You have to read between the lines of Prime Minister Jacinda Ardern’s press conference yesterday to get some idea of how much she believes Housing Minister Phil Twyford failed.
Ardern yesterday effectively removed Twyford from Housing and appointed Megan Woods to replace him as Housing Minister and appointed the new Cabinet Minister, Kris Faafoi, to be Associate Minister with responsibility for Public Housing.
Twyford retains Urban Development and picks up Economic Development from David Parker.
That move is unlikely to impress New Zealand First.
The Regional Economic Development Minister, Shane Jones and Parker are close friends, but Jones (and NZ First) and Twyford are not so tight.
NZ First have been critical of Twyford’s approach to his Transport portfolio, particularly his refusal to fund a four-lane highway from Whangarei to Auckland and also his advocacy of the Auckland light rail project.
Ardern offered a catalogue of reasons as to why she was moving Twyford aside.
The range of issues for solving the housing crisis was too great for one Minister, she said.
She as good as conceded that so far, Kiwbuild has been a failure.
“I know that many of the headlines have been about Kiwibuild not delivering against expectations. but that has included the Minister’s own expectations of Kiwibuild well.,” she said.
“We know that there is a lot that’s gone right in housing … there are elements where we haven’t got things right.
“We know they need to be fixed.”
And again in the press conference: “There are things that we also need to change particularly with Kiwibuild and having that extra set of eyes, and those extra ministers will help with rebuilding that program
“And so yes we haven’t always got those settings right.
“And we know that there are things that we need to fix.”
And so on and so on as Ardern repeated her contrition.
It was obvious that Twyford’s failure had struck at the heart of her Government and its aspirations.
“It is disappointing.
“I’m a member of a Labor Party and making sure that we improve those numbers (of houses) is important to me personally but also to the party.”
Then-Labour Leader, David Shearer, unveiled Kiwibuild in 2012 as a promise to build 10,000 houses a year for ten years.
Housing Affordability Bonds would be offered to investors to help fund the plan.
The building programme would be overseen by Housing NZ (HNZC) but be undertaken by private builders. Much of the land would come from HNZC buying new land or building on existing developments.
The houses would be set at a price to cover the Government’s costs and would not be sold at a loss.
They would be restricted to first home buyers, and buyers would have to live in them for a set time.
But by the end of last year, just 33 homes had been built with another 77 on the way, and currently, Twyford has told Parliament that there are 10,356 homes contracted for or committed to, but he has been unable to give a date when they might be able to be occupied.
This week the OECD produced a damning report on the progress so far and the thinking behind Kiwibuild.
It said that the current lack of spare capacity in the construction industry, particularly in Auckland, meanot that some crowding out of private activity was inevitable and quoted the Reserve Bank estimate that half to three-quarters of the KiwiBuild contribution to residential investment until the end of 2022 would be offset by crowding out of private investment.
But the OECD warned that by focusing solely on home ownership, KiwiBuild was not well-directed at enhancing well- being.
“The links between well-being and housing ownership are weak, and those in greatest need arc renters without sufficient income or wealth to buy their own house,” the report said.
And the report warned that by underwriting or purchasing new homes, the Government was taking on a substantial risk that could blow out the fiscal cost of KiwiBuild if housing markets were to fall or if the developments chosen were not wanted.
“Developers are far better placed to manage market risks and determine which developments are likely to be successful,” the report said.
The OECD recommended that KiwiBuild should be refocused on supplying land by aggregating fragmented land holdings and de-risking development sites to make it feasible for developers to step in.
“Priority should be given to financial support for the delivery of affordable rental housing, with requirements for dwellings to be leased at a specified discount to market rents. .”
The new ministers now have the upcoming three-week recess to read a series of official papers which will propose a “reset of Kiwibuild” — but whether it will go as far as the OECD recommends and essentially abandon the 100,000 house target is unknown.
Megan Woods declined an interview when approached by POLITIK last night but promised a statement setting out her views on her new job.
However, that statement never turned up.
Kris Faafoi was more forthcoming and held a joint press conference with new Minister outside Cabinet, Poto Williams.
Faafoi is of Tokelauan descent and Williams, Cook Island. Their appointment brings to five the number of Pasifika people in the Ministry; the highest ever.
Williams said the appointments were exciting.
“I know that my own Cook Island community and the wider Pacific community are excited to know that their desires and aspirations are actually going to be expressed at the top table. It’s very cool.”
Faafoi said it showed the Government’s commitment to diversity and to the Pacific community “and the hard work that we have put in over time.”
“There is a great Pacific journey to tell, but it would be too long to put in a sound bite!”
However, both new Ministers carry some controversial baggage.
In 2017 Williams defied then- leader Andrew Little to make a public statement against the controversial selection of Willie Jackson.
Williams had Little she would not speak publicly about the selection of the Labour candidate but went on to hire a PR firm to help her voice concerns about Mr Jackson.
Faafoi has been identified with Labour’s right wing.
As MP for Mana, he was close to controversial right-wing former Porirua City Mayor Nick Leggett, but that faded when Leggett defected to National.
Faafoi is the first Cabinet Minister to rise up from the Press Gallery since Frederick Doidge who was a Parliamentary reporter in 1908- 09. (Doidge later became Minister of External Affairs in the Holland National Government.)
Ardern also announced a number of what even she conceded were relatively minor changes to Whips and Committee Chairs. Ruth Dyson will replace Williams as Assistant Speaker.