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The Kiwibuild disaster: Matthew Hooton on why Twyford should go; plus some thoughts from Adam

23/06/2019

Matthew Hooton has a new column in the NZ Herald on the stupidity that is Phil Twyford and the KiwiBuild debacle

More than a year ago, I began predicting in columns and on Newstalk ZB and other radio that the number of houses to be built under Phil Twyford’s KiwiBuild scheme would be zero.

Hooton was not listened to, nor were others – See here and here for example. Indeed to most people other than Ardern, her luvvies in the Labour Party, Twitter and the media this was always doomed to failure.

Hooton makes this point

How my left-wing interlocutors guffawed!

The Beehive, they advised listeners, was well on track to deliver KiwiBuild’s 100,000-home target and at least 1000 before the end of June 2019.

Since then, Twyford announced his Buying Off The Plans scheme, as well as using part of his $2 billion fund to buy houses which were already built but had failed to sell. Even including them, the June 30, 2019 target was cut to a mere 300.

Total failure.

Twenty months after its formation, the Government now admits that only 122 dwellings have been labelled “KiwiBuild”, including those bought off the plans or after completion.

My bolding of a critical point. Bought off the plan, This helps to validate this post from early 2018 – Kiwibuild – MBIE suggests target will not be met – Twyford doesn’t agree

Of those, fewer than 100 have sold.

Note – FEWER THAN 100. In fact I suggest that MBIE in early 2000 was clearly over optimistic, despite Twyford’s insistence to the contrary.

So where is the huge demand that KiwiBuild was addressing?

Maybe people do not want these houses because

  • they are in the wrong place
  • over priced
  • poorly designed

There is no visible progress whatsoever towards the 1600 KiwiBuild homes Twyford announced for Pt Chev, or the 3500 for Mangere or 2400 in Mt Roskill.

No progress – in other words all talk no delivery – see for example

The best estimate of the number of houses actually built because of KiwiBuild continues to be zero. With KiwiBuild set to be abandoned, that seems likely to remain its permanent legacy.

I made the zero forecast 14 months ago not because I know anything about property development, alas. I made it because I have a wide range of trusted contacts in the industry who had been briefed by Twyford or his officials and confidently told me the approach the Government was taking would completely fail. They had communicated something similar to officials, albeit more gently.

I would point out as well this from Professor John Tookey who wrote a prescient article for the Dominion Post in December 2017 – I quote:

Without a robust plan to drive capacity development the policies are unachievable. Transformative industry growth is unlikely without a concerted focus on capacity growth.

At present that explicit sequence of capacity-building initiatives is absent.

General Montgomery said “amateurs talk strategy; professionals talk logistics”. The systemic problem in Auckland and New Zealand is most certainly the logistics of growing scale. But this is not being addressed by wishful policy statements.

Moreover, it wasn’t just Auckland property developers who were telling Twyford he was on the wrong track. More than a year ago, Treasury officials had told him much the same, prompting him to slam them publicly as “kids . . . fresh out of university and . . . completely disconnected from reality”.

This reinforces the points made by Stacey Kirk here that ministers now blame officials for their own incompetence and stupidity Twyford is probably the worst offender in this regard.

As the Prime Minister considers her first reshuffle, the current Beehive line is that perhaps Twyford should remain Minister of Housing now that he has learned about the industry and from his complete failure so far.

Absurd. Not only has he failed in Housing, he has failed in Transport as well. However, Labur’s pool of talent is small and their obsession with gender makes it worse.

This extraordinary suggestion may have something to do with Twyford’s popularity among Auckland Labour Party activists for his campaign work over many years.

That might be an indicator of a key issue. Twyford has not made the transition from campaigning to governing. He confuses words and slogans with achievement and reality.

But there is precious little evidence that Twyford, now 56, is a person who can listen and learn.

Indeed

Hooton then makes another very pertinent point and one that needs to be rammed home on a very regular basis.

KiwiBuild, after all, is not a new policy.

It was announced by Labour back in 2012 with Twyford responsible for building and construction all the way through. Had the former Oxfam boss listened to anyone in the construction industry since then, he would have known it is not possible to turn $2b into 100,000 houses over a decade just by recycling capital. It seems not even to have occurred to him that, were it possible, private developers would already have done it.

Twyford much preferred attacking National to actually working out policy. Indeed if he had spent some time on detail, he and Labour might have avoided a number of the issues he has run into. However, his arrogance and his ignorance combined to prevent that, especially as Twyford seems to be possessed of a god complex.

Even a $15,000 slice of each pie would turn the penniless entrepreneur into a billionaire.

Had Twyford listened to anyone, he would have learned that were anything like KiwiBuild to be possible, it would have to be done at scale, utilising the Crown’s procurement power, rather than as a collection of much smaller projects.

This is in line with the thrust of points made by Professor Tookey

Better still, he would have implemented KiwiBuild as the construction of 100,000 new state houses which would then be sold to tenants under a rent-to-buy scheme. While the Labour left would have whined about privatisation, such a scheme would be a beautiful fusing of the politics of Michael Joseph Savage and Margaret Thatcher.

No Matthew, Labour’s ideological bent is such that rationality does not come into the equation. This is borne out by the excellent analysis from Henry Cooke the other day.

Ardern may have hopes that even Twyford could oversee something so obvious and relatively simple, but surely the Prime Minister must hold him accountable for the tens of millions he has wasted on his initial folly — and for the embarrassment he has caused her personally including the cringe-inducing McLennan Rd “street party” complete with Dave Dobbyn wailing out Welcome Home.

More substantially, Ardern should reflect on the relationship problems that seem to emerge whenever Twyford is involved.

The extent to which he is to blame is unknown, but it was certainly unfortunate to lose the chief executives of both KiwiBuild and the New Zealand Transport Authority (NZTA) in a single year.

More mysterious was the sudden and largely unexplained departure of the highly regarded Auckland business leader and confidant of the Prime Minister, Michael Stiassny, as chairman of NZTA after just one-year in the job. The scuttlebutt suggests a disagreement about the proper limits of ministerial authority with respect to an independent Crown agency such as NZTA.

I think this is a vain hope. We have seen, repeatedly, that Ardern does not really like handing personnel issues. Indeed, Stacey Kirk makes that point quite pointedly in her Stuff article on 22 June 2019. Plus Ardern has repeatedly backed Twyford and talked up the recalibration nonsense see for example.

Housing and transport are both critical to preventing New Zealand’s already near-unlivable commercial hub and major population centre from completely breaking down, and — not unrelatedly — to Labour’s reelection in 2020 and 2023. The portfolios are also inextricably linked.

Ardern owes it to Aucklanders in particular to appoint the very best of her ministers to look after both jobs, not leave them under the control of someone whose credibility among everyone from first-home hunters to the country’s most senior business leaders is so low.

Very true.

Yet she exhibits no appetite for actually governing or leading an administration, PR, School Visits and ‘fluff and puff’ articles are her bag, along with globe trotting to occasions where she can star. Detail, and leading play second fiddle to dress-ups.

Twyford is not fit for purpose either as Housing Minister nor as Transport Minister of which more another day.

This whole episode again raises questions as well about Ardern’s competence and fitness to be PM. Empathy, hugs and wearing a hijab do not a Prime Minster make, nor does a consistent failure to understand economic reality help..

2 Comments leave one →
  1. 23/06/2019 20:40

    While Twyford has Real Estate agents collecting commission on the sale of these Kiwibuild houses and eroding capital it will never be possible to recycle the original $2bn over and over. I have worked on Kiwibuilds and there is no interest from the public in them.

    Like

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  1. Sloppy Journalism #12: One News runs ‘fluff and puff’ pushing Ardern’s major PR weapon – the baby! | The Inquiring Mind

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