Little slates Australian house sale proposals

Labour Party leader Andrew Little. Photo / Jason Oxenham

Labour leader Andrew Little says there is no rational explanation for the Government's allowing an Australian housing provider to buy up to 500 state houses as part of housing reforms.

"We have been paying taxes for Housing New Zealand and its predecessors to do this for the past 80 years," Mr Little said.

"I am interested to know what has changed to make Housing New Zealand incapable of doing this and why it is we need an Australian provider to do this. That has never been explained."

Housing Corporation and Finance Minister Bill English told TV3 on Saturday that Queensland charity Horizon Housing, which provides affordable houses for sale and social houses for rent, could be in the market to buy up some of the state houses to be sold next year.

Housing New Zealand's stock is about 68,000 and Prime Minister John Key pledged that by the end of 2017 it would be at least 60,000, meaning 8000 could be sold.

The Government's initial objective was to sell the houses to community service agencies such as housing trusts or church groups or iwi. But demand has not been high and the Salvation Army and Methodist Mission Aotearoa washed their hands of the sell-off.

Mr Little's primary objection was the privatisation of state housing.

"The issue is compounded by an Australian provider, not just the fact they we would be paying the Australians to do social services for New Zealanders but the value of the land that many of these houses are on ... It's another state asset sale for the benefit of overseas owners."