Most New Zealanders have become numbed to successive Governments hacking away at our Welfare State by undermining access and cutting entitlements. It’s a process that’s been going on since the infamous Labour-led “Rogernomics” reforms of the 1980s and the National-led “Ruthanasia” restructurings which slashed benefit levels from 1991. Even National’s $25 per week benefit increase in 2016 pales into insignificance with the news that reductions in the real value of Working for Families payments since National took office have taken a cumulative $2 billion from the homes of families on low incomes.

This has been accompanied by a not so subtle constant stream of nasty sideswipes at families on low incomes. In March 2017, for example, Prime Minister Bill English told us – when the facts tell us the opposite – that one of the significant reasons for high immigration is due to drug use by useless young New Zealanders. These constant negative messages take their toll and have set the scene for the biggest attack on the Welfare State to date with the largest privatisation of State assets ever undertaken in New Zealand – our $18 billion of State houses.

Wholesale Privatisation To Begin In Earnest

The process of undermining public support for State housing began in earnest some years back when National dramatically slashed State house waiting lists, forcing families to continue paying escalating rents in the private sector. National told us many of these houses were either in the wrong place, the wrong size, an earthquake danger or other such nonsense. So, we have thousands of State houses empty around the country while families sleep in cars, under bridges or two or three families together in one house.

The Government seems quite content to thumb its nose at the more than 40,000 homeless across the country of which Christchurch has its fair share. Our city has people living in cars, garages, under bridges or in hopelessly overcrowded homes. To put it bluntly the sale of State houses in the middle of a housing crisis is social vandalism. The Government says there is no need to worry because the houses being sold will remain available to families on low incomes. Soothing words for National’s middle class supporters but devastating for so many of those already marginalised, demonised and effectively excluded from meaningful participation in society.

Walking Away From Key Responsibility

The simple truth is the Government is walking away from one of its key responsibilities – ensuring every citizen has access to a warm, dry, affordable home. The Government was forced to admit in February 2017 that it doesn’t know the true scale of the housing crisis. After delaying for six months it was forced to release a report under the Official Information Act which showed it lacked any coherent plan to increase the number of houses for families on low incomes. It doesn’t even know the size of the problem. It doesn’t care.

Instead of embarking on a large State house building programme to address the housing crisis it is working in reverse to sell thousands of State houses. It’s an attractive offer for buyers. For example, a developer could demolish four State houses in a row, replacing them with 12 units, of which only four need to be retained for “social housing”, with the others sold privately. A very profitable exercise which is why large corporates here and overseas are putting in bids for these homes.

In an early blow to the credibility of the privatisation programme the largest legitimate social housing provider – the Salvation Army – announced it would not buy any State houses. The Methodist Mission followed suit and what is left is a group of smaller providers without the capacity to take on the delivery of housing services for hundreds of families. In its bid to sell 1,124 State houses in Tauranga and 400+ in Invercargill the Government announced its shortlisted buyers which were dominated by profit-driven transnational corporations:

For Invercargill the one preferred bidder was:

Pact – a not for profit social services organisation based in Dunedin.

Local companies Morrison and Company and Programmed FM were keen to grab rich pickings from Government subsidies for State house tenants. Even the not-for profits included Trust House Limited which makes money from pokie machines in clubs and pubs. Buying State houses is another way to profit from vulnerable New Zealanders. It was very disappointing to see local iwi trusts (Ngā Pōtiki a Tamapahore Trust and Tapuika Iwi Authority Trust) providing political cover for these money-hungry corporates, which will insist they get first call on tenant rents.

These trusts seemed to be taking their lead from the Maori Party which is siding with National against the interests of Maori tenants in State housing. It was also deeply disappointing to see local not-for-profit groups IHC and Pact seriously damage their reputations by helping the Government sell State housing and abandon State responsibility to provide quality, affordable homes for New Zealanders who need them. In the final negotiations, Pact withdrew saying the complexities of taking over State housing were too much for it, while in Tauranga, IHC was chosen as the buyer. The local and foreign corporates must wait for the next round. It’s clear the Government is nervous about selling to local or foreign for-profit corporates at this early stage as this may produce a backlash to the policy. 

Encouraging Overseas Bidders

In late 2016 it was revealed that Treasury officials went to Sydney in December to brief Australian social housing providers on the offer of 2,500 Christchurch State houses to encourage overseas bidders. The Government is worried no local company will be able to come up with the money. Treasury says the 2,500 Christchurch State houses have a price tag of $704 million but the buyer will not have to front up with all the cash. The Government says it’s prepared to leave money in until the successful bidder can develop these State assets – as described earlier – and make enough profit to pay back some to the Government.

This type of redevelopment should be done by Housing New Zealand to build up our State housing stock for so many desperately needy tenants and families. This is a far cry from the origins of State housing in the late 1930s when old movie reels show Cabinet Ministers turning up to carry furniture into the first State house for the first Kiwi family living in substandard accommodation. Only the Government has the resources and capacity to build the homes needed by New Zealand families. We faced a housing crisis in the 1930s and we face a housing crisis today.

To succeed in selling State houses it is relying on the rest of us to see our fellow citizens in need of housing as a burden rather than as people struggling in an impossible housing market. At some stage in the future any of our children or grandchildren may need access to a State house and I’m sure we all want them to have one. I feel confident Christchurch will not stand idly by while National asset strips the city of State houses. I feel confident we will defeat this policy by challenging it head on with a spirited community campaign on behalf of those in need now and those who will be in the future. Come on Christchurch. We are bigger than this. Let’s show the Government it has bitten off more than it can chew!