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Snap your fingers: Presto, 100,000 houses appear

HIDESIGHT

You gotta love politics.

Think of the care, the anguish, the endless calculations, the budgeting, the fear, the heartache that the average household endures before determining to build a house.

Politics dodges that.

You just announce it. No care. No anguish. No calculations. No budgeting.

And not one house. One hundred thousand houses.

Why limit yourself? The people are wanting something bold.

So make it big. Leadership demands big. A thousand houses wouldn’t cut it.

Where else can you pull that off? And be lauded for finally “doing something” about “housing affordability”.

In business you would be dismissed as a quack and jailed for fraud. That’s why politics is so wonderful. It turns the world upside down.

Newspaper editorials have enthused over the policy.

These same editorials condemned finance companies for their recklessness.

The 100,000 house policy makes the finance companies appear paragons of transparency, analysis and proper budgeting.

The 100,000 houses policy hasn’t even heeded the precepts of Policy 101.

There is no “what’s the problem we’re trying to fix?” “What are the options?” “What are the costs?”

Nope. It was politics.

“The boss needs a big one. His political life is hanging the balance. So, too, are our jobs. Needs a vision. Big picture. Something that gets the grumpies on their feet clapping. And puts Cunliffe in his place.”

“I know – houses. Lots of them. A big, round number. 100,000!"

It needs branding. It needs a name.

“I know. Call it Kiwibuild. Like Kiwibank, KiwiSaver, Kiwi Rail. Get it?”

It was done.

And they rose to their feet. And they clapped. And David Cunliffe was banished.

That’s how politicians get to spend $30 billion. And house 100,000 families whether they want it or not.

Where else do you get to do that? It’s a truly wonderful, heady thing.

Critics may try to pull you down by asking how it is you could build 200 cheap houses a week and quickly sell them to recoup the money to build another 200.

But such critics fail to appreciate the advantage politics confers. Politics makes the rules; politics doesn’t have to follow them.

The backers of the 100,000 houses policy don’t have to trouble themselves with a carefully worded prospectus that could land them in jail should the plan go pear-shaped. Nope.

They just have to announce it.

Politics has no need to attract investors. Inland Revenue works day in and day out fleecing citizens of their hard-earned cash precisely to fuel such grand projects, the very stuff and substance of politics.

There’s no problem with finance. There’s no awkward prospectus that has to be put together. Politics cuts through the financing problem that everyone else must confront.

There’s no need to cover costs. The government can give the houses away. And ballot them off.

Planning laws aren’t a problem. I have known developers who have seen governments rise and fall while they are still awaiting council consent for their modest subdivision.

Councils won’t detain politics. They can’t. Otherwise, the 100,000 houses are decades away.

So politics will legislate away the procedures and policies of the Resource Management Act. The justification is easy enough. The 100,000 house policy is an important development. It’s backed by the will of the people. It has to be done.

Easy.

Again, where else but in politics could such a result be achieved? And who wouldn’t want to legislate the difficulties of our planning laws away?

As I say, you gotta love politics.

Of course, just because politics can do something, and can make it sound good, doesn’t make the policy a good idea.

Politics can make war sound a good idea, too. That doesn’t necessarily make it so. 

More by Rodney Hide

Comments and questions
54

Snap your fingers, and 170,000 jobs appear!

Very well said again Rodders!

Yep - Mr. Key should be asking Shearer to "show me the houses" and start putting the acid on him to produce the numbers, the locations and the details... as to should the MSM...

Totally agree that politicians should be held accountable for their electioneering promises - very much like an investment prospective. Lyiing, fibs and unrealistic promises by snakeoil salesman politicians should be held up as the propaganda it is and the charlatans they are and held legally accountable for each and every promise... not just every 3 years.

The trouble for Labour leaders is that their tenure is often so brief, desperation so great, the outlandish promises need to get bigger and bigger to satisfy the ever increasing desperation of the internals powers to be because their "brilliant" policies aren't gaining traction... and in fact the "brilliance" of these policies are often held up to be omni-wishful thinking as opposed to credible alternatives... increasing the desperation and hand-wringing angst within Labour.

Parachuting JT into Labour will only add another layer of factional in-fighting vying for Labour's leadership. Pass the popcorn as we watch Labour implode upon itself in a heap of self-important, festering, factional bunch of hypocrites all eyeing the top slot...

170,000 jobs, and a surplus by 2014/15. Hey presto!

Yes, exactly. These sort of inane comments/statements by politicians really underscore their business naivety, stupidity or down-right dishonesty or, all three. Moreover, it really shows how dumbed down NZ’rs have become where politicians believe they can make such as absurd claims such as these, and think for a moment the sheeple will believe them. Sadly the sheeple do and I despair for the future of this country.

The bell-weather of any developed country's economy is the level of activity in its building/construction industry and in NZ, the industry is on its knees. I am a manufacturer of building materials and a manufacturer of the machines that make the building materials, so have some knowledge. There are a multitude of ways that would make housing in Auckland more affordable (and indeed the rest of NZ). The first step is to rid the industry of the bureaucracy that suffocates it.

Plucking absurd figures from the sky as both Labour and National have done, is just a nonsense, and underscore how inept they are at charting a growth path for the future of this country

Paul Marsden

Bell-wether

Yes and of course Hide himself has never been known to made a pitch that he could not deliver. Not at all.

Never mind about his being able to snap his fingers and make a 100,000 houses appear, let's just see if he can snap his fingers and hum at the same time.

It's funny reading these comments at the present.30 years ago an probably longer through the Auckland Master Builders Assoc, housing executives were busy telling the then Minister of housing Messrs Quigley an Goff that Auckland an Manakau had a real housing shortage.Media reports would follow,"Builders Crying Wolf "..".No homeless found under hedges" an so all the puffery an grandstanding continued.Those where the days when you could buy a good 3 bedroom home in good areas for $60-80,000.$5000-00 suspensary loans towards deposits etc.If only Goverment had the balls to listen ,imagine the wealth it could have created for the average kiwi family.today.

Let government eat itself, for once. All political promises to go under purview of FMA.

The problem is most politicians have delayed tackling the issue of unaffordability of houses in New Zealand (particularly Auckland) and the fact that the Labour party is making a genuine attempt to tackle it , has to be lauded.
At the least they have a "big idea" and no doubt they have a challenging task ahead.

Once again Mr Hide you have delivered a shining light on a matter other media seem incapable of grasping.

100,000 houses - or Quantitative easing in drag ? Failed in all other applications so what makes Labour think it will work in NZ ?

Really? No, really?

The mind boggles if you see Hide as a shining light. You do need to get out more.

Hold your horses. One step at a time.

-The plan has just been announced. The goal has been set. In business we call this an "elevator pitch". This is often used as a teaser to awaken the interest of potential funders, customers, or strategic partners.
- The next stage which I imagine would be closer to the election is to outline a detailed plan.

Years back Kiwibank and Kiwisaver met with the same opposition. Now one can look back and see that these bold ideas were a step in the right direction for New Zealand.

Innovative ideas are always met with resistance from the less enterprising ones.

I guess you are a Labour/Alliance supporter.

One can indeed look back at Kiwibank and Kiwisaver. Were these a step in the right direction?

Firstly Kiwibank. Why is Kiwibank's credit rating lower than the Australian banks? Who has to bail out the bank if it fails? Remember BNZ? How has a government owned bank helped the NZ Economy? It is possibly adding fire to the housing market with low interest rates? What could have been done instead with the Capital that has been utilitised by Kiwibank?

And Kiwisaver. Has this increased peoples overall savings? Has this prevented people from making their own investments (paying down mortgages etc)? How has this addressed the NZ Government's overall pension obligations in the future?

Bold ideas? I disagree.

It’s not innovative its insanity and that’s what has annoyed such a large number of people. Shearer has thrown out a bulls..t number to buy votes from those that know no better. There are solutions to our media pitched housing crisis and it will be both market and politically driven so the right outcome is achieved that benefits all.

Remember that nothing will ever be attempted if all possible objections must be first overcome. There has been opposition to every innovation in the history of man, with the possible exception of the sword.

New ideas pass through three periods:
• It can’t be done.
• It probably can be done, but it’s not worth doing.
• I knew it was a good idea all along.

As per the other Anonymous - the only people that think Kiwibank was a good idea are those economically illiterate enough to think that the 100,000 home policy is a good idea.

It wouldn't even pass the Reserve Bank restrictions for capital adequacy if it was separated from NZ Post. Notice how its credit rating has already been marked down twice in accordance with its parent.

Junk status here we come...

And Anonymous, you've forgotten to point out that Kiwibank is at present, constrained by lack of funds to lend. Great bank that, huh?

The latest building and consents data confirms that too few homes are being built to meet demand.
Our young people are leaving - tens of thousands each year - to Australia. Their incomes can't buy them anywhere to live. There is a real opportunity here- massive spare capacity in the labour force and manufacturing sector, cheap capital due to low interest rates, and an almost guaranteed demand from employed people on low NZ wages who just can't compete with property investors .

New Zealanders will be offered the chance to invest in Housing Affordability Bonds, and that to me is preferable to buying in state assets we already own.

At least Labour and the Greens wants to do something about housing, The other political parties just wants to sit on their hands and pretend there is not a housing crisis.

How would building another urbanised slum for disenfranchise low socioeconomic groups to fill, help our economy long term?

Mr Shearer we need 100,000 scholarships for these people, not houses. 100,000 scholarships in agriculture, horticulture, fisheries etc - we are an agricultural based economy if you hadn't noticed. Then free up 800,000 acres of fertile crown land and aquaculture resources to give to the ones that pass the well mentored 3-4 year degree and low interest loans for 100,000 houses to put on these new productive properties. You create 100,000 jobs, help the real (export) economy, pay for your 100,000 houses along with giving hope, respect and mana to disillusioned urbanised Maori and low socioeconomic groups. It won’t hurt our current farmers if it’s phased in over 20 years and several new trade markets we are hoping for are realised.

Come on Mr Shearer you can do better than clicking your fingers, surely!

Very, very well said - totally agree.

Give a man a fish... feed him for a day. Teach him how to fish...

Mind you, learning does take effort and commitment... and being sober etc.. You can lead a horse to water...

It's a good scheme and if handled correctly, could work well, if it means getting ordinary Kiwi families into their own homes. As well as stimulating the economy, it would go some way to addressing the problem of housing affordability.

Labour’s plans are a much more substantial response to New Zealand’s housing bubble, relative to incomes, than the National-led Government’s recent proposals.

It's not a "good scheme". So far it sounds like they worked it out on the back of a beer coaster after an afternoon at the pub. They don't know who would actually buy these houses, they don't who would give these buyers loans and Shearer seems to think all he needs is a "bulk discount" and someone to give him some land that doesn't seem to exist.

Gavin K, are you a raving lunatic? Building 200 houses a week will drive up (1) labour costs (since there will be a shortage) and (2) construction costs (same) just by simple economics! Suddenly $30bn becomes $90bn or $190bn. As Rodney says, they've clicked their fingers and made it so. Rod Petrecivic is in prison for doing something similar.
And as always, Labour will be using someone else's money.

Just shows the shallowness of the thinking of our "leaders" and also the cronic gullibility of voters.
Rodney, please get back into parliament. That might help to bring some much needed common sense back into that failing institution.
liberte

Another good article, Rodney.
Keep them coming!
liberte

The Greens want a population decrease and have said there are too many people in NZ. Refer their population policy. So if Labour build their 100'000 homes and their coalition partner is driving down population doesn't that mean...........the left in NZ are just too confusing for me.
Why don't labour give us a policy on DPB like Paula Bennett has. Kills two birds with one stone. Free condoms, reduces population which means less houses which means less buyers which mean cheaper houses. How much is a 12 pack worth again?

" BIG IDEAS, are so fragile, so easy to kill: Don't forget that,
all of you who dont have them."

Good on Shearer for having the balls to voice the vision.
We pride ourselves as being the "number 8 wire country so heres a real chance to use those talents.

"We will either find a way of make one."

John – he needs b*lls alright, but I don’t think Auntie’s gonna ease the grip… nor will the unions… or Cunliffe.

Too bad for Shearer he didn’t double check to make sure he wasn’t being set-up again like he was with the mysterious GCSB tape he’s still to release. Emperor’s new clothes tale comes to mind… and no one at their conference questioned him on how to achieve it.

Pragmatic reality trumps ideological populist rhetoric any day John…

this id@#T wants to run the country between labour and the greens we will all be f@#CKED

New Zealand is facing a massive housing shortage which is pushing up prices, especially in Auckland.

The govt's announcement of just 600 new affordable homes in one part of Auckland is just a fraction of what’s needed and is a feeble attempt to solve the current housing crisis in Auckland.

It is imperative that we start looking outside the square and the KiwiBuild plan appears to be a good start.

NZ isn't facing a massive housing shortage, Shane. There are houses, but the buyers are not willing to pay for them. And guess what? It's not the government's problem. It never ceases to amaze me how people have this belief that it's their right to own a home. What BS. KiwiBuild is a load of nonsense that just cannot work without someone else's money. And given that 53% of households in NZ are net beneficiaries already, I'd say the well will be sucked dry pretty quickly by the socialists.

Good ideas, as we have seen, are not always well received, especially if they are from the opposition.

Labour leader David Shearer has painted a bold vision. His KiwiBuild announcement is big picture stuff. As an avenue to economic prosperity the plan has merit. It will create jobs and skills and reduce the price of the main financial transaction in most peoples' lives. It is far superior to relying on monetary policy and low interest rates, which serves to further inflate house prices and indebtedness. Unless we solve this housing affordability issue we will continue our economic stagnation and relative decline. We can fix it if we choose to.

These morons couldn't fix anything because they don't understand anything. As everyone who knows anything about the building industry knows, the industry is completely strangled by bureaucracy and "can't do anything" regulations.

Labour and the Greens only know how to stop people doing things and making sure only Governments are allowed to do anything.

A win for moderate to middle income hard-working, tax paying families. Looking forward to signing up.

I have always been a National supporter and will continue to remain one. But I do agree that there is some merit in the new housing policy announced by Labour.
It would appeal to my young kids who are both saving to buy their first homes. And most likely they will end up voting Labour in the next elections.

If implemented properly this scheme can not only target the housing affordability issue , but would probably keep more of young people in NZ, lower accomodation subsides, lower unemployement and lower our overseas debt.

Vote Labour, get Green/Red

Building 10,000 houses in one year is a major project and it does raise a lot of questions in my mind.But overall though I think a lot of young Kiwis would welcome a brave and adventurous move as far as housing's concerned and that's the only thing that's going to be able to make a real difference to the housing affordability issue.

Unless we can keep housing supply up with demand, house prices will continue to spiral out of many peoples reach and we’ll create future social problems.
If Labour does comeback to power then this policy could provide much-needed jobs and apprenticeships.

Okay Rodney Einstein how do we house them all eh? Easy to say all this on what is presumably a reasonable parliamentary pension having not exactly done anything of note away from the trough.

If they are going build the 10,000 extra houses per year then I assume they will bringing extra trades people fom overseas to achieve this and the Christchurch rebuild at the same time. Have they got a "sign off" from their union mates that this is all OK ?

Even crooked finance companies or Ponzi schemes couldnt pull off such a confidence trick.To make it even worse the dumb public believe all the rhetoric, from an ill judged comment, played up by a media, who should know better.

Only reason why we have such crazy house inflation is because the banks are able to lend our money to property investors at ridiculous low returns. Let's get rid of the Reserve Bank and allow the market to decide what the interest rates should be. It would bring some balance back into the economy and allow money to flow into true economically viable investments, jobs and businesses.

I can see Labour closing the popularity gap on National on the back of bold policy initiatives such as this one.
The commitment to building 100,000 new affordable houses and the resulting spin-offs with apprenticeships, jobs and the potential boost to the economy will provide certainty and opportunity to the construction industry.

Labour leader David Shearer's bold new housing policy, has boosted the party's support giving Labour and the Greens the numbers to govern alone, according to a new poll.

Housing affordability is shaping up as a defining political issue - probably a major election issue in 2014

This policy could turn out to be an election winner for the Labour Party in 2014 and perhaps even the following three elections if they deliver their promise.

Just a minute. Aren't the baby boomers now selling up their three- and four-bedroom houses and downsizing to single or two-bedroom retirement houses. I'm guessing there are going to be more than 100,000 of them available every year for the next 10 years as well. Does this mean that their retirement investment is going to be reduced, supply and demand and all that? As they are grey haired this means they vote for Winston, so it can't be all bad.

Well Mr Hide, you may be very good at Hindsight and critique Labour's proposals, but where was your Hindsight or calculations and budget when you were the so-called minister of local government? You single-handedly ruined the lives of at least 3900 people over 12 months across NZ from within the Auckland councils to small businesses who served those councils. You had no answers and no knowledge and threw away three years of analysis, planning and budgeting done by the Royal Commission. Oh yeah, we all know Auckand needed one council, and that there are too many councils in NZ, but not in the way which you led in the reform. Oh, and there was that great jaunt you did across the world, funded by the taxpayer to look at all local government options when the Royal Commission had already done that. You are a hypocrite and have no insight let alone Hindsight. So off your high horse, sir, and stop making comments that your past behaviour doesn't support.

I think it is quite obvious that a large-scale increase in housing supply must be undertaken to tackle the housing crisis. But I do hope that National wakes up and does something about it before it is too late.

Prime Minister John Key has reacted to two new polls showing an increase in support for Labour, saying some recovery for the party is natural.
Looks like the KiwiBuild initiative is already titling public support towards Labour.