Sunday, November 02, 2014

Do you own a state house?

Apparently you do. Annette King says the government is:

“... washing its hands of responsibility for housing our most vulnerable New Zealanders and it is selling another asset, built up over many years and owned by all Kiwis,” Annette King said.

The only advantage of government owning assets to me is if they generate a profit and as a consequence we all get to pay less tax (mindful that taxes make people poor too.) Yet  a look back at history would show the more governments own, the higher taxes go. If assets are owned by a party with access to unlimited, guaranteed funding, then management of them will reflect that reality. They can't fail regardless of inefficiency or poor return. Even not-for-profit enterprise shouldn't operate at a loss. Yet tax-funded enterprises by their very nature are often financial sink-holes. All you own is a liability.

State houses can only be defended as part of wealth redistribution to aid the poor. But as such they feature all the downsides of welfare benefits. They trap and isolate groups of people.

But I will give credit to King. At least she is trying to rekindle a debate with some substance instead of endlessly harping on about 'dirty politics' which is now synonymous with a gaping yawn.

In fact the old pair of hands increasingly looks a better option for Labour than the new. Again last week I heard wannabe leader Andrew Little berating unpopular Labour polices like raising the Super age and a capital gains tax. Voters didn't like them so they didn't  like Labour, he says. The guys wishy-washy.

According to polls, a majority of  voters didn't like asset sales but they still voted for the party running the policy because on balance, they viewed National as their best option.


Anonymous said...

"All you own is a liability."

The vision of KiwiRail came into my mind. How many billions have we sunk into that black hole with no obvious sign of any good?

Brendan McNeill said...

"In 2006 it was revealed that Smashed windows, graffitied walls and rubbish-strewn properties have contributed to a record state house repair bill of $21 million.

Damage caused by tenants accounted for $16.7 million of the total cost – while $3.8 million of damage was caused by 'third parties', figures issued by Housing Minister Chris Carter reveal."

JC said...

The only problem for Annette and the media is its a beat up.

In this Feb 2014 video Key makes it very clear that he will not be selling any *whole* assets such as an SOE or all of a Govt business.

Then he makes it very clear that SOEs may well continue to buy and sell assets as a part of normal business.

He then announces Bill English will flesh out these thoughts and later in Feb BE does just that. He makes it clear that 30% of NZ state house stock is in the wrong place and should be sold so more appropriate housing and housing support can be purchased where it is needed.

He then says the Govt has 60-70,000 state houses worth $17 billion, ie an average value of around $260,000 per house.. this tells you these are most certainly not located in areas of housing demand like AK and Chch.. more like in hamlets in a depopulating rural region.

So, for most of this year the public has known there would be no more sales or shares in the likes of SOEs but that housing needs to be addressed with sales of some in order to buy more where needed.. English floated the idea of partnerships with the likes of the Salvation Army.. we all *knew* that because we were told earlier in the year and there's media video and articles to prove it.


tranquil said...

I fully support the moving of social-housing provision away from the government and towards providers like the Dwell Housing Trust in Wellington.

There are other providers as well (like Habitat for Humanity).

The old "government must do everything" model is broken and this kind of approach is the future.