OPINION: So much for our quarter-acre pavlova paradise. The Government belatedly has come to the conclusion that something needs to be done about the failure of the housing market to provide the necessary land; and for resources, somehow, to be directed to providing low-cost housing instead of the present concentration on the expensive stuff.
All this is hardly new. I recall Helen Clark, when prime minister, lecturing me at a Wellington Cup meeting more than a decade ago about the need for land to be made available - at a reasonable price - to address the crisis. She surmised then that speculators were holding on to the land to gain higher returns. And she fingered, quite prophetically, the absurdity of house construction costing 30 per cent more in New Zealand than in Australia.
Now the Nats are going to have a go at solving the problem, with Finance Minister Bill English basically admitting the market system has failed. The Kiwi dream of owning a house is now out of the question for lower-wage earners, with homes in Auckland costing five to six times the median wage, compared with two to three times 20 years ago.
This has all sorts of implications, including a supply shortage creating another housing bubble when our housing is already ridiculously expensive. The Economist magazine lists our housing as the fifth most over-valued in the world (in terms of long-run average prices) after Hong Kong, Singapore, Belgium and Canada. We are the second worst (after Canada) in terms of over-priced rents.
The complex and expensive local body compliance costs - a nightmare for builders and ruinously expensive for those trying to build or renovate a house- need to be at the top of the queue for attention.
It is no good the local authorities arguing that their cumbersome processes are essential: the leaky homes scandal, a $12 billion-to-$20b burden yet to work its way through the economy, showed how worthless this oversight is. These buildings were approved, then ticked off by council inspectors.
After that debacle, some would take the view that we could cut these red-tape costs by removing the local body approval process and somehow make builders responsible for their own work through some sort of industry fidelity fund. It will take an upheaval of that magnitude to make much difference. Without it the provision of housing for lower-wage earners will dry up, while rental housing prices will continue to go through the roof, requiring even bigger taxpayer subsidies.
While the Cabinet has finally committed to having a fumble with the housing crisis, Parliament is still fumbling its painful way through the Alcohol Reform Bill, with wails from all sides over pet causes.
Here I pay a tribute to the current affairs television commentaries at the weekend by Associate Justice Minister Chester Borrows and the impressive young Porirua Mayor Nick Leggett.
They changed my mind on two aspects of the bill. I have always had a horror of the ready-mixed drinks for the young, known as RTDs, and breathed a sigh of relief in managing to get a family of daughters to avoid these in favour of wine-tasting. But while I would previously have voted to ban RTDs, the sensible Mr Borrows pointed out that these had a known and reliable alcohol rating. Without them there would be mix-your-owns, with the unscrupulous supplying much stronger alcohol mixes to vulnerable youngsters. Methinks we should stick with the RTDs.
Similarly I had always objected to minimum pricing on the principle that this would escalate up the price chain with all drinkers having to pay for the sins of over-indulgent teens. Mr Leggett pointed out that those causing most of the alcohol disturbances were attracted by the very low-priced offers, not quality wine and premium beer. OK, I'll go along with minimum pricing as well then.
- The Dominion Post