19 May 2021

Budget 2021 has not much room for housing

2:54 pm on 19 May 2021

The government is dampening down expectations of any major new housing measures in tomorrow's Budget, saying it announced most of its plan in March.

At a get-together with Jacinda Ardern and other Ministers day after election

Housing Minister Megan Woods and Finance Minister Grant Robertson. Photo: RNZ / Dom Thomas

Finance Minister Grant Robertson yesterday confirmed the Budget would contain "significant" funding for Māori housing, but beyond that, the details were scant.

"Clearly that was a very large package that we announced in March," Robertson said.

"You'll wait till Thursday to see what else is there, but that [package] is the cornerstone of our housing approach, certainly in this year."

Housing Minister Megan Woods too bridled at questions over whether the Budget would contain a greater focus on housing supply.

"We've already had $5.8 billion worth of housing announcements. That's not some," Woods said.

Under pressure to cool the runaway housing market, the government unveiled a grab bag of initiatives in March, including an extension of the bright-line test and tougher tax rules for property investors.

The plan included a $3.8 billion fund to fast-track infrastructure and gave Kāinga Ora the green light to borrow another $2 billion to buy land for social housing.

Read also: What is the Budget and why it matters

Kiwibank chief economist Jarrod Kerr said that barely scratched the surface of what was required to dramatically increase the housing supply.

"I certainly wouldn't sit here and say the government has done enough, no way," Kerr said.

He said he hoped the Budget would supercharge the infrastructure fund, describing the initial $3.8 billion as "a drop in a leaky budget".

"It doesn't deal with the fact that we have under-invested and we haven't even maintained our existing infrastructure for decades."

Kerr said the government should also be doing "a lot more" to boost social housing.

"Kāinga Ora has proven itself to be a good provider and needs to be accelerated ... there's a clearly a need there. There are hundreds of families that should be in a state-provided home."

The Green Party wanted the Kāinga Ora debt limit increased by $5 billion, with the goal of building at least 5000 new homes every year.

"We must act boldly, and quickly, to address this crisis. The time to do something substantial to change the course we are on is now," Green finance spokesperson Julie Anne Genter said.

But the National Party said Kāinga Ora appeared to be struggling to deliver the number of houses required on its own.

National housing spokesperson Nicola Willis said the government should be partnering with community housing providers to help fill the gap.

"I would like to see dedicated funding in this Budget to work with the likes of Habitat for Humanity, the Salvation Army, City Missions ... to get more houses built."

Willis also wanted a funding plan to eliminate the need for emergency housing across the country.

Monte Cecilia Housing Trust chief executive Bernie Smith agreed Kāinga Ora could not be relied on to "do it all" and said the housing strategy was not meeting the public demand.

"We've had four years of rhetoric," Smith said.

"In the last four years, community housing providers could have actually built several thousand homes if they'd been given the opportunity from day one.

"The government needs to pull every lever, not just some levers, every lever."

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