David Hargreaves sifts through some of the building and infrastructure changes planned by the Government for this year and concludes they could have very significant impact, if the election doesn't get in the way - and that's a big if

David Hargreaves sifts through some of the building and infrastructure changes planned by the Government for this year and concludes they could have very significant impact, if the election doesn't get in the way - and that's a big if

As we know the Government (foolishly in hindsight) styled 2019 as the Year of Delivery.

As we also know it proved to be nothing of the sort.

But what we did get is a whole heap of promises, particularly in the areas of building and infrastructure in the second half of last year.

As I said I would in my earlier 2020 scene-setting column, I've had a bit of a wade through some of these things picking out the items of interest.

I said in that earlier column I was genuinely taken aback in glancing at some of the things the Government announced in the back half of last year at how much there really was.

If the Government's to live up to its promises then this year will definitely be The Year of Heavy Lifting.

But having said that, I immediately doubt it.

Symbolic gestures, yes. Execution, no

This is a Government that I would categorise as having been big on symbolic gestures but very poor on execution.

So, with it having achieved relatively little in terms of big-impact measures in the past two years, why would we necessarily believe that this year - an election year - is going to be the one when it all gets done?

And you have to say that it would be fairly back-to-front in terms of recent NZ Governments if this one does achieve a huge amount in its last year.

In general terms Governments huff and puff and get the stuff they really want to do out of the way in the first year or two and then in the third year they concentrate on getting re-elected.

Upfront therefore, I would have to say the risk is that this Government will indeed succumb to the desire to get re-elected as its priority and therefore there will be massive slippage in terms of getting the 'promised' things done this year.

This is all significant to bear in mind because if the Government does get at least some of the measures its put in motion up and running this year then some of these have far-reaching economic impacts. Likewise delays and slippage will not be so good in a country that needs to be making progress on backlogs in housing development and infrastructure.

What happens if it's all on hold?

If some proposed changes and legislation are therefore put on hold till after the election then the public face potentially the question of whether they vote for the current Government simply in order to get these measures through.

And that's if you believe that another term will see this Government any better at implementation of a plan than it has been this time around.

Hmm. All interesting.

In looking through the various measures that are on the table and that are of interest to me I'll go quickly over some and more slowly on other things that are of particular interest to me.

I still can't get enthusiastic about the talk of moving the Port of Auckland and would be surprised if anything happens at all in the near term.

The proposed light rail from central Auckland to the Auckland Airport is arguably a bigger problem for the Government, since Labour made the incredible promise before the last election that it would have a light rail going to Mount Roskill in four years and the airport in a decade.

Well, as we know, this is one light rail that's currently heading to nowhere quite quickly. As flops go the light rail idea is challenging, but could never beat, the twitching corpse that is the KiwiBuild as an outright failure of policy.

The train's off the rails

If the Government did make some decisions and progress on a light rail that would clearly have significant economic impact but, really, do we think there is a dog's show of anything happening on this before the election?

Likewise, in terms of things happening before the election, how much will we likely see of the proposed infrastructure spend-up announced by Finance Minister Grant Robertson in December?

Again, anything that does materialise will likely have a significant economic impact. But will anything materialise this year?

As we know, talk of building and roads and infrastructure invariably leads to that most vexed of vexed subjects - the Resource Management Act.

This is the Act that everybody agrees needs changing but can never agree how to do it. This Government is of course on the the case, but again, don't expect to see anything other than proposals (at best) before the election.

The current plan is for the expert panel that's advising the Government to get back with proposals by the "middle of the year". 

Trouble with timeframes

Disconcertingly, the timeframe for a number of issues the Government's looking at includes either "early this year" of the "middle of the year". It doesn't take a genius to work out that when we are talking about mere months, "middle of the year" can very soon become "after the election".

If anybody is able to change the RMA in a coherent way that gives us non-constipated planning processes in this country then they would have done a fine thing. But we are a long way away from seeing that yet.

In the midst of all this tangle is the Government's plans for a big urban development revamp. The big urban development/housing agency Kāinga Ora—Homes and Communities was officially established last year. However, the hammer that knocks the nail in for this new agency is the Urban Development Bill, which was introduced into Parliament towards the end of last year.

This bill would give the new agency the ability to fast-track urban developments, so, again a very far-reaching piece of legislation, which is now before Parliamentary Select Committee with a report back due by mid-2020.

In a similar vein is the Infrastructure Funding and Finance Bill, introduced into the House late last year, now at Select Committee and with a report due back in mid-2020. This is the press release issued last year.

I'm real interested in this one, because, to be honest I have a bad feeling about it. The issue of who pays and how for new infrastructure to support new housing developments has been pretty divisive. Anything that fixes that problem would be a huge boon for the country. My problem with this particular 'solution' is that its devilishly complicated and to me at this stage its not clear who will necessarily end up controlling the special purpose vehicles at the centre of the scheme and whether they will charge fairly.

Contentious issues

Potentially it's very contentious. I still want to get my head around what's proposed a little better because, as I say, it is devilishly complicated. I may come back with much more to say on it later. 

Another one that's contentious as far as I'm concerned is the proposed change to the tenancy laws. The major change is the ending of 'no cause terminations' of periodic tenancies. Potentially I think that's a very big game changer for the rental industry - if it goes ahead. 

This change, announced, late last year, hasn't made it into Parliament yet. It will involve changes to the Residential Tenancies Act. These changes will be set out in legislation, due to be introduced to Parliament in "early 2020".

So, there we go. And there are a few other things not mentioned here too, including building law reforms with legislation to be introduced in the "first half" of the year.

There's some far reaching things here. Even a few of these things coming to fruition will likely have a big impact.

But look how many there are.

A long hard look is needed

Realistically I would have thought the Government needs to take a long hard look in "early 2020" and prioritise a few things. 

If it doesn't do that I see two potential scenarios: Firstly, that the election gets in the way and virtually nothing gets passed and secondly that somehow the Government does move heaven and earth, brings a bunch of these measures in and maybe they turn out to be poorly designed - because of the rush.

If I was guessing, I would suspect that the election will come up too fast and most of the stuff described here will still be sitting on the table. Then it becomes a question of "vote for us if you want this". But then again, anybody who voted a certain way last time expecting to be now living in a KiwiBuild house and watching the light rail project approaching Mount Roskill may wonder about that...

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

76 Comments

Comment Filter

Highlight new comments in the last hr(s).

Another one that's contentious as far as I'm concerned is the proposed change to the tenancy laws. The major change is the ending of 'no cause terminations' of periodic tenancies.

It is a common misconception that the proposed tenancy termination changes are limited to periodic agreements. But the changes are far worse than that. Landlords will not be able to terminate tenancies at the end of fixed term agreements unless certain limited circumstances apply. For all intents and purposes, it would be the end of fixed term agreements as well as 90 day notice for periodic agreements. Trust me, this is huge.

The plan is clearly to nationalise the residential rental sector. Well, maybe nationalise and corporatise.

10
up

... the Gnats mistake was to sell off several thousand state homes ... just when demand for them was ramping up ....

Labour's mistake was to waste time and money on Kiwibuild ... it ought to have all gone into increasing the state housing stock ...

People that want proliferation of state housing almost certainly have never lived next door to one. For beneficiaries' sake as well as the tax payer we should be weaning people off state housing, not creating dependency. In my view a state house should be a temporary safety net for people in unfortunate circumstances beyond their control, not a way of life. This govt is treating the symptoms, not the disease. If they really want to make a difference they should look seriously at why incomes are low despite very low unemployment, and why productivity is so low.

Nonsense. Society might be better off if the residential rental sector were nationalised, corporatised, and taken away from Mums and Dads. The Labour-led government's great error was to dream up KiwiBuild. What we need is a vast increase in state rental housing for all who want it, for life if they like.
Have a read of the latest Economist:
The Economist | The horrible housing blunder
https://www.economist.com/leaders/2020/01/16/the-wests-biggest-economic-...

Just bought it! Great pieces in this edition.

The state houses near us are crappy 2 bed houses on stupidly big sections. They are now being demolished and made higher density, but a case of too little too late.
Most of the private houses were subdivided and or upgraded decades ago.
If HNZ owned more property In Auckland we would need a lot more hotels for people to live in.

HNZ are upgrading the density of the housing, but if they had more of them we'd need more motels for people to live in? Interesting logic there...

They are now. But it will take a long time before they catch up to where the private sector was 20 years ago. One of the many reasons there are no affordable houses in Auckland currently is because the areas that should have them instead have 4 state houses per acre.

right.. lack of investment in state housing was the problem, this is being addressed now. At least until National gets back in and just sells it all off, and whacks you with tax increases to fund all the subsidies they'll have to pay to the private sector to house the people.

Its why governments shouldn’t run anything that can be privatised. What has happened with state housing is exactly the same thing that would happen if the government made bread. Feast one minute, famine the next. That is why we let the private sector to do it instead.

So we should get the govt out of healthcare? Education? Transport?

Didn't pick you for an ACT voter Jimbo.

Some things are easy to privatise. Housing is one. The ones that you mention are not. Do you think the state should make and sell food?

Everything is easy to privatise.. just sell the hospitals and let the new owners charge the public directly.. private and wonderful.. except its not is it Jim? Same with housing, those with no money will get excluded even more than they already are.

Let investors buy up all the dialysis machines and leave them locked in a warehouse somewhere. Capital gains and all that.

I think health is much harder to privatise compared to say food or rent because it is normally a one off very expensive event so there is then a need for insurance etc. I wouldn’t mind seeing the transport system privatised because it would be so expensive we would see people doing things locally again (roads are another area of very poor land use by government).

I don't mean to point out the obvious, but the big reason that housing was so affordable in NZ prior to recent decades was the government working hard to make it so - including direct build, Housing NZ (including converting to ownership), capitalising the family benefit and having public-private partnerships that also kicked off quite a few of the home building companies now big in NZ.

Yes, we need the private sector to be doing most of the building but it wasn't a "free market" alone that created affordable housing.

There is a huge ring of state housing that runs from Meadowbank through Glen Innes, Panmure, Otahuhu, Onehunga, Mt Roskill, Mt Albert and Avondale that is ideal for young first home buyers. Close enough to city, public transport, etc. instead it has been wasted for decades as underdeveloped crappy houses for people who don’t even need proximity to city. Meanwhile first home buyers have to go way out west or south and commute for an hour. The public sector in action!

Why do they not need proximity to the city?

You're right that they shouldl have been redeveloped progressively many years ago, but if you think housing those same people via private landlords with the taxpayer picking up the tab would be cheaper, you've got rocks in your head. We are already paying $1400/week for private accomodation for many of them, you want to expand that to all of them?

a lot of those houses are worth close to 1 mil due to land size. I doubt the government would do that badly if they sold them and had to rent them back at probably $500 a week.

No the houses are worth $50k, the land is worth $1m. So putting new house on it like they are doing and retaining the asset is a much smarter move than selling them, then renting them back at 3 or 4 x $700 per house minimum as private rentals. About 7 years of rent for 4 families for that million dollars, and thats being generous.

Proximity to jobs is even *more* important for the poor. Being stuck in the wops without a vehicle makes getting a job extremely difficult. It's a poverty trap.

So the rich live close to town, the poor next closest, and the young and middle class live in the wops and commute for miles. Sounds about right.

John Trz,

Interesting piece. I didn't understand the reference to NZ recouping some of the windfall gains through frequently updated land and property taxes. Just what are they? That hardly matches our having some of the most unaffordable houses globally, based on median prices to incomes.

I have no expertise in this area. I was brought up to believe in home ownership and everyone I knew in Scotland bought a house before or when we got married. I encouraged my children to do the same. Owning rental properties was certainly not widespread and it was not till I came to NZ in retirement in 2003, that I came across this almost universal desire to own rentals. Like the Economist, I too prefer the stockmarket.

My preference to be to see a greater mix of property: state/local authority homes, co-operatives, rent-to buy and outright ownership. I would prefer to see a better balance between the rights and responsibilities in the rental market.

This Government is shaping up to be a one-term government.

Thankfully, the general election is only 9-10 months away - at the latest.

TTP

Ha...Good one..whos your pick for next PM. Comrade Soyman?

I'm still picking they will slip the knife between his ribs sometime before the election when his preferred PM ratings fail to escape the single digit percentage range.

Jian Yang and Xi Xinping are happy with that.

Well something has to change and getting rid of the amateur property investor model is a good step. Either have full state housing with stable tenure or reset the model with corporate scale landlords that act in a professional manner. Why? A colleague of mine has had two highly skilled staff leave their jobs at his company due to lack of stable rental housing in Auckland, they are off to Australia and his company is in crisis mode as a result. So thats quite an economic impact that no one seems to want to address.

Exactly. But as long as bank debt risk is passed from bank, to speculator, to tenant they are all "chums", and "Im so great's". The fact that its driving educated youth that employers need offshore, they simply dont care.

Time to vote for the tax base to be changed, to focus on assets vs income.

"The fact that its driving educated youth that employers need offshore,"
At best one-fifth of students move overseas and the majority of those were probably from overseas to begin with. There is little validity to your statement.

From a quick count of the people on my facebook account that I know from Uni, just over a third of the NZ contingent are now overseas. (I excluded the few overseas students on there from the count) And a couple more that don't seem to have any fixed abode at all.

Might be less for other disciplines, but decent engineers don't have a problem moving overseas.

Aside from civil probably most engineers should move overseas. Money and opportunities are better in countries with more technological industries.

Clarification - Kiwi born, raised, and educated. AKA a large net tax loss now paying their tax in Straya. Next time your Boomerness/or friend is a hospital, check out the the non NZ born, raised and educated work force. Why you may ask...

Yes. Those who wail and gnash their teeth aren't able to explain why much longer, more secure tenancies don't cause disaster elsewhere. The truth is, we need professionalisation of the rental industry. Mum and dad landlords are *not* a good thing for tenants.

Not so sure. Mum & Dad investors with one or two properties can be bad landlords but probably more often they are generous - never putting rent up because they like their tenant. The quality of landlords is not the big issue - the high price of houses and requiring big mortgages and therefore high rents - that is the issue. It would be easy to abolish Mum & Dad landlords or to hassle them into quitting but it would not solve the problem -of unreal property prices.

Has there ever been a government to promise so much but deliver so little? I think two words sum up politicians like Ardern, Twyford and Hipkins - ideological and incompetent. It's a dangerous combination, if they ever actually get something done. So far they've just wasted billions of our money, but they haven't caused too much damage otherwise.

... yes ... and they destroyed our offshore natural gas industry .... $ billions of exploration gone ... export earnings ... high paying jobs in the Taranaki ... allied onshore businesses ... POOF ... all going in a cloud of ideological smoke ....

Another appalling early (ideological) effort was to get rid of Special Housing Areas

Canning the roading fund for three years?

... but Roger , Phil Twyfords building you a rinky dinky new light rail .... can't ya get outta your car , and wait for it to come along ....
.
Choo choo ..... woooo hoooo

Talking to females who work in the city or socialise at city bars and nightclubs and who would be expected to use the Light Rail when in service. Without exception they said they wouldn't use it unless there was a security guard riding shotgun in every carriage. Auckland is still basically the wild west and will probably become more so.

I doubt the business case is based on getting pissed chicks home at night.

And now scrabbling to get it re-started as they realize what a mistake they have made. Biggest indictment of coalition is that they reactively cancelled stuff just because they didn't invent it, and with nothing better to replace it - that's not governing, that's childish pouting. (eliminating reporting of KPI's for health sector is another example)

I support extractive industry but your facts are incorrect. I have friends who left the taranaki area after their lucrative oil jobs went up in smoke when the shale oil boom started and the oil work in the region started to wind down. That was during the hapless national government era. Despite vast sums of money subsidising exploration there has been minimal interest from oil exploration firms because our reserves are too expensive to realize. From my perspective as a taxpayer, better to invest in the emerging tech sector than throw it down an empty deepsea well...maybe the drilling in the great southern basin will turn up something later this year?

Exactly.. but don't let the facts get in the way of a good rant from Gummy.

More scrutiny applied to the opposition than the chronic lack of delivery from the party actually in power. Speaking truth to power is a high and mighty journalistic principle which is well and good until you like the people in power, potentially even on a personal level. At that point it might as well be 'abandon all hope ye who enter'.

I have found myself increasingly relying on GA, Interest.co.nz and other outlets as other media organisations move behind paywalls or concentrate on four minute read times. Plus the comment streams here are generally entertaining at the very least and usually informative as far as debate goes. So keep up the good work all round everyone, even more so in this election year.

Aggree the mainstream isnt calling them out as much as they should be.

Who would have expected the Guardian to bring light.

https://www.theguardian.com/world/2019/dec/31/new-zealands-year-of-style...

I was literally going to make the same comment re: the huge divergence between promises and delivery.
I am generally centre left but not a Labour loyalist by any stretch. It's extremely unlikely I will vote Labour this time because I don't believe we can have any faith that this motley mob will turn things around.
So I will revert to self interest, if the Nats provide something that benefits me, like income tax cuts then I vote for them. If they don't then I really don't know who I will vote for, maybe TOP because at least they have some good ideas???

Idiot politicians that promote and encourage drug taking wont be getting my tick. The level of hypocrisy is astounding, on one hand they say smoke free nz, and on the other they want the population stoned.

How do you feel about James Shaw writing the PMs speeches to UN etc.

It’s no coincidence that Ardern’s opening speech at the United Nations climate summit in September, closely echoed his views. The world faces a “stark” situation she said, urging those listening that with the necessary changes, progress was “within our grasp.”

“I wrote a lot of it,” Shaw says.

https://www.google.co.uk/amp/s/amp.theguardian.com/world/2019/nov/08/we-...

Business outsourcing with no kpi or sla.

On whether global heating can be curbed, he says: “I think the chances are slim.” But there’s no reason for not trying, he adds. “In fact, that’s all the more reason to try.”

Does PM have success criteria by which minsters performance is measured and gauged?

How does PM measure James performance when he agrees the chances of success are slim?

"“I think the chances are slim. But there’s no reason for not trying.."". I read Jim Flynn's 'No Hiding Place' and agree with his conclusion - there are two ways to achieve a curbing of global warming (a) stop the developing countries developing (b) some at present undetermined technical break through (eg Fusion???). (a) is ethically wrong and there is no option (c). So carbon credits, electric vehicles, wind power, etc may well be worth pursuing but they will not solve this problem.

No magic required. CLean safe modular nuclear reactors can undercut fossil fuel power within 10 years given a few 10's of billions in R&D funding - roughly what is spent on climate change mitigation regulation etc every month. That is super-low hanging fruit. EV's and their battery tech are now inevitably going to eviscerate fossil fuel use in next 10-20 years (EVs will be cheaper than IC in about 5 years), and cheap batteries + EV's will make off-grid home PV cheaper than grid supplied electricity for most of world within 10 years. Spend money on energy R&D instead of expensive virtue-signalling and the fixes will occur even quicker.

But, but, but, you are listening to the words of politicians. Now you really should know better than that, David.

Ploticians follow a standard plotline:
1 Create problems for the future
2 Promise to solve problems politicians created in the past.

This, oh so cunning plan, means there is a pipeline of things for them to promise to remedy.

It is, of course, essential to promote the following ideas:
1 These are complex issues that cannot be resolved by anyone else
2 The politicians and bureaucrats are working earnestly on your behalf to find a solution.

Now, and this is important, they don't do this to create a job for themselves. That would never do.They do it in service of their tribe.

I agree. But let's say you are a political animal and attach yourself to the wingnut side of mainstream politics. You can always read Kiwiblog, which is more of a digital space for people to let out their frustrations towards the political "other." There seems to be a belied about the KB community that govt depts under a National-led govt will deliver. I'm not convinced. The ineffectiveness of the current mob is beside the point.

Quote from H L Mencken "The whole aim of practical politics is to keep the populace alarmed ( and hence clamorous to be led to safety ) by menacing it with an endless series of hobgoblins, all of them imaginary. "

Labour has been very quick to get their socialist policies in place (old rich people are already getting free winter power), but really haven’t done anything at all in terms of promised infrastructure. I kind of expected light rail to be funded within a few weeks and spades in the ground by now, but here we are almost 2.5 years later and still nothing. Why is it so easy to to find money to give away but not to build stuff with?

Any fool can sign a check, but building stuff is hard - takes skill, experience and backbone - Coalition has no-one with the right backgrounds to actually get stuff done. They need to start selecting MP's that have ability to deliver.

Heavy lifting is not something this crew struggle with at best.
The big question is do they play the wait to see if benefits from a late as possible election or a snap election to hopefully get past the post before more failures become evident.
Logically and looking at their non-delivery history, an early election while throwing dollars arround to gain votes is a sound path. I'm guessing Jacinda with her pie in the sky dreams will let it ride till the end with fingers crossed that something will actually be implemented and gains become clear, while throwing dollars arround...

In my opinion two types of people voted for labour at the last election:
1) people who wanted housing and infrastructure built
2) people who wanted a hand out
If they held a snap election now they would only get those in category (2). However that will probably still be the case by the time of the election.

Fair call.

By "hand out" I guess you mean social welfare, correct?

Free power, free tertiary education - call it what you will. (By the way I believe in free tertiary education but I’d still classify it as a handout)

and
3) people who wanted a mild reduction in immigration
4) people who thought selling NZ land and businesses to foreigners is irrational.

JJ understand the number of people voted Labour.

How do you factor the after voting stage, where the majority party was excluded and the odd couple COL was cobbled together.

I speak to people in Wellington who tell me, labour and greens mean nothing, as Winston keeps them all in line.

Good point with Winston. If he didn't have a hand on the rudder we would be in a lot deeper water.
The rumour in political circles is he is arround for the election then hanging up his boots. If that becomes common knowledge there would be no hope for Labour. Basically NZ needs to look at Shane Jones being the new leader of NZF with a hand on the rudder steering Labour and the Greens through the next term.
The usual gap between children is two years, 40 years old is starting to push the age limit on children. Jacinda is 39 now and if there is to be another child it will be in the next term leaving Shane Jones running the country for a good portion of the term.

Thank you Winston for inviting the whole high-school to my house for a party and then telling them not to make a mess.

I think it can be argued that people who want a hand out generally do not vote. Unfortunately Labour is very much a neo liberal party just less craven than National. So the structural changes that need to occur to make tge economy less unequal will never materialise as evidenced by the 12 billion dollar infrastructure spend up while sickness beneficiaries eat shit. Unless we repudiate inequality at the next election things will get markedly worse.

Unallocated spending.

It's a NSW Labour trick policy by press release.

Exactly. Labour hasn't been truly reformist for a very long time. Jacinda is very conservative.

Kezza, here is something PM could try.

A local govt good practice initiative. Her office plus consultants (leave the hopeless crew alone) run a reporting regime atop local government.

First target Wellington Council, replace the council with a statutory manager. Again a captain's pick from outside COL.
Fix up real and unreal problems Wellington suffers, claim that work as her own.

Basis for Wellington snatch:
https://i.stuff.co.nz/dominion-post/news/118890119/sewage-in-wellington-...

On one hand it has told residents it is fixing the problem - likely caused by wastewater including sewage getting into stormwater - but on the other it says it is still trying to find out what the problem actually is.

Perfect, add a few Trumped up charges. It becomes a massive distraction and scares the beegeez out of our good friends in Auckland!.

https://youtu.be/gmOvEwtDycs

From what I see of Jacinda if she had her way she would wrap everyone in the world in cotton wool for their own protection but in the real world it's impossible to make everyone happy and safe.
Back to David's artical.... Heavy lifting required..... logically thinking I dont think that many people think that they can get anything of real substance done.

Susport and confidence for this COL is waining and gathering pace with what is on their plate now let alone adding to it.

Yeah it's way too late. Takes years to get big infrastructure projects established and spooled up. They had to do it in their first year to have an impact, but they came to power entirely unprepared and instead wasted their first 18 months handing out jobs to their mates and flunkies on endless working groups.

Not to mention voting a certain way to have immigration reduced.

Labour and National are both scum.