Finance Minister Grant Robertson in his Beehive office, Parliament, Wellington. Photo / Mark Mitchell.
Finance Minister Grant Robertson in his Beehive office, Parliament, Wellington. Photo / Mark Mitchell.
Finance Minister Grant Robertson says a delayed Government loan scheme for apartment owners in earthquake prone buildings should be operational within the next couple of months.
The $23.3 million scheme was announced in Budget 2019 but not a single loan has been issued to date.
It's designed to help owner-occupiers who are likely to face financial hardship meeting their contribution to strengthening costs - forcing them to sell their home as a result.
An earthquake-prone building is anything rated at less than 34 per cent of the New Building Standard and many deadlines for strengthening these buildings in Wellington are looming this decade.
At a public meeting last night Finance Minister and Wellington Central MP Grant Robertson said no one was more disappointed than him that the scheme was not yet giving out any support.
The reason for the delay was technical and related to the Credit Contracts Consumer Finance Act involving the way Government agencies can lend to people, he said.
"It was more difficult than we had hoped to resolve those issues. We had to initially resolve who would be the lender.
"It is not as easy as it looks for the Government to lend people money."
In February 2020 Cabinet appointed Kāinga Ora to establish and deliver the scheme.
Kāinga Ora needed to get an exemption to the legislation to lend the money, which has now been processed, Robertson said.
"You will see the scheme up and running in the next couple of months."
A Cabinet paper outlining the scheme proactively released by the Government expected it would be ready to issue loans in the first half of this year.
National list MP and Wellington Central candidate Nicola Willis said the loan scheme has been a failure.
"Not a single person has been able to get a loan out of it yet."
National Party list MP and Wellington Central candidate Nicola Willis. Photo / Mark Tantrum.
In response to a written parliamentary question from Willis, Building and Construction Minister Jenny Salesa confirmed that the loan scheme was initially set to cost more money to set up and administer than the actual $10 million in capital available for lending assistance.
But since Kāinga Ora had been appointed, the set-up and administration cost has been reduced to $5.25 million because of the agency's expertise and existing systems in place.
The total amount of Government funding over four years is now $15.25 million.
Willis said that administration cost was still too much for what should be a simple loan scheme.
"I'd like to see that money actually helping people not being spent on bureaucracy and more people at Kāinga Ora.
"I think the fact that no one has been able to get a loan and so much is being spent on admin means this policy wasn't thoroughly thought through before it was announced."
A review of the scheme's settings was proposed 12 months after its launch, including an analysis of the up-take and strengthening costs.
Robertson indicated that review would now be fast-tracked.
"I think probably because time has elapsed in front of us we now need to make sure as it's being implemented that it is still fit for purpose, especially around issues like interest rates given what's happened over the years since we went through that detail."
