The Spinoff: Has Labour really been ‘the most transparent and open’ government ever?

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Some words and phrases weigh heavily on this government, like a concrete-block necklace. “Kiwibuild” is one such. Another is the promise made in November 2017 by MP Clare Curran, just a month after Labour had taken power, that hers would be “the most open and transparent” administration this country had ever seen.

Curran was soon after forced to resign from her role as minister for open government, but the ambition remained, at least notionally. And her words only reformulated, in striking language, sentiments uttered by her then prime minister, Jacinda Ardern. But open and transparent government has often eluded Labour, as it has faced all the usual temptations to limit the public’s role in decision-making and conceal information. So how well has it fulfilled Curran’s promise? 

One respected voice on these matters is Keitha Booth, who from 2008 to 2015 led New Zealand’s Open Government Information and Data Programme. “There has been progress,” she says of Labour’s efforts. Openness is partly about creating more opportunities for people to be involved in politics: Booth points to recent experiments with citizens’ assemblies, albeit largely at the local level, and – more contentiously for some – co-governance. Such innovations “seem to be becoming embedded”. However, she bemoans the lack of “public leadership on open government at the ministerial level”, noting that the responsible ministers, among them Chris Hipkins and Andrew Little, have generally been “far too busy” with other portfolios.

Opacity and privilege have also generated the usual parade of scandals, from the Ministry of Health removing unwelcome statistics from its reports to Stuart Nash disclosing confidential Cabinet information to donors. The government, however, bases its defence of Curran’s pledge on three pillars: the promised creation of a register of the true (“beneficial”) owners of New Zealand companies, the formalised publication of Cabinet papers (something that happened piecemeal under previous governments), and the release of ministers’ engagement diaries. All are potentially important reforms. But none has been perfectly delivered. 

The beneficial ownership register could, experts believe, represent real change, making it easier to determine who owns firms currently veiled in layers of shell companies and trusts, and to track down those responsible for corporate wrong-doing. But it is still a work in progress, and in any case represents openness from companies, not the government itself.

Meanwhile, on some measures, under half of all Cabinet papers are actually released. Promises of proactive publication are also, ironically, being used to refuse information requests, journalists say. As one puts it: “Too many papers are not released [at the time they would normally be], because the government promises to ‘proactively’ release them at some undetermined time in the future … when it is no longer of use to the media or the public.” (In passing, it should be noted that many countries are amazed we publish Cabinet papers at all.) The ministerial diaries, meanwhile, can be difficult to find online, are formatted as hard-to-use PDFs, and may not contain all the meetings of interest. 

One festering sore is the continued failure to overhaul the 1982 Official Information Act (OIA), which plays a vital role in mandating the release of public data and documents but is widely seen as needing renewal. In 2020, Little promised a full review, but it was “deferred” by his successor, Kris Faafoi, and never eventuated. In its absence, reporters have complained that abuse of the act has accelerated, just as it did under John Key and, before him, Helen Clark. Official statistics show more requests for information are being answered within deadlines, but that says little about the quality of the responses’ compliance with the law. 

Journalists report releases being heavily redacted, given to other, “friendlier” reporters, or simply withheld without good reason. Anna Fifield, when editor of the Dominion Post, castigated the government for its “obstructive and deliberately untransparent” culture – one that was worse even than in the other democracies she had covered.

To test how widely this view is shared, The Spinoff contacted half a dozen members of the Press Gallery, all of them journalists who have followed multiple administrations closely, asking them for impressions of this government’s performance and a ranking from 1 (much more open and transparent than its predecessors) to 5 (much less).

Their combined responses could be summarised in one word: meh. One experienced journalist said Labour had been “slightly more open and transparent, because my impression – and that’s all it is – is that the proactive release of officials’ and Cabinet papers has become an important source to allow deeper analysis of how decisions have been reached.” But they noted “significant ways in which the government as a whole has become less transparent”, especially now that departments’ press teams virtually bar reporters from speaking directly to officials. 

This practice was, another journalist added, “particularly problematic in a tiny country in New Zealand, where some of the best experts and voices on any subject are employed by the public sector”. But on the wider question, this journalist thought that the government “win[s] on a technicality. They are more open and transparent than other governments, but only because previous governments have been particularly opaque.” 

Some agencies were praised for proactively releasing material, notably the Treasury and ACC. There was a widespread sense that, among ministers, Hipkins had been one of the best, but had often failed to bring colleagues with him. “It’s a real mixed bag,” one journalist said of the overall record. “The intent has been good in many respects, but it’s the execution that has been the issue.” 

Others were even less enthusiastic. “I have noticed no obvious change in [official information] responses since the change of government,” one journalist wrote. “Still reliably up to the line on timing, sometimes over; still redactions and omissions which seem to me dubious. I have noticed an uptick in responses to straightforward inquiries that comms people chuck in the [much slower] OIA pipe, which is incredibly frustrating.”  

One journalist, even more scathing, said the failure to review the 40-year old OIA was “the clearest signal you need that [Labour] was never committed to open government”. They added: “A culture of secrecy and obfuscation has bled down from the Beehive into the public service … As a working journalist, I have found it increasingly difficult to get straight answers to questions. It also takes twice, three times as long because every paragraph is parsed until it is reduced to a statement that tells you absolutely nothing.” 

So how did the reporters rank Labour’s performance, overall? Their scores averaged out as a ‘3’ – suggesting there was nothing, on balance, to differentiate this government from any other.

This tepid response is supported by global comparisons such as the Open Budget Survey, which examines how readily the public can find information on the government’s finances. It does not make encouraging reading. From a high of 89 (out of 100) in 2017, New Zealand’s score fell to 87 in 2019 and then 85 in 2021. Partly this reflects the high-speed, pandemic-driven rewriting of the 2020 Budget; many countries experienced similar falls. Still: hardly a resounding endorsement of Curran’s ambition. 

On the plus side, Labour has paid more attention than National to the Open Government Partnership, an initiative in which 76 countries draw up regular action plans to improve participation and transparency. New Zealand’s first such plan, developed under National in 2014, was a derisory list of things that were already happening. Under Labour, the plans have – from this low bar – become more substantial. 

But they are still hardly ground-breaking. The independent audit of Labour’s latest plan suggests just three of its eight measures are “promising”, and even that assessment seems generous. One measure involves nothing more than “lay[ing] groundwork for online platforms to share public procurement information”. 

Worst of all, NGOs say, there is nothing in the plan to stop the introduction of the “secrecy” clauses increasingly being written into legislation to override the OIA. Labour alone has brought in over 30 – “a significant stain against its claims on open government”, says Andrew Ecclestone of the New Zealand Council of Civil Liberties, the NGO most active in this field. The proposal is instead to strengthen the scrutiny of more such clauses in future: the “open government” action plan, in other words, actively envisages greater secrecy.

So there it is. The government may claim that its three big changes – the promised beneficial ownership register, the regular release of Cabinet papers and the publication of ministerial diaries – are by themselves enough to lift it into “most open and transparent” territory. But the failings noted above, alongside the slight declines in global rankings, the usual parade of scandals and the ambivalent rankings of experienced journalists, argue the other way. And even some of those who deem the pledge technically fulfilled would concede that Curran’s language invoked a whole-of-government step-change: a transformative improvement, to use the adjective favoured by early-stage Ardern. And of that there is no evidence at all.

The Post: The trouble with PPPs ‒ problems, pitfalls and pain

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In Northern Ireland, taxpayers have been spending millions of pounds maintaining the buildings of an empty school. Why? Because it was built through a public-private partnership (PPP), a complex form of financing already used on local projects like Transmission Gully and set to become even more prevalent here.

Having seen these financial structures fail first-hand, I hope they don’t spread. And the fact we’re even entertaining the idea reveals deep failings in how we think about government in New Zealand.

The core of it is this. If the state wants something built – a school, a road, a power station – it has several choices. In the old Ministry of Works days, it could do everything itself, from finding the funds to directly employing the tradies.

These days, typically, it pays a firm like Fletcher’s to do the construction, but nothing more. The private-sector involvement, though not insubstantial, is nonetheless limited, controlled.

In a PPP, though, all the government does upfront is specify that it wants a building – a hospital, say. It then contracts a private-sector consortium to do everything else: design the hospital, borrow the money for its construction, build it, and then operate the facilities – for a hefty fee – for 30 or so years.

These financing structures first flourished in Britain in the 1990s, and were in full swing a decade later when I worked there as an infrastructure reporter. But even then the flaws were apparent.

Private firms always pay steeper borrowing fees than governments do, so PPPs have higher upfront costs. They save money only if the consortium can find efficiencies elsewhere. And the rationale of PPPs is that if a firm has to run a facility for 30 years, they’ll build it beautifully, rather than cutting corners and hiding defects before handing over to the state.

This logic is, alas, undermined by our old friend complexity.

Negotiating a contract that covers everything that might happen over three decades is nigh-on impossible. So either the consortium agrees to take on large, amorphous risks, in which case it charges a packet for the privilege; or, when unanticipated problems arise – the hospital buildings need to be rejigged to meet new models of care, for instance – the consortium can refuse to make the changes unless it is again paid colossal sums.

This is precisely what happens in Britain, where stories of ridiculous charges – thousands of pounds for a new tap, for instance – abound. The worst thing in the world is a private monopoly – and that is exactly what you get, for 30 years, with PPP maintenance.

Hence the Northern Ireland fiasco. When the contract for the PPP school was signed, no-one anticipated rolls would fall so rapidly that it had to close. But the taxpayer must keep maintaining an empty school, because that’s what the contract says. Far from being efficient, PPPs are exceptionally inflexible.

The negotiations are also a consultants’ dream. Take, for instance, the notorious (and admittedly massive) early-2000s London Underground PPP contract, where the lawyers’ and accountants’ fees alone were £500m. That’s a billion dollars, just to negotiate a contract, before builders set foot onsite: resources squandered on an epic scale. National, supposedly the enemy of waste and consultants, should take note.

It’s hardly surprising that, drawing on decades of experience, Britain’s National Audit Office concluded a few years back that PPPs cost more than standard construction contracts and there was no evidence they delivered better services. New Zealand’s Transmission Gully fiasco, with its constant over-runs and poor-quality road seal, is no aberration.

So why would both Labour and National still contemplate PPPs for roads and other projects? Partly because of the myth that they solve the state’s financial problems by getting the private sector to pay for things upfront.

They don’t, of course: there’s no free lunch, and the state just has to pay back the (inflated) bill through 30 years of maintenance fees. There is, what’s more, no financial problem to solve, at least in New Zealand.

Our government borrowing, at roughly 20% of GDP, is low by global and historical standards. We could – and should – borrow more without running into any difficulties, in order to fund the infrastructure needed in coming decades.

How do we ensure these schools and hospitals are well-built? Restore the public sector’s construction expertise. We need a team of super-procurers, of expert engineers and architects, permanently based in government, designing beautiful and efficient buildings, driving tough deals with construction firms, and – crucially – retaining the knowledge and learning the lessons from each project, so as to be able to insist on lower costs, and higher quality, next time round.

The recent creation of the Infrastructure Commission, and the repurposing of Christchurch rebuild agency Ōtākaro into a wider project-delivery body, are already promising steps. Let’s build on them – and avoid embracing the failed, wasteful and hyper-complex world of PPPs.

The Post: Confronting old orthodoxies and hard truths

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In Britain for work recently, I asked everyone I met the same question: can their country be fixed? After months of reading headlines about “broken Britain”, of seeing stories of collapsed public services and soaring poverty, I didn’t necessarily expect a positive answer. But what I learnt was illuminating – for New Zealand as much as for the UK.

In London, it was impossible to miss the damage done in the twelve years in which the Conservatives have governed with a toxic mix of incompetence and cruelty. The average wage is essentially the same now as it was in 2010, embodying an extraordinary, and distressing, stagnation of living standards.

Brexit has permanently damaged the British economy, according to every reputable analyst. Trade is down, investment is down. This is what economic self-sabotage looks like. And it’s something to remember here whenever Christopher Luxon touts National’s fiscal credentials: conservatives don’t always make good economic managers.

More troubling still are the social impacts: in Britain last year, one charitable network alone delivered three million food parcels, a depressing record. Nearly eight million people are waiting to see a doctor. Owing to increased poverty and malnutrition, a by-product of Conservative austerity, new cohorts of British children are literally getting shorter.

For the mostly middle-class people I encountered, life was still tolerable. In the warm summer evenings they sat in public parks, picnicking in that picture-postcard way the British do, dog-walkers and young families mingling under the calmly lengthening shadows.

But even so, my acquaintances feared for their country’s future. They worried about others’ struggles, about long-term decline and the erosion of society. And they were sceptical about whether politics had any answers.

In few countries, indeed, is there a clearer sense of the tide running out on the political certainties that have dominated recent decades. And this leaves both major parties stranded.

Margaret Thatcher’s 1980s reforms, just like our own Rogernomics, were supposed to unleash entrepreneurialism. And in part they did. But hands-off, laissez-faire government also fostered what the French call rentiers – people who live passively off the income from their assets – and encouraged firms to extract super-profits.

In Britain, this is most noticeable among their privatised water companies: sold debt-free by Thatcher, they have since borrowed £53bn and paid out £72bn in dividends, enriching their shareholders while hiking water charges and pumping sewage into the Thames.

Rentiers can be found, too, among the older generation whose homes have soared in value as house-building has plummeted, and who maintain that state of affairs by blocking all development. They then help their kids buy a house, while others 30-somethings are left paying exorbitant rents; inequality replicates across generations.

And as the rentiers profit, others struggle. One leading Conservative thinker, Nick Timothy, argues that Britons have become “serfs to debt, trapped by low pay and bloated assets”. So loud are these recriminations that columnists like the FT’s Robert Shrimsley have begun asking: do Conservatives “still believe in capitalism?”

But UK Labour also faces a dilemma. Too timid to challenge economic orthodoxy, the party seems unwilling to significantly raise taxes if it wins the next election, expected sometime next year. It promises instead to repair public services using the proceeds from higher economic growth.

But, as the former Labour adviser James Meadway argues, turbo-charged growth may not be possible, as climate change sparks extreme weather events, crop failures, food and water shortages, “and the conflicts all these help produce”.

The parallels with New Zealand politics, though not perfect, are clear. We have our anti-development rentiers. We have problematically privatised utilities: notably, the electricity ‘gentailers’. Most of all we have cartel-like behaviour in industries dominated by a few players who can hike prices at the consumer’s expense: supermarkets, banks, fuel retailers.

All this challenges our image of a New Zealand economy founded on plucky entrepreneurialism. It also suggests laissez-faire capitalism is working rather less well than intended – something that should concern National, the party of free markets, as much as anyone, though it seems largely indifferent to the problem.

Meanwhile, we face an ever-more intolerable situation in which the older generation’s healthcare and pension demands grow but we tax only the resources on which the young rely: incomes in the form of salaries and wages. Surely, the resources dominated by the over-60s – assets like rental properties and financial investments, in other words capital gains and wealth – cannot remain untaxed forever.

Yet Labour leader Chris Hipkins has ruled out such levies in his political lifetime. Admittedly that may last only three further months. But still there is a growing risk of political stasis: an unwillingness to confront old orthodoxies and hard truths.

Britain shows us what happens when, over the course of a decade, politics fails to engage with a new reality. We must not slip into that same slough of despond.

The Conversation: Tougher donation limits and funding fixes would make future NZ elections fairer for all

Co-written with Lisa Marriott. Read the original article on the Conversation

Less than three months out from New Zealand’s 2023 election, large political donations have been making headlines. Donations to both the ACT Party and the National Party have significantly outpaced large-scale contributions to other political groups.

Should this be a cause for concern? Studies from overseas indicate those who raise the most money tend to win. And, based on our recent “Doughnation” research, donors know that too. Wealthy New Zealanders admitted to gaining access to the levers of power through political donations.

So do our current campaign finance rules do enough to protect a basic principle of democracy – that we should all be equal in the ballot box?

Not according to an interim report from the Independent Electoral Review, which warns New Zealand’s current electoral laws are still “not as fair as they could be”.

Its final report will be delivered to the government in November – too late to have an impact on the 2023 election.

But if we want future elections to be fairer, here’s what the report found needs to change.

How can we make future elections fairer?

The Independent Electoral Review’s interim recommendations include

• replacing the current broadcasting allocation with a “fairer and more effective form of state funding” for registered parties

• per-vote and base funding for registered political parties

• tax credits for donations up to NZ$1,000

• introducing an expanded Election Access Fund and a new fund to facilitate engagement with Māori communities.

Those changes are additional to several changes to political party finance implemented at the beginning of 2023, ahead of this year’s election.

What changed ahead of this election?

Changes included lowering the reporting threshold for large donations from $30,000 to $20,000 and new requirements around reporting donations above $1,500.

In the first six months of 2023, the main political parties have already received more than $4 million in donations over $20,000.

The National Party benefited the most from political donations, receiving $1,255,587 in large political donations, closely followed by ACT, which received $1,255,000. New Zealand First received $567,304, the Green Party received $496,260 and the Labour Party received $428,844.

These figures reflect the large donations that have to be disclosed within 10 days of receipt. We won’t know the sum total of small donations until well after the election.

How much do large donations sway elections?

Research suggests donations can help political parties win more votes, but that typically this only applies to the more established parties. And, while money matters in New Zealand, it’s not necessarily a straightforward relationship.

Recent data from the United States showed better-than-average fundraising is a strong predictor of better-than-average electoral success, concluding that “money still matters”.

Australia’s Grattan Institute found that over the past five federal elections there, the party with the biggest war chest tended to form government. And an analysis of general elections in France and the United Kingdom between 1993 and 2017 showed increased spending per voter improved candidates’ share of votes.

Read more: 'They're nice to me, I'm nice to them': new research sheds light on what motivates political party donors in New Zealand

New Zealand’s 2017 election also illustrated a strong relationship between money and votes. National received 44.45% of the votes after a $4,579,086 fundraising haul. Labour received 36.9% of the votes and received $1,611,073 in political donations.

But the 2020 election result suggests there are limitations to the relationship between funding and votes, particularly for the two main parties. In 2020, other factors clearly contributed to the electoral outcome. For example, Labour’s handling of the COVID-19 pandemic appears to have outweighed National’s fundraising advantage.

Some voters’ voices are louder than others

Even if political donations don’t always decide elections, it is fairly well established that money buys access. Work from the Grattan Institute shows that highly regulated industries – such as mining, transport, energy and property construction – provided the highest level of donations to Australian political parties, made the greatest number of commercial lobbying contacts, and had the most meetings with senior ministers.

Access is not the same as influence, of course. It is typically difficult to make a causal connection between donations and influence, except when political scandals occur.

However, research out of the US by Martin Gilens showed that politicians’ decisions do not represent the preferences of poorer or middle-class citizens. Rather, these decisions fall in line with the interests of the wealthiest – a situation that Gilens attributed at least in part to the influence of wealthy donors.

In New Zealand, the Independent Electoral Review’s interim report acknowledged the

risks to public confidence in the electoral system if some people have more access to, or can unduly influence, parties and candidates through political financing.

In a recent opinion piece, former ACT board member Robin Grieve defended political donors as not always being motivated by self-interest, giving an example of a donor wanting to help children in the care of Oranga Tamariki.

While there may have been altruistic intent, the issue is still that the donation was made by a wealthy person to a political party with the stated objective of influencing legislation.

Is that fair? In our research exploring the motivations of wealthy donors, some agreed that it was unfair that they could donate while others could not, with one noting a

real problem with people who accumulate a lot of money supporting the systems that have allowed them to accumulate a lot of money.

Another commented that they did not think

that it is right that rich people can distort democracy.

Not everyone was concerned about this situation, with one donor telling us

the fact that some can promote their position more than others doesn’t worry me.

If acted on, the Independent Electoral Review’s recommendations for tighter donations controls and fairer funding for registered parties would help create significantly more transparency in New Zealand’s political donations system.

We believe a move away from a reliance on large individual donors would help increase public trust in the way political parties are funded. It also is likely to help level the playing field of access and potential influence in New Zealand politics.

The Post: A revolution in how local government works could be coming soon to a mailbox near you

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The revolution, in Gil Scott-Heron’s famous phrase, will not be televised – but it might just be mailed out to you.

Next week Wellingtonians should check their letterboxes, and their email, for an invitation to take part in a citizens’ assembly, an initiative that promises to help reset the troubled relationship between resident and council. Aucklanders have already had a happy taste of this new way of doing politics; if it also works in the capital, other areas may soon follow suit.

A citizens’ assembly is, in essence, a miniature public. In Wellington’s case, a firm contracted by the council, Global Research, will send out 10,000 invitations, and from the positive responses will select 40 residents. On six key categories – age, gender, education, home-ownership status, ethnicity and suburb – they will be broadly representative of the wider city.

Their task, over four weeks in September and October, will be to determine what the public wants to see in the council’s long-term plan, which sets the city’s direction for the next decade. Councillors have committed to receiving the citizens’ assembly report, incorporating its advice into their decisions, and reporting back to the assembly on what they’ve done.

It’s the latest sign of a movement slowly gathering steam. Last year, Watercare and the Koi Tū Centre for Informed Futures ran an assembly to determine Auckland’s next major water source. In Porirua, Ngāti Toa is working with the community to run wānanga, or assemblies, that will likewise seek to solve public problems in new ways. Last month’s Future for Local Government Review recommended more such innovations.

So why is all this revolutionary? For a start, it recognises that the relationship between the public and its representatives is seriously frayed. Nowhere is this more evident than in Wellington: a survey last year showed only one resident in eight was satisfied with how the council makes decisions.

These are crisis-like levels of discontent. Locals are sick of political infighting, decisions taken without transparency, and meaningless “tick-box” consultations.

Of course the council hears from residents all the time. But that feedback is, famously, biased towards the rich and the retired. It can also be poorly informed, representing thoughts formed in isolation, not considered opinions forged through deep engagement with dissenting views. Nor is it anchored in the constraints facing public bodies, notably the financial trade-offs required to fund any new service.

This leaves politicians groping in the dark for the public’s true opinion, unsure of what residents would choose if they had to listen to others, justify their views, change their stance, and come to a consensus.

Overseas experience, though, shows citizens’ assemblies can reveal that consensus – and spark change. Ireland used one to set itself on the path to marriage equality. In Melbourne, an assembly of 43 citizens drew up a much-lauded 10-year, $5b budget for the city. France shaped its climate change policy through a “convention citoyenne”.

Some will say this decision-making is precisely what we elect politicians to do. And in many cases they can go ahead and make the calls themselves.

But when they are deadlocked, or when – as is often the case – it is entirely unclear what trade-offs the public wants them to make, a citizens’ assembly can be a circuit-breaker.

Its participants are unencumbered by party lines. Financial supports – including small payments for people’s time – help ensure a wider range of views and experiences are represented than in standard consultations.

Good facilitation ensures everyone gets to speak; participants are taught how to listen and reflect. They are carefully briefed, and can decide which experts they want to hear.

But the real magic lies in discussion: the way the wisdom of the crowd emerges as people shift their views in response to better information and stronger arguments. Being a city in miniature, an assembly can claim that its decisions reflect what Wellingtonians would choose, if all 200,000 of us could be brought together to hash things out.

One citizens’ assembly, of course, doesn’t solve all our problems. Councillors might ignore its advice – something they must be encouraged not to do. There are tough questions to resolve, too, about how such forums sit with Māori aspirations for political autonomy.

The Ngāti Toa and Koi Tū projects are starting to answer such questions, however. And the assembly doesn’t stand alone. It will be followed by another democratic innovation, participatory budgeting, in which residents will be able to directly allocate the funds set out in the long-term plan.

If more such innovations become embedded in New Zealand’s political landscape, we will have taken a huge step towards overcoming democratic dissatisfaction, opening up decision-making, and – quite simply – delivering better services. It would be a victory for a new form of politics, and an initial healing of the bond between resident and representative. It’s exciting – and it’s coming to a mailbox near you.

The Post: NZ is having a bad moment – but it won’t last

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If I described to you a country that had recently halved its rates of child poverty, curbed its addiction to coal and engineered its biggest house-building boom in half a century, you might think that was a country where you’d like to live. Congratulations, then, because you’re already there: that country is New Zealand.

If this picture seems implausible, it’s because such points of light can barely penetrate the gloom that pervades the nation in its winter of discontent.

The proportion of New Zealanders who say things are on the right track, lodged for decades at around the two-thirds mark, is now closer to one-third.

Christopher Luxon’s claim that the country had “lost its mojo”, though politically incautious, may not cost the National leader many votes. It resonates.

In New Zealand, it seems, nothing works: our infrastructure is outdated, our preparedness for climate change inadequate, our slide down the education rankings apparently terminal. We can’t seem to close the salary gap with Australia; our productivity problems defy resolution.

None of this is without foundation. But the successes listed above are real. And they are – crucially for this country’s future – cross-party achievements.

The number of children living in families that can’t afford basic items, like paying doctor’s bills or buying two decent pairs of shoes, has fallen from 25% in 2011 to 10% last year. Housing consents have quadrupled in little over a decade. Less coal is now burned than at any point since 1990, and in the last 30 years, the share of renewable energy has risen from around 60% to over 80%.

These successes span National and Labour administrations. And they would probably continue, in some form or another, whoever wins October’s election.

On all the above issues, much remains to be done.

But our governments are clearly still capable of confronting grave social problems. We shouldn’t, in short, talk ourselves into thinking matters are worse than they are.

Such attitudes lead to despair, and despair often leads to inaction: the perpetuation of the thing lamented.

But how have these achievements been rendered so invisible? Labour’s setbacks elsewhere haven’t helped; a narrative of failure, once set, is hard to break.

More recently, Covid and the cost-of-living crisis have cast a huge cloud over everyday life. But all these things will pass.

While it has become fashionable to parrot the term “polycrisis”, humanity has in truth faced – and overcome – constant trial.

People born in 1900 endured, in swift succession, two world wars, an influenza pandemic and the Great Depression. Then they built back better.

We tend to forget such struggles because, as recent psychological research shows, the idea of a golden age is immensely seductive.

We are too attentive to bad things now, painting the present in a negative light, but – paradoxically – we also allow those thoughts to rapidly fade from our memory, leaving us with an overly positive image of the past.

Which is not to say that all is well in New Zealand now – with the country or with its government.

In a recent Listener essay, the writer Danyl McLauchlan posited three key problems: an inwards-looking bureaucracy better at brand refreshes than building things; an excess of oligopolistic, rent-seeking companies; and a culture of rampant sectoral lobbying and policy “capture”.

Much of this can be summarised with one phrase: the hollowing-out of the state. Its ability to plan for the long term, for instance, is minimal.

This stems from our national addiction to quick fixes – “number-eight fencing wire” is a short-term remedy not a far-sighted plan – but also the post-1984 small-government revolution.

When it comes to infrastructure, a 2021 Sense Partners report rightly labelled the 1980s and 1990s “the decades of underinvestment”.

This Government is ramping up infrastructure spending; again, good things are afoot. But the next problem is that we don’t have enough skilled construction staff.

Our long-term workforce planning, deficient in so many ways, needs urgent attention.

State capacity problems are widespread. Agencies rely too much on consultants because they have themselves lost the skills and confidence needed to deliver big projects. Labour may have hired 14,000 more public-sector staff, but many are young and inexperienced, novices joining agencies run by managers still repeating small-government mantras.

The restoration of state capacity could start small. The Australian government is creating a centre for evaluating how well its policies work, something that should both radically improve public services and cut the consultancy fees paid to what wags label “the coalition of the billing”.

More broadly, economist Mariana Mazzucato’s “state missions” – the vision-led initiatives that put a man on the moon and kick-started the clean-energy revolution – could help restore government’s sense of purpose.

Will any of these ideas be implemented? Possibly not. But if some big problems – poverty, coal use, constraints on house-building – are being tackled, there’s no reason others can’t be too.

The Post: Greens' wealth tax plan reflects a more mature country – and party

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One of my favourite quotes, from the American entrepreneur John Paul DeJoria, is this: “Success unshared is failure.” It delights me to see people do well, develop their talents, make something of themselves. But if that success isn’t shared, if it doesn’t help elevate others, if it won’t acknowledge our individual reliance on collective goods or seek to bolster that shared wealth, then something is badly awry.

Former prime minister John Key came out swinging this week against scrutiny of the rich. A recent Inland Revenue report, which showed that multi-millionaires like himself pay a lower rate of tax than supermarket cashiers, was “pathetic”, he said. Clearly it was a prelude to hiking taxes. Instead, we should be “ambitious”.

But where’s the contradiction, John? Raising more in tax, in order to buttress public services, is the height of ambition. It’s about being ambitious for the country as a whole. Multi-millionaires have often worked hard, but they’ve also used government-funded ultrafast broadband, driven on public roads, attended state schools and checked into public hospitals. (Key, of course, grew up in a state house.)

Having drawn deeply from that pool of collective services, the well-off need to replenish it with equal generosity, so future generations can flourish. Paying an average tax rate of around 9% is hardly generous, not when aged-care workers on $26 an hour pay around 17%.

Admittedly, that Inland Revenue report did count increases in the value of unsold assets as income. But many of those increases get cashed out at some point – and when that happens, there’s unlikely to be much tax paid.

The simplest solution would be a capital gains tax, buttressed by a levy on the largest inheritances. A landmark 2018 OECD report backed that combo. But it also said that, if your country has neither of the above, a wealth tax – a small annual levy on the biggest fortunes – is a good backstop. Switzerland deploys one, raising 1% of GDP a year without scaring away billionaires.

Hence the Greens’ recent announcement of a 2.5% tax on wealth that couples hold over $4m, clear of any debts. This would fund tax cuts for low earners, drastic reductions in child poverty and better support for the long-term ill.

It’s a refinement of the 2020 Greens proposal for a levy of 1% on individual assets over $1m and 2% over $2m. Although in reality that would have caught just the wealthiest 7-8%, too many Kiwis thought immediately of the average house being worth $1m.

The new tax has been tailored to not alarm the middle classes. Almost no couples own a house worth $4m, let alone mortgage-free. And even then the tax would be levied only on the increment above the threshold – the last $100,000 of a $4.1m fortune, for instance. Just 1% of Kiwis, the Greens estimate, would be affected.

And while the attacks on it will no doubt build, so far the reaction has been warmer than in 2020. Then, a wealth tax seemed terribly radical, and Jacinda Ardern ruled it out right away. Now, though, Newshub polling shows a majority of Kiwis back such a tax, albeit one applied at an unspecified threshold; other, unpublished, polls reveal similar support for a levy cutting in at $14m.

Part of the appeal is that people love taxes they will never have to pay. But thanks to the Covid wage subsidy and the recent asset bubble, people have also become accustomed to more generous government support – and to the idea of unearned wealth.

The Greens, meanwhile, are a safer prospect than before. In the past, insiders say, research on “Green-available voters” painted a picture of soccer mums and dads, enthusiastic about the party’s values, but worried about looking flaky. They needed reassurance and a low-risk vibe.

The same research now suggests the Greens have, after five years of being a stable government partner, ticked that box; their target voters expect more – dare I say it – ambition. These voters, many of them current – but dissatisfied – Labour supporters, want the bigger party pushed out of its comfort zone.

The trick, for the Greens, is to peel those people away from Labour – but not go so far left that they frighten centrist voters back to National, handing the election to the Right.

The wealth tax proposal by itself won’t do that. Nonetheless, with his eye fixed on the middle ground, Chris Hipkins will presumably rule it out. The question then is what compromises would be available, should Labour and the Greens beat the odds and form a government, probably with a Te Pāti Māori that also likes taxing wealth.

The Greens might need alternative policies then. But they would enter negotiations knowing that, as the public mood slowly shifts, taxing wealth starts to look less like something scary – and more like a vehicle for our collective ambition.

The Spinoff: Has Labour worsened inequality?

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Income inequality under this government has fallen dramatically. Yes, you read that right: the disparities between rich and poor, on one measure at least, have reduced. But how can this be, some will ask, given the constant media coverage of foodbank queues lengthening while actual bank profits soar, and given the belief among respected commentators like Bernard Hickey that Covid saw “the biggest widening of inequality in New Zealand history”? What is, in fact, going on?

First, some history. Contrary to its egalitarian self-image, New Zealand has always been an unequal place, at least since colonisation led to the widespread raupatu (confiscation) of indigenous land. In the 1890s, the wealthiest 1%, essentially a handful of male settlers, held a startling two-thirds of the country’s assets. A few decades later, the richest 1% had 18% of all pre-tax income. (The distinction here is that wealth is a stock of assets that people own, like houses and shares, while income is a flow of things that people earn, like salaries, wages and benefits. Wealth is always more unevenly distributed than income.)

In the first 80 years of the 20th century, these economic inequalities were diminished by the institutions of social democracy: the welfare state, strong trade unions, state house-building, inheritance taxes, and top income tax rates of up to 80%. Widespread discrimination notwithstanding, incomes for women and Māori, as a proportion of Pākehā male incomes, were rising strongly from the 1950s onwards. By the early 1980s, the top 1%’s share of wealth had fallen from 65% to perhaps 16%, and its share of pre-tax income from 18% to 6%. (Not that the make-up of the 1% is necessarily always the same: people can be asset-rich but cash-poor, and social mobility shuffles the deck.) 

Then, in the shift towards a market-driven, individualistic view of the world, everything changed. From 1985 to 2005, New Zealand experienced the developed world’s largest increase in income disparities.  The pillars of social democracy were all weakened, and progress on closing the income gap between Māori and Pākehā stalled (even as, culturally, many things changed for the better). The 1%’s share of wealth rose to 25-26% and its share of pre-tax income to 12%.

Little changed, in the bigger picture, between the early 2000s and 2017, although the Helen Clark government’s introduction of Working for Families slightly reduced income inequality, and John Key’s tax cuts and other policies slightly increased it. Then along came Jacinda Ardern.

What has happened in the last five years can be judged from something called the Gini coefficient: a measure that – in a crude sense – adds up each of a society’s divergences from a perfectly equal distribution and combines them into a single number. Zero represents total equality (everyone has the same income); 100 represents total inequality (one person has all the income). This figure rose sharply in the 1980s and 1990s, plateaued for 15 years – and has now fallen noticeably, back to roughly its 1990 level. Astonishingly, half the damage of the “Rogernomics” era has – on the face of it – been undone.

Can this really be true? Can this be reconciled with what we see, or think we see, around us? Yes, up to a point. To take, firstly, the bottom and the middle of the distribution, Labour has poured an extra $16.5bn into the welfare system, through higher benefits, boosts to Working for Families, and the introduction of payments like Best Start. Minimum wages have also increased sharply. 

While the situation for the very poorest – the 10,000 or so at the bottom of the ladder – may have worsened owing to the housing crisis, Covid and the cost of living, nonetheless another 115,000 people have been lifted above the poverty line. So it is plausible that, as the data shows, the bottom fifth of the population has increased its share of post-tax income from 6.6% in 2019 to 7.9% last year: not an epochal shift, and still well short of what it could be, but distinctly higher. 

At the other end of the scale, interest and dividend income has been flat in recent years: the New Zealand stock market is still under its early-2020 mark and interest rates were, before their recent rise, at record lows. The richest New Zealanders’ self-employed income is slightly down, possibly because owners are retaining more money in their businesses  to avoid Labour’s new 39% tax rate on income over $180,000. Again, it seems plausible that the richest fifth’s share of post-tax income fell from 40.1% to 37.8%.  

If the government can really boast such achievements, though, it seems strange that it isn’t, well, boasting about them. This data was released in March to no fanfare whatsoever: readers of this article are among the first to discover it. Government sources say, however, that the Gini coefficient data may simply have been too technical to explain, and would certainly have been overshadowed by the simultaneous release of figures for child poverty, a subject on which the government has staked significant political capital.

The inequality data comes, in any case, with caveats. The government cannot claim credit for the stock market’s recent poor performance, which may well pick up again this year, and interest rates have risen rapidly as the Reserve Bank attempts to tackle inflation. The 2023 Gini coefficient may well be higher than the 2022 figure.

The data also captures only what New Zealand counts as income for tax purposes – and that famously excludes most of the capital gains people make from selling assets. That, in theory, doesn’t change the trend line, since such gains have always been excluded. But it could be argued that 2020-21 in particular saw record capital gains, given the unprecedented spike in house prices. And that is undoubtedly true up to a point. 

On the other hand, people who sold and bought in the same market may be no better off overall, some of the house-price gains have unwound in the last year, and the brightline test presumably captures a growing proportion of investment property sales (although data there is scarce). Including capital gains would probably make the government’s performance look less stellar – but not reverse it entirely.

The housing market, of course, affects inequality on many fronts. As well as altering incomes, it is the primary source of wealth in Aotearoa, making up over half the country’s asset base. It was, in that sense, the core of the arguments that were made about pandemic-era increases in inequality. 

There have, of course, been bigger wealth transfers in history: for instance, the 1890s Liberals’ dubious purchases of millions of acres of Māori land, which benefited Pākehā farmers; or the 1980s and 1990s sale of state assets at below-market rates, to the great enrichment of business tycoons and asset-strippers like Alan Gibbs and Fay and Richwhite. Nonetheless it certainly looked, in the heat of the pandemic, as if wealth disparities were opening wide. Bernard Hickey identified, among other things, a $600bn untaxed increase in house values, at the same time as home owners and businesses’ bank deposits boomed but beneficiaries’ debts ballooned.

Now, though, we can see that not only have some house-price gains been unwound, wages have also increased, if only to keep pace with inflation. As a result, the ratio of house prices to incomes has almost returned to its (still disastrously high) pre-pandemic level.

Consider, meanwhile, the change in the value of New Zealand’s housing stock, including the pandemic spike, the subsequent fall, and the Treasury’s prediction of a further 4.6% decline this year. If the Treasury’s expectation is correct, the government’s record on housing values may be much like that of its predecessors, all told. 

This is not to defend that record whole-heartedly: the pre-pandemic rise in house values was a social disaster, and continuing that is no achievement. And while much of the “easy money” policy-making of 2020 was justified given the apocalyptic Treasury predictions of a collapsing economy and soaring unemployment, there were decisions – like removing loan-to-value ratios and creating the “funding for lending” programme that went straight into home lending – that looked like bad calls even at the time. But overall it does not seem as if the government has transferred wealth from renters to home-owners at a markedly different rate to its immediate predecessors.

The government can also point out that, on its watch, social housing places have risen by 12,000 and wider house-building has boomed – even if this only continues a trend that started in 2011 under National, and now appears to be going into reverse, as the industry repeats its eternal cycle of boom and bust.

Outside of housing, other apparent rises in pandemic-era inequality, such as the increased value of the shares held predominantly by the 1%, were driven partly by international stock market trends beyond this government’s control. And while the Covid wage subsidy should have come with tougher conditions, so that businesses that didn’t need it had to repay the money, it was still a massive anti-inequality measure. In New Zealand, people made redundant are, five years later, typically earning a fifth less than they did at their old work. There are few things better for warding off inequality than – very simply – keeping people in their jobs. The government’s Covid response could have been more egalitarian still: other countries temporarily doubled benefits or delivered “helicopter money” cheques to low- and middle-income households. But it was hardly an inegalitarian disaster.

For all these reasons, it is no surprise that the official figures on wealth inequality up to mid-2021, the latest date for which data is available, show no real change since 2018. The 1% continues to own around a quarter of all wealth, once the Rich List is included. But then housing is relatively unimportant to them (they hold much of their wealth in bonds and businesses), so a rising house market actually decreases their share and increases that of the middle classes. In doing so, of course, it widens the gap between home-owners and renters.

What, then, should we conclude from all of the above? There is no neat story to say that Labour has increased or decreased inequality, in toto – but then life is not much given to neat stories. Instead, a narrative can be pieced together from a few key strands.

First, income poverty has clearly decreased overall, thanks in large part to the billions poured into the welfare system, although life is probably worse for the very poorest. Second, income disparities between the rich and the rest have fallen, although perhaps less so if capital gains were included. Third, the Covid response was a mixed bag, inequality-wise. 

And, fourth, the government has not, any more than its predecessors, managed to solve the problems of the housing market, with the consequence that wealth inequality has – at a minimum – not improved, and in some specific senses worsened. Labour’s record has been, in a word, imperfect – but also, in the round, rather better than most of its critics, and popular opinion, would currently allow.

The Spinoff: The Two Poverties

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Iosua, a 41-year-old Wellingtonian, lives in a boarding house because no better accommodation is on offer. After the rent is paid, he has $130 a week for food, clothing and other costs. Paul, a 50-year-old with multiple health conditions, applauds the government’s recent benefit increases and the less punitive attitude among agencies. These men both experience hardship, to varying degrees, and together they start to shape an answer to a pressing question: how much has been done, in truth, to alleviate poverty in this country, ever since that day in October 2017 when Labour came to power promising to transform the lives of the disadvantaged?

From the outset, Labour has looked at this issue through the lens of child poverty, in part for tactical reasons: people are less likely to blame children for their situation. The Child Poverty Reduction Act, passed in 2018, made the government accountable for the first time for reducing hardship, on three main measures. 

1. How many children are in families with less than half the current typical (median) income; this is a level where, budgeting research shows, it becomes hard for families to afford the basics. For a sole parent with one child, the poverty line in 2021 was $600 a week; for a couple with two kids, $965.

2. Whether families have more than half the income a typical household had in 2018. This tests whether living standards are rising over time – and takes housing costs into account.

3. How many families report being unable to afford basic things like going to the doctor, buying fresh food, and providing their children with decent clothes and shoes. (This is called material hardship.)

All three measures have fallen under Labour (that is, since 2017-18), by between 29,000 and 77,000 children. “This isn’t [yet] the structural change we need to see,” says Paul Barber, a Salvation Army policy analyst, “but we are going in the right direction, at least.” The payoff is clear in the government’s measures of child wellbeing, most of which have improved. Just 13% of children say food runs out “sometimes or often”, compared with 20% in 2019, and rates of avoidable hospitalisations have decreased. (Some measures, such as mental distress and truancy, have worsened, owing in part to the pandemic.) 

The National Party sees the hardship data differently, claiming Labour should be held responsible for the 2017-18 figures, when poverty was higher than usual. But that data actually covers the period from July 2016 to July 2018: most of it was gathered when National was in government, and virtually all of it reflects National’s policies. It is, in fact, the party’s last gift to the nation, as far as poverty is concerned.

National also claims Labour has just continued a prior trend of decreasing deprivation. And John Key’s record here was better than some on the left would admit: material hardship, for instance, was falling from 2011 onwards. But income poverty – the gap between poor families and contemporary middle-class households – wasn’t. And, crucially, Labour has continued to drive poverty down, or at least hold it steady, through a pandemic. When National was faced with its own pandemic equivalent, the global financial crisis, it allowed poverty to rise, before bringing it down some years later. 

Central to Labour’s strategy has been the welfare system, partly because it can be tweaked with relative ease and partly because beneficiaries are especially poor. The Families Package, passed in 2018, has given households an extra $1.1bn a year in Working for Families and other payments. The unemployment benefit, known as Jobseeker Support, has risen from $215 to $340 a week. The Accommodation Supplement has been boosted, the Best Start payment for newborns introduced, and the rate of the unemployment benefit linked to the average wage (so that the two increase in step). In total the government has injected an extra $16.5 billion into the welfare system. Even after accounting for inflation and higher rents, the average beneficiary’s income has risen 43% since 2018, and around 350,000 households are on average $113 a week better off.

To understand the scale of the task Labour has tackled, it helps to consider what welfare payments are worth compared to the average wage. Benefits were not only cut brutally in 1991 by National’s Ruth Richardson but were allowed to fall further and further behind wages under Helen Clark and John Key. Since 2018, they have headed back up towards their past peak. Only partway, of course, and some beneficiaries remain $100 or $200 a week below the poverty line.

Outside the welfare system, Labour has tried to ensure work pays. (As half of poor children live in households whose main income is from paid work, a job is not, by itself, a sure route out of hardship.) Since 2017, the minimum wage has risen rapidly, from $16.50 to $22.70. But other changes have been slow to arrive: none of the government’s much-touted Fair Pay Agreements, for instance, have been signed yet. Nonetheless, overall hardship has fallen: since Labour came to power, some 115,000 people have been lifted out of poverty.

Not that everything is rosy, of course. Material hardship rates, for instance, remain far higher for Māori and Pacific children (23% and 28%, respectively) compared to European and Asian children (10% and 6%). People with disabilities also face elevated rates of poverty.

And Labour faces a stiff challenge trying to maintain progress. Its targets for child poverty in 2024 and 2028, are demanding: income poverty, for instance, would have to fall by two-thirds in a decade – from 16.5%, a worse-than-average record in the developed world, to just 5%, among the very best performers. Why, then, does it not feel as if New Zealand is embarked on an epochal combat against the scourge of poverty?

An anecdote is telling here. According to government sources, Jacinda Ardern was known to go away and read papers on subjects like the indexation of benefits – an important but strikingly dull topic – and return them covered in red ink. Which is to say: the former prime minister was a policy wonk, and her child poverty agenda deeply technocratic. The measures employed – for instance, how many children are in families living on less than 50% of equivalised median disposable household income, after housing costs – may be beloved by experts, but are, in their raw form, unintelligible to voters. 

A government so often accused of being “all spin” turns out, ironically, to have implemented a deeply serious agenda that it is largely unable to explain to the public. And rather than wage war on exploitation – by tackling outrageous rents, for instance, or requiring all employers to pay significantly better wages – Ardern’s government has relied on more bureaucratic means, things that can be changed at the flick of a switch, like benefits and winter energy payments. There has been no real rallying cry, no sense that the state’s full resources are being mobilised to fight the evil of poverty, no crusade that would resonate deeply with the public. 

There is another sense in which the apparent reduction in poverty seems implausible. How, some will ask, can it be reconciled with the stories of record foodbank use and of families still sleeping in cars; how is it consistent with our sense that, at the bottom, life is as bad as ever, or even worse?

Leo Tolstoy would have known how to resolve the paradox. In the famous first line of his novel Anna Karenina, he wrote that although all happy families are alike, “Every unhappy family is unhappy in its own way.” So it is with poverty: each person’s experience of it is subtly different. And although it is impossible to fully capture this complexity, it is still useful to understand that there are, at a minimum, two kinds of poverty.

The families whom Labour have lifted out of hardship are, for the most part, what might be called the ordinarily poor: households that, although largely holding things together, were desperately short of cash and struggling to pay their bills. Numbering in the tens and hundreds of thousands, they have, thanks to Labour’s wage and benefit increases, often been lifted from just below the poverty line to just above it.

Under this government, some people genuinely feel better off. Paul Clutterbuck, the 50-year-old Wellingtonian living with multiple rare health conditions, says that until the recent benefit increases, his disposable income had “stagnated terribly” over several decades on what is now called the Supported Living Payment. “I have definitely been better off over the last three years [compared to] my previous 30 years on the Invalids Benefit,” he says. “Obviously there’s a long way to go, and it’s nothing like the income of working people, but I’m grateful for the improvement since Labour came into office.” Clutterbuck has also detected “a huge culture shift at Work and Income, moving away from beneficiary bashing and towards an environment of trusting the client to do the right thing. It’s obviously not perfect either, but it’s a huge leap forward.”

For some people in extreme poverty, though, nothing much has changed in recent years. Stephen Turnock, the director of Wellington social agency DCM, says the number of people his organisation works with, around 1,000 a year, has stayed static under Labour: “We are back to pretty much where we were [pre-Covid].” Sitting in his office on Lukes Lane in central Wellington, Turnock describes the agency’s whānau as “incredibly alienated” people battling multiple issues, often including physical and mental health problems, homelessness and addiction, and possessing “limited capacity to support themselves out of poverty”. 

Right at the bottom of the ladder, these people, numbering perhaps 5,000 or 10,000 across the country, “are all overlooked or lost in the rest of that much bigger picture”, Turnock says. Many do not have young children, so have gained nothing from the focus on child poverty. Briefly, during the pandemic, they were all housed, but – famously – not in permanent or suitable accommodation, and the urgency of action dissipated post-pandemic, the Covid lessons left unlearned. 

Iosua Clarke is one of those struggling to gain a foothold. Released from prison last year, he has spent 12 months in emergency accommodation, most recently the Halswell Lodge boarding house in central Wellington. Work and Income (WINZ) has been “pretty good”, he says, providing a $350 “steps to freedom” payment and food grants. WINZ and DCM have both tried to help locate more suitable housing. “But it’s hard finding accommodation, especially for [ex] inmates and fullas in the struggle. No-one will really take us – just the Lodge and places like that.” 

Staying at Halswell costs something like $300 a week, split between Clarke and WINZ, leaving just $130 a week for food and everything else. “And everything’s expensive here in Wellington – so expensive, eh? Far, you got to be rich.” Clarke is also fighting long-term alcoholism; DCM helps but there is not, he says, much state support. And he feels life has got harder recently. “I can see it in people’s faces. Ever since Covid happened, things have changed … The homelessness is getting worse, with all the drugs coming through now, not just P, different types of drugs.” For the last year, he has been trying to secure better housing and a building apprenticeship, but nothing feels certain. “I’m not happy. I’m definitely not happy. I try to do things to make myself feel better, but … I just feel lost, sort of thing. Not ‘lost’ lost, but, ‘Where do I go now?’ lost.” 

What would it take to fix these kinds of situations – and indeed the social problems that have, Turnock argues, been building up for decades? Above all, he says, government agencies need to co-ordinate their policies (a recurring request that somehow never gets answered) and, in collaboration with NGOs, revamp the services targeted to the poorest. Currently, alcohol addictions may bar whānau from accessing mental health services, or vice versa. Or there may not be a health clinic in their area that will let them in the door. This is a community that needs dedicated, flexible, whānau-friendly health services.

And – no surprises here – it needs more homes. DCM is a provider under the government’s Housing First scheme, which finds people accommodation and then wraps services around them. But of the homes DCM has used to house nearly 300 people, the vast majority have been rented – often temporarily – from the private sector; only 12 were provided by Kāinga Ora. “Everyone is in the same sandpit … just moving things around,” Turnock says ruefully.  

Several large social housing developments will shortly open in Wellington, easing the pressure somewhat. But, in an awful irony, the organisation’s housing woes are not limited to those it serves. “Our own staff are struggling,” Turnock says. “We are talking about housing [our service users], yet our own staff can’t afford the rent.”

Housing is, of course, another flashpoint for Labour. The debacle of Rotorua’s motels aside, what matters most for the poorest New Zealanders, long-term, is the supply of social housing: dwellings available at less than market rates. Superficially, this story also looks bad for the government: the social housing waitlist has spiralled upwards from 8,000 in March 2018 to 24,000 today.

Ministry of Housing and Urban Development data shows, however, that nearly 12,000 places were added to the social housing stock between July 2017 and March 2023. Of these, just over 4,000 are Kāinga Ora net new builds (7,900 built, minus 3,300 demolished and 300-odd sold), and 1,900 built by NGOs like Dwell Housing Trust. A little more than half the 12,000 “places” are new homes (once demolitions are factored in). The remainder have been bought or leased from the private sector, or “redirected” from other parts of government. (Transitional and Housing First places have also been greatly increased.)

This approach has its defenders, though. Repurposing private homes has been a quick way to prioritise housing for the very poorest, even if it adds nothing to the overall stock. And whether one takes the 6,000 or the 12,000 figure, the contrast with National’s record is a favourable one. Exact figures from that period are surprisingly hard to come by, but a 2018 stocktake found the number of state houses fell from 69,717 in 2011 to 62,917 in 2017, a drop of nearly 7,000. In many cases the homes were transferred to NGOs, with no change in rent, rather than sold to private landlords. But Labour claims that, across both the state and NGO portfolios, there were 1,500 fewer social houses in 2017 than in 2008. Leading National figures like Nicola Willis and Chris Bishop have admitted their party did not do enough last time round. And as the current housing minister, Megan Woods, likes to point out, if National had added places at the same rate in its nine years as Labour has in its six, the housing crisis would be greatly diminished.

The social housing waitlist is also biased by something that affects many such statistics: the extent to which they reflect not greater need but greater access. Across the welfare system, the consensus among experts is that help is now much easier to get. Under National there was, for instance, a lengthy social-housing triaging process, in which people hoping to go on the register had to phone the Ministry of Social Development and undergo a “screening” assessment before being allowed to make an application. As those hurdles are removed, the apparent increase in the waitlist partly reflects greater ease of access. Labour has also invested in services like Community Connectors, paying NGOs to help struggling families better understand the support available. 

Just how much this affects the figures, no one can say. One government staffer, interviewed for this article, said they had spent years trying to ascertain how much lower the waitlist would be if National’s processes had been retained, but to no avail. In any case, the scale of the recorded increases surely dwarfs such effects. The number of special needs grants, for instance, has risen from 182,187 in the December 2017 quarter to 382,707 in December 2019 and 396,909 late last year. No one outside government, and perhaps no one inside it either, believes that can be explained solely by increased ease of access.

All of these issues are, of course, exacerbated by the current cost-of-living crisis. The government’s response has been to lift benefits and minimum wages in line with inflation. But the poorest New Zealanders have long experienced a higher rate of inflation than others, as prices rise fastest in the basic goods that consume much of their budget. 

Growing social stress is evident in media reports of pensioners sitting in the dark to save energy, of households poleaxed by rising grocery prices, of widespread truancy among poor families. In early May, a survey of foodbanks found they were twice as busy as they had been pre-pandemic. The combined weight of covid and the cost of living has badly strained people who were barely coping in the first place. 

But because there are, at a minimum, two poverties, that picture is entirely compatible with a world in which benefit and minimum-wage increases have also lifted tens of thousands of people out of deprivation. So where does that leave the whole poverty debate? For analysts like Paul Barber, this is a decisive year. “Many [previous] initiatives have stopped, or need to be renewed,” he says. “The benefit increases of past years [for instance] have been paid out. My big question is, ‘What next?’ We are really going to need to move if we are going to meet the goals we have set as a nation.” For some groups, genuine progress has been made – but not to an extent that it couldn’t be unwound. “It all feels fragile, and not bedded in yet.”

The Post: Whisper it, but could KiwiBuild have finally found its mojo?

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Death, taxes and the construction industry’s boom and bust cycle: the three eternal verities of New Zealand life. Building consents are down by a quarter from last year’s peak; new liquidations are announced every week.

Some sympathy for construction firms is in order: they have been hammered by ever-rising material costs and interest rates designed to engineer a recession. But, like a socially irresponsible roller-coaster, they keep performing this rise and fall, over and over.

In 2004, New Zealand was consenting 30,000 dwellings every 12 months. Five years and a global financial crisis later, that figure had halved. A decade then passed before the peak of 50,000 consents was attained last year, just before the latest slowdown. As the veteran finance writer David Hargreaves has observed, “Once our building industry contracts, it takes a long time to get it cranked up again.”

But we can’t afford this delay. Despite the recent boom, we still have a housing shortage, even if estimates of its size vary. And a return to rising immigration brings tens of thousands of newcomers to accommodate. More people, fewer homes built: the seeds of the next housing crisis are already being sown.

The government can’t, of course, solve the construction industry’s internal problems. But for over a century, it has been understood that the state can act as a counterweight to economic cycles, propping up demand when private investment stalls and flattening out downturns.

Obviously it shouldn’t try to rescue every failing firm: some creative destruction is inevitable, necessary even. But liquidations are also immensely wasteful. Teams are dispersed, institutional memories lost; firms are slow to re-form. Ideally this damage would be minimised. How, then, might our political parties ward off another housing crisis?

National’s plan, launched earlier this week, abandons the bipartisan accord on infill townhouses, substituting a classic carrot-and-stick combination, albeit in reverse order. Councils would be forced to zone enough land for 30 years of construction, and rewarded with $25,000 for every house built above the long-term average.

That has a certain logic, and the plan thankfully does uphold one piece of the higher-density consensus: more six-storey buildings along transport routes. But quite apart from probably encouraging urban sprawl, which drives up emissions and infrastructure costs, the plan as a whole wouldn’t necessarily help builders immediately. Analysts at Greater Auckland fear it might actually slow things down, as councils rip up current plans for infill housing and start afresh.

By contrast, Labour, already in government, can point to work under way. More than 5000 state and transitional homes are in construction, and the Budget funded at least 3000 more. That work could – if run smoothly – provide certainty to stressed house-builders.

The Government’s Build Ready Development scheme also aims to stop planned developments falling over, either buying them up for state housing or underwriting open-market sales. Ministers say this has guaranteed 144 homes already; a second round of applications will close this month.

Labour will no doubt campaign on further state-driven house construction, and in doing so lay down a challenge to National, which admits it built too few social homes under John Key but hasn’t said what it would do next time round.

This week’s plan would actually remove the $200m-plus Affordable Housing Fund that supports community-sector construction, though National’s social housing policy, yet to be launched, may well suggest an alternative.

There is, of course, another state scheme designed to provide private builders with certainty by guaranteeing the purchase of homes at a discount.

Its name is KiwiBuild; you may recall some discussion of it in the press.

It launched amid a housing boom, when no developer needed to deal with it – a key reason it flopped first up. But it has plugged away, delivering 1700 homes (albeit somewhat short of its original 100,000 target). A further 1000 are under construction, as are 1700 conventional private-market homes in developments that are – the Government argues – enabled by those KiwiBuild guarantees.

And after all the scheme’s negative publicity, developers are turning to it in their hour of need: more than twice as many KiwiBuild contracts will be approved this financial year than in 2021-22, the Government forecasts.

That doesn’t guarantee plain sailing. One house-builder recently told me the price cut they have to take, to get the KiwiBuild guarantee, has risen from 2.5% to a scarcely believable 17.5% – driven, apparently, by the Treasury pricing in the risk of developments failing but not the full social benefit of maintaining construction rates. Certainly it’s plausible that the Treasury, like a cynic, would know the cost of everything and the value of nothing.

It would nonetheless be a delicious irony if KiwiBuild finally found its mojo – just as Labour enters an election campaign with an Opposition determined to scrap it. The parties agree we need more houses; the state’s role in delivering them remains as contested as ever.