The one thing that can doom Jacinda Ardern: disappointment

In its bid for power during the 2017 campaign, Labour vowed to solve what Jacinda Ardern is now calling the housing “problem”.  

For much of its nine years in government, National was an ostrich with its head in the sand on the issue, pretending that the country wasn’t in the midst of an escalating crisis. 

For Labour, this failure was central to its 2017 election critique. During its first term, it promised, it would flood the market with thousands of affordable homes, increase state stock and eliminate homelessness. So important it was to Labour that, when Jacinda Ardern outlined her priorities for the first 100 days of the Labour-NZ First coalition, housing was at the top of her list. 

Ardern had assured the country that, under Labour, they could “make home ownership possible again” – that things could and would be better. 

Promises of big and bold transformation were made, with the construction of 100,000 KiwiBuild homes in 10 years being the most obvious example. 

So, three years on, how much progress has been made?  

Well, we all know the disaster that is KiwiBuild. By September 2019, only 258 homes had been built at which point the policy was reset and the targets were dropped. A year on and less than 600 have been completed. The programme was a complete and utter flop – and has continued to be so even after Phil Twyford lost his ministerial responsibility for it.  

The Government has been more successful when it comes to boosting public housing (though demand exceeds supply significantly). It has built around 3,500 state houses in its first term and put an end to National’s state housing sell-off policy. The blemish here was the Government being caught out having quietly sold at least 146 state homes worth more than $30 million since 2017. 

Overall, however, its record on homelessness and social housing is no better than that of KiwiBuild. The wait list has tripled to more than 20,000 households since 2017. 

And all the while, house prices have continued to rise and rise without let up or remorse. 

For all the inspirational rhetoric and promises that were made in 2017 and the months following, Labour has figured out that tackling the housing crisis is not as easy as it looked. Back when the coalition government was first formed, it claimed we had a housing shortfall of 71,000. Today, the Government doesn’t even bother giving a number. 

The newly elected Labour-only Government can’t blame anyone else for what happens this term. There is no other party or individual there to throw a spanner in the works. The buck stops with Labour.  

Those who think a capital gains tax or wealth tax would help the situation will continue to be disappointed. Jacinda Ardern has repeatedly ruled out both for as long as she is Prime Minister. There is no chance she would risk her popularity by going back on her word and introducing either – especially without anybody else to whom she can attribute blame.  

There is agreement from all sides that the Resource Management Act needs an overhaul with Labour going so far as promising to replace the RMA during the 2020 campaign. But the legislative process is expected to take considerable time to see through. Even then, it will be a while before we see an impact on house prices. 

There has been some suggestion that the Government could loosen the income caps on the First Home Grant scheme. However, while this will help first home buyers earning over $85,000 (or $130,000 jointly), the effect of injecting more state money into the sector will likely lift house prices even further. It is the kind of measure National was rightly criticised for by Labour when in opposition. 

As for Kiwibuild, the prospect of it having a major impact on supply is bleak. Almost non-existent. 

It’s clear that finding a solution is not easy. But when a political party comes to power largely on the back of a promise to tackle something like the housing crisis, conditions should at least become better, not worse. People are right to expect some improvement and equally right to feel disappointed when it does not happen. 

If Ardern wants to keep her grips on power and live up to her repeated claims of leading a transformational government, she needs to come up with a plan. Fast. 

Monique Poirier has a Masters degree in Political Studies, and is a small business owner and former Parliamentary staffer. She is the Campaigns Manager for the Auckland Ratepayers’ Alliance.