By Bernard Hickey
Prime Minister John Key has announced a reform and increase in the apprenticeship system which he estimated would allow a further 14,000 apprenticeships over the next five years.
He also said the government was considering comprehensive Resource Management Act (RMA) reforms because the government may need to get more proactive if local councils weren't able to change their planning processes.
"I want to see big improvements in this area and it's going to be a high priority for the government this year," Key said in a 'State of the Nation' address at the North Harbour Club at the North Harbour Stadium in Albany in Auckland.
Seperately, Tertiary Education, Skills and Employment Minister Steven Joyce announced the details of the apprenticeship reforms, which include the combination of the 'Modern Apprenticeships' scheme with other apprenticeship-type training into an extended schem called 'New Zealand Apprenticeships.' He said overall subsidy payments for apprenticeships would be increased by around NZ$12 million in the first year and would rise over time.
The reforms would allow an extra 14,000 apprenticeships over five years, over and above the 7,000 apprentices who enrol each year currently.
Currently Modern Apprenticeships are only available for people who being their training between the ages of 16 and 21. They receive a top-up in funding which is greater than the subsidy that supports their learning programme.. The reforms would mean the New Zealand Apprenticeships would provide the same level of support and the same level of subsidy for all apprentices, regardless of age.
"Fewer than half the people doing apprenticeship-type training are actually funded as proper apprentices through the Modern Apprenticeships scheme, and we're going to change that," Key said.
The current top-up for Modern Apprentices would be redistributed across all apprentices as an extension of their learning subsidy. The government would also set clearer roles and performance expectations for Industry Training Organisations (ITOs) and give employers other options if their ITOs don't perform.
Key also announced the government would give the first 10,000 new apprentices who enrolled after April 1 this year NZ$1,000 each towards their tools and off-job course costs, or NZ$2,000 if they were training in priority construction trades. The same amount would be paid to their employers.
Key said in the speech the economy would be "front and centre" for the government this year.
He said the Government itself was planning to build more than 2,000 houses over the next two financial years, but also wanted to work with local councils on the "underlying problems of land supply, building and resource consents, and provision of infrastructure."
"We need more houses built in New Zealand, at a lower cost," he said.
"That means we need more land available for building, more streamlined processes and less costly red tape."
Council delays and fees 'ridiculous'
Key said it was ridiculous that developers had to wait 6 to 18 months for a resource consent and it was ridiculous that councils were allowed to demand "almost anything as a condition for the consent."
"And it's ridiculous that we allow them to charge whatever fees they want."
Key described Labour's plan to build 100,000 new houses as dishonest and unable to stack up because the plan didn't do anything to actually fix the cost of building.
He said the government wanted to work cooperatively with local councils.
"In particular we are keenly awaiting the Auckland Council's spacial plan, and I'm expecting it to include multiple options for both greenfields and brownfields property developments," he said.
"But if councils aren't able to change their planning processes, then the Government would have to get a lot more proactive, because we are very serious about resolving this issue."
RMA reforms
Key said New Zealand needed a much better system of planning and resource management to 'enable growth and provide strong environmental outcomes in a timely and cost effective way.'
He said the government was already legislating to set a six month time limit on the processing of medium sized consents, and to establish a streamlined process for Auckland's first unitary plan.
He said the RMA was constantly cited as a source of frustration by investors and communities, pointing to the need for consistency with 170 different resource management planning documents over 78 local authorities.
"We also need to ensure that local plans aren't overly restrictive and that consent processes are proportionate to the sale of the activity," Key said, adding the government would release a comprehensive package of reforms in the "next few months."
(Updated with details and link to speech)
48 Comments
A little too late I think for Key to now bet againsts Labours' and Greens' "$300,000 house and cheap housing for life" offer.
RMA changes takes too long to work its way up the construction industry chain before the next GE by which time prices would have gone up another 10%........
Perception is now for immediate action and the clamour for "now" is too defening....
It's a bit laughable really....National has been paying lip service to housing affordability over last four years...and they've probably just seen some results from polling and focus groups saying it's a big issue and Labour has the edge...so now it's catch up time for National.
Laughable is the right word.
Firstly, the goal of both PP's - endless growth - is unattainable.
Secondly, the pursuit of that goal will kill our offspring (as Christine Lagarde so eloquently pointed out).
Thirdly, it appears - globally - that 'pollies are beginning to understand that the end-site for the 'productive economy', is houses. To grow exponentially, they need to induce an exponential consumption, and houses are it.
Fourthly, the temporary ratio of 'incomes' to the 'cost' of housing, has run to the end of its underwrite. Apparently, despite Hughy being well-challenged hereabouts. The next-cheapest development is always more expensive than the last - same for houses, hydro dams, energy-sources. NO NZ JOURNALIST HAS QUESTIONED/INVESTIGATED THIS - A JOURNALISTIC FAILURE OF MONUMENTAL PROPORTIONS.
But the big joke is on all those pathetic folk who see their current houses in terms of 'personal equity'. Oh dear, they're the voters, aren't they? Anyone told them that this will 'reduce their equity'? They'll need told - but heaven help whoever is the Govt when their pennies drop, so to speak.
A quick way is for the government to lead the way and just start building on land. In the UK the government has resulted to ignoring local councils and just gone ahead and built. You are the government so just get the job done. You don't need to apply for planning permission.They can start need Tuesday after the long weekend, find a piece of land and start building.Ignore Auckland, Wellington or Christchurch councils and just go ahead and build houses.
I don't hold out much faith. Had someone call in talkback yesterday saying they were at a trade/investor show in China a month or two ago and there was someone there from the NZ Ministry of Economic Development handing out taxpayer-printed glossy brochures touting to wealthy Chinese to invest their money in NZ. Amongst these, above all else there was alarge section encouraging investment in residential property, basically saying how easy and devoid of risk it was.
When you've a govenment doing that kind of thing you can see they're not seriously going to look at anything. They're just paying lip-service so that they can satisfy the non-homeowners that "something" is going to be done, whilst knowing full well that the status quo will remain.
That makes my blood absolutely boil. For a long time I have believed that this sort of thing is, of not the primary, then up there, cause of housing unaffordibility in NZ for NZers.
I am practically blue in the face now, but I will keep up the call for foreign non-resident buyers to be banned from the property market in this country, all of it!!
Friday is a 'spin day' right Fiddle!.....time to blurt out the 'same old' again..."seriously concerned about housing costs...establishing a working group of experts...going to look into their findings"...blah blah blah.
Facts are National failed to shift its collective bum on this issue for four long years and now promises from the pinky green fringe look set to cost too many undecided votes.
Stuffing stupid scaffolding rules down builders throats and onto the bottom line for the few buyers out there was not a bright move...doh
Nor was raising gst. And failing to move that bum on fundamental economic scams like the landlord benefit rort did not help.
Election and govt defeat approaching fast.
"...halt to immigration..."...are you insane CM....you want to stop the flow of booty that props up the bubble....that whitewashes the economic farce we live with....immigration forever is all we have...part of the cycle of idiot political behaviour....it's our drug of choice Chris-M
It's major leg of the grand ponzi scheme that is the NZ ecconomy. We all know how ponzi schemes end. Seriously they should be scared witless because the longer they keep the game running the worse the consequences will be, but then who wants to be the political party that stops the party. It's sort of the political version of pass the parcel.
What they won’t say out loud is the complicated part of the issue is that they don’t actually want house prices to drop as this will also see them voted out. The problem is that anyone who has brought a house after 2003 has paid far too much for it and the only way to keep these people in positive equity is to keep the credit fuelled bubble going, via all the current means, low land supply, immigration, low interest rates etc. The issue with this is each year NZ gets closer to Greek style debt levels, National can’t admit this to the people though. No according to them everything is just fine, Idiots. To sum it all up there is plenty the government could do to avoid the all-out disaster which we are heading for. The problem is it would be unpopular for the group they represent, the 50s plus as these are the majority of the home/rental owners. This Government does not care about overall NZ or the young people that grew up here. All they are doing is giving it lip service while actually protecting the older generation’s asset value gains which have been based on selling our land to foreigners and borrowing money offshore.
Has there ever been a greedier more moral corupt generation than the current one that is in power?? Their parents fought for this land and now they just sell it off to foreigners to ensure their tax free capital gains are made so they can go on their world cruises.
Couldn't disagree more. Are you a registered valuer? Then how do you know people are paying far too much, other than just a gut feeling?
Go and look up how much it actually costs to build a freestanding house. Then look at how many people want to live in Auckland. The numbers are pretty much exactly where you would expect them to be, all things considered. Please stop talking about "low land supply". Land is scarce. There is no more of it to be produced. Any land that is redesignated for residential use now is being taken from some other use. Don't pretend there isn't a cost.
Housing is becoming too expensive for some people; that is true. The solution for them is high-rise unit blocks which provide by far the most practical form of low-cost accommodation. However, I do take issue with the conventional wisdom that housing is severely unaffordable across the spectrum. If that is true then who's buying it? I am tired of hearing about bogeymen from China. At best this is nibbling around the edges. The fact is that there are plenty of Kiwi families out there who can afford housing in Auckland as it stands today, and plenty more would be able to afford it if there more units for sale.
First of all, not everyone can live in central Auckland. This is not a right. Maybe those first-home buyers should forget about Mt Eden or Epsom and start thinking about Otahuhu, where there are still affordable homes for sale. Quelle horreur!
Secondly, greenfields land is not the solution. If people won't look at Otahuhu because it isn't Mt Eden, then they certainly won't look at greenfields projects in, where exactly? Helensville? Manurewa? Drury? Wellsford? The emphasis must be on building up rather than out. Look to Sydney for guidance. It might not be the Kiwi dream but the Kiwi dream is not a birthright. High-rise unit blocks are the only reasonable way to produce lower-cost accommodation in Auckland. Make it happen. People are just going to have to adjust their expectations.
If we continue to gobble up ever more land around the edges then where does it end? Hamilton? Perhaps when we've finally covered much of the country's most fertile farmland with quarter-acre blocks so that everyone can have the Kiwi dream, we will realise it wasn't worth it if we can't produce affordable food any longer.
Oh dearie me.
Count up the acreage consumed by lifestyle blocks around any NZ city now, and consider how much that same population would occupy at urban density. Yet lifestyle blocks are a direct response to persoanl preference and MUL's.
The solution to any constriction of supply as a factor on forcing prices higher, is to open the floodgates on supply. Working example: Marmite.
Most universities offer an ECON101 course, covering this and other fundamentals.
Pretty snarky remarks. Small problem. The supply of land is fixed and cannot be increased. "Increasing supply" does not mean what you think it means, in this case.
As you say, most universities offer a range of courses covering the fundamentals.
If you are interested in elevating this exchange above the childish then give me a signal and perhaps we can give it a try.
Do you have a source for that?
I am not flatly opposed to any expansion of MULs. However, we have to recognise certain realities. We are living in NZ, which is the land of subpar infrastructure investment. Someone else made the point about the spread of lifestyle blocks outside of the MUL and they are quite correct, but think about the impact of urbanising all of that land. Given the economic returns government requires of all new infrastructure projects, the model of constantly expanding suburban development simply won't work because the numbers will not add up for the kinds of public transport and roading works that would be required. Think about Penlink, for example. That project won't go ahead before 2030, if at all, because the numbers simply don't add up.
Why are we obsessed with this idea that everyone in NZ is entitled to a quarter-acre block, regardless of the economic costs, rather than the far more practical option of asking councils to allow high-density living in more central areas where most people would actually prefer to live?
Yep, see here. NZ is 39% pasture plus 1.6% horticulture. Artificial surfaces (anything manmade including landfill, roads and rural buildings and urban areas) acount for 0.8%. Even lakes cover 1.3%.
Incidentally, each 4Ha lifestyle block could house 88 people at current Auckland density. More if higher-density rules were applied.
Thanks. Didn't meant to imply I doubted you, if that's how it came across.
I fully realise the impact of lifestyle blocks and agree that they are a problem. However, this idea that instead of a lifestyle block we could just throw up 20/30 houses and the problem would be fixed (or even materially improved) just seems totally unrealistic to me.
Yes first home buyers need to lower their expectations.
But say these first home buyers have a family and don't want to have street races down the road they live in. Or say they don't want to be burgled every 3 to 6 months. Or have neighbours that tell them to F... O... every morning. And perhaps a school where their kids don’t come home with bloody noses or worse, and leave at 15 because they are not getting taught anything. I'm not saying the cheaper areas of Auckland are all like that, but some of them definitely are.
If they are going to pay through the nose for it, they also want a house that doesn’t leak, and isn’t going to cost them the cost of a rebuild to fix.
They also want somewhere within an hour’s commute of work, so that they can see their children at night (after working 10 hour days to pay for said house, because the labour market is so tight at the moment).
Auckland just has VERY little to offer the average kiwi family. In fact compared to other city’s that are available to NZ’ers, Auckland is a pretty ridiculous proposition.
Auckland may be one of the best city’s to live in if you have lots of $$. But for those of us who don’t own property, or have wealth, it’s a s…. hole, and I’m glad I got out.
I know how you feel. When I was young (90s) I lived with my parents in Takapuna in houses that are now changing hands for $5m plus. Several years ago, when looking with my wife for our own first house, we would have loved to be able to afford one in Takapuna. Guess what? So would everyone else. What you are talking about is just the natural consequence of plenty of people having plenty of money and all wanting to live in the same small area. The idea that houses in Takapuna should only cost 3x earnings just doesn't stack up with that reality. It also illustrates my point about the pointlessness of extending MULs ad infinitum. People want to live in places like Takapuna, not out in the wops, and extending MULs won't make Takapuna land any cheaper. Are you interested in buying and, if so, where are you looking?
I know what you mean about places like Otahuhu, but I genuinely don't think it's as bad as you make it out to be. Certainly, the influx of buyers that will inevitably discover it over the next 10 years will change the image and reality of the area. One of the most significant things it has in its favour is that it is not really all that much further down the road than places like Onehunga (and really close to lots of significant commercial and industrial areas, meaning jobs), which are probably already out of reach for many families. It makes Otahuhu quite an attractive option versus living in the middle of nowhere on some greenfields subdivision.
Sigh.
Thread is already festooned with clown shoes, BH.
The pronouncements on Local Gumnut are exactly in line with the suggested solutions (a summary here).
It is nothing less than a loaded gun to the LG temple, and to the Kates of the world who seem to think that allowing LG to wreak its economic cluelessness for another span of time, on the population of aspiring homeowners, is a worthy ambition, I cast a moral judgement: simply disgusting.
In my days in rural LG (recounted here and here) the 2002 Acts infliction of the Four Wellbeings had yet to descend upon the ratepayers. So costs were moderate, and the pressure to acquire revenue streams that did not roll up into 'Rates Required' was fairly much absent.
Now, LG is a major economic actor (Mike Greer, Christchurch builder noted that the Council component of a typical build was $75K, or around 25% of Labour's hoped-for total unit build cost for it's 100K houses.
Quote: "Greer struggles to see how the market is going to provide for those with less to spend. Even if the council [Christchurch City] released still more land to bring section prices down, its development levies - the cost of consents, new roads, sewerage and other services - are still going to be about $75,000 of the cost of a section, he says."
Who pays?
The aspiring homeowner: in four ways:
- The LG cost comes mostly early in a development cycle for the land developer, so the carry on that cost is added - say another 40K for a five-year cycle and WACC at 10%
- The developer's profit - based on all input costs - say 20% on raw land costs including carry of $160K - 32K
- The consents and inspections plus consultant costs for items inserted into the build like TC3 land foundation design (individual, no standard available) will add another 10-40K
- Whee! Our aspirant homeowner has a home, and has paid a range from 80-odd to 120K in Council imposed or caused costs in the process. Oh, wait, that will need a mortgage, and as much interest as principal is repaid, typically. Darn! That Council bit over the life of the mortgage is thus doubled - 160-320K.
So boring old LG can do a power of real $ stuff, eh Kate.
Gonna reconsider yer glib put-down?
Gonna conceded that hammering LG, capping levies, freeing MUL's and limiting LG costs by driving a wooden stake through the heart of Social and Cultural Well-being could even perhaps maybe just be a Good Thang?
waymad, LG is a 'creature of statute' - it exists only at the whim of Parliament - it has no constitutional basis. Central government chose to devolve and decentralise many of the things it used to do to LG in the reforms of the 1990s - many of these things were un or under funded and as a result LG introduced more and more user pays and higher and higher rates but still they weren't fully recovering the cost of delivery. Hence enter the LGA and Parliament giving LG the ability to charge Development Levies - on top of the Reserve Contributions under the RMA. And then the entire leaky fiasco was another 'creature of statute' stuff up by central government - subsequently loading more responsibility, liability and costs onto LG. And yes, the four wellbeings and the 'general competance' clause in the LGA .. and even then, when Dunedin ratepayers said they couldn't afford a covered stadium - who stepped in to provide the top up? You got it, central government.
I repeat - LG is a 'creature of statute' - statutes written by CG.
Tweeking isn't reform. Reform is needed but this present CG Executive hasn't got the intellectual grunt - no new ideas. And the longer they leave it - the worse it gets.
Statute has been amended: see the redefinition of 'Purpose - sec 10 - reproduced below, and tell me that this isn't a new idea, and that nothing has happened.
If I was still in LG wiv my cold hand on the financial tiller, I'd be looking at the Social and Cultural hangers-on and thinking - Gosh - how long am I gonna see your well-remunerated faces 'round 'ere for? Being as how yer Statutory Purpose has been negatorated? In fact, I'm not sure I'm allowed statutorily to Pay y'all next week!
As Bob the Dylan sings 'Things have Changed' - (written and performed for the film 'Wonder Boys')
Oh, the new LG purpose: (I've just kept the straight definition, there's a lot of inserting and replacing as it's yet another 2002 Act Amendment):
“(b) to meet the current and future needs of communities for
good-quality local infrastructure, local public services,
and performance of regulatory functions in a way that
is most cost-effective for households and businesses.”
and 'good quality' is defined as:
In this Act, good-quality, in relation to local infrastructure,
local public services, and performance of regulatory functions,
means infrastructure, services, and performance that are—
“(a) efficient; and
“(b) effective; and
“(c) appropriate to present and anticipated future circumstances.
LG readers - in the words of the aforementioned:
"People are crazy and times are strange
I’m locked in tight, I’m out of range
I used to care, but things have changed"
Big deal - the important bit is the definitions for infrastructure and services. Got them to hand?
PS - here's a great example - will anything in the amendments prevent CCC from hiring the person they employed (see fancy title for the employee on second to last page) to put out this stunningly crucial piece of LG 'services' work;
http://resources.ccc.govt.nz/files/AllCommsStuff/2012/RoadSafety/WalkingSchoolBusBooklet.pdf
And particularly in light of the fact that a CG agency, NZTA, has put this one out on the very same 'services' subject;
Followed by the fact that most schools also put out their own materials in actually providing the 'service' as well;
http://www.mteden.school.nz/Site/Travelwise.ashx
Kate - LG is a creature of Statute written by CG. It is however the Councils that are administering the Statutes that is the major problem. MP's can't directly go and tell the Councils how to run the process for that is not allowable. Exceptional circustances have to occur before Government can step in e.g, Environment Canterbury.
The RMA process is made expensive by the staff within Council. Council staff stuff up and there stuff-ups are billied to the applicants requiring Consents.
There is one case I know of coming up before the Environment Court and I am horrified at what the applicants have been through with the Council and Submitters. This was for a variation to an existing consent. The conditions that Council have placed on this particular applicant are seriously breaching the Bill of Rights Act.
I know of cases where those on the Hearing Committee have failed in their duty to follow the provisions of the RMA.
Waymad has correctly identified where a large proportion of the costs are in housing.
I think the PM is sending a damn strong message to the Councils to get their act together and if they don't the Govt will take action.
"Thread is already festooned with clown shoes, BH." ... "Gonna reconsider yer glib put-down [Kate]?"
Mirrors are useful things.
I have read your Half-Full Cup column and as you concede at the end, those ideas are all politically impossible. So, instead, are we left with the practical suggestion of ever-expanding MULs in order to satiate everyone's desire to live the Kiwi dream? Auckland's housing supply is already short by many tens of thousands of dwellings and you are presumably well aware of the projections for population growth within the council area. Where are they all going to go? Lifestyle blocks - seriously?
Surely, expansion of the MULs is of limited benefit, other than providing yet another bogeyman for everyone else to blame their situation on.
Providing greater supply of land where few people want to live is not going to affect the value of land where almost everybody wants to live. You suggest doing away with zoning completely; although that will never happen, presumably this suggestion indicates that you do in fact agree the primary solution is higher intensity zoning in already urbanised areas. Why not focus on that?
HErald article says:
Productivity Commission and other recent research suggests New Zealanders face far higher housing costs than in comparable developed countries, owing to a combination of costly regulatory processes, uncompetitive building materials markets, restrictive urban limits and the absence of uniform home designs to drive down building costs.
Thinking of things here in Adelaide, regulatory processes are not costly ($200-$300 for most planning / building consents), building materials markets are quite competitive, urban limits like Auckland are quite restrictive, and there is a big uniform home design market.
So Adelaide has got 3 out of 4 aspects right, Auckland none.
Auckland could easily resolve its costly regulatory processes. In a small city / country getting building material markets and mass uniform home designs will be much harder. Freeing up planing controls should help get building costs down slightly, but not much.
Not only scale, but the topography of Auckland / NZ is not particularly conducive to uniform designs either.
Auckland / Nz is not a flat pancake like many parts of texas or Aus
Yes in crude city wide terms not much difference
But - and its a big but - in Adelaide there are far more affordable options within 25 mins of the city than Auckland -
Also day to day costs - especially gas and groceries - are so much cheaper than Auck, which shows that the median multiple is a somewhat crude measure
(also family tax benefits extend to higher levels of income than WFF)
RE: Esprit
I don't hold out much faith. Had someone call in talkback yesterday saying they were at a trade/investor show in China a month or two ago and there was someone there from the NZ Ministry of Economic Development handing out taxpayer-printed glossy brochures
If the brochure exists it will be political dynamite- people will really really not like it if it is true and they can actually see it. someone needs to scan it and post it online asap
I looks in t'mirror and sees a cynical old grump who is deeply worried by the path housing is heading down.
I have built, repaired and assisted in others builds of dozens of houses, all in a DIY basis, and am of the firm opinion that the ability to do so is a basic human right. Food, shelter, transport and security are the core human activities, and at least part of my very apparent ill humour is the fact that so much of this basic stuff is effectively illiegal without a string of meaningless credentials foisted upon us by unelected officials with Good Intentions and turf to expand and defend.
I like what I see in the mirror.
Deal with it. /rantoff
Just in the process of selling a self built lifestyle block. We were told there was no buyers full stop due to PSA, amongst other negatives, and there's heaps of "beautifully built" houses and blocks on the road and been on the market for years.
There has actualy been huge interest. A lot seems to be because it's different, we never built to sell like everyone else with a eye to sell, but to actualy live in it. And we weren't particularly interested in what the council thought, we just wanted a roof and space.
One of the best things was building around us meant our numerous kids got to see just how it was done, I hope they in turn get the chance at DIY stuff to.
Penny Hulse spot on this morning in the Herald:
http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=1…
As I've said before, if the unitary plan is not given special status in terms of taking effect when first notified later this year, no matter how good it is, it won't have any effect for another 4 years - too long!
"...John Key has stressed a new urgency in kick-starting the sluggish economy "
Gosh John...whatever is causing it to be "sluggish".....don't spose it might be the gst theft do you...or the Tsunami of debt flooding the families...jeez these things are hard to suss out...would the red tape and bureaucracy from central and local govt be a cause...maybe it's because the truth about the shite state of the world economies and all the thieving at the banks is dawning on Joe Kiwi......then again it could be that the NZ economy is nothing but a property farce utterly dependent on keeping the cheap credit ponzi game going......
what do YOU think !
Excellently put and in better - um - poetry than anyone else can muster.
Now if we could just harness the rotational energy of ol' George and all those other prescient deceased types spinning away. looking at the lid, why, we'd have the Energy Source of the Future....
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