Housing New Zealand nearly broke

It has been revealed that the New Zealand Government ran a significant surplus in 2015-16. After years of being in the red as a result of the global financial crisis, expenditure to help Christchurch this would have been welcome news for Treasurer Bill English.

Not surprisingly the Government is absolutely beaming with the news of the surplus, which it says gives it some real options going into election year. Some have suggested that tax cuts might be on the cards. Others think that it provides leverage for bigger spending promises to woo swing voters who might otherwise vote for the Opposition.

At the same time, we have officials warning – and the Treasurer Bill English has admitted it – that Housing New Zealand needs more money to continue its building programme. Without a funding top up, it will have no cash by the end of February 2017. As recently as July, the Government was denying there was a cash flow problem, until Steven Joyce said that that Housing New Zealand would not pay a dividend for the next two years.

But what do I think? I think any government that thinks Housing New Zealand should be allowed to go broke when New Zealanders are screaming for housing relief thoroughly deserves an election defeat. Any government that lets it get to a state where it cannot continue its core programme of building and operating state owned housing for New Zealanders is not looking after one of the most important parts of the New Zealand welfare programme.

Now, I don’t claim to be an economist – I failed the one economics paper I did at university – but I doubt that the officials writing the warning would have felt so obliged if there was no immediate danger of H.N.Z. running out of cash. Scaremongering without reason is akin to the old childrens lesson about the boy who cried wolf, lest you be ignored in a real emergency.

At the same time I would be interested to know what H.N.Z. is doing about older stock that is sitting idle when it should have tenants in it. Yes some of the houses are pretty grotty and some will no doubt be in urgent need of repairs, surely a temporary patch up job could be done and short term tenants moved in, with their rent helping fund the longer term maintenance work? And if Mr English and Economic Development Minister Steven Joyce have such a great handle on the situation I should theoretically have zero case for writing this blog because no such claims would have arisen in the first place.


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