Labour set itself a lot of aspirational targets during the last election campaign. Driven more by desperation than direction, those targets are proving to be a heavy weight around their necks now. A promise to end homelessness in four weeks pre-winter 2017 was always going to be foolish, 100,000 houses in 10 years backfired brutally and plans to reduce child poverty have barely scraped the statistical margin of error.

 

Two years into a five-year Families Package, costing over $1 billion annually, all Labour has done is demonstrate what I will say for free; big government doesn’t work. A forecast 3% increase in benefits on April 1 will not make a difference, just as National’s $25 benefit increase in 2015 didn’t.

 

Social welfare is how New Zealanders refuse to accept that anyone should be completely destitute in this country. The point of welfare is to guarantee that when life throws you a curveball, the Government will ensure you and your children will have somewhere to live, food to eat and electricity. If you are completely dependent on social welfare then I don’t think it is unreasonable to consider yourself to be living in poverty. That will never change while you are welfare dependent and increasing weekly payments to beneficiaries will lift nobody out of poverty.

 

This larger than normal increase is the result of the Government linking benefit payments to the average wage, instead of the Consumer Price Index. Normally a 1.5% increase in benefit payments would be the result of a CPI adjustment; using movements in the average wage is the reason for a 3% increase this year.

 

Using two equity (percentage of children living in households earning less than 50% of the median wage before and after housing costs) measurements as poverty measurements has shown a 1.6% decrease in pre-housing costs numbers and a 2% reduction in post-housing costs numbers. On the other hand, using figures that measure material hardship (multiple indicators including footwear, electricity and the ability to pay to visit a doctor) show an increase of 0.4% of children living in such households. In any case, it is decimal academia barely worth mentioning were the persons making up the statistics not so important.

 

There is more significant data outside of the reporting requirements of the Child Poverty Act that paint a clearer picture of the impact Government policy is having on low income New Zealanders.

 

The Government started whacking tobacco smokers with CPI+ 10% excise tax increases in the 2011-12 financial year. The data available only extends to the 2017-18 year though the annual Health Survey won’t be far away. In 2011-12, 25.9% of the bottom quintile (the bottom 20% on the deprivation index) were daily smokers. That’s 172,000 people each annually paying $1742 tax in today’s dollars. In 2017-18, 23.2% of the bottom quintile (173,000 people) were daily smokers, but their annual tobacco tax bill had grown by 79.39% to $2986.85 per person.

 

Without the foreign-buyer ban and the nonsensical plan to build 100,000 houses over ten years, Labour’s housing policy looked reasonably solid. Unfortunately they’ve only tried to implement the stupid bits, resulting in a 142% increase in the social housing waiting list in the previous two years, while rents in Auckland have increased 15% on average in the previous four years. Emergency Housing grants have nearly doubled from 2018 to 2019. Low-income families spent  27% of their income on average on housing in the 90’s but now accomodation eats up 55% of their income.

 

What they’ve failed to tackle are the fundamentals of the housing market which strangle supply while demand continues to grow. The Rural-Urban Boundary around Auckland, which has been proven to increase land prices 2km inside the boundary by 700% compared to 2km outside the boundary. ACT demonstrated in the 2017 election that, were the boundary to be abolished, there would be room to construct 660,000 more residential properties in Auckland, stabilising housing affordability and growing the pool of ratepayers to sustainably fund infrastructure.

 

The problem for low income working families and beneficiaries isn’t one of income; it is the accelerating price of living. An extra $10 a week to reduce poverty is low resolution thinking. Removing school fees, providing lunches in schools, electricity subsidies in the winter and a handful of coins makes people more dependent on the state. Allowing house market corrections, reducing excise tax on cigarettes and slashing income and company tax returns responsibility and power back to individuals.

A dollar taken from your wallet, run through a bureaucratic washer, picked at by policy rats and spent on ‘reducing poverty’ will never create the economic impact that a dollar spent by you does. The Provincial Growth Fund is just one of many tools this government has developed to prove it. $3 billion and 2 ½ years later, Shane Jones’ slush fund has created 1922 jobs (616 full-time).

Checkmate socialists.

Scapegoating is a tried, tested and true method of obtaining power in a democracy. It will keep a reforming government in power for a wee-while too, especially in a country which has elected just two one-term Governments in 85 years. The first three years just isn’t enough time for your policies to succeed or spectacularly fail, the second term might see a wheel fall off but is rarely terminal in New Zealand. It tends to take three terms for those who blamed the scapegoats to realise they’re now the victims.

 

Things may be a bit different this time around. There certainly has never been a regime with such a horrendous gaff-to-govern ratio in my lifetime. Had the most recent government not eaten all its friends, they may have survived longer than three years, but they were hardly a reforming government. What little reform the single MP Act Party achieved was done uphill, with handbrake applied and anchor down right up until National decided they were the best ideas they’d never had.

 

The three-headed monstrosity has scapegoated very well in its first term:

  • The holders of unpopular opinions (121,423 wasted votes cast in 2017)
  • Licensed firearms owners (250,000)
  • Immigrants (145,800 arrived in 2018)
  • Taranaki oil extractors (3,000 in 2018)
  • Landlords (130,964 in 2017)
  • Farmers (52,785 in 2016)
  • Employers (534,930 in 2018)

 

They’ll need to be careful not to blame so many people that they run out of voters. The problem with scapegoating is that wreaking vengeance upon them doesn’t fix the ills of which they are accused. Quite the opposite. As the indigenous population of Zimbabwe discovered, scapegoating one group on the behalf of your supporters turns voters into victims.

 

It never ends well.

 

My husband and I are both in our mid 30s and have both been life-long renters. I’ve mentioned before that I’ve lived in some real shitholes, like the subsiding house which required concrete blocks under one end of my bed so I could sleep horizontally. Being 25 and earning a grand salary of $32,000 I was quite happy to live there for $65 a week.

Before moving to Meadowbank where we have lived for a year, we resided for four years in a Forrest Hill unit without insulation. Unsurprisingly it got cold, damp and mouldy during the winter. Logically we employed appropriate layers of clothing, a heater, dehumidifier and good old Spray ‘n Wipe. At the end of 2018, the landlord gave us 90 days notice to move out. Like many landlords in his situation, meeting the insulation standards made a full renovation much more appealing. Thousands of dollars later, JP and I moved to a nicer home but were financially hammered. We survived, but I cannot fathom how low-income families with children are better off moving house than living in a cheap uninsulated rental. 

Fortunately we found our latest home just prior to the ban on charging letting fees to tenants. If we’re going to be honest, it would be far more accurate to describe that policy as compulsory laundering of letting fees. A letting fee of $485 vs. $5 more rent each week makes tenancies lasting two years more expensive following the letting fee ban.

 

Passed last year, further scapegoating of landlords using the Residential Tenancies Amendment Act will begin to impact tenants from July 2021. Every rental must comply within 90 days of a new or renewed tenancy agreement. In the short-term, don’t be surprised to see a lift in two year lease agreements to minimise the pain for both parties, however ducking this avalanche of expenses can’t go on forever. All private rentals must comply by July 2024.

 

Here are a few of the proposed changes (commentary in italics)

 

    • Remove the ability for the landlord to end the tenancy with no cause. The new legislation will provide a range of reasons the landlord must specify including anti-social behaviour.
  • Increasing the risk involved in renting will incentivise higher rents as an additional form of insurance should things turn sour. Yes, landlords should have insurance for their investment but they can’t insure against increased premiums the accompany insurance claims. If you’re young, poor, brown or have children finding a private rental just got a lot harder.
    •  
    • Ensure that tenants can add minor fittings such as brackets to secure furniture and appliances against earthquake risk, baby proof the property, install visual fire alarms and doorbells, and hang pictures.
  • I’m loath to use a term such as ‘gay white male privilege’ however I’m reasonably confident getting offered three properties on the same day is exclusively a GWM privilege. I do know that some landlords ask if you intend to have children. My current home still bears the scars of baby-proofing cupboards etc. I don’t care but if I did, repairing ripped paint and removing glue damage throughout the home isn’t cheap.
    •  
    • Prohibit the solicitation of rental bids by landlords and limit rent increases to once every twelve months.
  • Why shouldn’t a landlord and tenant freely negotiate the level of rent? It is a symptom of a market regulatory bubble that won’t correct, not the cause of it. Limiting rent increases to once a year makes forecasting the necessary level far more difficult and landlords aren’t going to err on the side of low.

 

A number of Healthy Home Standards were also included in the Residential Tenancies Amendment Act, but I’m mindful of compiling an encyclopaedia of sections, subsections and mundane detail on top of a 1000 word opinion piece. I suspect this website is also too classy to include a Housewives Illustrated photoshoot to maintain your interest in percentages for another 20 minutes. However, we’ve barely peered beyond the impact these law changes will have.

A healthy home is bloody useless if you can’t afford to rent it and next week I’ll expand upon the catastrophe Labour is planning to inflict upon its own support base should they be re-elected.

 

What I would like you to consider in the meantime is just how bad things are getting for Labour voters victims now, despite how mildly the scapegoating of landlords has been up until now.

 

  • The definition of homeless is so broad as to be useless. It includes those without shelter, in ‘temporary accommodation’, sharing a dwelling with the usual residents or living in dilapidated housing (under my earlier example, I was homeless for six months). That figure of 41,000 is useful for an opposition party but bloody hard to fix when you’re spending $100 million putting the homeless in motels (where they are still defined as being homeless)
  • Prior to winter 2018, Labour promised to provide shelter to all homeless within four weeks. 
  • Auckland rents went up an average of 15% from 2015 to 2019.
  • The waiting list for social housing has increased 142% in two years, from 6,000 to 14,500. That isn’t the number of people waiting; it is the number of households. In the same period, only 3,300 social housing places have been created (my source doesn’t differentiate between those vacated by moving the current residents on and those newly constructed).

 

(originally published on Insight, 31 January 2020)

It is entirely appropriate to be cynical about Labour’s $12b infrastructure package announced on Wednesday. They cancelled most of the projects National had planned and obtained consents for (which is why I don’t get excited when I hear housing consents are now higher than in 1974). They spent two years toying with ideological nonsense such as light rail to the Auckland Airport, while Julie-Anne Genter wrote of most of the country as being “car fascists.”

 

Now it is election year and the big ticket transport project promises, similar in cost to the $11b fiscal-hole Steven Joyce warned about in 2017, have been dumped into the news all at once. Considering this is the most difficult to pick first-term Government election I’ve ever seen, you’re either naive or a fanatical Labour supporter if you aren’t cynical.

 

Reckless borrowing plans aside, the package isn’t all bad. It addresses some projects which haven’t progressed beyond empty promises and vague intentions for decades. The Penlink Highway on Whangaparaoa Peninsula has been moved forward from 2029 to 2021 and it is well overdue. Unfortunately, like most infrastructure projects in New Zealand, the two lane bridge will be too small, too late and future local body elections will continue to be dominated by candidates with ‘Penlink’ in their affiliation. At least it will be a toll road and theoretically financially neutral assuming the toll proceeds pay for the borrowing that builds it. Assuming.

 

The widening of the Southern motorway at a cost of $423 million between Papakura and Drury is of obvious value to anybody who listens to the quarter-hourly traffic reports on news radio each day. If it weren’t for the mention of specific accidents shutting down the entire network periodically, you’d think it was just pre-recorded and replayed.

 

The Mill Rd arterial route has been a local issue for over a decade, harking back to consultations run by Papakura District Council around upgrading the road into a highway from Manukau to Drury for 40,000 daily commuter trips. National announced prior to the 2017 election (anyone spot a pattern here?) that they would inject $1b into the project. Now accusing Labour of stealing their ideas, National might, but won’t, understand how the Act party feels.

 

National…like Act, but shit.

 

Skypath is finally going ahead at a cost of $360 million. Of course the economics of it don’t really stack up and the ability to walk or cycle across the harbour bridge isn’t going to answer the prayers of anyone who, like myself, commute across the bridge twice a day. However, this expensive clip on to the Harbour Bridge is symptomatic of the half-arsed and slow manner in which New Zealand goes about infrastructure projects. 

 

Proposals for a crossing in the vicinity of the current harbour bridge go back to 1860 when engineer Fred Bell was commissioned to design a crossing of floating pontoons but the £16,000 cost estimate ($2 million today) scuppered that plan. A 1946 Royal Commission recommended the construction of a six traffic lane bridge, with the ability to change lane direction depending on traffic and pedestrian footpaths either side. The National Government opted for a four lane bridge, without footpaths and weren’t even going to build a motorway until locals protested over traffic effects. Opened in 1959, the bridge was already unable to cope by 1965 when annual use reached three times the original forecast. In 1969, two lane clip-on sections were added to each side by a Japanese company leading to them being nicknamed ‘Nippon clip-ons.’ A little bit racist.

 

Finally, sixty-one years after its initial construction, the Auckland Harbour bridge could be considered finished, once foot and cycle traffic can finally use the bridge in the same manner almost every other major bridge in the world allows. Hopefully it doesn’t lead to an increase in the number of suicides of which there are currently 1-2 each year. The Sunshine Skyway Bridge in Tampa, Florida has had over 100 deaths since its 1987 construction. Despite 24 hour patrols and the installation of six crisis phones, the rate has not declined.

 

Since the mid 1960’s, before the addition of the four clip-on lanes, lanes, and the Greenhithe bridge as part of the nearly-complete Western Ring Route, the construction of a second harbour bridge has been mooted. Numerous plans have failed to progress beyond concept stage, including a 2008 proposal which mooted a multi-tunnel link one kilometre east of the bridge. Anyone who uses the bridge regularly will attest to the fact that the bridge itself is generally free-flowing and that the congestion generally occurs on the motorways leading up to the bridge, making the 2008 proposal farcical.

When standing in the 2018 Northcote by-election for Act, I put forward a fully costed proposal, designed with the help of a handful of traffic and engineering experts, to construct a second harbour crossing that actually could eliminate the congestion issues on State Highway 1 and the streets leading onto it such as Onewa Rd. Costing under $6 billion, the proposal would have linked the North-Western motorway to a crossing at Meola Reef near MOTAT. The bridge would stretch across to Chelsea, meeting a new motorway that snaked and tunnelled its way up to the Upper Harbour Highway.

It takes just one major accident on State Highway 1 to paralyse the city because we force all traffic going to South, East and West Auckland, from North Shore, to go through the CBD despite being a destination for only 18% of daily commutes. That second harbour crossing proposal would have eliminated Onewa Rd congestion, taken tens of thousands of vehicles off State Highway 1 and demolished precisely zero private residences in doing so. While very popular amongst the residents of the two thousand doors I knocked on, in a byelection that appeared to be tight, people weren’t going to risk letting a Labour candidate win, so Act’s support was hoovered by Dan Bidois.

 

This election, infrastructure plans that look the same will be the arena fought over by two parties that are the same. In terms of paying for it, I’m sure Act has some sensible solutions that will be announced in time. Borrowing and spending billions in an everyone-pays fashion ain’t our style.

 

Ordinarily it would be a bit odd to find out in December about the extra cash you’ll receive on April Fools Day but because it is the Labour-led Government, that makes perfect sense. Workplace Relations and Safety Minister Ian Lees-Galloway has had a bit of a tough year, so I guess he is as keen as anybody to finish 2019 on a good news announcement.

 

The minimum wage already increased this year by 7.3% to $17.70 an hour, so the next increase in 2020 will be 6.8% to $18.90 per hour; by far the highest minimum wage in the OECD. This will affect 250,000 New Zealand workers, excluding the 8000 made unemployed by the last two minimum wage increases, based on figures from the Ministry of Business, Innovation and Employment.

 

This graph may bore you but I hope you’ll persevere. The usual economic rule of thumb when applied to artificial increases in the cost of purchasing goods and services is that it will result in a reduction in demand as well as an increase in supply. The point indicated by W1/Q1 on this graph is the market equilibrium, representing a meeting of supply (S) and demand (D)  for labour at the highest point both can meet. When this price is artificially increased via a higher minimum wage, demand on the (D) line reduces to the point represented by Q2, while supply of labour on the (S) line increases to the point indicated by Q3. The red New Minimum Wage (NMW) line meeting the newly reduced demand and increased supply points, forming a triangle shape above the previous market equilibrium, represents the increased but unwanted supply of workers called the Real Wage Unemployed.

This is as basic as economics gets in regards to supply and demand, and ignores every other possible economic event which may be occuring at the same time. However, it’s interesting that two very significant minimum wage increases over an 18 month period would have an impact as small as 8000 fewer jobs, according to MBIE. For much of the time under the previous National government, increases in the minimum wage were (rightly, in my opinion) a virtual non-event. Each year the increase was just 25 or 50 cents. It wasn’t until April 1 2018 that a 75 cent increase kicked in (possibly a hangover of the previous government), followed by a 7.3% increase of $1.20 to $17.70.

 

I don’t recall exactly, but I think I can reliably guess that I would have predicted economic doom and catastrophe at the time, though since then I haven’t had too much to say. It wasn’t a convenient silence to minimise my personal embarrassment; rather I forgot in the same way putting on the same pair of shoes each day loses some significance when they never wear out. 

 

It wasn’t until the Fair Pay Agreement proposals released by Jim Bolger’s Working Group in December 2018 and forgotten by just about everyone except Labour’s trade union donors, became newsworthy in August this year. Labour’s trade union donors were getting impatient and noisy, making stupid claims about cleaning companies and supermarkets competing against each other by “slashing wages in a race to the bottom”. It was then, while rubbishing such lazy bullshit, I reviewed the food price index against the recent 7.3% minimum wage increases and noted it had increased only 0.5% overall, dropping 8.8% for produce, 0.8% for non-alcoholic beverages and increased just 2.5% for meat and poultry. That refutes any nonsense about slashing wages to compete, however it also raises questions about economic orthodoxy relating to significant minimum wage increases.

Perhaps I’m impatient (yes) and need to wait longer, especially to see the impact of a second significant increase within 12 months. The unemployment rate at the last four quarters has been 4.2% 11/2019, 3.9% 8/2019, 4.2% 4/2019 (as the minimum wage increased 6.8%) and 4.3% 2/2019. Very low, quite constant and little relationship to the minimum wage change.

 

Youth, older persons, Maori, Pasifika and low-skilled workers are represented in greater numbers in unemployment statistics, so this is a logical demographic to compare next. Youth (aged 15-24) unemployment levels have dropped significantly over the last four quarters from 14% in February to 13%, 10.3% and 10.6% last month. Not only have those levels dropped significantly in a short time period, but they are also the lowest levels in New Zealand since 2007. How?

 

The Labour Force Participation Rate, defined as those of working age who are employed or looking for work out of the total number of working age people can often shed a bit of light on the health of an economy, and as the unemployment rate refuses to behave like it is meant to, it may be more informative. From  2005 to 2014, it has hovered around 68%. It spiked and fell from 69 to 68 until 2016 before shooting over the 70% level and continues to hover until now. Higher than the US where it has bounced around 63% since 2013 and higher than every other OECD nation bar three (Sweden, Switzerland, Iceland). Does that make us the Scandanavian Socialist Miracle of the South? There isn’t a socialist miracle in the north, so let’s not get foolishly excited. 

 

There are statistics elsewhere in the economy that I believe are early warning signs of disaster to come. Net migration levels remain relatively normal at this stage; hovering around the 55,000 level for the previous couple of years. More stringent rules making it harder for those on student and work visas to renew have probably minimised any impact on unemployment figures from 2019’s minimum wage. Obviously wages at the lower end of the scale impact lower skilled workers. In my personal experience, that unskilled overseas labour is not being replaced with New Zealnders. Anecdotal evidence isn’t proof but it makes me more comfortable predicting increased low skilled labour shortages over the next twelve months.

 

The number of people receiving some form of the Jobseeker or Increased Support benefit has skyrocketed under this Government’s watch. It is possible to receive these benefits up to a low threshold of employment income. Those on the Jobseeker benefit increased 10.1% from September 2018 to September 2019. Emergency housing assistance has also skyrocketed over this term. September 2017-2018 saw 53% more families receiving emergency housing assistance; September 2018-19 that increased 109% on the 2018 figure.

I believe the orthodox expectation to significant minimum wage increases will show themselves in the orthodox places but the Ministry of Social Development has inadvertently softened and slowed that effect. While slower than previous years, 2.1% economic growth is still stronger than most OECD countries. With hints at a large spend up coming from Finance Minister Grant Robertson, economic optimism may sufficiently hold until next year’s poll.

 

It cannot last much longer than that however, especially with the final scheduled increase to $20 following in 2021. What shade will Roberston have up his sleeve after that?

While working on a submission  on the Ministry of Business, Innovation and Employment (MBIE) proposed Fair Pay Agreement Discussion paper, the reality of dealing with one small, obscure detail in this Government’s disastrous public policy program becomes a bit frustrating because it isn’t the sole issue by itself. A bit like saving the life of a lung cancer patient who refuses to give up chain smoking with a lung transplant, there is a wider philosophical issue at hand. Until that philosophical debate is concluded, those of us who advocate for the small government side of debate are doomed to deal with one poorly constructed regulatory tedium after another.

 

When I look back at the legislative patterns of both National and Labour governments since 1999, I see a pattern of unhelpful public policy implementation. A fault or injustice, real or perceived, will be identified with just one solution determined; that the Government do something about it.

 

It is rare that new legislation solves a real or perceived problem. The problem may not be a problem at all, such as equal financial outcomes for men and women, existing only in the eye of the beholder. It could present itself due to a faulty means of measurement such as applying an income level proportionate to median income as a measure of poverty. That is an inequality of outcome measure and using it would show poverty doesn’t exist if we were to destroy all wealth.

 

The most common problems which feed demand for government action are those which are symptomatic of previous government interference, such as skyrocketing land prices caused by planning processes artificially reducing land available for development. That has spawned greater restrictions on foreign purchases (which we probably need to fund more developments), a failed government construction plan, significant increases in the minimum wage and greater interference in the labour market.

 

What problem is the Government trying to solve with increased labour market regulation? Minister Ian Lees-Galloway has identified several in the proposed FPA system discussion.

 

“For a number of decades we have experienced increasing levels of inequality and poverty. Too many hard working New Zealanders are struggling, too many children are living in poverty. Too many parents tell us they are working more than one job to get by and aren’t getting enough time with their children.”

 

That is vague election rhetoric that appeals to most moderate voters for whom the solution to any problem is “the Government must fix this.” What is ‘too many hard working New Zealanders?’ Without being given an acceptable number of hard working New Zealanders, that is impossible to define. I don’t think anyone would be comfortable in declaring the number of hard working New Zealanders struggling that is appropriate. It becomes an undefined problem that will always exist, can never be solved and writes more regulation on top of existing regulations that have failed to fix the unfixable.

 

It also includes the irredeemable failures of collectivism, the ultimate of which is that you and I are not groups. With the exception of individuals that have voluntarily joined together into organisations, with founding documentation or an agreement or constitution, nobody is a group. ‘Too many hard working New Zealanders’ exists in the imagination of Ian Lees-Galloway. Individual people have unlimited reasons for succeeding and failing. Some individuals succeed or fail, in the eyes of an outsider, when there is no ‘fair’ reason for how they got to their station in life. That station in life is commonly ‘dead.’ Fortunately, in a free western liberal democracy, those aberrations are the exception. 

 

Individuals can find themselves in a tough spot financially as the result of infinite variations that could commence with having a terrible upbringing in a poor region. Infinite variations on countless choices they make at different stages of their life can rightly or wrongly lead to them being hardworking and struggling. I’m not saying that people choose to be poor. I’m saying that the choices they make will have the greatest impact on their situation in life over the long-term. 

 

Life is tough. It is tough for everyone to varying degrees. All of us will have it extremely difficult at some times whether we have made poor choices for the right reasons or the best choices in every situation. If you do achieve success in whatever way you perceive it, life doesn’t simply become easy. The problems you struggle with become different problems. The stress of trying to pay your bills when extremely poor or the stress of being the highly-paid CEO of an enormous corporation, is still stress. It can still be crippling.

 

The solution to the difficulties of millions of different individuals, resulting from infinite situations and choices made, creating a further infinite variation of consequences, will never be fixed by ‘the government must do something.’ Identifying parents working more than one job as a problem doesn’t give a reason for each parent being in this situation or what they have done to change it. If it isn’t possible to know that, then how is it possible to know the solution and determine that that solution is more Government? 

 

If a person responds to the claims of poverty or inequality with the application of logic, they risk putting themselves into a very uncomfortable position indeed. By not accepting a persons moot without question, you will be attacked for being uncaring, having no empathy or held up as an example to others as a horrible human being.

 

An example that comes easily to mind was seeing a tweet from Chloe Swarbruck describing walking down the street holding her female partner’s hand and getting “the look.” To her that was unassailable proof of common homophobia. To me there were countless points to consider before determining her first instinctive thought was unquestionably correct and ‘the government must do something.’ The response to my questioning was rapid, numerous and vicious. 

 

To the left, being seen to care is more important than any other response, including determining whether there is a problem to fix or actually producing a solution. 

The previous National government was criticised in its final term for shortages presenting in the social housing system. This led to the Ministry of Social Development paying for motel rooms for families to keep a roof over their head while the family waited for social housing accommodation to become available. Labour attacked National for this scandalous mismanagement of the social housing sector while in opposition. Now in Government, has Labour improved the situation?

 

The social housing waiting list reached a new record in July 2019, with 12,644 people on the list. This was an increase on June’s record figure of 12,311. The number of grants being approved for emergency accommodation motel stays in July 2019 was 3316, up from 1797 the previous year. In that month 768 households had been permanently housed but half of those households had waited at least 126 days for that home. The list continues to grow however, with 2005 families being added that month.

 

Is there actually a problem to be fixed by building more social housing? The build rate of public housing is 9 times what it was in 2016. Minister Kris Faafoi is remarkably candid in replying, “The Government is showing a clear commitment to fix the neglect of the previous government and people are responding to that by coming forward asking for help, which is partly reflected in these figures.”

 

This Christmas, the queues for food and gifts outside Auckland’s City Mission will reach record lengths, beating the previous year’s record which itself beat the record set the year prior. This will be presented as evidence of worsening poverty levels, reinforced by Government statistics intended to measure poverty that actually measure equality.

 

I was tasked with doing the research for Act’s health policy in 2017. What I discovered in doing so was very surprising, and somewhat frustrating, while looking for what could be done better. Health funding has gone up, on a per head of population basis, every year since 2009. The number of doctors per head of population, 3 per 1000 was also at record levels. The number of mental health beds in 2017 were double the level in 2009. Major factors considered, the public health system at the time wasn’t a catastrophe. Despite all of this, patient satisfaction with public health was at a 10 year low.

 

Labour claimed National had cut health funding; a blatant lie. They used graphs showing that health funding as a percentage of GDP had reduced. That’s a very different and quite irrelevant way of measuring health funding. If the country experiences an explosion in economic growth greater than the increase in per head funding, that measure is completely useless. Their other tactic is to claim health has been underfunded by National for 9 years. That is the entirety of the claim.

 

Labour has never defined what a fully funded health system is. They’ve never produced a figure that represents 100% of the health system being funded. They’ve never defined every single need that the public health system should satisfy. Dental care is largely a private sector service, Labour hasn’t made free dental care for all a policy platform, nor have they promised laser eye surgery, ending the need to wear glasses be fully funded. I’m not saying they should but glasses are the result of their wearer having eyes that don’t work to their full potential. So, just like “too many kiwis struggling” the claim that “health is underfunded” is immeasurable because fully funded public health can’t be defined. It is a perpetual and unfixable ‘problem’ that suits opposition politicians until they become government politicians that will always fail to fix it.

 

A turn of phrase I don’t use because it is unimaginative but generally true, is that we can’t “just keep throwing money at a problem.” Economic principles around supply and demand show what happens to the demand for product when the price is zero. Demand lifts to levels that cannot be satisfied because sufficient supply can never be produced. 

 

Globally, life has never been better. Real deprivation (living on less than US$1.90 a day) internationally has dropped from 40% of the population in 1980 to just 8%. The number of individuals living in real poverty now is lower than at any time in human history despite the global population being higher than any time in human history. Infant mortality has never been lower. Life expectancy has never been higher. This makes me wonder, is the solution to the problem that “Government must do something” or is “Government must do something” the actual problem?

 

At a time when poverty on a global scale has never been lower in the entire course of human history, hundreds of thousands of voters in New Zealand are still receptive to a completely different narrative. The proprietors of this narrative point to statistics showing child poverty levels are getting worse (using a measurement that actually demonstrates income inequality, not poverty). 

 

The narrative says the minimum wage must increase radically, which feeds demands for a living wage because being paid the minimum offends their dignity. Demand for social housing, with more than 15,000 on the waiting list is the evidence for the failure of capitalism, and the 41,000 people defined as homeless reinforces that failure (90% of that figure actually live in temporary, shared or poor quality accommodation).

 

Is New Zealand in a poverty crisis or is it a product of the angry left, who will push the goalposts as far as it takes to manufacture a demand for their ideas? Well, of course there is  a segment of the population living in hardship. There is a significant number of working poor doing it tough year in,year out, barely providing the meagre basics for their families. To argue otherwise you’d have to be a cold-hearted prick and you’d be wrong.

 

What is the truth about New Zealand poverty and its cause? Green MP Golriz Ghahraman says “Poverty is man-made and we must dismantle the system that causes it.” The air-headed sloganism claiming that cause of poverty appeals to the brain-optional ‘feels’ of her target voters who fail to appreciate that poverty is actually the default position in life. In terms of dismantling the system that causes poverty, I couldn’t  agree more. 

 

Socialist political parties peddling a rhetoric which blames free-enterprise, wealth creation and individualism are the most destructive force against prosperity remaining in New Zealand today. The trade union movement, initially necessary to ensure basic dignity in the workplace has long lost any relevance or value; only 10% of private sector workers now belong to a union and believe me, our best and brightest aren’t beating a path to fill in the membership forms. That’s why their last hope for recovery depends on de-facto compulsory unionism in the form of the proposed Fair Pay Agreement regime.

 

Yes, the angry left are blowing the problem of poverty out of proportion, evidenced by the recent invention of ‘period poverty’ (women unable to go to school or work because they can’t afford $3 for a pack of 16 tampons), however let’s not do the poor a disservice by focusing only on the stupidity of the rhetoric in the debate. What is the single biggest expense for the overwhelming majority of New Zealanders? It is accommodation and this is a genuine and severe expense for even those that may have once considered themselves the upper-end of the middle class.

 

Whatever subsidies or charity or food in schools or period poverty or tales of heating the home with an open oven door are minute symptoms of an enormous problem that neither mainstream political party has ever come close to fixing. The clickbait headlines change only in their desperate inventiveness to sell advertising space next to the same old bloody story – housing is expensive because land is expensive because the tinkering with planning laws for the last forty years hasn’t made the slightest bit of difference to artificial price inflation. The National party won’t do a thing about it – even when Act and United Future gave them the numbers to pass serious RMA reform – because their donors and core supporters believe high asset values make them rich. It doesn’t. It just guarantees Council rates, charged as a proportion of asset value, go up every year.

 

National knew full well how the issue needed to be tackled, which is why they implemented Special Housing Areas in which the usual planning rules were disregarded by central government diktat. What a pity they chose a short-sighted deal with the Maori party to entrench tribal privilege via farcical RMA ‘reform’ over making Auckland, Queenstown and Christchurch entire Special Housing Areas. Lance Armstrong will always beat the National party when it comes to the matters of moral integrity and testicular fortitude.

 

When Labour released their housing policy prior to the 2017 election I naively allowed myself a smaller twitter of excitement. The foreign buyer ban was cheap racism and if it was going to make an impact on house prices (it wouldn’t) that would only be the result of artificial land scarcity encouraging speculative investment behaviour. The Kiwibuild program inspired by fond memories of Micky Savage in the distant past never going to clear the modern day hurdles of planning and health and safety regulation never imagined eighty years ago. However, concealed by geriatric moths was a flickering torch light of hope: a pledge to abolish the Auckland urban boundary! The price differential between land just inside and just outside of the urban boundary, was shown to be as high as 800% by the Productivity Commission in 2010.

I only have myself to blame of course. I’ve been in this game long enough to know better. In the last two years, Labour have done everything but abolish the urban boundary, the impact of which fuelled inflationary housing markets in the rest of the country years ago. Every other policy Labour has attempted has predictably turned to shit and I count New Zealand lucky that the artificial scarcity of land has been outdone by the Government’s genuine scarcity of brains or the situation would be much worse. 

 

Enter Greenpeace icon Megan Woods and bronze star Kris Faafoi. Woods is no intellectual heavyweight and Faafoi learned a couple of tricks in journalism school but these are the faces of Labour’s recovery and delivery. What they lack in economics 101 they make up in sufficient organisational ability to prove once again socialism doesn’t work. 

 

I’ve trotted out this line a long time and all that changes is the figure but I’ll do it again; I’m a 36 year old highschool dropout with no kids, no tertiary education who has worked in a supermarket for 21 years and rents. I still have not been targeted for handouts by Labour or National governments. I don’t want them but it would be nice to be able to say no. 

 

Labour thinks that additional changes to tenancy rules are just what lifelong renters need and no matter how loudly I yell, “NO!”, they aren’t listening. Every bloody regulation, subsidy, supplement, warrant or process they pass into law costs money and every additional cost imposed on landlords, whatever margins they imagine landlords enjoy, will be recouped thfrom renters. That nonsense idea the Green party has to implement a warrant of fitness on rental properties was actually offered by a business voluntarily in Wellington in 2017. It cost $2000 a home or the equivalent of me paying five weeks of rent. Those policy advocates, with a sufficiently strong heartbeat to compensate for being brain dead equate the ability understand economics with accusations that I’m a privileged white prick who hates the poor and doesn’t understand life is hard.

 

Sure, let’s play that game shall we? There are some horrific examples of rentals on the market and enough scumbags owning them to muddy the reputations of the majority of property investors. My first flat was shared with three other people, one of whom converted the foyer at the front of the house, between the front entrance and hallway, into a bedroom. The entire house was sinking sufficiently to one side that I placed bricks under one end of the bed to sleep level. Split between us, the rent was $65, perfectly affordable for my situation at the time. Eventually I tired of living with a loser who spent the day removing the stereo from their car to cover the rent money they drank and moved out. Some of the furniture actually made it to the next house without falling apart in my hands due to suboptimal mould to wood ratio.

 

Years later, after I met my husband we found an old 4 unit building in Remuera with a postcode to boast of, if not the building. At $220 a week it was sufficiently affordable to compensate for having landlords that didn’t give a flying flamingo about us. The lawn had to get sufficiently high to conceal one before it got cut and the ancient pipes resembled an intoxicated horn section when showering in the middle of winter. Eventually that property was sold to another investor who kicked us out, converted the one bedroom units into 2 bedroom units for international students which is how I eventually discovered the bond payment had not been placed into a trust as legally required taking, six months to get it back. The former owners were bankrupt and divorced but the ex-husband’s signature on his ex-wife’s tenancy agreement was enough for the tribunal to ensure I got my bond and costs.

 

It was a few nice cheap units and many years later (last year actually) when me and my husband next got screwed over in the rental market. However, this was the first time government regulation was the culprit. Remember that law making it compulsory to insulate rental properties and fines threatened should this not happen? We lived in an uninsulated unit in Forrest Hill for four and a half years, paying an average rent of just over $400 a week during that time. Yes, it went up a bit each year. No I don’t want to hear your plan for price controls. Being uninsulated probably made the property a bit colder during winter. I’m no builder and I don’t have a before/after example to work from, but will accept it contributed to a bit of dampness, mould and cold. Those wonders of modernity, the heater, jumper and Mr. Muscle were sufficiently adequate for our survival.

 

Half way through the tenancy, the landlord stopped offering one-year fixed leases which was a bit disconcerting but the rent stopped going up which was nice. In November 2018, I had a rental policy debate at Auckland University to attend and the very same day received a 90 day notice to leave the property as the landlord had decided to do a full-scale renovation while installing insulation. Little bit ironic, don’t you think?

We decided to move back across the bridge and find a rental in the Meadowbank area. Fortunately, childless homosexual couples are highly sought after by landlords so that wasn’t the difficult part. The difficult part was paying for the experience, which cost several thousand dollars only to spend thousands more fixing a broken down car twice then needing to borrow thousands of dollars on top of that to buy another car. Thank God I’m a privileged white man or this could have been a genuine sob story. The point of this tale of woe? We survived rental regulations implemented to protect low income families from greedy landlords by the skin of our teeth and if the UN climate model predictions turn out wrong, we will probably be OK.

 

I worry about the low-income families that spent 27% of their weekly income in the 90’s on housing but spend 55% now. Despite Working for Families, accommodation supplements, Auckland Action Against Poverty activists at the entrance of WINZ offices and all other support available, the working poor are a broken down car or an illness away from catastrophe. Moving out of their home because the landlord is legally required to install insulation isn’t going to help those families; it will destroy them. No wonder the waiting list for social housing is longer than it has ever been.

 

For the members of Generation Rent, this government is a lingering existential threat and Kris Faafoi is about to protect the fuck out of us. A summary of the next rental regulation tsunami includes:

 

  • Rent increases limited to once a year (One big increase replaces two small).
  • Improve tenant’s security by removing a landlord’s right to use no cause terminations to end a periodic tenancy agreement (that will be appreciated by the thousands of marginalised families who are now viewed as too risky to offer a tenancy).
  • Improve compliance with the law by increasing financial penalties and introducing new tools to take action against parties who are not meeting their obligations (the cost of those obligations will increase and be passed on to tenants by decent landlords – the scumbag minority will treat financial penalties as a cost of doing business IF they get caught).

 

This is only the next round of law reforms. Socialists are yet to discover the correct number of regulations needed to attain utopia and requirements to force landlords to permit pets, more healthy home laws etc. aren’t mentioned in this package. This comparatively mild list isn’t without its unintended consequences , which NZ Property Investor Federation executive officer Andrew King has already identified.

 

These new regulations won’t just punish their intended target (landlords) and those they’re meant to help (tenants), King says. They will punish every person living next door to tenants with anti-social behaviour and while there may be a housing shortage, there is no shortage of anti-social tenants. NZPIF research shows only 3% of tenancies are ended by 90 day notice each year and half of those are the result of anti-social tenant behaviour. It is predicted that equates to 7,000 tenants impacting upon up to 70,000 neighbours. The promised tools offered by the Government to manage antisocial tenants actually put the safety of victimised neighbours at risk because their cooperation will be required to end tenancies previously dealt with by the 90 day without reason rule.

 

There is genuine poverty in New Zealand and it isn’t all material hardship. What real poverty that does exist is fundamentally rooted in artificially inflated land values feeding higher costs of living. On top of that is the periphery of additional regulation dealing with symptoms without understanding the causes, fuelling further problems that socialists promise to solve.

 

There is a greater insidious form of poverty, the type of which one only finds abundant in wealthy first world democracies. It is a poverty of responsibility. It is a poverty of personal ownership and motivation. It is the sort of poverty that finds an excuse to sit on the couch instead of a reason to walk out the door and Labour governments are absolutely addicted to it. If we are ever to run out of people who blame everyone else but themselves when life gets hard (life will always get hard), Labour will go from government to non-existent.

 

I know that people can have brutal lives and often it isn’t even their fault. The government will never regulate away the inevitable suffering of life, but that won’t stop them creating infinite misery trying. If the solution to the problem is government, the cause is them too.