike River Mine Inquiry day four

Published: 8:35AM Thursday July 14, 2011 Source: ONE News

12.47pm: A letter written to the Ministry of Energy by [Harry Bell – Former Chief Inspector of coal mines ] Bell in 1997 is bought up as evidence. He confirms that he still holds the views expressed in the letter. He wanted the Mining Inspection Group (MIG) to stay within the Ministry Of Commerce. Marine and aviation industries had been left out of the new Occupational Safety and Health regulations, and he believe that mining also should be left out. “Mining is an entirely different industry to shops and factories.” That letter came at the end of the transition process, but Bell says it was a view that had been expressed from the beginning. “All the inspectors did, but nobody listened, they had already made their minds ups.”

12.45pm: Bell says that mines cannot be audited ‘on paper’ – mines need to be physcally inspected. He says that a lack of regular inspections was a “Recipe for disaster”.

12.42pm: Bell says he has had concerns about the closure of dedicated mine training through polytechs with regular standards set by the Board of Examiners, made up by experienced miners. He has concerns that students are not orally examined, with students not checked that they understand any work that they have completed.

12.39 pm: He says that under the new regime there was only one inspection in one year at a mine he managed. “A reactive response is not appropriate for the underground coal mine industry.”

12.34 pm: Bell says, “The Pike River plans should never have been approved, and in my opinion would not have been approved in the prior regulatory environment.” He says he believes the Pike River disaster can be attributed in some part to human error, lack of inspector experience, and lack of inspections.

12.32 pm: He says that since 1993 calibre of the OSH (Department of Labour) inspectors has slipped dramatically, and that management and the miners are left to self regulate. Today the inspectors are not experienced with gassy mines or the management of roles. He says a factor in this was that salaries were cut – experienced miners would no longer take the role.

See: TVNZ – As it happened: Pike River Mine Inquiry day four

In 2010, New Zealand’s meat industry earned $5.7 billion in exports.

Our entire reputation as a reliable, dependable, and safe source of food has been based not just on our relatively clean and mostly unpolluted environment – but also on our strict inspection regime.  Up until now, meat inspectors have been independent and impartial, giving fear nor favour to no one.

History has shown that where an industry is left to self-regulate, that problems will occur.

Self-regulation is not a bright idea. In fact, it stinks like meat offal left out in the noon-day sun.

Next, the multi-billion dollar leaking-homes scandal,

”  I think that is important that we accept that we have a Government—not just this Government—and a whole lot of people who have the mantra of deregulation and self-regulation. We are being told, everywhere we turn, that self-regulation and deregulation will work. We do not need all this onerous regulation. This leaky home disaster is an abject lesson in what happens in the huge cost of deregulation.

What did this 1991 Act do?

The aim of it was to encourage competition in the market, to boost the building industry, to reduce building costs, and to save money. Everyone whipped themselves into a fervour about the wonderful things that would happen with the passage of the Building Act and deregulation. They wiped out all the previous regulations and controls, they loosened councils’ inspection procedures, and they allowed the introduction of private council inspectors, so that there would be competition with council inspectors. 

See: Green Party –  Leaky Homes caused by deregulation

It does interest me that the building sector has, indeed, self regulated since 1821 (when New Zealand’s first house was built — Kemp House — nearly 200 years ago).

Self regulation is where an industry has Codes of Practice — eg, training standards, self monitoring and/or voluntary accreditation systems — like the Registered Master Builders Federation which imposes entry standards and criteria upon membership.

Yet, it is only now that the Government has deemed it necessary to regulate the building occupation, and then, only the residential sector due primarily to the leaky homes saga

Mind you, we don’t start being “regulated” until March 1, 2012, so we are, indeed, still self-regulating.

See: Building Today – What is the actual Licensed Building Practitioner scheme?

Self-regulation in a commercial environment is not a good idea. There are simply too many pressures brought to bear on Inspectors, and eventually a culture of short-cuts and turning a blind eye develops.

As usual, this daft proposal emanates from  National – a party in power that penny-pinches and cost-cuts, and exposes New Zealand’s economy to dire risks.

Unfortunately, as with the ministerial architects of the 1991 Building Act “reforms”, those who legislate; de-regulate; and self-regulate are not the ones who will be held to account when something goes horribly wrong.

As usual, the politicians responsible will not shoulder responsibility – and it will be the taxpayer who foots the bill to fix whatever mess eventuates.

Self-regulation in the meat industry. Not a good idea. In fact, it’s a dumb idea.

This will end in tears. Again.




Related blogposts

Bugs and balls-ups!



= fs =

Oh the irony…

27 February 2012 2 comments



From National’s website, I found this little “gem”,




Now, considering that the whole sorry saga of the  Leaky/Rotting Homes fiasco began with the  Building Act 1991 – when the then Bolger-led National government de-regulated the New Zealand building industry – it seems that National has not learnt a single, damned thing about that failed experiment in de-regulation.

As Auckland Mayor John Banks says, “It was a previous Government that put in the legislation that allowed for untreated timber, cavity-less walls, chicken wire and plaster. So they should at the least accept an equal liability with local government.”

Mr Banks should know. He was a member of the Jim Bolger-led National Cabinet that passed the permissive 1991 Building Act which was naively based on the premise that National’s developer mates could be trusted not to cut corners.” – Source

Fast forward from 1991 to 2012,

Fast-track building consents for standard, multiple-use building designs ” ???

Make building law changes to allow more do-it-yourself building, and to make a broader range of minor and low-risk building work consent-free “???

It is appropriate that #55 – “Leaky Homes: Develop a $1 billion financial package to help owners of leaky homes get their homes fixed” – follows on from #53 and #54. Because de-regulating Building Consents and making DIY easier, without professional over-sight, will probably end up with yet more dodgy building; more rotting  homes; and more New Zealanders having to pay thousands of dollars to repair shoddy workmanship.

Nice one, Mr Key, Mr English, Mr Brownlee, et al.

Never let it be said that you guys “waste any time”  learning from your previous mistakes…



Wikipedia: Leaky Homes Crisis