Kitset Solutions: Imagine Housing The Homeless For $15,000 Per Unit.

Commie Kitsets: By negotiating a deal with the Chinese, whereby cheap kitset homes are shipped to New Zealand at a fraction of the cost of building a similar house here, the social and economic problems attributable to the lack of low-cost housing could be tackled head-on.

A MATE OF MINE sent me an e-mail. “I guess no one told Phil Twyford about Ali Baba.” I followed the link to an advertisement for kitset homes manufactured in China. You could have one of these: completely broken down and shipped to your nearest port in a container; for approximately $NZ15,000.

The quality of the home I cannot vouch for, but that really isn’t the point, is it? If this Government had possessed the courage to, just once, think outside the square, then by now the housing crisis would be over. By negotiating a deal with the Chinese, whereby cheap kitset homes were shipped to New Zealand at a fraction of the cost of building a similar house here, the social and economic problems attributable to the lack of low-cost housing could have been tackled head-on.

The potential problems associated with the quality of these kitset homes could easily have been addressed at a government-to-government level. Given the enormous pay-off for Beijing, the durability and weatherproofness of such dwellings could be guaranteed. With the state supplying the land and installing the necessary infrastructure, whole towns could have sprung up out of the ground with astonishing speed – as they once did in the days when New Zealand still possessed a Ministry of Works.

Just think of the economic and social impact of being able to supply a warm, dry, and healthy home for every family in need of one. The satisfaction of this need would, obviously, have reduced property speculation dramatically and kept private-sector rents low. In response, investment would have been re-directed away from real estate and into more productive areas of the economy.

Welcome as these effects might be, they would pale into insignificance when compared to the improvement universal housing would bring to New Zealand’s rapidly declining social indicators.

The educational performance of New Zealand’s poorest children would improve rapidly once their parents were safely and securely housed. Nothing retards a child’s educational attainment like being forced to move frequently from house to house and school to school. The elimination of serious overcrowding would also eliminate a broad range of the physical and mental health problems generated by too many people living in too little space. Domestic violence, too, would reduce dramatically.

Solving the housing crisis would reveal to every New Zealander just how many of the country’s other problems are the direct result of widespread homelessness and unrelenting housing insecurity.

The problem, of course, is that even if this government’s first housing minister, Phil Twyford, had been made aware of the capacity of the Chinese construction industry to meet the demand for cheap public housing, he would have been confronted immediately with a whole host of obstacles.

Obviously, New Zealand’s domestic construction industry would have screamed blue-bloody-murder at the price-depressing effects of such formidable foreign competition. The seriously disrupted relationship between local government, land-bankers and builders would, similarly, have provoked loud protests. The most ear-splitting shrieks, however, would have come from landlords. Overnight, their business model would have collapsed – along with their ability to ruthlessly immiserate their tenants by constantly ratcheting-up rents.

Owning multiple properties would no longer make commercial sense. Thousands of former rental properties would thus be put up for sale in what would very soon become a buyers’ market. What had been a crippling shortage of affordable housing would suddenly become a glut. Prices would tumble, and the dream of home-ownership for middle-class thirty-somethings would be realised.

As this cascade of consequences descended upon the New Zealand economy, homeowners would watch with mounting horror as the putative value of their houses declined precipitously. The powerful sense of well-being engendered by the seemingly unstoppable rise of house prices, sweetened by the prospect of pocketing hundreds-of-thousands of dollars in tax-free capital gains when they eventually sold-up and moved to the provinces, would evaporate in a red mist of anger and resentment.

Exposed, in all its ugly reality, would be the naked class interests bound up in the maintenance of the housing crisis. By freeing the working-poor and beneficiaries from the misery of housing insecurity and homelessness, the Deus ex machina of cheap Chinese kitset homes, purchased with cheap Chinese credit, would have produced a profound re-ordering of class relations. The 60 percent of New Zealanders who had been on the winning side of the housing crisis would not have been best pleased.

To strategic onlookers located in Washington, London and Canberra, such a sudden reversal of class fortunes, especially one made possible by the shrewd intervention of Beijing, would’ve been utterly unacceptable. As disturbing to our “allies” as it was to those on the deal’s domestic downside.

The very idea of the New Zealand working-class clasping with relief and gratitude the helping hand offered to them by a courageous Labour Government, and its Chinese Communist partners, would give New Zealand’s Five Eyes partners the screaming heebie-jeebies. In the time it takes to “make the economy scream”, Jacinda Ardern would’ve found herself walking the same path as Salvador Allende.

The problem is not that New Zealand’s housing crisis cannot be fixed, but that it is not in the unequivocal material interest of enough New Zealanders to allow it to be fixed – not even at Ali Baba’s knock-down price of $15,000 per unit.

This essay was originally posted on The Daily Blog of Thursday, 3 February 2022.

KiwiBuild Should Be Targeting The Poor.

Lotto - Oops, I Mean KiwiBuild Ballot - Winners: Derryn Jayne and Fletcher Ross pose with Phil Twyford and Jacinda Ardern outside their new KiwiBuild property in Papakura. Twyford is willing to buy Labour’s promised houses straight off the property developers’ plans. At a stroke, bad financial bets are transformed into sure things. Phil’s happy. The developers are happy. The banks are happy. And the winners of KiwiBuild ballots are over the moon.

KIWIBUILD, Labour’s flagship housing policy promising first-home-buyers 100,000 affordable dwellings by 2028, is a dog. It started out as a political fix and has yet to mature into coherent policy. Nowhere are Labour’s ambitions for KiwiBuild matched by the resources needed to fulfil them. Worst of all, the people most in need of 100,000 extra dwellings – beneficiaries and the working poor – are not the scheme’s targets. KiwiBuild is a perverse mixture of corporate and middle-class welfare, offering a handsome subsidy to builders and a generous hand-up to young professionals.

KiwiBuild began its life as David Shearer’s answer to David Cunliffe. In November of 2012, convinced that the Labour Left was plotting to replace him, Shearer was casting about desperately for a political circuit-breaker. He needed something that would halt the ambitious Cunliffe in his tracks and reassure the party’s rank-and-file that he was a Labour man through-and-through. KiwiBuild was that something. His announcement that the next Labour government would build 100,000 affordable homes for young New Zealanders brought Labour’s 2012 annual conference to its feet. In the warm glow of the membership’s support, an emboldened Shearer banished Cunliffe to the back-benches.

Having served its purpose, KiwiBuild was filed and forgotten. The necessary detailed development work on how it would be implemented, by whom, and at what cost, never progressed much beyond the hurried sketch vouchsafed to conference delegates and the news media six years ago. The consequences of Labour’s failure to fill in the gaps are now embarrassingly clear.

A Labour Party with stronger connections to the world beyond Parliament would have identified much sooner the practical limitations of KiwiBuild. The people and the products required to build 10,000 dwellings every year for 10 years simply aren’t out there. New Zealand’s construction industry remains chronically short of labour. The private sector will struggle to meet its own deadlines – let alone the government’s.

Unlike the First Labour Government, Jacinda Ardern’s coalition is attempting to build thousands of additional new dwellings with a construction industry at full-stretch. John A. (Jack) Lee, the man who oversaw Labour’s massive state-house-building programme between 1935-1938 could summon thousands of unemployed carpenters, tilers, plumbers, electricians and other construction workers to the cause of housing the people. Idle factories could be reactivated to supply the required building materials. This is what made “The Houses That Jack Built” possible. The absence of such vital enabling factors explains the houses that Phil Twyford cannot build in 2018.

Six years ago, when KiwiBuild was born, the full extent of the housing crisis had yet to emerge. Back then, affordability was the issue. The near impossibility of young professionals getting their feet on the first rungs of the housing ladder. Fortuitously, these same young professionals just happened to be the Shearer-led Labour Party’s prime electoral targets. First and foremost, KiwiBuild was a political “solution” to a middle-class “problem”.

Six years on, and the focus has shifted to beneficiaries and the working-poor sleeping in their cars or shivering in the overcrowded garages of family and friends. Voters for Jacinda’s transformational “politics of kindness” they may be, but they’ve not been deemed worthy of 10,000 houses per year. For these, the working-class people in whose name Jack Lee built the “social housing” of 80 years ago, 6,000 new state houses, in total, is considered adequate.

The irony is that, at an estimated price of $650,000, KiwiBuild’s “affordable homes” are rapidly moving beyond the reach of all but the luckiest of middle-class offspring. Those to whom the Bank of Mum and Dad still happily provides a deposit. Those for whom the wills of Mum and Dad hold out the prospect of eventual relief.

Undeterred, the Housing Minister presses on. Treasury may have revised downwards its projection of the scheme’s contribution to residential investment – but what do those “kids” know? Twyford is willing to buy Labour’s promised houses straight off the property developers’ plans. At a stroke, bad financial bets are transformed into sure things. Phil’s happy. The developers are happy. The banks are happy. And the winners of KiwiBuild ballots are over the moon.

About the only people who aren’t happy are those who believe that publicly funded social interventions on the scale of KiwiBuild should be directed first to those most in need. Tragically, however, the Coalition Government is selling the poor a pup.

This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 2 November 2018.

Killing Them Softly: Labour’s Caution Is Proving Fatal To NZ First.

Happier Times: Seven months into the Ardern-led government's first term, it is clear that Winston Peters' assumption that Jacinda and the Labour Party were one and the same was profoundly mistaken. Peters was right in thinking that without her even the possibility of change would be non-existent. Where he erred was in thinking that Labour’s willingness to be guided by the person who had brought power within its grasp was anything like as great as NZ First’s.

WINSTON PETERS had better have something up his sleeve – preferably an ace – or things are going to get messy. Reviewing the latest poll from Newshub/Reid Research, the thought must surely have crossed the NZ First leader’s mind: “Did Jacinda play me?” Because, it is almost impossible to imagine a politician as experienced as Peters agreeing to install such a potentially unstable combination as the Labour-NZF-Green government without first being convinced that Jacinda was genuinely committed to New Zealand’s economic and social transformation.

Seven months into the Ardern-led government, however, it must be clear that his assumption that Jacinda and the Labour Party were one and the same was profoundly mistaken. Peters was right in thinking that without her even the possibility of change would be non-existent. Where he erred was in thinking that Labour’s willingness to be guided by the person who had brought power within its grasp was anything like as great as NZ First’s. Jacinda may have rescued Labour from a crushing (perhaps fatal) defeat but that didn’t mean she was the boss – not by a long chalk.

Since Helen Clark’s departure in 2008 the Labour Party has come to resemble the Scotland of the 1500s. Nominally an absolute monarchy, England’s northern neighbour had singularly failed to produce a dynasty to match the all-powerful Tudors. Scotland had thus become a rancorous and fractious realm in which the monarch wasn’t even primus inter pares (first among equals) but the plaything of its most powerful noble families.

Over the past nine-and-a-half years Labour’s parliamentary caucus has steadily fallen under the sway of a handful of ambitious MPs, without whose backing none of its leaders have been able to operate effectively. The most powerful of these MPs, Grant Robertson and Phil Twyford, have become (not coincidentally) the crucial arbiters of what is – and is not – going to happen in the Labour-NZF-Green government. If Peters had anticipated calling the shots alongside Ardern, then he must be feeling tremendously frustrated.

Certainly, Peters was able to secure a considerable sum for his own foreign ministry and a billion-dollar regional investment fund with which his most likely successor, Shane Jones, can top-dress the provinces. But, the Deputy Prime Minister is not blind, he must see that it is these two men, Robertson and Twyford, who will make or break the government he and Ardern caused to be formed.

What Peters needed, and what Ardern showed every sign of wanting to form, was a government dedicated to making big changes. Nothing less could hope to deliver the “transformation” promised by the Prime Minister. Her “politics of kindness” would require a revolution – of sorts.

The 2.4 percent level of electoral support to which NZ First has fallen is a reflection of just how far the government put in place by Peters has fallen short of its followers’ expectations. Only now, on the eve of becoming NZ’s acting prime minister, is it becoming clear to Peters that “Jacinda” is a politician with two faces. The first is the face New Zealanders thrill to: hopeful, open, empathic. The second is the face she wears in Labour’s caucus: shrewd, cautious, realistic. Peters is realising, too late, that it is this all-important second face that Ardern will, on no account, set against her two overmighty subjects: Robertson and Twyford.

What Peters needed from Labour were revolutionaries. What he got, in the seats of power that truly mattered, were two uninspiring tinkerers with the status quo. Last October, Peters and NZ First were confident that what they were hearing from Jacinda and her colleagues were the uplifting harmonies of kindness and transformational change. Seven months on, it’s clear that whatever kind of music is killing them softly – it isn’t the Hallelujah Song.

This essay was originally posted on The Daily Blog of Tuesday, 29 May 2018.

“The Data Is Simply Not Available, Minister.”

SIR HUMPHREY APPLEBY: "Yes Minister, promising to build 500,000 affordable homes would be a very courageous policy, indeed!"

IS LABOUR getting Sir-Humphreyfied on housing? For younger readers, Sir Humphrey Appleby is one of the leading protagonists in Antony Jay’s and Jonathan Lynn’s incomparable 1980s television satire “Yes Minister”. So compelling was the Sir Humphrey character (played to perfection by the late Nigel Hawthorne) that his name quickly became synonymous with the obfuscating, prevaricating, manipulative and often downright misleading senior civil servant who steers his ministerial master away from his better instincts towards the maintenance of the bureaucratic and political status quo.

Dr Chris Harris, a specialist in urban design and planning, raised the Sir Humphrey question with me after a careful reading of “Stocktake of New Zealand’s Housing”, the study authored by Alan Johnson of the Salvation Army, Otago Public Health Professor Philippa Howden-Chapman and economist Shamubeel Eaqub, which was released by the Housing Minister, Phil Twyford, on Monday afternoon.

One figure, in particular, caught his attention. This was Figure 3.4 “New Dwellings Consented, By Owner Type, 1970-2017” (see below). It’s most notable feature, explained Dr Harris, was the extraordinary spike in new dwelling consents which followed the election of the Third Labour Government, led by Norman Kirk, in 1972.

The graph shows consents flat-lining at around 23,000 per year in 1970, 1971 and 1972. Between the end of 1972 and the beginning of 1974, however, the number of dwelling consents shot up to an astonishing 39,000.

The first and most obvious question that springs to mind is: “How on earth did the Kirk Government do it?” Finding the answer to that question would, surely, be of considerable assistance to Minister Twyford as he sets about tackling New Zealand’s appalling shortage of affordable housing?

Presumably, the same thought occurred to the “Stocktake” authors. What was their conclusion? That’s when Dr Harris’s eye fell upon the concluding sentences of the paragraph printed immediately below Figure 3.4:

“While current levels of new house building compare favourably with the low levels of construction seen immediately after the global financial crisis, during the period 2009 to 2011, these current volumes are not historically exceptional particularly compared with the early 1970s. However, data on government involvement in the 70s boom is not available.”

Get that? Information on the way in which the Kirk Government managed to nearly double the number of houses being consented “is not available”. (My emphasis.)

In his e-mail alerting me to this extraordinary omission, Dr Harris writes:

“Note the last sentence! In fact, you can find out quite a lot from consulting the on-line NZ Official Yearbooks of the time. State Advances credit, available for actual housing construction but not speculation since 1919, was increased. And on top of that there was as yet no Accommodation Supplement to fritter away government housing money, so that it very much went on actual building. There was also a shift from building large stand-alone houses on the city fringe to building lots and lots of small and affordable flats in more urban locations, which is where the real shortage was, and had long been. And this was all directed from the top by Big Norm.

“Norman Kirk re-founded the old-time Ministry of Works as the Ministry of Works and Development in 1973, and founded the Housing Corporation in 1974, also to try and get more houses and flats built. It turned out that urban flats proved easiest and quicker to build once central government weighed-in to overcome the usual obstacles. This was a really important part of the recipe for getting runs on the board quickly. Our cities are still full of flats built in the 1970s – the standards were higher than in later decades. Mass-produced hollow concrete blocks, suitably reinforced, were the building material of choice. Concrete block walls signify a 1970s flat in the same way that a tiled roof is typical of a 1940s state house. 

“Big Norm's policy of pulling out as many stops as possible and focusing on flats really did work surprisingly quickly and the proof is in the consent graph. Our population back then was only a bit over three million, so the graph actually understates the success of the policies of the 1972-1975 Labour Government.

“Actual builds are always a bit less than consents granted. In the early 1970s the peak rate for actual housing construction was 34,300 units built in one year. This roughly equates to 50,000 a year today, if not more, and that nice round number might explain why Shamubeel Eaqub challenged the government to see to it that 500,000 housing units are built in ten years.

“Interestingly enough, few of the houses built under Kirk's administration were state houses. To get things moving quickly, the policy was very much one of collaboration with commercial builders and developers, who were offered guarantees to go and work flat out building small affordable units without worrying too much where the money was coming from, or whether the consent was going to be approved.”

Dr Harris goes on to observe:

“You have to wonder whether there is some kind of an embargo on the level of government activism that led to such a boost in housing production in the early 1970s. It's like an episode of Yes Minister in which the bureaucrats have hidden all the relevant files and the politicians don’t notice that they’re missing straight away. Adding to suspicion of a stitch up by a business-as-usual brigade is the fact that the word ‘credit’ does not appear in the report and there is only spotty and empirical reference to ‘finance’. So, no need to frighten the banks in other words. There also doesn't seem to be any mention of the really important part played by central government institutions in making things happen more effectively and in a streamlined way back in the past: institutions such as the State Advances Corporation, the MWD – which the Rogernomes abolished in 1988 while dialling-back state construction lending at the same time – and the Housing Corporation. The Housing Corporation is still with us of course, but only in a feeble and gutted sort of a way.”

Here, perhaps, is the explanation for Shamubeel Eaqub’s extraordinary forthrightness during Monday’s media conference in the Beehive Theatrette. With barely concealed frustration at what he clearly regards as the new government’s half-hearted housing effort, he urged the governing parties to break free of the fiscal “straightjacket” in which they are currently restrained by Finance Minister Grant Robertson’s Budget Responsibility Rules.

The last thing the “Sir Humphrey’s” at the top of our own civil service want, deeply imbued as they are with the neoliberal economic orthodoxy which has guided New Zealand public policy for more than 30 years, is for “their” ministers to begin searching back through the historical record to discover how, forty years ago, a newly-elected Labour Government responded to the needs of its people by – of all things – fulfilling them.

This essay was originally posted on The Daily Blog of Saturday, 17 February 2018.

Taking Stock: Is the Government Doing Enough to End the Housing Crisis?

A Fading Dream: “The past 25 years have seen the gradual demise of the so-called Kiwi Dream – a place where home ownership and the economic independence which this offers, was within reach of most working families. Home ownership rates have fallen to a 60-year low and could fall further. These falls have been alongside rapid house price inflation in many parts of New Zealand and, with this, deteriorating affordability. We are quickly becoming a society divided by the ownership of housing and its related wealth and recent housing and tax policy settings appear to have exacerbated this division.” - Stocktake of New Zealand's Housing, 12 February 2018.

THE FULL MAGNITUDE of the housing crisis confronting the new government stands revealed in its Stocktake of New Zealand’s Housing. Released this morning, the document paints a far worse picture of the situation than even the parties now in government presented to voters from the opposition benches.

In the words of the three authors of the stocktake, Alan Johnson of the Salvation Army, Otago Public Health Professor Philippa Howden-Chapman and economist Shamubeel Eaqub:

“The past 25 years have seen the gradual demise of the so-called Kiwi Dream – a place where home ownership and the economic independence which this offers, was within reach of most working families. Home ownership rates have fallen to a 60-year low and could fall further. These falls have been alongside rapid house price inflation in many parts of New Zealand and, with this, deteriorating affordability. We are quickly becoming a society divided by the ownership of housing and its related wealth and recent housing and tax policy settings appear to have exacerbated this division.”

The policies advanced by the Labour-NZF-Green government in response to New Zealand’s housing crisis – most particularly Labour’s KiwiBuild initiative – no longer impress informed observers as either bold or comprehensive enough to bring about a speedy resolution of the crisis. On the contrary, they seem doomed to fail: there being neither the material, nor the human, resources required to make them succeed.

One has only to look back at the first great wave of state-initiated and funded house construction to appreciate the full scale of the difficulties confronting the new government.

Between 1936 and 1949 the first Labour government was responsible for the construction of 30,000 state houses. In other words, over a period of 13 years, the Department of Housing Construction and its private sector contractors were able to build fewer than a third of the number of dwellings which the present government has promised to build in ten!

What’s more, those 30,000 state houses were built at a time when the New Zealand economy was awash with unemployed labour and underutilised resources impatient to be set to work. Labour’s state housing programme was the New Zealand equivalent of US President Franklin Roosevelt’s “New Deal”: a massive public works programme designed to both enhance the nation’s quality of life and provide steady and well-paid employment for its people.

One of the ways the First Labour Government accomplished these goals was by mandating the use of local materials in state house construction. This decision gave an immediate and massive boost to all those businesses ancillary to the construction industry. To help the private sector keep pace with the state-induced demand, the Department of Housing Construction established two publicly-owned factories dedicated to producing the standardised joinery used in state house interiors.

The present government’s chief promoter of the CPTPP, David Parker, might pause to consider that such a policy of buying and using only Kiwi-made and sourced materials is expressly forbidden in practically all of the free-trade agreements New Zealand has signed since 1984 – including the CPTPP.

The state housing programme of 1936-1949 involved an unprecedented mobilisation of New Zealand’s human and material resources to construct a total of 30,000 dwellings. Even allowing for the fact that New Zealand’s population has more than doubled in size, how likely is it that Labour’s Phil Twyford is going to out-build Jack Lee’s Department of Housing Construction by a factor of 3 – in just 10 years?

Is it even remotely feasible that: from a tight labour market already suffering serious skill shortages; and from a construction sector already running at full-tilt; this government will be able to elicit an average of 10,000 additional houses per year?

Because, just to be clear, that total of 30,000 state houses constructed between 1936 and 1949 was over-and-above the normal total of dwellings commissioned and constructed by and for private companies and individuals. It is not yet clear whether Twyford’s promise of 100,000 “affordable homes” between 2017 and 2027 is on-top-of, or included-in, the output of private house construction.

It is important to remind ourselves at this point that Twyford’s “affordable” KiwiBuild homes are expected to sell for between $500,000 and $600,000 – a price completely beyond the reach of the tens-of-thousands of New Zealanders who possess neither a home of their own, nor a secure tenancy in somebody else’s.

For these: the working-poor on rock-bottom wages; Kiwis struggling to survive on a benefit; and, increasingly, for pensioners without a freehold home of their own; the Labour-NZF-Green government is promising to build just 1,000 state houses a year.

With the findings from the Stocktake of New Zealand’s Housing in their hands. With their heads chock-full of data showing how desperate New Zealand’s housing situation has become, Mr Twyford and his colleagues are proposing to build 1,307 fewer state houses than Jack Lee and the First Labour Government managed to build in a little country laid flat by the greatest depression in human history – eighty years ago.

This essay was posted simultaneously on Bowalley Road and The Daily Blog of Tuesday, 13 February 2018.

Vision And Creation – Or Fiscal Restraint?

Fatal Obsession: It was Gough Whitlams' Minister for Minerals and Energy, Rex Connor, whose lifelong dream of "buying back the farm" (nationalising Australia's mineral and energy resources) led him into the coils of an American-inspired conspiracy featuring the shady Pakistani banker, Tirath Khemlani, that precipitated the infamous dismissal of his Labor government on 11 November 1975. Every reforming Labour government should have Connor's name tattooed over its heart - as a warning.

THERE’S ONE NAME that should be tattooed over the heart of every Labour Party politician: Rex Connor. It was Connor’s determination to “buy back the farm” – i.e. deliver Australia’s mineral wealth into public ownership – that set in motion the sequence of events which persuaded the Australian Governor-General, Sir John Kerr, to dismiss Gough Whitlam’s Labor government on 11 November 1975. The lesson for all subsequent Labor (and Labour) governments was clear: never let the policy commitments of a single minister deepen to the point where they drag an entire government down to defeat.

Connor was an old-time Labour socialist and economic nationalist who was fond of quoting the American poet, Sam Walter Foss:

Give me men to match my mountains,

Give me men to match my plains,

Men with freedom in their visions

And creation in their veins.

When the Australian Treasury persuaded Connor’s Labor colleagues that his plans to borrow $4 billion (a colossal sum in 1974!) were economically and legally reckless, the bluff old socialist went behind their backs and attempted to borrow the money from Middle Eastern potentates, who, following the dramatic oil price-hikes precipitated by the 1973 Yom Kippur War between Israel and its Arab neighbours, were awash with “petro-dollars”.

With the benefit of hindsight, it is clear that the United States government, alerted to Connor’s intentions, laid a trap for him. A shadowy Pakistani banker by the name of Tirath Khemlani was able to ensnare Connor by promising to arrange a loan large enough to make all of the Minister for Minerals and Energy’s dreams come true. It was the Liberal Opposition’s exposure (undoubtedly with American assistance) of the “Loans Affair” which sparked the political crisis culminating in Whitlam’s dismissal.

Why are political events which occurred in Australia more than 40 years ago being rehearsed in New Zealand in 2018?

The memory trigger, in this case, was pulled by the National Party Opposition’s Transport spokesperson, Judith Collins. In a media release issued on Tuesday, 16 January, Collins castigates the Minister of Transport, Phil Twyford, for raising the possibility of diverting motorist-derived revenues from the National Land Transport Fund for the purposes of developing Auckland’s light-rail network.

“This desperate grab for more taxes is the result of this free-spending Government realising how much it’s going to cost to build its pet rail line from Auckland’s CBD to the Airport”, argued Collins, “so it’s looking to divert funding from regional roads as a result.”

Collin’s criticisms were echoed in a release from the right-wing lobby group, The Taxpayers’ Union, which enjoined Twyford to keep his “hands off motorists’ piggy bank”.

Now, this is a very long way from Khemlani’s false promise to provide Rex Connor with the wherewithal to “buy back the farm”, but every doomed journey begins with a single step.

Phil Twyford has staked his own reputation – and that of the Labour-NZF-Green Government – on fulfilling not only their commitment to end Auckland’s traffic gridlock, but also, and more importantly, to have Labour’s “KiwiBuild” affordable housing initiative well underway by the 2020 election.

The $4 billion question is: are there sufficient financial resources available to permit the government to meet these (and many other) policy commitments? The answer, of course, is yes. All governments have the power to beg, borrow or steal whatever resources are needed to implement their plans. In the case of this government, however, the matter is more complicated.

Jacinda Ardern’s Cabinet contains many men and women with “freedom in their visions” and “creation in their veins” but, unfortunately, on his performance to date, her Minister of Finance isn’t one of them. Grant Robertson’s determination to keep his government within its self-imposed “Budget Responsibility Rules” is presently on a collision course with ministers’ determination to keep their promises.

If the Prime Minister allows that collision to occur, then the chances of someone doing a Rex Connor will increase spectacularly. Whitlam’s fatal error was to refuse to make a choice between vision and creation, and the budgetary restraint necessary to keep the confidence of the Australian people. Ardern’s challenge is to decide what sort of government she intends to lead. Will it be a government of vision and creativity? Or, a government which refuses to abandon its commitment to fiscal rectitude.

If it’s the latter, then Jacinda needs to sack her Rex Connors – now.

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 19 January 2018.

Is The Talented Mr Twyford Talented Enough?

The Man With The Plan: The “Housing Crisis” strikes at the core expectations of hundreds-of-thousands of New Zealanders. By promising to meet those expectations, the Labour-led government has made itself a hostage to the supremely-confident individual who insists that he alone has the political skills to end the crisis – Phil Twyford.

PHIL TWYFORD is an eye-roller. Not that there’s anything wrong with that. We all know eye-rollers: those guys (and gals) who consider themselves to be so incontestably “across” a subject that anyone offering a contrary viewpoint is dismissed with an exasperated roll of the eyes. All well and good, providing the subject under discussion is rugby, or the best way to cook a Christmas turkey. But, if the subject under scrutiny is housing: the issue upon which this government is positioned to either succeed or fail; well then, that’s not so good. Not so good at all.

It doesn’t help that the Minister of Housing and Transport, in addition to being an eye-roller, is also a chin-jutter. As anyone who’s ever watched him on television can attest, he is prone to sailing into political discussions like one of those Ancient Greek war-galleys: with his chin standing-in for the battering-ram! Unhelpfully, by positioning his head in this way, Phil is more-or-less required to look down his nose – which only makes things worse!

Eye-rolling superiority, coupled with chin-jutting belligerence, can sometimes work for a politician. Especially when they’re simply part of a much larger ensemble of intimidating behavioural gestures. Just think of Sir Robert Muldoon – or Donald Trump! On the other hand, if you’re determined to be Mean Mr Mustard, then there’s absolutely no point in you also attempting to be Sweet Baby James! Or Phil, for that matter.

All very personal. But, a politician’s personality is not something to be casually disregarded. As Jacinda Ardern has so spectacularly demonstrated, the ability to project a likeable personality can take a politician – and her party – a very long way indeed! By the same token, an irritating political persona can all-too-easily distract voters from their government’s core messages, or, even worse, impede the progress of its core policies.

There is no policy more critical to this Government’s political survival than housing. The availability and affordability of warm, dry houses for all New Zealanders was a key voter motivator in the 2017 election. For many working-class Kiwis, simply finding somewhere to live – at a rent they can afford – has become a relentless struggle. At the same time, young middle-class Kiwis are beginning to despair of ever being able to afford to buy a home of their own. The “Housing Crisis” thus strikes at the core expectations of hundreds-of-thousands of New Zealanders. By promising to meet those expectations, the Labour-led government has made itself a hostage to the supremely-confident individual who insists that he alone has the political skills to end the crisis – Phil Twyford.

No pressure, then, Phil.

Except, every day, the pressures bearing on just about every aspect of the housing crisis grow. Most seriously, doubts have been expressed within both the Reserve Bank and Treasury about the viability of Labour’s flagship housing programme, “KiwiBuild”.

Promising to build 100,000 “affordable houses” in ten years, KiwiBuild has stood at the centre of Labour’s housing policy since 2012: a flashy hand-me-down from the doomed leadership of David Shearer. Essentially, KiwiBuild was a feel-good policy, cobbled-together by the Labour Right to defuse an internal party crisis. It was a rickety concept five years ago and, unfortunately, it’s gotten no stronger.

The problem with KiwiBuild, along with Labour’s other big promise to build an additional 1,000 state houses per annum, is that there simply isn’t an agency of sufficient size and authority; with sufficient financial resources, labour and building materials; to turn Labour’s promises into actual houses in anything like the numbers promised. Regardless, Twyford refuses to countenance the socialistic methods adopted by the First Labour Government, preferring, instead, to rely upon “the market” for a construction effort unprecedented in 80 years.

Accordingly, KiwiBuild looks set to become one of the largest Public-Private-Partnerships in New Zealand history. At least as large as the partnership between the First Labour Government and James Fletcher’s state house construction firm. Unfortunately, this is not 1937: there is simply no slack in the building industry: everything, including its labour force, is fully stretched. Nevertheless, Twyford remains “confident” that the private sector will come to the KiwiBuild party. In the absence of substantial state subsidisation, however, that seems unlikely.

The only path to fulfilling Labour’s housing promises is via the creation of a massive state-directed, properly resourced and publicly-funded entity, driven forward with the same monomaniacal zeal displayed by New Zealand’s first housing “czar”, John A Lee. Jacinda Ardern erred in over-loading Twyford with two key portfolios: Transport and Housing. She should have given the whole Transport portfolio to the Greens’ Julie Anne Genter.

Twyford does not believe he is overburdened. Nor does he accept that his reliance on the private sector will ensure Kiwibuild becomes a fatal political failure. Suggest otherwise and he will simply jut out his chin, and roll his eyes.

This essay was originally published in The Press of Tuesday, 21 November 2017.

Sins Of Omission: Why Phil Twyford's Most Recent Post Fails To Convince.

Revealing Statement: Why would Labour's housing spokesperson, Phil Twyford, begin his most recent blog post by listing the achievements of New Zealand’s five Labour governments – only to omit entirely any reference to the second and third? As if Walter Nash’s second Labour government of 1957-1960, and the Norman Kirk/ Bill Rowling-led third, which governed from 1972-1975, never existed. Or, if they did, left no achievements worth mentioning behind them.

 

AS ANY GOOD DETECTIVE will tell you, it’s what suspects “fail to mention when questioned” that gives them away. The subjects a person doesn’t want to talk about can tell you as much about them as the things they’re only too happy to discuss. It’s a forensic rule-of-thumb that can be applied with equal success to the utterances of politicians.
 

What, for example, can we deduce from the most recent posting (5/10/16) from Labour’s Housing Spokesperson, Phil Twyford, on the subject of his party’s “housing reform agenda”? Why would a Labour politician begin by listing the achievements of New Zealand’s five Labour governments – only to omit entirely any reference to the second and third?
 

This is what Twyford wrote:
 

“All Governments are defined by the big challenges and how they meet them. For the first Labour Government it was lifting people out of the poverty of the Depression, and dealing with a World War. For the fourth Labour Government, for better or worse, it was modernising and opening up the economy after nine years of Muldoon. For the fifth it was restoring sanity and decency to government and the economy after the nasty divisive 90s.”
 

Extraordinary! It’s as if Walter Nash’s second Labour government of 1957-1960, and the Norman Kirk/ Bill Rowling-led third, which governed from 1972-1975, never existed. Or, if they did, left no achievements worth mentioning behind them. These are serious and highly suggestive omissions. But before we examine them more closely, a word or two must be devoted to Twyford’s characterisation of the fourth Labour government.
 

Most damning of all is that ugly verbal shrug, “for better or worse”. It represents the very worst kind of moral abdication. Twyford is perfectly aware that for tens-of-thousands of Labour supporters the unleashing of Roger Douglas’s neoliberal revolution was an unmitigated disaster. Whole industries, along with the communities that depended on them, were devastated by “Rogernomics”. For those Maori New Zealanders employed in the nation’s processing and manufacturing sectors, the changes signalled the onset of chronic economic and social pain. Thirty years after the “modernising and opening up” of the New Zealand economy, the consequences of the fourth Labour government continue to blight Maori lives.
 

Twyford’s choice of the words “modernising” and “opening up” are also highly revealing. Both expressions are positive (especially when placed alongside their antonyms “antiquated” and “restricting”) and Twyford’s use of them can only be interpreted as a vote of confidence in the fourth Labour government’s actions.
 

Having examined the “worse” side of Twyford’s “better or worse” dichotomy, we must also examine who had cause to experience Rogernomics as something “better” than the economic regime which preceded it. The financial and property speculators, asset-strippers and importers whose political contributions filled Labour’s coffers in the 1980s certainly had reason to sing the praises of the Rogernomics revolution. Curiously, Twyford seems less keen to solicit their support in 2016!
 

Twyford’s essentially positive assessment of the neoliberal policies of the fourth Labour government, coupled with his equally positive comments about the fifth, provide the explanation for his unwillingness to so much as mention the second and the third. Like the rest of his caucus colleagues, Twyford wants nothing to do with the nation-building policies of Labour leaders like Arnold Nordmeyer, Phil Holloway and Norman Kirk.
 

His aversion to the economic ideas of William Sutch and Wolfgang Rosenberg is even stronger. The whole notion of import substitution and state-led investment in new industries produces only synchronised eye-rolling among the current crop of Labour MPs. The party, under Helen Clark, may have restored “sanity and decency to government and the economy after the nasty divisive 90s” (although a great many people on the left of New Zealand politics would dispute Twyford’s rosy assessment!) but that does not mean Labour has the slightest intention of embracing the economic nationalist policies of the second and third Labour governments.
 

It is this refusal that makes Labour’s flagship housing policy – Kiwibuild – so disappointing. Were Labour committed to constructing 100,000 state houses over the next 10 years. If what was being proposed was a dedicated construction force, trained, paid and equipped by the state, and with the capacity to order construction materials in the volumes local and overseas suppliers require to reduce their prices (it currently costs $NZ1,300 per square metre to construct a home in New Zealand, compared to just $NZ600 per square metre in the United States!) then Kiwis could have some confidence in Labour’s promises to build affordable homes. But all Twyford is prepared to say is:
 

“Since the 1980s a generation have convinced themselves Government is not capable of doing anything right. That you can only trust the market. We are going to change that mindset. We are going to do it in partnership with the private sector – but we are going to build 100,000 affordable homes for first home buyers.”
 

Note that well: “first home buyers”. Note also the price of an affordable home in Auckland – approximately $600,000! Labour’s “partnership” with the private sector reduces Kiwibuild to little more than a giant welfare scheme for property developers – in whose pocket the party now so clearly nestles. John A. Lee, the Labour firebrand entrusted with Labour’s original state house construction programme, wouldn’t know whether to laugh … or cry!
 

It is not difficult, however, to imagine what a political detective might say:
 

“Philip Stoner Twyford, you are charged with hoodwinking the New Zealand electorate. You are not obliged to say anything (and, quite frankly, if this is best you can manage, you’d do better to keep your mouth shut) but your failure to acknowledge, when posting, the achievements of the second and third Labour governments, and your refusal to condemn the betrayals of the fourth, will certainly harm your defence in the High Court of History.”
 

This essay was originally posted on The Daily Blog of Wednesday, 5 October 2016.

The Space To Make Dreams Come True: Why Labour’s Latest Move On Housing Could Be A Ground-Breaker.

Back To The Future: By sanctioning green-field (as opposed to brown-field) housing development, Phil Twyford and his colleagues are now free to draw forth from Labour’s honourable past the sort of planning ideas which, had they been implemented at the time they were developed (the late-1940s) would have made Auckland a much easier city in which to live and move around.

 

PHIL TWYFORD has urged the National Government to rule Auckland’s contentious Urban Growth Boundary out of the city’s Unitary Plan. This is a major policy announcement from Labour’s housing spokesperson. By embracing the virtues of expansion over intensification, the party has repositioned itself as a defender of Auckland’s characteristic urban sprawl – and everything that goes with it. That Twyford’s announcement prompted congratulatory media releases from the National Party, Business New Zealand and the Taxpayer’s Union is a measure of just how big a concession Labour has made.
 

Labour should not, however, be condemned simply because in some respects (and only in some) its housing policies are similar to the Right’s. Politically-speaking, the policy of urban intensification was as impractical as it was controversial. Homeowners were always going to balk at the prospect of multi-storeyed apartment buildings sprouting up in their leafy streets. Overruling those objections would have required a degree of heavy-handedness quite foreign to the New Zealand scene. Those deemed responsible – be they local or national politicians – would have paid a heavy price.
 

Policy-wise, Labour now has room to breathe. It also, quite literally, has the space to display some progressive creativity. By sanctioning green-field (as opposed to brown-field) housing development, Twyford and his colleagues are now free to draw forth from Labour’s honourable past the sort of planning ideas which, had they been implemented at the time they were developed (the late-1940s) would have made Auckland a much easier city in which to live and move around.
 

Seventy years on, however, with the population of Auckland approaching two million, the size of the planning canvass has expanded considerably. Looking forward, we must now envisage an urban corridor extending all the way from Hamilton to Whangarei.
 

A conurbation of this size cannot be serviced efficiently by the automobile. Crucial to its success would be the creation of a state-of-the-art rapid-rail network capable of whisking commuters from Hamilton to Downtown Auckland in 30 minutes. (If that seems impossible, just have a word with the French and the Chinese!) The huge enabling power of such a network would be more than sufficient to underwrite the many housing developments along its length.
 

Rather than leave the design and construction of these new communities to the private sector, Labour should promote the creation of a public design and construction entity dedicated to building homes, apartments and community facilities equal to anything currently on display in Germany and Scandinavia.
 

This massive public construction programme (which would not only encompass the building of houses and apartment buildings, but also the new rapid-rail network) would need to be accompanied by a radical reform of New Zealand’s tenancy laws. Only by, once again, making the State the nation’s pre-eminent – and most accommodating – landlord will New Zealanders enjoy access to well-designed and healthy homes, with full security of tenure, at an affordable rent.
 

On RNZ’s “Morning Report”, this morning (18/5/16) Max Rashbrooke and James Crow spoke to Guyon Espiner about the urgent need for 20,000 new homes – just to meet the needs of this country’s homeless families. Many of these families reside in Auckland, and neither their needs, nor the needs of the tens-of-thousands of New Zealand and immigrant families who intend to make the Auckland Region their home, will ever be adequately met by the existing, market-driven, system – which daily demonstrates its incapacity.
 

By abandoning the Urban Growth Boundary, Labour has given itself both the physical and intellectual space in which to prove that it still knows how to make New Zealanders dreams come true.
 

This essay was originally posted on The Daily Blog of 18 May 2016.

The Impotence Of Purity

"Certainly, The Impotent Are Pure": Gough Whitlam struggled to make the left of his party understand that purity at the expense of power is a poor bargain. “It is true that some parties can exist only as pressure groups ..... Neither our traditions nor our purpose permit us to adopt this role for ourselves. We are in the business to serve and preserve democracy. Parliamentary democracy.”

 

GOUGH WHITLAM’S LEGACY to Australian Labor is huge, so it’s easy to assume that he was always its hero. Nothing could be further from the truth. Such a doctrinaire beast was the Australian Labor Party in the 1950s and 60s that the “modernising” Whitlam was widely and deeply distrusted. Nowhere was this more evident than in Victorian Labour Party (VLP). Victorian Labour saw itself as the Keeper of the Flame of “true” socialism. Whitlam, a silver-tongued Sydney lawyer, born of privilege and power, was not the sort of person these “true believers” warmed to.

 

Whitlam, however, had a very clear idea about where Labor needed to go if it was ever to bring the seemingly interminable reign of the Liberal-Country Party Coalition to an end. The VLP, he knew, was a vital station on the federal party’s path to power. The Keepers of the Flame would have to be politically confronted – and ideologically defeated. In June, 1967, Whitlam finally bearded Victoria’s socialist lions in their den.

 

Speaking to the VLP’s annual conference, Whitlam laid it on the line – as only he could. Addressing directly Labor’s abysmal electoral record at both the state and federal level, he spoke the words that everyone knew to be true, but which no one dared to utter:

 

“We construct a philosophy of failure, which finds in defeat a form of justification and a proof of the purity of our principles. Certainly, the impotent are pure. This party was not conceived in failure, brought forth by failure or consecrated to failure. Let us have none of this nonsense that defeat is in some way more moral than victory.” [My emphasis.]

 

Nor was he afraid to name Labor’s two great enemies on the Left: the Moscow-aligned Communist Party of Australia; and that bastard child of Catholic reaction, the Democratic Labor Party (DLP).

 

“It is true that some parties can exist only as pressure groups. The Communists support this view because they do not want to win Parliamentary representation or power; the DLP supports it because it cannot win Parliamentary representation or power. Neither our traditions nor our purpose permit us to adopt this role for ourselves. We are in the business to serve and preserve democracy. Parliamentary democracy.”

 

It was this key insight that made Whitlam such an extraordinary change agent. He grasped what the Keepers of the Flame had either forgotten, or never quite understood in the first place. That before it could be about socialism, Labor had to be about democracy. Why? Because socialism only happens when people start taking democracy seriously.

 

The events of the past three weeks have made it clear just how urgently the New Zealand Labour Party is in need of a good Whitlam-style dressing down. Members of Labour’s Caucus have been stunned and hurt by the viciousness of their own party’s Keepers of the Flame. That Phil Twyford’s campaign to highlight the role played by offshore Chinese property investors in Auckland’s housing bubble could be likened to the activities of the Ku Klux Klan was beyond outrageous.

 

New Statesman columnist, Helen Lewis, calls it “values signalling”. Heedless of the personal and political damage inflicted by their social media interventions, the Values Signallers are only interested in letting their “friends” and “followers” know just how emphatically they are on the side of “the right and the good”. Not for them the hard slog of increasing their political party’s electoral support – always a desperately frustrating process, fraught with difficult personal compromises and dubious moral elisions. To operate in this world requires a level of maturity which most Values Signallers simply do not possess. For them, proclaiming one’s principled purity to the world is much more satisfying than helping one’s party win the next election. That such strident and unhelpful posturing might indefinitely delay the day when their principles are backed by the power of a parliamentary majority is not an idea they are much given to considering.

 

In the end, Whitlam’s observations about impotence and purity go to the heart of a much more profound political and philosophical debate. The invitation to sacrifice one’s personal political purity in favour of collective political potency is always a hard one to accept. And yet, if it is not, then the conditions permitting the enlargement of social, as well as individual, morality cannot be realised.

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 31 July 2015.

Busy Doing Nothing: Why Andrew Little Needs To Keep Labour Out Of The Headlines.

Schmoozer-In-Chief: Andrew Little and his team are quietly meeting and greeting business and community leaders, leaving behind, hopefully, a few dozen impressed punters who will tell their friends and colleagues the next day: “You know that Andrew Little’s not a bad bloke.” Yes, it's banal, but banal is what gets you elected.

 

BELIEVE IT OR NOT, the Labour Party is currently engaged in a critically important political campaign. No, it may not look like Labour is doing very much at all at the moment, but that is the whole point. After the sheer mayhem of the last four years, a period of tranquillity is crucial to Labour’s chances of re-election.

 

All of the party’s research suggests that by the end of 2014 the New Zealand public was fed up to the back teeth with Labour. As far as most voters were concerned the party was a joke. It seemed to specialise in choosing the wrong people to lead it. Its caucus was incapable of even the most perfunctory political discipline. Indeed, there were some MPs who clearly got a bigger thrill out of sticking the knife into the back of a colleague than they did from sticking it into the front of the Government. The party organisation was no better. It delighted in choosing Party List candidates that struck many of its voters and potential voters as having been drawn from a carefully prepared list of the politically bizarre and/or the simply unelectable. (Which may well have been true!)

 

As 2015 loomed, what Labour most needed to do was to get its name out of headlines. No more leadership elections. No more Caucus back-stabbing. No more shots of furious rank-and-file party members calling for the heads of the “Anyone But Cunliffe” faction. The new leader, Andrew Little’s, best course of action, after he’d spent a little time reassuring the voters that he could string together a coherent English sentence, and that he wasn’t in the least bit sorry for being a man, was to say and do as little as possible and just let the people of New Zealand get used to him.

 

And that, if you think about it, is pretty much what Labour has been doing all year – as little as possible. With the honourable exception of Phil Twyford, who has been waging a solid, one-man-war against the Government’s disastrous housing policies, the Labour Opposition has assiduously (and largely successfully) avoided making a fool of itself. Its key strategists figure that if it can avoid making a fool of itself for another six months, then the electorate might just be ready to start treating it as a serious electoral option.

 

This is an extremely difficult strategy to sell to the sort of left-wing activists who read The Daily Blog. Their preference is for a campaigning Labour Party that is ready and willing to take the fight directly to the National Party enemy. Activists are never happier than when delivering righteous blows to the people’s enemies. Deliver enough of these, the activists are convinced, and the “missing million” will shake themselves free of their apathetic torpor and, falling in behind their progressive government-in-waiting, deliver Labour a landslide victory.

 

Except that is not what the polling and the focus groups are telling Labour. Nor does it reflect the findings of the academic research. Enjoying the confidence of the activist Left is not a necessary pre-condition to electoral victory in New Zealand. What is required is the confidence of a substantial plurality of the New Zealanders who vote. People aged 35 and up, in work, and comfortably housed. People who do not live and breathe politics, but who pay enough attention to formulate a reasonably strong view about who can and cannot be entrusted with running the country. The prevailing opinion among these voters is that National, its growing list of miss-steps notwithstanding, is still the party best equipped to govern New Zealand. Labour’s job over the next 18 months is to convince them otherwise.

 

To do that Andrew Little must do two things. First, he must establish a connection with the people who vote. Second, that connection must, very rapidly, be reinforced by convincing the people who vote that he has the personal and political wherewithal to actually do what he says he will do. In other words: he must come across to the people who vote as a credible proposition for the role of Prime Minister. The two “Cs” – Connection and Credibility – are what Little and Labour are struggling to achieve. And right now the best way to do that is for him to do as close to nothing as it’s possible to get away with.

 

A big part of “doing nothing” is arranging opportunities for the sort of people who influence others to be influenced by the Leader of the Opposition. Quiet gatherings of community and business leaders with plenty of opportunities to exchange a few well-chosen sentences with the man who would be king. Leaving behind, hopefully, a few dozen impressed punters who will tell their friends and colleagues the next day: “You know that Andrew Little’s not a bad bloke.”

 

Yes, I know, it sounds banal – and not at all like the stuff of which revolutions are made. But a huge amount of contemporary politics is banal. And it’s precisely because John Key does banal with such extraordinary aplomb that he has broken every record of political popularity this country has ever set.

 

Banal is what gets you elected.

 

At some point, however, Andrew Little is going to have to give the voters something more than an absence of embarrassing headlines. Part of establishing that all-important connection with the people who vote is to say or do something powerful enough to bind them – the politician and the voters – together. By far the most effective way of doing this is through words and gestures; symbolic moments that imprint themselves on the voters’ minds; events that leave people thinking: “That guy would make a damn good prime minister.”

 

So far, Andrew Little has not managed to do this. His “cut the crap” comment was a promising start, but it was more the product of good luck than good management. In his quest to achieve the two “Cs”, he could, therefore, do a lot worse than to take a leaf out of the new Green Party co-leader’s, James Shaw’s,  political play-book. Whether by good luck or good management, Shaw managed to find himself an immensely talented speech-writer. Danyl McLauchlan will likely prove invaluable in helping his boss master the two “Cs”. Andrew Little, while he’s busy doing nothing, needs to be doing something about finding a wordsmith of his own.

 

This essay was originally posted on The Daily Blog of Friday, 3 July 2015.

Housing The People: Will The Next Labour Government Be As Economically Inventive As The First?

Housing The People: During the 1930s and 1940s New Zealand cities faced a chronic housing shortage. In response the government started a state rental housing scheme, which included building entire suburbs of houses. This is the Hutt Valley suburb of Naenae in 1944. Following the lay of the land, the curving streets were designed to reduce the monotony of straight streets. (Photograph and caption courtesy of Te Ara)

WHICH IS MORE DIFFICULT? Listening to the Prime Minister deny the existence of a housing crisis, or trying to make sense of Phil Twyford’s solution to it? The Organisation for Economic Co-operation and Development’s (OECD) has just ranked New Zealand 34 out of 34 when it comes to the over-valuation of residential property relative to rent and income. According to the OECD, New Zealand house prices, relative to rents, are 70 percent too high.

 

The Prime Minister will have none of this. Rather than reflecting some sort of crisis, soaring house prices are merely a symptom of the New Zealand housing market’s rude good health. Besides, says John Key, one has only to go on to ‘Trade Me’ to discover plenty of houses priced affordably at around the $NZ300,000 mark.

 

Twyford’s response to this nonsense began well enough on Radio New Zealand’s Morning Report. New Zealand’s very real housing crisis, he said, was the result of market failure: something which only the State possesses sufficient resources to correct. Labour’s KiwiBuild programme, he said, was pledged to building 100,000 affordable homes in ten years.

 

If only KiwiBuild meant the New Zealand State buying the land, constructing the houses and then leasing them out at affordable, income-related rentals to young New Zealand families. That, after all, was what the First Labour Government had done. Between 1935 and 1949 entire suburbs had been built by the State. Sturdy, well-designed “state houses”, constructed out of local materials, were erected in the tens-of-thousands.

 

Orakei, Mt Roskill, Mt Wellington, Panmure, Naenae, Taita, Corstophine – Labour’s commitment to “Housing the People” made as real as the concrete foundations these suburbs’ state houses stood on. In its propaganda for the 1938 General Election Labour quoted the words of Professor A. H. Ryan, of Queen’s University, Belfast, who told an Auckland audience: “I had the good fortune to visit the Orakei housing scheme. I have an extensive knowledge of housing schemes and have visited them all over Europe, and I want to congratulate New Zealand in having the finest housing scheme in the world.”

 

Sadly, KiwiBuild offers nothing like the First Labour Government’s housing policy. Essentially, it is a Public Private Partnership, in which the State facilitates the private sector’s construction of houses which it will then sell at “affordable” prices ($300,000 to 400,000 in Auckland) to first home buyers.

 

In other words, Labour is promising to help the sons and daughters of middle-class New Zealand into their first home. Twyford may talk in emotive terms about coming to the aid of people living in garages in South Auckland, but the houses that he, Labour and an army of grateful property developers are proposing to erect are not intended for them. Where are working families on the minimum wage going to find the deposit on a $350,000 house?

 

The question that rattles around in my head is “Why?” With the noble precedent of Labour’s first great exercise in “Housing the People” still standing on a thousand streets all over the country, what is preventing Twyford from following it? Does it all come down, like so many things the Labour Party would like to do, to a lack of money?

 

The cost of its housing policy certainly taxed the ingenuity of the First Labour Government. The answer they eventually came up with shocked New Zealand’s Civil Service mandarins to the core.

 

W.B. (Bill) Sutch, writing in his book The Quest for Security in New Zealand 1840 to 1966, describes the extent of Labour’s political inventiveness:

 

“To build the houses, credit was created by the Reserve Bank at a rate of 1.25 percent for the first £5 million. John A Lee was made Under-Secretary in Charge of Housing. He accepted on the understanding that money would be available from the Reserve Bank. This procedure was a political victory for those in the Labour Party who wanted to use the financial system to build New Zealand even though such an action might conflict with the banking authorities in New Zealand and in Britain and necessitate a change in ‘free trade’ conceptions. Said Lee later, ‘This was a contentious Party issue. With tens of thousands of men on relief work the Labour Party, Nash and Fraser apart, believed that the funds of the Reserve Bank should be used for essential capital works until available men, machinery and materials were being fully employed. We wanted to undo the politically enforced bankers’ deflation.’”

 

Can it really be true that the Labour Caucus of 2014 contains no one with the wit and courage of Jack Lee and his colleagues? Is there really no chance that the sort of unorthodox economic thinking that made possible the first great exercise in “Housing the People” will be replicated on Twyford’s watch?

 

Is there no one in Labour’s ranks who was present and understood what the late Sir Owen Woodhouse was telling them two years ago, on 3 November 2012, at the fortieth anniversary of the election of the Third Labour Government?

 

Sir Owen was the architect of New Zealand’s world-beating Accident Compensation Scheme. Originally, the scheme had been a pay-as-you-go operation – it’s costs being met out of the levies charged, augmented if necessary from the Consolidated Fund. In the late 1990s, however, in preparation for its eventual privatization, the National Party insisted that the Accident Compensation Corporation become fully-funded. In other words it was required to build up a fund sufficiently large to meet all of its existing and likely future obligations.

 

According to Sir Owen:

 

“… ACC has been regarded by some as an insurance scheme under another name. And eventually the need for an income flow was converted from pay-as-you-go to a commercial insurance-type funded system. It is an expensive mistake. For this reason, every year employers and owners of vehicles have been paying much larger amounts than need be in order to build up the large invested funds which now total more than 20 billions. The funded approach should cease in favour of ACC’s annual needs – the system that has always operated for health, education and all general social benefits. By this simple change levies and vehicle charges would be much reduced; they could be averaged across all industries; individual ACC accounts could be amalgamated. And only by this means can the system be extended to sickness as intended by the original report and later outlined as feasible by the Law Commission. It may be asked what of the large fund now in place?”

 

What indeed?

 

Sir Owen’s suggestion was that a “sufficient portion should be retained as the necessary contingency against the risk of major disaster with a balance to future levies”.

 

Well, yes, that would be one solution. But, were a future Labour Government to follow Sir Owen’s advice and revert to a pay-as-you-go ACC, then that $20 billion, or, at the very least, the annual income it generates, could be turned to other purposes.

 

Like “Housing the People”.

 

This essay was originally posted on The Daily Blog of Monday, 19 May 2014.

Outrageous Choices

Waitakere Woman: To take the seat of Waitakere off Paula Bennett, Labour needed to select someone who could match her in street cred' and shit talk. (Think Outrageous Fortune meets Erin Brocovitch.) Carmel Sepuloni, bless her, just aint that gal.

UNBELIEVABLE! The Labour Party has just offered the NZ electorate further proof (if any more was needed) of its accelerating political infirmity.

It has just selected Carmel Sepuloni as it Waitakere candidate.

In making this decision it has not only chosen wrongly, but it has also dealt what may prove to be a fatal blow to the career of one of its more talented MPs, Phil Twyford.

"Waitakere Man/Woman" is the key to Labour’s recovery. Who is he/she?

I attempted a thumbnail sketch of the key demographic which crossed over from Labour to National at the last election in The Independent of 3 September 2009:

The voter escorting National to its First Term Ball turned out to be the sort of bloke who spends Saturday afternoon knocking-back a few beers on the deck he’d built himself, and Saturday evening watching footy with his mates on the massive flat-screen plasma-TV he’s still paying-off.

His missus works part-time to help out with the mortgage, and to keep their school-age offspring in cell-phones and computer games.

National’s partner – let’s call him Waitakere Man – has a trade certificate that earns him much more than most university degrees. He’s nothing but contempt for "smart-arse intellectual bastards spouting politically-correct bullshit". What he owns, he’s earned – and means to keep.

"The best thing we could do for this country, apart from ditching that bitch in Wellington and making John Key prime-minister," he’d inform his drinking-buddies in the lead-up to the 2008 election "would be to police the liberals – and liberate the police."

Waitakere Man values highly those parts of the welfare state that he and his family use – like the public education and health systems – but has no time at all for "welfare bludgers".

"Get those lazy buggers off the benefit", he’s constantly telling his wife, "and the government would be able to give us a really decent tax-cut."

On racial issues he’s conflicted. Some of his best friends really are Maori – and he usually agrees with the things John Tamihere says on Radio Live. So long as the conversation stays on sport, property prices and fishing, he doesn’t really notice the colour of a bloke’s skin. It’s only when the discussion veers towards politics, and his Maori mates start teasing him about taking back the country, treaty settlement by treaty settlement, that his jaw tightens and he subsides into sullen silence. Though he didn’t say so openly at the time, he’d been thrilled by Don Brash’s Orewa Speech, and reckoned the Nats’ "Iwi-Kiwi" billboards were "bloody brilliant!"

Winning over Waitakere Man turned out to be a great "twofer" deal for the Right. To its immense satisfaction, the highly-skilled, upwardly-mobile working-class blokes who began trooping into National’s camp following the 2005 election were bringing their wives with them.

Carmel Sepuloni’s going to win back those voters?

Yeah, right.

The truly sad aspect of today’s selection is what it tells us about the paucity of talent in Labour’s ranks.

For God’s sake! Two of the four candidates standing were sitting MPs! And dear old Hamish McCracken is a bloody political studies lecturer – just the sort of bloke Waitakere Man and his missus are desperate to sit down and have a drink with at the pub.

The clear goal facing Labour in Waitakere was to choose a candidate who can beat Paula Bennett. That candidate needed to be: female, have a solid working-class background (to which, at some point, she had added a tertiary qualification) be either Pakeha or Maori (or, ideally, a mixture of both) and, most importantly, be capable of "talking shit" with the same cheeky facility as the incumbent. Think Outrageous Fortune meets Erin Brocovitch.

A healthy Labour Party would have women like that lining up for the Waitakere seat. That it has ended up selecting a candidate who would, quite frankly, have been much more usefully matched against National’s Sam Lotu-liga in Maungakiekie (where I also happen to think Labour has made a wrong choice) speaks volumes.

And none of those volumes contain very much in the way of good news.