Bryce Edwards: Is KiwiBuild now KiwiBusted?

Bryce Edwards: Is KiwiBuild now KiwiBusted?

Is the Labour-led Government “disconnected from reality” over its fledgling house-building programme? KiwiBuild minister, Phil Twyford, says he is “pretty gutted” by his realisation that the house building agenda will fail to get anywhere near its targets this year.

It’s merely the latest in a long-line of bad publicity, stuff-ups, and questions for the Kiwibuild scheme. And this will have many voters and aspiring home-owners losing confidence in the Government’s housing plans. And inevitably KiwiBuild is once again picking up new nicknames – such as “KiwiBusted”, “KiwiFraud”, or Simon Bridges’ chosen term, “KiwiFlop”.

Disconnected from reality?

It was only a few months ago that Phil Twyford was laying into critics and even government officials who suggested KiwiBuild might not deliver the promised number of houses on time. For example, when Treasury forecast that Kiwibuild was only going to have half its forecast impact on construction, Twyford rebuked the officials, saying “Some of these kids in Treasury are fresh out of university, and they are completely disconnected from reality”.

Now Twyford has had his own reality check, and yesterday told media that he wasn’t going to be able to deliver on promised Kiwibuild numbers for this year. While the Government is promising 100,000 affordable KiwiBuild houses, the target for July of this year is only 1000, of which only 33 appear to have eventuated.

This is all best covered by Henry Cooke in his news report, Phil Twyford says only 300 KiwiBuild homes are due to be finished by July, which quotes the minister saying “It’s clear now that we won’t meet our first year target, and that’s a real disappointment to me… It’s been tougher than we expected for the first year.”

In this story, Opposition spokesperson Judith Collins is trenchant in holding Twyford to account: “He clearly cannot do the job. He’s been a minister since November of 2017 and delivered 33 homes – in that same time the private sector has built 35200… He’s got no excuse because he had this portfolio in opposition for over six years. He should have worked out how hard it is to have interventions in the property market.”

Although the Government has promised 1000 houses by July of this year, Twyford isn’t confident enough that they will even deliver 500, according to Jenna Lynch, who also reveals that some KiwiBuild houses aren’t selling to first home buyers and are being released onto the market, “defeating the whole point of the programme” – see: KiwiBuild houses might not end up with first home buyers.

Twyford has been joined by both Prime Minister Jacinda Ardern and Finance Minister Grant Robertson in conceding defeat on the KiwiBuild numbers, but Acting Prime Minister Winston Peters isn’t giving up – see Jason Walls’ Deputy Prime Minister Winston Peters still thinks 1000 KiwiBuild houses can be built by July.

Having been asked about the targets, Peters told reporters today: “We’re not giving up at all – we’ve got six months to wind this up as fast as we can, and practically we will.” He added: “We’re going to recommit ourselves in our first Cabinet meeting to getting this thing back on track.”

Ongoing problems with KiwiBuild

In explaining KiwiBuild’s failure to reach its targets, Phil Twyford appears to be pointing the finger at the construction industry and developers. He said yesterday that “It’s been more difficult than we expected to really shift developers off their existing business model which is about getting a return on capital from small numbers of mid to high end homes.”

The Minister also talked about this last year in an interview with Newsroom’s Thomas Coughlan, in which he characterised setbacks as merely “teething problems” – see: Twyford on his hopes for 2019. Apparently, Twyford “believes the teething issues have come from the state of the residential construction sector, which is dominated by small firms, with low productivity, who are incentivised to build expensive rather than affordable homes.”

There are some other problems with the KiwiBuild scheme. Anne Gibson, for example, looks at some of the figures listed on KiwiBuild’s official website and finds that although 46,807 people registered as being interested in KiwiBuild, only 267 have actually become “pre-qualified” to purchase a house – see: KiwiBuild monitor: 33 complete, 967 to go by July, Twyford says target ‘tough’.

In response to the low numbers of eligible buyers, Mike Hosking wrote last year about these figures: “You would have heard of the thousands that applied, of course. The Government wanted you to hear that. The thousands that signed up for the updates, the thousands that showed an interest. But an interest isn’t a deposit, it isn’t a deal, and it certainly isn’t a sale” – see: So where’s all the KiwiBuild buyers then?

Hosking has also written earlier this week on the housing programme, summing up the alleged failings of the scheme, so far: “the homes that aren’t built, the homes that don’t sell, the tenders that don’t attract bidders, the prices that are too high, the locations that don’t parent right, the sizes that don’t suit” – see: New Year, same old KiwiBuild stuff-ups.

In this column Hosking looks at the mystery surrounding ex-KiwiBuild CEO Stephen Barclay, who has resigned. He comments: “yet another cock-up in a long line of cock-ups that’s plagued this grandiose farce since day one.” And he complains that “no one is fronting in terms of just what has gone wrong”.

There is plenty of speculation about why Barclay has stepped down. For the most plausible, see economist Gareth Kiernan’s article, Resignation another step to KiwiBuild failure. He suggests that perhaps Barclay had his “wings clipped” with the organisational re-configuration that happened last year in the KiwiBuild programme. And if so, “the prospects of getting a new head of KiwiBuild with the initiative to turn Phil Twyford’s dreams into reality seem slimmer than ever”.

What happens next?

Given the apparent mess that the KiwiBuild programme is in, should it be scrapped? Should the Government go back to the drawing board? Or should the Minister responsible be sacked?

Unsurprisingly, Judith Collins is calling for Twyford to go. She was on TVNZ’s Breakfast today giving advice to the Prime Minister: “I would say to Jacinda Ardern, a bit of advice for someone who has been in politics a little bit longer, to shift Phil at her next reshuffle because if she doesn’t I’m going to have so much fun over the next year” – see: Judith Collins: Ardern should dump Twyford over KiwiBuild – ‘If she doesn’t, I’m going to have fun’. Collins also forecasts KiwiBuild’s “demise inside 12 months”.

On The AM Show, Duncan Garner suggested Twyford needed to go, saying “you’ve flopped Phil… In any other world, Phil Twyford would be dog-tucker, out” – see: Duncan Garner lets rip on ‘toxic’ KiwiBuild not hitting targets. But, despite the “poisonous” failure of KiwiBuild, he says that Twyford will be “protected for now”.

Garner also suggests that the Labour-led Government needs to look again at the whole KiwiBuild programme: “Freeze this policy, rethink it, even ditch it, it’s been changed so much anyway who knows what it even stands for now.”

Over on Newstalk ZB, Mike Hosking declared that the minister is “deluded” and “so far out of their depth it’s dangerous” – see: KiwiBuild fiasco is far from over.

But there’s also a fair bit of praise for Twyford: “I tell you what I do admire about Phil Twyford, the embattled, bewildered Housing Minister: At least he fronts. He fronted with me yesterday, and took a pasting because you can’t hide or argue your way around the cluster or calamity of facts and the avalanche of bad news that’s fallen down on top of him. But at least he is there to actually fight his corner. Many people these days run and hide. I also admire him for bulldozing over the Unitary Plans in places, like Auckland, where for years councils have refused to make enough land available for building.”

So, should Twyford be sacked? The Spinoff’s Alex Braee writes about the issue today, and he agrees that the Minister deserves to be fired, pointing out that Twyford’s mistakes are worse than those of sacked minister Clare Curran: “This failure is vastly more serious, both in political perception terms, and in terms of how much of a real world impact it has” – see: Kiwibuild set to fail at first hurdle.

Yet Braae declares that it is better that Twyford stays: “Perhaps a more fitting punishment for Mr Twyford, after presiding over a horrendous botch of one of the government’s most important policies, would be that he has no choice but to continue. Then again, there’s a cabinet reshuffle expected early this year, so someone else might find themselves with the nightmare job of fixing this.”

Finally, despite all the criticism and pessimism about Kiwibuild, there are still some enthusiasts pointing out the arguments in its favour. For the best effort, see Barnaby Bennett’s What almost everyone is missing about KiwiBuild.