Greens: Invest in state housing

Property

Greens call for govt to ramp up state house building programme to cover for woeful NZ building activity ahead of quake rebuild

5th Dec 11, 12:38pm by Alex Tarrant

The Green Party is calling on the government to ramp up state house building in order to keep skilled construction workers from leaving New Zealand ahead of the Christchurch rebuild.

Figures released by Statistics New Zealand this morning showed residential building activity at its lowest point in 18 years in the September quarter.

"This coincided with consents issued for new homes also hitting a near-record low earlier in 2011. Building consents issued indicate the intention to build, and building activity estimates the work that was put in place," Stats NZ said.

"This survey of building activity is designed for accuracy at the national level, not regionally. However, to assess the effect of the 2010 and 2011 Canterbury earthquakes, we investigated building activity in the region and compared it with the rest of the country in the September 2011 quarter," it said.

"Overall building activity in Canterbury appeared to have a similar drop as in the rest of New Zealand. However, residential building work in the region seemed to have fallen, while the rest of the country had a small increase," Stats NZ industry and labour statistics manager Louise Holmes-Oliver said.

'Build state houses'

Green Party co-leader Russel Norman said in light of the figures, the government should invest in state housing construction in a bid to boost the sector.

“The National Government is asleep at the wheel when it comes to the building sector. They risk losing capacity and skills from the construction industry while they wait for the Christchurch rebuild to get underway,” Norman said.

“Losing more skilled labour to Australia would be a disastrous outcome for the Christchurch rebuild. A smarter way forward would be to smooth the contraction by investing in state and community sector housing construction, bridging the gap between the current downturn and the Christchurch rebuild," he said.

“Expanding the supply of state housing now would increase the stock of housing in the market, limiting the possibility of another housing price spike caused by a lack of supply."

Norman said the Green Party had costed plans to build an additional 2,000 state and community sector houses before the rebuilding of Christchurch got underway. The initiative would cost NZ$670 million and employ 3,100 directly — creating 9,300 jobs in total if indirect and upstream employment effects were included, Norman said.

See and compare the Green Party's housing policy in our party policy section here.

“There’s a huge shortage of rental accommodation, especially in Auckland. The building of an additional 2000 new energy-efficient state and community sector houses nationally would help rents become affordable and give more families the security of a place to call home,” Norman said.

Building work completed

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Source: Statistics NZ

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34 Comments

by David B | 5th Dec 11, 12:54pm 1323042873

I'm not entirely sure if they are building any houses in Australia at the moment either. Hugh do you know? If so, there wouldn't be much point in going to Australia if you're a builder/ construction worker.

by Boatman | 5th Dec 11, 1:02pm 1323043320

3 QUESTIONS

1) Why should the Government house anybody other than those in the in the most dire financial position?

2) How the hell is the State going to pay for this if it ever got implemented ?

3) Why not leave the Housing Construction sector to normal market forces ? When there is demand , there will always be a supplier .

We already have one in five people of working age on some kind of benefit and as a result I spend one three weeks a month working to pay for my own needs and one week a month to pay for someone elses needs , who is not working

Its only Okay up to a point , then it all becomes too much, and thats when Australia looks a whole lot more attractive.

by skudiv | 5th Dec 11, 1:42pm 1323045756

1) Everyone needs to work if they want to eat and have a home. You gotta give a little to get a little.

2) This is a drip in the bucket compared to the FIRE sector bailouts and subsidies, cut some of them.

3) There is no demand for new houses, prices need to come down first.

I think you will find that once you include GST, inflation, and government borrowing (stealth taxes) your total tax bill is around 21 weeks a year for govt and 31 weeks for you. Achieve financial freedom, reitre early go on the dole today.

by Wolly | 5th Dec 11, 1:50pm 1323046206

Time to stop work skudiv....jeez mate it's Dec 5th...holiday time dude....throw a sicky...go on strike....hit the beach and the Snapper....come back in February...

by Anarkist | 5th Dec 11, 2:28pm 1323048517

Boatman,

Yeh and how have "normal" market forces been working for New Zealand these past two decades Boatman?

Government debt is as good as private debt, if not even cheaper. Debt is still debt, whichever way you look at it. It matters not which economic actor holds it.

At least this type of debt creates jobs, pays for materials sold by other companies, and produced by still other companies, whilst debt on already existing housing stock just saps purchasing power from the borrower and leaves him with less disposable income to spend in the rest of the economy. You know the part that pays wages and produces profit?

by Wolly | 5th Dec 11, 1:10pm 1323043812

This new age socialist has decided where he will spend other peoples money...thankfully he's got three more years without influence in govt...

Either Norman is financially dumb....or he thinks it's worth making a play for the Labour rump.

We need less govt splurge right now....not more.....you fool.

by the_dc | 5th Dec 11, 1:47pm 1323046068

I suppose Singapore is a nation of fools then?

http://en.wikipedia.org/wiki/Public_housing_in_Singapore

"The majority of the residential housing developments in Singapore are publicly governed and developed and about 85% of Singaporeans live in such houses....Public housing in Singapore as such is not generally considered as a sign of poverty or lower standards of living as compared to public housing in other countries. Although they are generally cheaper than privately-built homes in Singapore, they are built in a variety of quality and finishes to cater to middle and upper middle income groups."

by Wolly | 5th Dec 11, 1:58pm 1323046691

The Beehive fools could build us all a new house and charge a dollar a day if we happened to have an economy that generated massive surpluses every year and borrowed not one zloty.

That's the point the socialists always refuse to accept...they believe in the money tree...do you believe in the money tree DC?

by the_dc | 5th Dec 11, 2:26pm 1323048360

Nah, I just try to believe in facts. Here's one for you: NZ's sovereign debt is less than a third (as a % of GDP) that of Singapore's. Our problem is the private sector (esp household) debt, which was racked up by punters, paying too much for ... houses.

by gavini | 5th Dec 11, 5:42pm 1323060155

The state house tenants in Singapore actually appreciate and look after "their" units. If the residents of State housing here were more inclined to be look after "our" properties I would be more inclined to funding them.

by midgetkiwi | 6th Dec 11, 1:34pm 1323131662

hehe dc ;) when Singapore has a bigger population than NZ, and land area smaller than that of Lake Taupo, there's a much bigger incentive for government to take control of housing developments.. They even have to increase the size of the island by land reclamation!

Also, did you notice in the article you quoted, that almost all of public housing in Singapore is on a 99 year lease-hold? You only "buy" it for 99 years :) Also, they have very low taxes, and no welfare to speak of. They have positives and negatives in Singapore, but Public housing is more of a neccesity than an optional benefit.

by bob | 5th Dec 11, 1:55pm 1323046507

I would of voted for the Greens if it wasn't for these nutty housing policies - introduce CGT etc. to kill off investment in housing and the building industry, then make the government build houses to save it.

by Les Rudd | 5th Dec 11, 3:20pm 1323051600

Take cover, ....... incoming......

http://www.stuff.co.nz/the-press/opinion/5260027/Housing-on-the-state

It describes how reserve bank credit was used to fund NZ's state housing project in the 1930's.

by Anarkist | 5th Dec 11, 3:40pm 1323052829

Not sure if it'll work this time around Les. Back then our primary economic dealings were with Great Britain who was then willing to accomodate our government's flirtation with Social Credit as long as the milk and lamb kept flowing. But the National Government that followed, had to deal with perilously low Sterling reserves, which New Zealanders had splurged in the post-World War II economic boom. We had to import most of the capital equipment needed to invest in our own industry from offshore and we face much the same problem today, though the Global Geo-political Order has changed drastically and I very much doubt the United States will prove as accomodating as Britain did when we were her primary breadbasket. Now we're just a basketcase. Living on borrowed time and income.

by Anarkist | 6th Dec 11, 9:59am 1323118762

Iain,

No I'm not at all. I have done my homework. I suggest your read the article below. The mistake you monetary reformers make is your illusion that we exist in a closed system, but we don't. We live within an open system, which is essentially a giant ponzi scheme underpinned by the confidance fairy. Overseas investors are willing to accomodate our delusions of granduer where we think we're entitled to live far beyond our means by feeding us offshore capital only as long as they're confidant the perverse game of music chairs has a chance of continuing.

"Thanks in part to public works construction (which had begun to revolutionise road, rail, and air transport) draining overseas reserves, in part to a flight of private capital from the country, scared by a government that still seemed “socialistic”, in part to a sag in prices for exports jeopardising the guaranteed price system, and in part to the unsympathetic attitude shown by London financiers to some £16 million of debt shortly falling due, things looked ominous in 1939. The debt was converted on rather stringent terms; exchange and import controls were applied.

http://www.teara.govt.nz/en/1966/history-settlement-and-development/19

by Les Rudd | 6th Dec 11, 8:31am 1323113512

Go here:

www.positivemoney.org.nz

from the home page, download the highlighted NZ Investor article. See the editor's comment and some report of an apparent discussion with RBNZ. Ditto the editor's arguement.

Hear what you say but if NZ can become more competitive and productive because of using such finance in the way/s suggested, therefore earning more fx via our real economy, so what?

by Wolly | 5th Dec 11, 5:27pm 1323059242

But Hugh...watermelon drivel is what harvests the votes from the idiots...and gathering in the votes is seen by Norman et al as the best thing since snails came onto the menu...speaking of snails, how long must we wait before the govt allows the west coast iwi to market those big beasty ones they have over there! We could export them live to Paris...err perhaps not...I have a vision of Sarkozy being sucked in by a Kiwi giant snail ....

by waymad | 5th Dec 11, 7:03pm 1323065000

Sidle up ter yer nearest DOC ranger, Wol. They have around 800 or so (750, perhaps there has been some inventory shrinkage) snails on ice as we speak. A small donation to the Office Party Fund, and one never knows: Powelliphanta Augustus fricassee? Burgers? Caesar Salad? They're not, unfortunately, carbon-free, so perhaps you'll have to plant a tree or three as well - there's always an indulgence to purchase when you get into any religion....

As for the Green's houses, a bit of fingerish arithmetic never goes astray.

$670 milly divided by 2,000 houses equals $335k/house. No mention of land costs, so presumably that's on top.

Hmm. When it's possible to fling together an average over-60's pad, complete with land, for around $200k, that seems a tad excessive.

by Wolly | 5th Dec 11, 7:23pm 1323066191

Do I detect a Wilbur Smith plot afoot waymad...I aint seen no pics of no 800 beasty snails all frozen blue like...so who checked to see they aint been spirited away live to be farmed in a froggy environment....will we wake up one day soon to discover the frogs have 'found' they too have beasty worm sucking snails and too late for Kiwi to grab the market share.....of course our man from the SIS with the double zero should have been on the case from the word go...but he misplaced his briefcase somewhere in wgtn....

by Don m | 6th Dec 11, 1:21pm 1323130918

Re the doc snails....I think you will find that your shrinkage will be 100%.Some doc idiot turned the freezer down a bit low and they froze to death.I guess its the thought that counts...

by Matt in Auck | 5th Dec 11, 8:24pm 1323069888

I wrote to two MPs just prior to the election on the idea of reducing GST on new houses to say 5%, to boost the construction sector and assist with housing supply and therefore affordability . I never heard from them. I still think its a good idea

by Vera Fayed | 5th Dec 11, 8:40pm 1323070828

It's called a subsidy or a grant Matt. Seriously dumb idea. That's probably why they didn't reply. The last place that tried this idiotic aproach was a country called Australia. Ever heard of it? Result was the same as every other time governments have tried subsidies and grants to make housing more affordable. Just blowing into the bubble mate.

by Gibber | 6th Dec 11, 11:37am 1323124664

Yah agree. Keep the subsidies out of it. When would you remove the subsidy?

by David B | 5th Dec 11, 9:29pm 1323073744

Matt in Adeliade, Why would you expect to hear back from them? You don't live in New Zealand, correct? Why would they be wasting taxpayer's money on a reply to you?

by Mark Hubbard | 6th Dec 11, 8:48am 1323114489

So many contradictions. The owner of this site is pushing to 'bust' housing investment.

As reported so coldly in Herald this morning, quote:

Shamubeel Eaqub, principal economist for the NZ Institute of Economic Research, said New Zealanders had a housing obsession which he wanted broken.

And yet we're trying to save the house building industry? Why? If we want to 'bust housing'.

A question.

Forgetting the growing housing shortage, forgetting the growing rent rise because of a rental housing shortage, so, forgetting the facts of reality, Bernard, can you please finally answer for me from a mainstream economist - Keynesian - perspective: is the house building industry, including builders, plumbers, electricians, carpenters, kitchen retailers and wholesalers, building supplies wholesalers and retailers, paint shops, painters, roofers, household retail, etc, etc, ... is this industry part of the productive economy or not?

And rather than every economist trying to use State force to 'bust' it, why doesn't the State just get out of this sector, and let the market decide it? Whether they've set a tax regime to advance or retard the house construction sector, including via RMA and all the red tape bullshit, the only certainty is politicians have made a complete hash of it, as they always will. You can't beat the market sorting out the complex interrelationships of millions of individuals going about their pursuit of happiness.

I had wild boar bacon for breakfast this morning, bought from the Picton Farmers Market on Saturday morning, and yet in her latest 360 page food bill, Herr Wilkinson, laughingly from the major party that supports small government, is trying to shut these markets down, despite to my knowledge I've never died, nor know of any death, from buying fresh and glorious produce at Farmers Markets. Politicians and Statists: bugger them, we don't need them.

by Malarkey | 6th Dec 11, 8:49am 1323114581

"Forgetting the growing housing shortage..."

That's smoke-and-mirrors spruiker talk. There is no shortage, and there never was a shortage.

"...forgetting the growing rent rise because of a rental housing shortage..."

Any rent rises that have occurred are not the result of any shortgae, because there is no shortage.

"...forgetting the facts of reality..."

Yes, you property spruikers certainly do have a problem with facts and reality.

"can you please finally answer for me from a mainstream economist - Keynesian - perspective: is the house building industry, including builders, plumbers, electricians, carpenters, kitchen retailers and wholesalers, building supplies wholesalers and retailers, paint shops, painters, roofers, household retail, etc, etc, ... is this industry part of the productive economy or not?"

They are no better than the armies of suits within the higher echelons of banking and finance. Both have chewed the economy into a pulp.

by Mark Hubbard | 6th Dec 11, 8:55am 1323114928

Major Housing Shortage Looms.

Um?

by Mark Hubbard | 6th Dec 11, 8:57am 1323115032

Insurer predicts shortage will lead to higher house prices

Um?

by Mark Hubbard | 6th Dec 11, 9:00am 1323115233

Housing shortage of up to 40,000 houses by 2014.

Um?

by Mark Hubbard | 6th Dec 11, 9:02am 1323115356

And again, my point: no central planner can beat the market sorting out the complex interrelationships of millions of individuals going about their pursuit of happiness. That complex set of interrelationships IS the market.

Get the State out of this sector, and every other.

My proof: history.

by Gummy Bear Hero | 6th Dec 11, 11:13am 1323123213

A question , Mark ....... what is the capital value of the 65 000 or so houses , owned by the tax-payer , rented to the ne'er do wells ? ..... $ 20 billion , give or take ....... the perfect SOE to be floated onto the NZX , with the government retaining it's 51 % , and with a professional private administration running the business .......

..... and the tenants will have to pay market rents , as the rest of us do .......

[ Kate Wilkinson proves the " Peter Principle " , of people rising to / and beyond their level of incompetence , is alive within the National government ...... surprised ? .... Ha ! ]

by Mark Hubbard | 6th Dec 11, 12:27pm 1323127661

Possbility Gummy, though why not just sell the entire stock off? (Staggered of course).

by Gummy Bear Hero | 6th Dec 11, 1:13pm 1323130397

I agree , but look at the histrionics from some politicians and a large swathe of the public at National planning to float just 49 % of certain SOE's onto the NZX ....

.... we're gonna have to lead Kiwis back into the lightness of being free from Nanny state , with gentle baby steps.....

Poor lambs ..... 80 years of welfarism has entrenched feebleness in their milk-sop minds...

by bob | 6th Dec 11, 1:44pm 1323132271

Yes - and then if they bring in ringfencing for PAYE earners it won't affect the rental companies (who'll still be able to charge expenses against income) so they'll have a big advantage and be able to buy up all the rental housing stock so more stuff can be owned by fewer people.