PM's Wellington rent rise 'success' comment, another olive branch to Peters on Super and tax cuts vs Cullen Fund contributions - Wednesday in Parliament

Bill English’s comment that rising Wellington rents were a problem of success, another National olive branch to Winston Peters and the resumption of contributions to the Cullen Fund over tax cuts, all featured in Parliament’s Question Time on Wednesday.

Labour Party leader Andrew Little took English on over housing, putting to him a trio of examples of Wellingtonians and others struggling to find rental housing, asking whether they fit with the Prime Minister’s description.

English said he stood by his full statement, which he noted went on to say that demand for Wellington rental housing was “certainly concerning for people who are looking for accommodation.”

He added that he also stood by statements made by Wellington’s Labour Mayor, Justin Lester, regarding the building of new homes beginning to get into gear; that while growth in new consents had lagged behind targets for the last two years, the city this year was in a very strong position and tracking well by working with central government to make it easier to build new homes.

On the opposition side of the House, Labour MPs responded that he was referencing Wellington City Council (WCC) social house building initiatives, which had little to do with central government – in fact central government funding for the council’s social housing plan has already been used up.

English then encouraged the WCC to apply to the government’s $1 billion housing infrastructure fund if they wished for further central government help on the issue.

The problem: Wellington is not one of the councils deemed fast-growing enough to tap the fund. Another problem, Labour housing spokesman Phil Twyford pointed out from across the house, was that councils were wary of accessing the initiative as any funds would sit as debt on their balance sheets.

This did not deter the Prime Minister. There were currently “intensive negotiations” with several councils over their use of the fund, he said, mirroring a similar comment a number of weeks ago.

And in relation to Wellington, he added that it was pleasing to see the city was becoming an attractive place to live in again after a period of low growth.

Soon Peters will have the whole olive tree

Meanwhile, English appeared to hold out yet another olive branch to New Zealand First (NZF) leader Winston Peters over National’s superannuation proposals.

Questioned by Peters on how English could have deemed NZF’s call two years ago to raise the Super residency test threshold from 10 to 25 years as racist and bigoted, then turn around and raise it to 20 years now, the Prime Minister again asked Peters to consider the policy.

If NZF’s one concern on the policy was the change being 20 years rather than 25, English said he accepted there could be some debate over that aspect of the policy.

Tax cuts or the Cullen Fund?

Labour finance spokesman Grant Robertson then took on Finance Minister Steven Joyce over the government’s move to halt contributions to the Cullen Fund when it got into power, then in 2010 announcing tax cuts. Which would the government prioritise with its surplus cash, Robertson asked.

Joyce replied that the 2010 tax package was fiscally neutral – with the lift in GST supposedly offsetting income tax cuts. That didn’t sit well with Robertson, who pointed out that the government appears to be planning tax cuts in this year’s May budget – which would come before the government’s stated plan to resume Cullen Fund payments when net debt hits 20% of GDP in 2020/21.

The debate then went onto when the Cullen Fund would actually start to make a difference to the government’s pension costs. While Robertson pointed out that the fund was set to begin paying out from 2032, Joyce maintained that payments would not be “meaningful” until sometime in the 2060s, under the current schedule devised by the previous Labour government.

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4 Comments

An epiphany from the PM:
Scarcity in rental accommodation is a concern for those without anywhere to live.

The Planet Key hangover is a painful one :-).

These guys are locked into population growth is a success story. Now that Wellington has soaring house prices and pressure on its infrastructure it is a successful city.
The previous 8 years when prices were stable was evidently unsuccessful.

Wellington was not just unsuccessful but actually "dying" according to John Key

Emergency housing for 8000 people isn't much at all. It won't take the pressure off at all as the number is too small. Nor is $300m of funding as that would only purchase 5 or 6 houses in Auckland in the near future under National's utopia.