The Auditor-General’s office has confirmed it will investigate concerns raised by National about taxpayer cash being used to underwrite KiwiBuild houses, National’s Housing spokesperson Judith Collins says.
“I’ve discussed with the Auditor-General several concerns I have about the way KiwiBuild operated under former Housing and Urban Development Minister Phil Twyford. I’m glad his office agreed my concerns were worthy of further examination.
“In my view, serious questions need answering about the way taxpayer funds were used to prop up Labour’s flagship housing programme. My main concern is the suspicious-looking deal to underwrite houses already under construction in Canterbury and Auckland.
“KiwiBuild’s Cabinet paper made it clear the taxpayer underwrite – which guarantees developers a minimum price for houses that don’t sell – was for homes sold “off the plans” and offered for sale “in the first instance” to KiwiBuild buyers.
“But KiwiBuild underwrote a development in Otahuhu where all of the apartments were already complete. Council documents show the apartments were built to plans approved before the last election, and construction started before Phil Twyford became a Minister.
“The apartments were also unsuccessfully offered for sale at the same price KiwiBuild later underwrote them for.
“All of this runs contrary to what Cabinet had approved funding for. There was absolutely no benefit to taxpayers by underwriting these already complete apartments.
“Houses underwritten in Huapai, north of Auckland, and Canterbury fall into the same basket. They were under construction and unsuccessfully marketed well before KiwiBuild.
“What’s worse, the houses in Otahuhu, Huapai and Canterbury are all struggling to sell and the Government has been forced to step in and buy them with taxpayer cash.
“Phil Twyford committed to underwriting $660 million worth of KiwiBuild houses during his time in charge, leaving taxpayers with plenty of reasons to be worried.
“I’m very concerned that money has been appropriated by Cabinet and then used for a purpose that was not exactly agreed to. That is a serious issue and one for which Phil Twyford and any other Minister involved should be held to account."
Revelations that some people have qualified for KiwiBuild with house deposits upwards of $600,000 is further evidence the scheme is basically taxpayer-funded welfare, National’s Housing spokeswoman Judith Collins says.
Media reports have revealed three KiwiBuild pre-approvals were based on applicants with deposits of $650,000. The three people with pre-approval declared annual incomes of less than $11,000, yet they claimed the ability to stump up massive deposits with help from family members.
Sixteen applicants declared deposits of more than $200,000 with a number of others declaring more than $300,000.
“It’s been obvious for a while now that KiwiBuild is little more than welfare for property developers who are struggling to sell houses in places that people don’t want to live,” Ms Collins says.
“Now it appears that welfare scheme has been extended to New Zealanders with plenty of money they can tap into through parents or friends. Why does Phil Twyford feel the need to give these people a taxpayer subsidy when they can just take their large house deposits down to the bank and get a good deal?
“This shows that KiwiBuild is being accessed by people for whom it was clearly not intended. The scheme has a budget of $2 billion, yet hardly any first-home buyers have actually been able to benefit from it.
“New Zealanders were sold a dog at the last election. Phil Twyford had six years in Opposition to get KiwiBuild right but didn’t think the policy through. The best thing to do now would be to get rid of it and focus on working with community housing providers.
“While Labour continues to over-promise and under-deliver, National is the party that gets stuff done. We are working on Resource Management Act reform that will make it quicker for developers to get properties to market, bringing down the price, and make it cheaper and easier for people to build houses in the first place.”
KiwiBuild continues to offer nothing but failure, with the Government effectively confirming it won’t meet its watered-down expectation of 300 houses built in the project’s first year, National’s Housing spokesperson Judith Collins says.
When asked by media on Monday whether KiwiBuild would live up to Phil Twyford’s reduced expectation of 300 houses completed by June 30, the Prime Minister would not commit to that number.
“It’s yet another broken promise from the Government,” Ms Collins says.
“This shouldn’t surprise anyone after both the Prime Minister and Housing Minister refused earlier this month to commit to KiwiBuild’s over-arching pledge of delivering 100,000 affordable homes in a decade.
“This is just the latest in a long line of missed KiwiBuild targets. First the Government promised 1000 houses in year one, then it was 300 houses, and now it’s simply ‘not-many-at-all’ houses.
“Nowadays you hardly even hear anyone from Labour say the word ‘KiwiBuild’ out loud in public, which tells you how toxic this ill-thought-out policy has become.
“Labour has been planning KiwiBuild since 2012 and Phil Twford had six years in Opposition to get the policy right. Yet 19 months into the Government’s term, it has only managed to build 83 houses.
“This latest failure is further evidence that Mr Twyford needs to resign his Housing and Urban Development portfolio. His inability to deliver on Labour’s flagship election promise has robbed both him and his party of any credibility in the eyes of the public.
“KiwiBuild was a dog of a policy from day one and there’s little Mr Twyford can do to salvage it at this point. Allowing him to keep going will only tarnish the Prime Minister’s reputation.
“National knows the answer to providing New Zealanders with houses is to reform our planning laws to make it easier to build, and to help community housing providers put roofs over people’s heads.”
Despite Phil Twyford claiming there is “strong demand” for KiwiBuild houses in Canterbury, there hasn’t been a single sale since the first ones went on the market three months ago, National’s Housing spokesperson Judith Collins says.
“The Minister of Housing and Urban Development’s deal with Mike Greer Homes to underwrite 65 KiwiBuild houses in Canterbury with hundreds of millions of taxpayer dollars, is shaping up as a serious financial risk to the people of New Zealand.
“The first seven of these houses hit the market on February 20 with prices ranging from $459,000 to $480,000 – and Mike Greer Homes hasn’t had a single nibble from home buyers since then.
“There is little-to-zero demand for houses in this price bracket in Christchurch, despite Mr Twyford’s assertion to the contrary. It shows just how little thought was put into his KiwiBuild policy, which has been a spectacular failure.
“The Canterbury houses have gone unsold for so long now there is a real risk taxpayers will either have to buy them back as surplus to requirements, or Mike Greer Homes will drop their price on the open market and taxpayers will top up the lost profits.
“Taxpayers should be worried. The Minister of Housing and Urban Development has already committed to underwrite $660 million of KiwiBuild homes across the country.
“He should admit defeat and dump this terrible KiwiBuild policy now before he throws any more of New Zealanders’ tax dollars at developers to cover up his failings.
“National would focus our efforts on reforming the Resource Management Act, to bring down the cost of building for all New Zealanders, and support community housing providers who are much more experienced in this field than Mr Twyford.
It is time for the Minister of Housing and Urban Development to step down over his inability to deliver on the Government’s flagship housing policy, National’s Housing spokesperson Judith Collins says.
“Phil Twyford’s statement that he would ‘neither confirm nor deny’ whether the Government is still committed to building 100,000 KiwiBuild homes in 10 years confirms it is not. If it was, the Minister would say so rather than telling New Zealanders to wait for the results of KiwiBuild’s ‘reset’.
“The Prime Minister also failed to show leadership and commit to the target when questioned by National, which shows her Government has broken yet another election pledge just 18 months into its term.
“The only thing Phil Twyford has successfully built during his time in charge of KiwiBuild is a house of cards with all his flimsy promises to home-buyers, and that house has finally come crashing down. It’s time for him to go.
“There’s not a shred of credibility left for Labour’s failed programme. A thousand homes were promised in its first year, but that target was scrapped in January. Only 80 houses have been built thus far and only a third of them have sold.
“Phil Twyford has publicly staked his job on delivering 100,000 houses in a decade. Now that KiwiBuild is heading the way of Labour’s capital gains tax it’s time for him to honour that commitment and offer his resignation, for the sake of his and the Prime Minister’s credibility.
“Removing Mr Twyford from the equation would allow the Government to kill off KiwiBuild and focus on building state houses and encouraging community groups to be involved housing provision, as well as deal with much-needed reform of the Resource Management Act, which National is working on now.”
It is becoming increasingly confusing to figure out the level of rigour being applied by KiwiBuild officials before Phil Twyford gets out his chequebook, National’s Housing spokesperson Judith Collins says.
“The Minister of Housing and Urban Development has already spent $660 million taxpayer dollars on buying and underwriting KiwiBuild homes, and I’m very concerned about how much meaningful change his spending is actually having on the housing market.
“The Minister has said housing developments must satisfy an ‘additionality test’ in order to get a KiwiBuild subsidy. The idea is that the taxpayer cash injection will either speed up the delivery of those developments or see them redesigned to include more affordable houses.
“But when KiwiBuild swooped in to buy the 19-house Mason Square development in Otahuhu, all of those houses were already well under construction and 10 of them had already been completed.
“How can houses be redesigned or completed faster when they’ve already been completed?
“What’s more is the price of those homes didn’t drop a single cent from what they were being marketed at before KiwiBuild came calling – and only one of the houses offered for sale six months ago has actually sold.
“The Minister may well argue that buying the Otahuhu houses freed up the developer to get on with other things, but people can’t live inside good intentions, and the Otahuhu development looks like little more than a wasted subsidy at this point.”
Phil Twyford’s credibility as the minister in charge of KiwiBuild is shakier than it has ever been, and it’s time for someone else to step in and clean up the mess he’s made, National’s Housing spokesperson Judith Collins says.
“This past week has shown just how little knowledge the Minister has when it comes to KiwiBuild, as well as the lack of control he has over the Ministry of Housing and Urban Development.
“It started with his officials claiming the so-called additionality test they use to determine whether to underwrite KiwiBuild homes with taxpayer money is done verbally with developers.
“Then we saw the Minister tell Parliament that ‘extensive documentation’ existed to show the process his officials were following, only for his Ministry to then come out and say no such documentation existed.
“I believe Phil Twyford has misled the public over this issue, and if he cannot provide a satisfactory explanation for these shifting statements then it’s time for him to stand down as the Minister of Housing and Urban Development.
“It’s telling that his Ministry’s chief executive, Andrew Crisp, has also hidden from public view and is refusing to be interviewed on the problems plaguing KiwiBuild.
“These taxpayer underwrites guarantee developers a minimum price for KiwiBuild homes that don’t sell, and this latest fracas has shown the process followed to date before signing off $660 million worth of underwrites has been far from robust.”
Housing Minister Phil Twyford has shown how fast and loose he is playing with taxpayer money by underwriting millions worth of KiwiBuild houses based on little more than casual chats with developers, National’s Housing spokesperson Judith Collins says.
“Last month we found out Mr Twyford agreed to underwrite KiwiBuild houses with developer Mike Greer Homes, despite many of these already being built before KiwBuild got involved.
“Now the Minister has admitted he was surprised to learn – after questions from the National Party – that the test his officials used to determine whether the underwrite would apply was done verbally with the builder.
“Mr Twyford’s underwrites guarantee a minimum price for KiwiBuild homes that don’t sell, shifting the risk from the developer to the taxpayer. He was very fast and loose with taxpayers’ money last year, signing off $660 million worth of underwrites.
“Conversations are hardly a robust assessment of whether these homes will present a risk to the taxpayer, which is a real possibility given the shambles KiwiBuild has been to date.
“Only a third of the houses have sold; the Minister has already had to buy unsold houses and is now stuck with them; he has missed building targets and announced a recalibration in January that he said would take a few weeks, but still hasn’t been announced.
“Not only does this show how on-the-fly KiwiBuild has become. The lack of a paper trail for these government underwrites flies in the face of promises to be open and transparent.”
Housing Minister Phil Twyford’s contract to underwrite KiwiBuild houses with developer Mike Greer Homes is looking murkier and murkier, National’s Housing spokesperson Judith Collins says.
“There were 13 houses already being built by Mike Greer in the Christchurch development before KiwBuild got involved and agreed to underwrite 104 houses across the country. Just yesterday the Minister said ‘it’s not about individual houses’ failing to acknowledge that there were actually 13 of them.
“Mr Twyford claims the Mike Greer homes wouldn’t have been delivered without the help of him and his KiwiBuild programme.
“But by guaranteeing the price for Mike Greer KiwiBuild homes, the developer now no longer needs to worry whether they sell because the taxpayer is picking up the tab.
“Mr Twyford is claiming partnering with Mike Greer gave the developer confidence to deliver more affordable housing, but that excuse doesn’t fly given Mike Greer is also marketing its own non-KiwiBuild homes in the development, some larger with an extra bedroom or bathroom, for $20,000 less.
“Now that the Minister has guaranteed Mike Greer a price for their homes, the developer can focus on selling homes that, for all intents and purposes, are better value for money than their neighbouring KiwiBuild dwellings, in a market that has an oversupply of houses.
“The Minister has more dollars than sense. Not only is his pet project failing, but it’s now risking thousands of taxpayer dollars if the KiwiBuild homes don’t sell for the price he has guaranteed them at.
“KiwiBuild isn’t adding any houses that wouldn’t already have been built, and in some places they’re more expensive than houses without the KiwiBuild sticker. The taxpayer is paying for Mr Twyford’s mistakes.”
Housing Minister Phil Twyford’s pet housing project KiwiBuild is not only unlikely to reach any targets set, but those houses it does deliver will be at the expense of houses that were being built by the private sector, National’s Housing spokesperson Judith Collins says.
“Mr Twyford arrogantly ignored the Reserve Bank’s forecast in November last year that KiwiBuild will only deliver 7000 to 14,000 additional houses by 2022, significantly lower than the 28,000 houses the Minister has promised.
“Earlier last year Mr Twyford had called officials at Treasury, who had made similar estimates, ‘kids… completely disconnected from reality’.
“Today, the Reserve Bank Governor said if KiwiBuild is to build 100 houses, that means between 50 and 75 houses elsewhere won’t be built, and Mr Twyford once again could not accept that information.
“KiwiBuild is not substantially adding to the housing supply in areas where it is needed, and in homes the size that people want to buy. Instead it is simply redirecting workers away from private home builders.
“The policy is not only going to fail to build enough houses, but its stripping resources away from builders that were already going to be built or were in the pipeline.
“National had a comprehensive housing programme underway when we left office. We were on track to build nearly 100,000 homes over the next three years, which is twice the number of houses currently in Dunedin.
“It is no wonder KiwiBuild is a joke. Mr Twyford was lazy in Opposition and didn’t hammer out the details. He’s blindly pushing on with the programme, despite all signs pointing to KiwiBuild descending into one of the biggest failures of public policy in recent New Zealand history.
“It’s Mr Twyford who is ‘completely disconnected from reality’.”