Kiwibuild budget only out by $18 billion!

The Herald reports:

Before the election, Labour promised to deliver 100,000 KiwiBuild homes over 10 years – 10,000 a year.

This would be funded by a $2 billion capital injection, which would be recycled as the houses were sold, then returned to the Crown at the end of the KiwiBuild programme.

Midway through this year, the Government amended those figures to 1000 homes being built in the 2019 financial year, 5000 in 2020 and 10,000 in 2021.

So instead of 30,000 by the election, only 6,000.

But the MBIE business case study said $2 billion was simply not enough money to provide 10,000 houses a year.

“$2 billion is insufficient working capital to meet the target of 10,000 homes per annum (on an optimistic average three-year recycling of the capital, only 1000 homes could be built per year)” the document said.

It was pointed out before the election that their assumptions were heroic or unrealistic.

The promised funding, according to MBIE, would mean a 9000 home shortfall and the estimates to reach 10,000 homes a year were $18 billion off, Bridges claimed.

Because of this, he said the Government shifted its focus from building KiwiBuild homes to underwriting private developers to build them.

“Labour had nine years in Opposition to come up with policies. It’s unbelievable that one of its flagship policies that it campaigned on in the election was miscalculated by such a huge amount.”

He said rather than increasing the budget tenfold, Labour shifted the policy from “KiwiBuild to KiwiBuy.”

And there’s a huge difference. With Kiwibuy, there is no increase in housing stock. Kiwibuy is just a middle class subsidy where people win lotto and get a subsidised house. Totally different to what Labour promised which is 100,000 additional houses.

Twyford revealed 800 – or 80 per cent – of the KiwiBuild homes in the 2019 Financial Year would be bought off the plans. That number jumps to 2500 in 2020 and 4000 in 2021.

So rather than 10,000 new homes in the first year, you actually get just 200 or 2% of what was promised.