If there’s one thing Jacinda Ardern does flawlessly, it’s announce things.
It’s quite a skill, really, making announcements about a policy without any sort of plan to achieve it, and then have the country believe that what you’ve just said is significant, transformative or, as we heard this week, foundational. National was criticised for this all the time and often quite fairly. Under this government, however, such expediency has almost become a form of art.
Some of us are a bit more cynical, of course, but I think it’s fair to say that the vast majority of people – including some in the media – find it easier to just go along with the polished soundbites provided to us by politicians.
That’s why I couldn’t help but chuckle when I woke up a few weeks ago to the following Stuff headline: Labour announces that it will make more housing announcements this year.
Finally, someone who was bold enough to point out that Labour’s first housing announcement of 2021 had already been made – and in May of last year, no less!
What this “re-announcement” revealed was a vulnerability with Labour that is hard to ignore. It simply does not know what to do about what was once a “crisis” but which Ardern has since termed “the housing problem.”
By February of this year, the Government will have considered advice from both Treasury and the Reserve Bank to try to take some heat out of the market. But Labour has been in power for three and a half years now. Why has it taken this long just to receive advice on how to tackle the market, and what on earth was it doing during that period?
If we go back to the election campaign of 2017, Labour was yelling from the top of its lungs about the housing crisis – and rightly so. It even called for a state of emergency to be declared. But the current state of the market is not at all what Labour promised its voters.
Perhaps it was naivety, or perhaps it was just general uselessness. Either way, this is not the transformational change that Ardern vowed would occur under her leadership.
The most ardent of Government supporters will point to the banning of foreign investors, the good intentions behind KiwiBuild, fiddling around with stricter taxes, and the acceleration of the social housing programme as examples of action it has taken to address the issue.
But nothing seems to have made housing any more affordable. Quite the opposite, in fact. In 2020 alone, the average house price went up from $628,000 to $749,000 – an increase of more than double the average wage for a worker. Home ownership is, quite simply, becoming nothing more than a fantasy for many hard-working New Zealanders.
Yet despite home ownership falling in recent years to below 65%, most kiwis own their own home. It’s probably reasonable to assume they are personally satisfied with the capital gain their most significant asset is making right now. You don’t hear too many stories about people selling at below market value out of any sense of solidarity.
Better still, Ardern has guaranteed that their property will continue to increase in value. And for those who can afford to buy multiple properties – and have the leverage to do so – it’s only rational to make such an investment. In fact, it would be irrational not to – particularly with such low interest rates.
Traditionally, we wouldn’t associate Labour with rich property owners. That’s the capital class. But here’s the thing. Labour has switched teams. It’s no longer prioritising workers or young families who are locked out of the market.
Perhaps Ardern knows that she’s got the traditional left wing Labour vote locked in so transformational change can wait for them. Or perhaps she just no longer cares. What is clear, however, is that she wants to lock in centrist New Zealand too. They’re the people who voted for Labour in 2020 and they’re also, for the most part, property owners. The Government would be foolish to risk their majority all for the aspirational first home buyer.
David Seymour summed it up perfectly when he said that Labour has “overseen the greatest transfer of wealth from those who work to those who own in the history of our country.”
The harsh reality is that, unless the Government takes responsibility when it comes to the housing supply, rapid house price growth will continue. If it fails to do so, an entire generation of New Zealander’s will be locked out of the market. We will go from a property-owning democracy to a nation of renters.
What a sad indictment of Labour’s legacy that will be.
Monique Poirier has a Masters degree in Political Studies, and is a former small business owner and Parliamentary staffer. She is the Campaigns Manager for the Auckland Ratepayers’ Alliance.