So much money is on Phil Twyford being ditched as Housing and Urban Development Minister. Photo / File
So much money is on Phil Twyford being ditched as Housing and Urban Development Minister. Photo / File
COMMENT:
Prime Minister Jacinda Ardern's shown us once already that she knows when to fold 'em.
Ditching the capital gains tax was a gutsy bit of politics as cynical as kindness is desirable.
Taxing wealth was going to bog the government down, so she cut it free.
Today's Cabinet reshuffleis a similar opportunity to cut free a minister associated with another limping policy: Phil Twyford and KiwiBuild respectively.
So much money is on Phil Twyford being ditched as Housing and Urban Development Minister today that a betting person might take a punt the other way just for the odds.
After all, the whole Cabinet has been exposed, from the inside, to just how hard it is to build anything at speed or at scale in New Zealand for the myriad reasons we all know but that never seem to get fixed.
His colleagues might find Twyford an occasional liability in front a television camera, but so is Shane Jones, and Ardern can't sack him because he's a New Zealand First minister. Only Winston Peters can do that.
By comparison, Twyford is a paragon of careful policy development in Opposition followed by an attempted execution. As this column noted a fortnight ago, the government campaigned on 100,000 "affordable" KiwiBuild homes because it was popular and easy to understand.
Twyford and new KiwiBuild home owners Derryn Jayne and Fletcher Ross stand with Jacinda Ardern outside their Papakura home. Photo / File
But without fast-track urban development legislation, still at least a year away, it was never going to happen quickly.
While government is building new state houses hand over fist, none of them are labelled 'Kiwibuild'.
Hence, a policy 'reset' is on the way.
It's a fair bet the 'reset' will hereinafter not be referred to as a 'KiwiBuild' reset but a 'housing policy' reset.
While the KiwiBuild name may survive, it looks likely to be subsumed by a more traditional-looking Labour house-building programme that is as likely to incentivise the construction of new private rental properties as homes being for first-home buyers.
Affordable rental housing stock is a key feature missing from KiwiBuild, whose initial targeting of first-home buyers was well-intentioned but has ended up looking like a gigantic version of the middle class welfare inherent in the free university fees policy – also the subject of a carefully managed backdown from the originally promised three years.
The government will also try to make a much better job of trumpeting what Ardern has taken to saying is the biggest government house-building programme since the mid-1970s.
The trick will be to put KiwiBuild in a new, diminished perspective, in both political and policy achievability terms, while probably also repurposing Twyford's $2 billion revolving fund for KiwiBuild to meet other aims, particularly rental stock.
Where is the evidence for this shift?
Firstly, there is Twyford's own admission at select committee hearings last week that 'build-to-rent' projects may become part of the government-assisted house building mix.
Then there was Tuesday's report on the New Zealand economy from the boffins at the Paris-based rich countries club, the Organisation for Economic Cooperation and Development.
"Other OECD countries, including Austria, Canada, France and Germany promote delivery of affordable housing without incurring the same fiscal risks or hands-on allocation role, primarily through subsidising construction of affordable (often rental) housing," the report said.
"Subsidies to developers for affordable housing if necessary, would allow private and not-for-profit developers to take the lead in delivery and allocation of affordable housing and better allocate risks to those best placed to manage them."
As for KiwiBuild, it should be "refocusing … on enabling the supply of land through aggregating fragmented land holdings and de-risking development sites".
That is already part of the KiwiBuild policy but, as noted above, is only now seeing the necessary legislation arrive. So, too, are the infrastructure bonds that may help local government fund infrastructure that denser, bigger cities will need.
The trick will be to put KiwiBuild in a new, diminished perspective, in both political and policy achievability terms. Photo / File
In other words, the policy framework that Phil Twyford envisaged is nearly in place.
If so, why would Ardern replace him? To do so would be to admit the housing policy is a failure. Yet ministers do not believe that, albeit they want to reframe it to emphasise aspects of the programme other than KiwiBuild, which is clearly struggling.
Twyford is the architect of this policy approach. It is complex and in some respects still difficult to defend politically. Expanding urban boundaries to reduce pressure on land prices is easily called 'sprawl'.
But the policy is only now showing signs of delivering the tools required to cut through local community and government obstacles to intensification of urban development in New Zealand cities.
That is necessary not only to make housing affordable, but to make public transport work in the interests of both fighting climate change and improving community life, and to improve the resilience of urban communities whose waste, water and roading needs are best delivered at scale.
On that basis, Twyford should still have a job as Urban and Housing minister today.
