Earlier this week the Coalition Government released the report into Kāinga Ora, which found the housing and urban development agency was underperforming and not financially viable.
Housing Minister Chris Bishop was particularly scathing about the board of Kāinga Ora and announced its members would be replaced.
At the post-Cabinet press conference – where he and Prime Minister Christopher Luxon announced the findings of the review – Bishop was reticent about what else the Government might do, including with the first-home loans and grants.
“Well, as I say, we’re considering all of those different funding schemes, and once we come to a view around them, we’ll make those announcements.”
Just two days later he announced the First Home Grant scheme was being scrapped and some of the money transferred to funding 1500 new social housing places to be provided by community housing agencies, not Kāinga Ora.
Housing Minister Chris Bishop.
Miserly?
NBR's Grant Walker, back after a long break and now the boss, wonders whether this is being done to pay for tax cuts, is prudent handling of the economy or is just “being miserly”.
Presumably the savings might go towards helping fund tax cuts given from the expected $245 million in savings the Government is only spending $140m on more social houses.
Bishop’s argument for dropping the home grant scheme is that with eligible first home buyers getting a median grant of $5000 it meant it had gone from being 10% of a standard deposit in 2010 to just over 4% now, and that in most cases it does not make a difference to whether someone can buy a home or not.
Clearly too there was a message to Kāinga Ora in the decision. KO had been responsible for administering the grants and instead of getting at least some of the savings will watch the money be paid to community housing providers instead.
Labour Party leader Chris Hipkins says the decision will kill the first home ownership dreams of an entire generation.
It might end the hopes of some but probably not a whole generation. And the Government is retaining the First Home Loan scheme, which Bishop says is more effective at supporting buyers over the deposit barrier.
Labour Party leader Chris Hipkins.
Monetary policy
And talking about making it easier for home buyers, on Wednesday the Reserve Bank released its May Monetary Policy Statement (MPS). Anyone looking for interest rate cuts would have been disappointed. Not only did the bank signal interest rate cuts are not on the cards until next year but the monetary policy committee also discussed raising rates.
The sticky nature of domestic inflation continues to keep the Reserve Bank worried, hence its consideration of a rate increase. Instead, though, the committee decided to keep the official cash rate unchanged at 5.5%.
Walker for one is sick of the Reserve Bank’s mantra around interest rates – and he is the boss – but he is not likely to change its mind anytime soon.
He does point out though that pressure on local government rates, insurance premiums – his have gone up 40% - and even rents are not likely to ease in the near future, so little chance maybe of sticky domestic inflation getting much better.
At the same time, the Reserve Bank has posed a warning about the Government’s pending tax cuts in next week’s Budget. While Finance Minister Nicola Willis is adamant they won’t be inflationary – in fact she thinks at the margins they will take pressure off inflation – the bank is taking a wait and see approach.
The summary of the monetary policy committee’s meeting says any like changes to government spending or private spending because of tax cuts are not included in the projections of the MPS.
“This timing difference poses an upside risk to the forecast of aggregate demand, the relevance of which for monetary policy will be clearer over coming quarters,” it says.
Finance Minister Nicola Willis.
Politicians’ freebies
Meanwhile, the latest release of MPs’ pecuniary interests – aside from reminding us how much property many MPs own – revealed a few titbits about gifts MPs had received.
Walker is bemused that Christopher Luxon, Carmel Sepuloni and Brooke van Velden all got tickets to the Ed Sheeran concert and Chris Bishop got Foo Fighter tickets. But Erica Stanford got a bed. Why? Who knows.
While MPs might have been getting a few freebies they’ve also been indulging in a bit of wayward behaviour lately, with the Greens at the top of the list. Julie Anne Genter is already off to the Parliament’s privileges committee over her behaviour earlier in the month and the party is still waiting for the outcome of an investigation into new MP Darleen Tana over allegations of migrant exploitation. Now, though, Tana also faces questions about whether an election donation was properly recorded. Fellow Green MP Ricardo Menendez March is also under a cloud after using the F-word in an exchange in Parliament with Labour MP Phil Twyford.
RNZ reported Green Party co-leader Chloe Swarbrick – and she must be getting sick of this – saying that Menendez March had spoken to Twyford to ensure him no offence was intended on his part.
“We understand there was none taken,” Swarbrick said.
But there was offence taken when Te Pāti Māori posted on social media that Act MP and Children’s Minister Karen Chhour, a wahine Māori, had a “disconnection and disdain for her … people”. It came as Parliament was debating the first reading of the Oranga Tamariki (Repeal of Section 7AA) Amendment Bill on Tuesday, which would remove an obligation on the agency to form partnerships with iwi and Māori organisations to ensure children in state care still have a connection to their whakapapa.
Tell my story
In response to Te Pāti Māori’s attack, Chhour, who was in state care as a child, told Parliament she was not going to justify how she was raised.
“I am also not going to let anyone else, especially Te Pāti Māori, think that they can tell my story for me. Especially when they have no idea what they’re talking about,” Chhour said.
Finally, during the week National MP David McLeod was removed from the environment and finance and expenditure select committee when it was discovered he had failed to declare about $180,000 in donations in his election declaration to the Electoral Commission. The commission is now looking into the matter, and it seems likely it will be passed on to the police to investigate.
Overall, the last few weeks haven’t been a good look for politicians and will have done little to give the public confidence in their elected representatives.
Next week, Willis delivers her first Budget and that will likely dominate headlines for at least a few days afterwards.
