Private sector set to help fund National's large-scale house building plans, Joyce says; Adams to announce policy in lead up to Budget; Migration may have peaked, but set to stay high as construction demand amps up

Private sector set to help fund National's large-scale house building plans, Joyce says; Adams to announce policy in lead up to Budget; Migration may have peaked, but set to stay high as construction demand amps up

By Alex Tarrant

Private sector funding looks set to help a future National-led government boost housing supply on Crown land that will then be sold off to the ‘affordable’ private market.

And there will “always” be an element of migrant labour required to top up the domestic workforce for these projects, and others, earmarked by the Government as infrastructure spending rises, Finance Minister Steven Joyce says.

He was speaking to media Thursday after announcing to the Wellington Chamber of Commerce that new government capital infrastructure spending over the next four Budgets will total $11 billion, up from $9bn projected previously.

Joyce said that while part of that increased spend would go towards state-led house building, the private sector was to play a part as well.

The Minister responsible, Amy Adams, will be making further announcements on funding levels between now and the 25 May Budget, Joyce said.

The Government was looking at ways to finance an increase in house building both on and off its balance sheet. The off-balance sheet portion would be via partnerships with local government and the private sector.

“One of the key things of the Government’s infrastructure spend is leveraging other people to be part of it as well,” Joyce said in response to questions on funding a house-building programme. “There’s no cast iron rule that says it all has to be paid for by taxpayers.”

See Alex Tarrant’s article from Sunday on how National is gearing up for a big housing announcement and that a key difference between its policy and Labour’s KiwiBuild initiative looks set to be around funding sources.

Labour: NZ tens of thousands of houses short

Labour Party finance spokesman Grant Robertson Friday morning told Radio NZ that housing was a key priority for increased government infrastructure spending. New Zealand's stock was tens of thousands of houses short of where it should be, he said.

“Labour’s KiwiBuild programme is about getting that going. That’s a couple of billion dollars of initial capital outlay that the current government’s not even interested in," Robertson said.

He attacked the National-led government for selling off Housing NZ stock while the social housing crises was deepening.

"Yes it’s a problem that’s built up over time, I absolutely accept that. But this government has to stand responsible for the fact that, in the face of a growing population, they simply have not invested the money that they should have," Robertson said.

"Now they’re beginning that process, it’s hard to mount much of a celebration about that," he said.

"What’s acutely happened in the last nine years is our population has grown significantly. Many people have been calling for big infrastructure spends and the government’s actually been going in the other direction."

Joyce: Workforce can handle it – with immigration

The increased infrastructure spend would enable New Zealand to cope with a growing population, Joyce said on Thursday.

Stats NZ figures this week showed a new record net migration inflow into the country at nearly 72,000 in the year to March. The numbers helped fuel a vicious political debate, with Labour leader Andrew Little earlier saying they needed to be cut by “tens of thousands”, and New Zealand First attacking NZ Herald journalists of Asian heritage over the paper’s reporting of the issue.

A key theme in the migration debate has been around how to control numbers while allowing for an inflow of construction workers to help the two main political parties’ promises to boost housing supply in Auckland by about 50,000 homes on Crown land over the next decade.

While both National and Labour point to the need for more locals to be drafted into the industry, there is an acceptance from both that migrant labour is required - particularly in the construction sector.

Joyce on Thursday admitted an issue facing the Government was whether there were enough workers to deliver the Government’s infrastructure and construction goals.

“I think that’s a challenge,” he said. “You need the people to do the building.”

New Zealand’s stronger employment market than Australia’s could help, he said.

“We already have the biggest construction workforce that we’ve ever had. But we are encouraging more and more people to enter the sector locally and I do think we’ll steadily attract more people back from Australia,” Joyce said.

Most of the required people will already be in New Zealand, he said. Government learnt from the experience of Christchurch that a lot of people came back into the construction workforce from other industries when demand was there.

“But there’s always an element of migration as part of it,” he said.

Inward migration to New Zealand was required “to make sure we’re able to fill the roles, and build the infrastructure and the buildings.”

‘It’s a good thing’

Asked whether the need for the new spending itself was created by immigration pressures, Joyce said the need was due to New Zealand having “a growing economy, which is an attractive place to work and live – much more attractive than historically when we used to have 30,000-odd people net leaving each year.”

“That has created the desire for growth. It’s a good thing. You don’t get projects like the Kapiti Expressway and the Western Ring Route unless you have the capacity to grow and pay for them,” he said.

Migration numbers may have peaked

Meanwhile, Joyce referenced economist predictions that net migration numbers may stay at current levels for some time, but not move higher. He suggested the composition of the numbers might change due to government policy tweaks last week, and as more construction workers entered the country.

“It’s predicted that [headline figure] will come back a bit. I think we are at the peak at the moment. But it’s going to stay around this number for a while yet because we have this big demand,” Joyce said.

“We’ve got companies like software companies, like infrastructure companies, like all these regional places that just can’t get enough staff, and have low levels of unemployment – throughout the whole of South Island for example.

“You have a choice: You either say ‘oh well these companies can’t grow’ or actually, ‘we are prepared to bring in some skilled migrants’.”

Labour: Migrant workers needed, but you must train locals

Robertson on Radio NZ Friday acknowledged the need for migration settings to allow for workers to be brought in to the country to help deal with pressures of increased infrastructure spending on the construction industry.

"Infrastructure’s a long term investment. So this will have to happen…over many decades," he said. "No doubt there will need to be some workers brought in to help do this work initially. But the programme has to be to train New Zealanders as well and that also has not happened sufficiently.

"Work needs to be done, but there are 140,000 unemployed New Zealanders at the moment. We need to be doing a lot more to support them to be trained, to be part of this work," Robertson said.

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?

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14
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Private sector interest also is in making right noise to support national being election year.

Why now. Smells.......

22
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My number one reason for wanting them gone is to try and prevent the corruption they've fostered from becoming even further entrenched.

10
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Many reason for them to go (Must admit that have voted national in last 3 election) but to err is human.

Be very careful, you may throw the baby out with the bathwater. The facts are on some issues National have been behind the ball but considering the challenges of the last decade have done this country very well. If all those crying for a change in government take a careful and objective look at the alternative they would realise that a government made up of Labour, Greens and Winston Peters will be impotent. There election manifestos are hardly worth the paper they are written on unless they can demonstrate how they are going to get agreement on these issues with their coalition partners. Ask yourself if you honestly believe an alternative government would have done better on every issue. Remember National got handed a basket case budget by a Labour government who had remained in power by unfunded handouts to all and sundry. And finally if you trust Winston Peters.................???? You have a short memory.

13
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What new policies exactly have the current government implemented which has been of benefit? Can you provide a list so I can understand where you are coming from?

I cannot think of many. The only ones which come to mind are when they have had their will broken by voters and have done half measures to get out of the spotlight - eg. zero hours contracts softening (still legal btw), immigration tweaks, enquiry after enquiry "proving" nothing needs to be done which affects big buisiness or the government doing what they want.

Rebuilding ChCh does not count as any government would have done much the same there.

Guiding through the GFC doesn't count. That is not a policy they implemented. Let me know exactly how they did that, and what was so clever that no other government would have ever thought of doing. It seems to me like we have just deferred our hard times by cranking up housing debt and pumping the country full of immigrants.

And finally if you trust Bill English.....?? I have some accommodation supplements you can double dip.

11
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Dazz will "look into" your request - might take some time

Well JK certainly put us on the world map with the pony tail pulling and Smitty was always good for a laugh.
There was also talk of a National bike trail ........

Shame though about gutting the Cullen fund and Kiwisaver plus the massive run up in debt following the prudent Labour years. Selling the family silver wasn't a real sharp idea either.

Well Labour and the greens sabotaged the asset sales anyway by saying they would re-nationalise the power cos. They owe the citizens of this country millions of dollars for that.
Honestly - do you ever think about why the debt was increasing? Please enlighten us with your profound hindsight-aided insights into how you would have managed the financial crisis without increasing debt!

Well the big three for me are tax reform, social welfare investment policy and infrastructure.

Back to you The Joneses with how you feel Labour/Greens/Winston First would have better handled CHCH/GFC please. Ask the 54,000 Christchurch employees who benefited from the wage subsidies. Ask the red zoned property owners who received top 2007 valued buyouts on their homes.

Keep in mind before the earthquakes treasury had forecast 10 years of deficit based on historical spending. Yes we had 14 years of surpluses prior to GFC but with some disciplined spending they could have been higher. Rampant inflation caused in part by hiring multitudes of public servents at higher rates than the private sector thereby transferring productive employees away from industry. Yes we had to compete at the same time as paying high interest rates due to fiscal policy which was too stimulatory. Oh as well as paying an extra weeks annual leave, compulsory kiwiwsaver contributions, days in lue for public holidays worked, adult pay rates for 16 and 17 year olds etc.

Finally..... with your ideal scenario of earthquake, GFC fixing done, would you have done that with a lower deficit than National govt achieved prior to bring the books back into surplus before forecast?

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Gliding through the GFC is all due to Labours 'basketcase' budgets paying down debt. If national had been in charge with endless taxcut induced deficits, we would have had much less room to sit back and let the automatic stabilisers do their work.

I agree - National are somehow heralded as brilliant stewards of the economy, but it's just not true. Look what they did to the Cullen fund, suspended payments in 2009. What was the strategy there? buy-high, sell-low. Amateurs! Just think of the opportunity cost from that poor decision.

Labour lost all credibility when Cullen decided to buy a dud (KiwiRail) out of spite to ensure there was no surplus left for National to spend.

Settle down,
Do you honestly believe any NZTA project has been worth the money , The road to nowhere, transmission gulley, puhoi-warkworth,auckland spaghetti junction and the death highway southern motorway, the tauranga ring road., the waikato road to hell,...pathetic.
Toll were laughing as they ruined NZ.
Our rail system is the only system we have left.

Nice piece Dazz
I voted for the Key govt twice but Labour the last time because the Key government had not provided
a strategic plan for NZ in 6 years
All those promises from the Nats that John Key was a great businessman were proved pretty hopeless.
John Key did organize a loan for the ASB bank after the GFC but that was the spin we were told
I cannot say ChCh was handled well at all ! The whole process of inspections was frankly ridiculous with unqualified people being employed and the government EQC extremely understaffed and slow.
This continued for years with little done to improve the sad situation
Leaky homes was also kicked to touch. Another sad situation where a manufacturing giant has been let off the hook. In my city their wall cladding is banned ! Yes the same material used on NZ homes even today !
National & ACT forced the Auckland Super City onto us all which ended up with workers sacked and contracts
for city maintenance went to the private sector like one Australian company that would clear the drains. Service times took longer ! The city had none of their own workers anymore to clear the drains if requested.
The paper work increased ! The costs increased !
I could say a lot more about what Nationalhave failed o do as a 9 year long government but it would end up a 10 chapter book.
So please do not vote for Bill English because as bad as the others are National is hollow & empty of ideas

But what is the alternative, the crowd that have been running the Super City, the Lab/Grn coalition? Give us a break. The Super city was poorly set up and yet for all that Lab/Grn have been running it for 7.5 years and all they have done is make everything worse. They promised a compact city and we are sprawling from Wellsford to Pukekohe. They promised an environmentally friendly city with intensification and delivered sprawl. They promised affordability and set about creating the greatest property bubble in NZ by shorting land supply.

They are utter crap. So please don't vote for Andrew Little either.

The choices are Winston, United, Maori, Mana or Morgan.

Vote anyone but national. 9 year is too long time for national.

I was wondering who was going to pay for this

I actually laughed as I read this.

"Private sector funding looks set to help a future National-led government boost housing supply on Crown land that will then be sold off to the ‘affordable’ private market."

The apostrophes around 'affordable' nail it. Sums it up nicely Alex.

12
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National sell land to private builder and than they make house and sell :)
Will that be affordable ?

If want to make it affordable - sell the land directly to FHB at very low price to make it affordable.

Good point,
Government will subdivide and sell sections direct Im sure...
Then put a transportable on it and bobs you uncle.
One of the near neighbours did that, seems to be going well.

Updated with comments from Labour there now.

Cheers

Oh dear another immigration debate.

While both National and Labour point to the need for more locals to be drafted into the industry, there is an acceptance from both that migrant labour is required - particularly in the construction sector.

That is total BS. Australian cities build 4x as many homes whilst having much higher labour costs than Auckland. The reason we are crap at building has nothing to do with labour costs or most levels of demand.

Auckland is saddled with land costs that are almost as high as Sydney on average, it is therefore uneconomic to build here at any level of migration. Cutting it or flooding the gates open doesn't make the slightest bit of difference.

Phil Goff is the only person who could solve the housing crisis, by opening up land to Auckland City. Of course he won't, but that is the point. Phil Goff is instead committed to growing epic levels of car only sprawls miles away from Auckland, he is not going to do anything useful.

You seem to be saying Phil Goff/Auckland Council could be opening up centrally located land for housing. Where is this land and what's on it now? Or are you talking about increasing density ie through more apartments?

They want the lot
Most of these cries are from imports (migrants that is) .. they want ALL the golf courses and Auckland Domain, Albert Park, Bastion Point, and Alexander Park and Ellerslie and Avondale race courses

Ardmore, Swanson, Albany offer the opportunity of contiguous suburban development to create lower Auckland land costs. This land is currently lifestyle blocks trading at a fraction of residential land costs. Lower land costs will impact positively on the economic viability of building within the city.

The CBD has been zoned for apartments for the last 20 years and could sustain another 15,000 apartment builds within current zoning. For the first 10 years Auckland had reasonable land costs and built lots of apartments. Then Auckland jumped the price of land upwards and has spent a decade building apartments at 1/3 or so as fast as before.

Renegotiating the area zoned for apartments in Auckland is a deck chair arranging exercise, after we have crashed into the iceberg of structured high land costs.

I think Kumeu, Huapai and Riverhead recent developments were all on either lifestyle blocks or farmland. The subdivided sections were all in excess of $450,000 for 5-600 sq m and completed houses there now are well over the million dollar mark. So there seems more to it than just opening up '000s hectares of land for development. If the land is cheaper farther out, someone is making a killing!

You see the green bit you had to pass through to get from the City to Kumeu/Huapai/Riverhead? Lots of countryside exists between Westgate and all of those places we are allowed to build on. That land has comparatively very low land values.

Some people are indeed making a exploitative killing profiting off the housing crisis, but Phil Goff can stop that. If Phil Goff opens up all of the inexpensive land between Auckland City and the big new exurban sprawls, then the people who have cornered the current restricted market will be faced with real competition.

And Auckland wouldn't have to spend so much on infrastructure, because the distance to new housing will be much smaller.

And Auckland's environment will be better off, because our commutes will be shorter.

And there would be less sprawl.

So of course it won't happen.

Nobody forget the building supplier duopoly in NZ
The difference in prices between NZ & Nth America is colossal
A tube of builders/ plumbers silicone rubber is 400% higher and timber is a complete local racket.
You would never know by the exorbitant price of NZ timber that NZ has one of the best climates for growing trees !
Thanks National for keeping your business mates in exorbitant profits at new home buyers expense

Close is a relative term. Phil Goff prefers to open up areas of land far removed from the city - Pukekohe, West Kumeu, Orewa, Warkworth, Wellsford. The sum of the new sprawl areas of Phil Goff is larger by historical measure than we have ever had in Auckland.

“There’s no cast iron rule that says it all has to be paid for by taxpayers.”

It's public land so we are paying for it in some form or another!

We will be effectively selling public land at a 60% discount under nominal Auckland land values, to make it almost viable to build affordable housing.

Of course Phil Goff could open up some of the 1000s of hectares of land immediately adjacent to Auckland City which have costs of less than 20% of nominal Auckland land values and solve the same problem overnight. Obviously Phil Goff will not do anything useful like that. Phil Goff will instead continue with 2000s of hectares of land miles away from Auckland for double the cost and half the value. Because that is how Auckland planning works.

Im living in a subdivision watching houses built.
Most bring in prebuilt framing and trusses but that apart there are two people working most days and an owner told me the expected duration was about 12 weeks not allowing for weather.
That means two builders can build four houses a year, if it doesnt rain and all goes well.
Well, we need12,000 builders to build 24000 houses a year.
Experience, a year in a polytechnic course?
There are subtrades of course, plumbers, electricians, earthworks, but they seem to whip through the work.
Whats the problem?

ahh how backward are we the germans can build a house in days, all pre manufactured in the factory, lights etc the works

https://www.huf-haus.com/en.html

Quick, but not cheap.

They can but only half of them are built that way, and the population is 81 million

Hmmmm

Does anyone else feel that the government is acting unlawfully by cutting regulations and developing their land for major housing. Why did we all have to suffer through years with redtape and over burden for every new subdivision applied?
It seems unfair government is able to bypass all the sht we had to endure through for so many years. Let see there major housing plan take shape with all the regulations and redtape us commonfolk endured.

I dont get this.

We build more houses because we have to many people for the amount of houses we have, but we let in more people to build the houses. These people have families. My maths is not that great but wont we need more houses then.

Why dont we reduce the people coming in considerably. Build houses for what we have, take a deep breath and see where we are.

NZ has a low wage economy, dont we want a highly intellectual economy where we can make technological and internet based companies that are scalable globally that can employ people on good salaries. It seems as if we want to go backwards. We need more companies like Xero, not NZ companies that fleece NZers.

Swapg I have said it before so forgive me if you have heard it already but National's whole economic policy is based on the Ponzi scheme of immigrants building houses for immigrants who were building houses for immigrants who were build...
Like all good Ponzis it looks good for a while but the further it goes the bigger the mess when it unravels.
Fix immigration down to proper levels, kill all the low skilled entries and the student scams and housing might just have a chance.

Stephen Joyce is a brilliant, highly competent chap but he has obviously been drinking the water at the beehive:
"We have too many people so we need more people to build expensive houses for them".
"We have too many low paid jobs so we need more cheap migrants to fill them"
"We import too much capital so we need more people"
"Kiwis don't save enough so we need more low paying jobs"

I just can't bring myself to vote for the Little Green Winston Party, but come on National, get it together, please.

Sharon Smyth of BLOOMBERGS posted this article , and its a must read :-

" U.K.'s Landlord Levy Raises $1.3 Billion More Than Expected"

Its stopped speculators in their tracks and prices fell by 6%