John Key took social housing head on in his first big speech of the year and in doing so raised the ideological politics of ownership, trying to cast it in a new light

The thing about being in government is that you get to actually do things. While Oppositions position, pose and chip away, as Andrew Little did this morning, John Key got to talk about, y'know, an extra $40 million in spending on social housing and plans to sell up to 8,000 state houses this term.

Naturally, Key described the nation as being in a very different state from Little. Where Labour urges us to do things differently and warns what we're doing now won't support our future standard of living, National likes to talk about "stability, cohesion and confidence" with increasing employment and rising wages. (Although I'd note the tepid language on National's long-promised surplus. We're back to "working towards a surplus", rather than having it locked in and spent, as it was last year).

But both men had one thing in common – a focus on 2017. But their positions compel different approaches. While Little is laying the bricks, Key is ready to redecorate. Labour promises unspecified change in 2017, while Key wants to ensure his team looks energised and anything but 3rd-term tired.

And while Key said he had three or four topics to choose from, his state of the nation speech – and National's energy – is focused on state housing. As is his way, he chose a gnarly issue where the government is at risk and took it head on.

The kind part of the policy is over 3,000 more New Zealanders will get some form of social housing subsidy, costing $40m a year. The tough part is that there will be 3,000 more reviews of state tenancies. While Key repeatedly said they will be done gently and no-one will be moved on without a new home to go to, it's ramping up the speed with which long-term state house tenants will be moved out of their homes.

The ideological part is that between 1,000 and 2,000 state homes will be sold to community housing providers in the next 12 months, and that could increase to 8,000 this term if the sales "go fabulously well". National is promising no fewer than 60,000 state houses at the next election, down from the 68,000 now. However, it also promises the total number of social houses in 2017 will be above 68,000 and growing.

In language reminiscent of the Bolger government, he and Paula Bennett stressed that ownership doesn't matter and they are now "tenant-focused". Said Key:

"It's about the tenant, not who owns the home".

Much the same has been said about everything from hospitals to railways in the past. What I expect to hear a lot from Key in the coming months is the line that a person on the waiting list for a house doesn't care who owns the place, so long as they have a roof over their heads. Opponents will call is an asset sale in drag.

Remember last year Bennett admitted it was an asset sale, just not a big one? She also refused then to rule our the sale of a significant number of state houses to private developers.

So you might look at those thousands of houses to be sold and think it could be a windfall for developers and anyone else in the private sector. However Key and Bennett in the press conference after the speech said the sales would be to community housing providers, with no more sold to privater owners than is already common.

"No more" than usual, was Bennett's direct answer.

So while these sales certainly diminishes the state and relies more on the private sector, it's those social agencies – the acceptable face of privatisation – who will be the buyers. This isn't selling the railways to Fay-Richwhite or the phones to some American profiteers. This is what you might call semi-privatisation. Or perhaps a third way for the right.

The one wrinkle in that (if you're worried about private developers profiting at the taxpayers' expense and the profit motive undermining the welfare state) is whether they want and can afford the houses. Key announced today the transfer of houses from Housing New Zealand to the community sector would not be "open market" sales, so "we might not get the book value of the properties". He later said the community groups would get a discount.

At the same time he said it would be an "open and competitive process" and they're looking for a "fair and reasonable price for these properties". Which is pure spin. They're either going to take a hit on these houses or they're not. Almost certainly they will take a hit, as the housing providers I've spoken to don't have the cash to pay market rates.

The truth is they will need to "partner" with private developers to get the capital; those private developers will want the discount the community groups bring with them and will care more about profits than the needs of the poor. That's where the ideological tension lies and why National is trying to have it both ways.

Housing New Zealand too will be forced to develop more property more quickly into more one and two bedroom houses to cut the waiting list, which few could argue against. But will they too become more reliant on the private sector, be it via sales or partnerships?

The line Key wanted everyone to absorb was the promise of more social housing in three years time, regardless of ownership. But it's that very question of ownership that will be at the nub of this debate over this term.

Voters will (again) have to decide in this post-Rogernomics era whether they care who provides the welfare state and who owns its services. The over-arching question is: Does ownership matter?

And therein lies another tricky question for Key. If, as he says, ownership doesn't matter, why sell thousands of homes at a knock-down rate and spent millions in restructuring not to build more houses, but just to change the ownership of those that are already being lived in?

Comments (1)

by onsos on February 04, 2015
onsos

Looks like Neo-Liberalism to me.

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