Open Mike 27/08/25
Open Mike 27/08/25
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6:00 am, August 27th, 2025 - 57 comments
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Today's Posts (updated through the day):
It Is Not Enough Only to Change the Government
New Post up:
It Is Not Enough Only to Change the Government
The elephant in the room – New Zealand's corrupt fraternity of failure.
https://www.nzherald.co.nz/nz/opinion-chumocracy-is-threatening-new-zealands-future-robert-macculloch/ECSOQZ4VSNCBHIV2VJ3MCJZQ6U/
So many people have been wrong for so long that it's much easier for them to defend each other and keep hiring each other and keep referring to each other than admit that they all screwed up and don't know what they're talking about. It is our entire political elite that has failed, not just a few people, a whole generation of bureaucrats and politicians and journalists failed.
And that elite exists in the MSM, it exists in the political community, it exists in the bureaucracy of our largest corporations and it exists particularly in ministries like treasury. And instead of having a real introspection—like what the heck have we got wrong?—they have gone into self-defense mode. Everyone got it wrong. And all that means is that the same people who got it wrong to begin with are getting it wrong now, but they're being treated as if they have a good idea of what they're talking about when they don't.
https://archive.li/q2U0Y
Chumocracy started in the 1980s. As a former public servant I could almost name the moment. It was the latter 1980s, the nephew-in-law of the new ministry boss became the head of the Auckland based office where I worked. He was a former American Marine in a sensitive area of government at the height of the stand-off between the US and NZ over our anti-nuclear policy. Yes, there was a scandal there but it was hidden from public view.
Listening to Willis on RNZ this morning, she's beginning to sound like a female version of Donald trump. Its gonna be great folks…. we have some great ideas, great policies… great everything unlike Labour who destroyed everything blah blah blah – I paraphrase. Turned the radio off.
Always best to turn off the radio before she starts speaking.
As Jane Austen commented to her neice:
"You are now collecting your People delightfully, getting them exactly into such a spot as is the delight of my life;—3 or 4 Families in a Country Village is the very thing to work on.".
Bruce Jesson two decades ago actually did a map of the interrelated Directorships across 30 of New Zealand's top companies in the late 1980s. It was tight.
The Right Honourable Christopher Luxon talks to the acting RBG before he decides on the OCR.
Beyond pretty legal, to outright wrong.
Is there any unstated inference, do what you are told and then become a permanent appointment?
You should just get over believing the RBNZ is particularly independent, because this kind of thing simply happens all the time.
How else do you think QE suddenly appeared just as the government rather suddenly began its economic support policies to implement a country wide lockdown. Maybe you agree that was a sensible thing to do, but what it wasn't was independent.
The independence is political window dressing (it's not important to operations) allowing the government of the day to stand off monetary policy decisions and attempt to say, hey blame those guys over there for the inflation rate, or the economic downturn, or rising house prices (or falling house prices). In practice monetary policy can't be implemented without daily to weekly coordination between the treasury and the RBNZ.
Instead, the next time Luxon says why aren't interest rates being lowered by the RBNZ, the next question should be, "so why hasn't Nicola Willis taken charge written to the RBNZ about her objectives for them and told them to lower interest rates".
Really? Has it been reported that this was the practice of former PM's?
Probably based on a consult with Treasury and the Minister of Finance over their plans.
Daily or weekly … I would doubt that.
The Minister of Finance wants to take credit for a falling OCR, so cannot be seen as begging (as the PM is doing), let alone demanding that one occur.
"Really? Has it been reported that this was the practice of former PM's?"
No, typically the PM is able to get the finance minister to communicate it for them. But really, so what, that's not even different except the visibility is lower when the finance minister does it privately.
"Daily or weekly … I would doubt that."
Exchange rates and Wholesale interest rates – Reserve Bank of New Zealand – Te Pūtea Matua
If surplus govt spending is left in the financial system then the 90-day bank bills rate (the rate banks lend clearance funds to each other) falls away from the OCR and heads to zero (the RBNZ loses effective control over monetary policy). The financial system operates inside the RBNZ, the government spends money in some capacity daily, this coordination is pretty much daily to allow the RBNZ to maintain monetary policy.
This is also part of QE, where treasury anticipated that there was not nearly enough reserves to purchase the bonds they were about to be issuing (which would have spiked the govt bond rates) and so the RBNZ got to work converting outstanding bonds into reserves (by purchasing them) in anticipation of this spending adjustment.
You should get the impression that this is all fundamentally built in to how the system functions, because it is.
"The Minister of Finance wants to take credit for a falling OCR, so cannot be seen as begging (as the PM is doing), let alone demanding that one occur."
As I said, the independence is political theatre. The minister of finance literally sets the objectives for the RBNZ annually.
I should have noted the importance of the word implementation.
That said this is not related to policy settings.
The annual setting out of objectives is at least in the public domain.
The reason why a Minister of Finance would talk to a RBG is not supposed to be about influencing their decisions, but for their own information about RB plans (and vice versa).
"The reason why a Minister of Finance would talk to a RBG is not supposed to be about influencing their decisions, but for their own information about RB plans (and vice versa)."
What a strange understanding you have. The Minister of Finance literally writes the objectives for the RBNZ. Traditionally this has been to once again focus on inflation with the use of monetary policy (most recently specifically while not worrying much about unemployment in doing that), but it can be far broader as the specific objectives are not set out by legislation, which is why they are conveyed in this letter.
This means the RBG does not have independent decisions, if Nicols Willis says one of the RBNZ objectives is to make mortgages cheaper for Kiwi's the RBNZ can like it or lump it and that's about as far as independence goes.
You may be misunderstanding me.
The objectives are only written once a year.
They meet during the year, because meeting the goals of each for the year require some knowledge of what the others plans are. What the budget concept is, whether there will be a mini budget later in the year. What changes the RBG might make to deposit criteria etc.
You'll be surprised to learn that there were letters of expectations June and December of 2024 and June of 2025 then.
As I said the belief in this cadence altering how the RBNZ functions is strange.
If the govt wants to change their RBNZ expectation's they can quite naturally do so at any time through a variety of more or less formal or visible channels. The point is the government is able to do so, so if they are projecting policies they want, the focus should be on why they have not implemented them and become ready to be held politically responsible for those policy choices.
No change to objectives then
https://www.rbnz.govt.nz/hub/publications/corporate-publications/letters-of-expectation/letter-of-expectations-2025
June is the usually timed one, December was the unusually timed one which already demonstrates these are not actually dependent on annual events for these communications to occur.
nice
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https://bsky.app/profile/did:plc:4kshoaytrzhgsziro6ywozul/post/3lxbb3sfaks2j?r
Map of the new urban plan for building density in Auckland.
One or two storey areas set to go to three storey.
https://dgdzxrhiqhcpk0.archive.li/DJ83A/7640cb9d8d12c46e32025299ebf084476391ce1e.jpg
Going to four storey building would require a resource consent.
https://archive.li/DJ83A#selection-4755.0-4759.75
For mine it should have been consent to go to 3 or 4 storey.
Yes I have a flat in New Lynn that just got density upscaled.
Back in the day 2005 when we were doing the funding application for the New Lynn integrated bus+train+apartments++carpark+medical centres+shops we had always hoped this kind of density planning would occur.
It took far too long. The standout example of success is Manukau Centre.
But together with Avondale's exceptionally bold developers in Okham and others, New Lynn will see transit oriented development like it always should have had.
20 years. Sigh.
But it is not only transport infrastructure that needs to be in pace.
So what will be the capability to manage the density led growth rate and or extent?
https://archive.li/DJ83A#selection-4755.0-4759.75
Management could involve limitations.
If so, why not options for 5 storey instead of 10 and 10 instead of 15.
And some streets set aside at the 1-2 storey level with a move to 3 or 4 storey by consent.
can you please post the original link as well. You link looks odd to me when I click on it
https://archive.li/DJ83A
SPC doesn’t seem to know what “original” means.
https://www.nzherald.co.nz/nz/auckland/auckland-council-maps-show-rezoning-for-more-intense-housing-in-suburban-areas/N5VMIEWAMJHCRLRNWCQ5HKAOIY/ [behind paywall, of course]
If she had meant that, why add, the link looks odd to me when I click on it?
(I had highlighted something on the other link and it came up in blue).
when I clicked on the link I got a security check page that looked weird and I'm not used to archive.li (I use archive.is)
(It's also a courtesy to the website whose paywall is being bypassed, so that people can choose the website rather than the archived version if they want. And the original version let's people see the URL and know where/what it is)
Back in 1992 the government allowed state housing tenants to have 2 boarders (so they could afford market rents).
This policy is now being revised from next year.
So poor people are going to be worse off and some people will stop taking in boarders.
And thus homelessness is set to rise.
No one likely to vote NACT will be impacted.
https://archive.li/tFMXc
Also a long history in NZ of parents charging board to their newly left school now working children, putting it in a bank account and giving it back to them when they leave the nest to help get set up flatting etc. So not really a board payment – more a compulsory savings scheme.
That'll be rich kids so nothing to see here!
I missed the opportunity to respond to comments on my speech at the July Keith Locke memorial debate. You can find the whole debate including Wayne Mapp's contribution at: https://www.youtube.com/live/CVRJZj1UjvY?si=XeEk-ma3d5e92ckQ.
My speech was a counter to the moot China is a threat to regional peace. There is an enormous amount of contextual complexity and history – including the dark side and liabilities in China's governance that cannot be addressed in a 10 minute response to the moot. Given the stakes, the more information, dialogue and context our policy makers have the better. (especially in the current "fog of info-war" environment) We have a long way to go. One recent contribution of note is the new book Breakneck by Dan Wang. My post about this and a recent interview with the author here: https://x.com/TrevorJ24567534/status/1960243533035540838 . Trevor
Danyl McLauchlan says in this weeks Listener that “Arden found herself trying to run the country with cabinet ministers you wouldn’t hire to mow your lawns or paint a fence … and … instead of a serious policy agenda, a handful of implausible promises – such as Kiwibuild’s 100,000 homes.”
I heard Phil Twyford speak about the Kiwibuild plan before the 2017 election and was utterly convinced by his presentation.
I still can’t work out why KB was so implausible- especially as the Labour Party had done it before.
I am convinced that if we continue to allow future generations to become disenfranchised and unable to access the myriad benefits of home ownership our future society will suffer.
Don't let the facts get in your way.
By 2023 through both community housing groups and Kainga Ora Labour delivered over 12,000 homes. That was more houses built per year since the 1950s.
From July 2023 to July 2024 Kainga Ora delivered another 4,864 units.
Almost as importantly they demolished a whole lot of old ones that had worn out.
And then through Budget 2025 and the massive restructure of Kainga Ora, this government cancelled 3,500 units that were planned.
And for anyone who complains about the debt Kainga Ora got into, they also had a massive asset base to borrow on.
No one said they were gong to get 100,000 new homes in a year. But Labour – as they should – made more solid progress to it than we had seen in decades.
The record here.
https://thestandard.org.nz/open-mike-02-07-2025/#comment-2037741
and here.
https://thestandard.org.nz/open-mike-02-07-2025/#comment-2037753
Ad Kiwibuild wasn't about building State Houses.
The idea was to enable our young to own their own house and get a stake in NZ
We don't want more people renting – we want people owning their own houses.
I'm praying that Bishop wins the ideological war he seems to be waging within the COC for house prices to continue to fall in a controlled manner.
that's the state throwing petrol on the housing crisis. Everyone of those houses would end up being sold in the private market and the first home buyers would be looking to make a profit. Thus housing gets more expensive.
The only way to stop that is mass building of social housing, by central and local government, and Iwi and other NGOs, and for those houses to be kept out of the private market. Once we've caught up on having enough houses, private rents should stabilise.
It's not the only thing that needs to happen but it's an essential one.
Weka the ideal is for people to OWN houses not rent. Social housing is rental housing. Almost all NZ'ers would rather own than rent.
Just read a good article in the Spinoff on the topic.
https://thespinoff.co.nz/society/26-08-2025/newly-sober-nation-begs-for-one-more-hit-of-high-house-prices?utm_source=substack&utm_medium=email#
Bernard Hickey has called the NZ economy a housing market with bits tacked on and echoes Bishop in that we need to get the way we make money out of houses and into productive businesses.
It would revolutionise NZ society if we could increase home ownership from 50% to 80% over ,say, three generations. Obviously there are people who could never own a home and that is the reason for social housing.
It's great that rents and house prices are currently dropping and long may it continue.
I edited the post to make it more clear what is quote and what is your words 👍
Home ownership is 66%, down from 74% in 1991.
https://www.stats.govt.nz/news/home-ownership-increases-and-housing-quality-improves/
I'm not sure that 100% is something to aim for (do students at university really want or need to own their own home?). But my points stand. You can't make housing affordable (ownership and renting) by playing the market.
If property values dropped to affordable for everyone, a whole bunch of people would have upside down mortgages. I don't think that's inherently bad, but it does mean people can't move around as much. Also not inherently bad, but we'd need to make other changes to society as well eg not having to move for work.
I'm clear that we could never get to 100% home ownership but we could put a political plan together (agreed to by all parties) to get to 80% if we had the will.
Of course students can't buy a home because they haven't reached the part of life where you typically purchase one. Some may be able to purchase but choose not to. But I've never met one.
The problem we currently have is that the deposits required to purchase a home are currently almost insurmountable. Even for those in well paid jobs.
We need prices to drop slowly so that banks don't panic. Or we need our businesses to prosper because of all the money diverted from housing and wages to increase.
If the price of my home drops and I buy and sell in the same market it doesn't make me less wealthy in terms of my housing.
Yep, but you and I are in the minority in terms of that position. Most home owners want capital gains as well.
that's one problem. The other, bigger problem is that people simply can't afford mortgage repayments.
There is that idea that we need to increase wages. But I've not seen any actual accounting on this. How high does the living wage need to go in order for most people to be able to afford house? And what about benefits? People on a benefit used to be able to buy homes too. Is anyone seriously thinking that benefits can rise to meet a relatively small drop in house prices?
First we need to get house prices down from the ridiculous cost of10x median income to at least 5 or 6. Then mortgages are lower. And interest rates are lower because house price inflation is tracking in line with other commodities.
A large rise in house ownership would raise living standards, reduce inequality, increase social mobility, promote economic growth, reduce homelessness, increase birth rates, help the environment, and much more.
My wife and I have helped many families get their own homes over the last 30 years. The church I attend runs all sorts of helpful classes on budgeting etc.
My interest in politics stems from the realisation that if the government got behind a plan to get everyone who committed to a pathway into their own home it could scale in a way no individual or organisation could achieve.
Yes it was.
But the other side of the equation was more income related rentals as well.
KB 100,000 homes was so implausible because it was up to the private sector to scope, plan and do the builds……..a well organised, well managed, well equipped govt funded and govt run Ministry of Works on a national scale may have achieved that target……..Interesting at the time Winston Peters said it could be done…….he was most likely thinking we still had a MoW……..
Kat the first Labour Government managed to build over 30,00 homes from their election to 1949 – and that was with a war stopping production.
All of these houses were built by the private sector. It was an outstanding achievement. Surely we could have done better than the few thousand that KB managed to get built.
The only problem with the target of 100,000 homes was that it was weaponised, scorned, and converted into an attack soundbite by the right.
@Michael Scott…….those houses you mentioned were physically built by private enterprise builders……however it was subsidised by the state on property owned by the state, overseen by the dept of housing construction and managed by state services…….this is a fundamental difference to KB which may have been govt initiated but totally left up to the private sector to produce………that's why it failed….there was not the capital available to finance it…….and that is why most critical infrastructure continues to be a problem today….we need to reinstate a 100% govt owned and run Ministry of Works…….however that course along with all the other govt depts that were dumped is the polar opposite direction to the current neoliberal regime in place……….sadly…..
What is more remarkable is the complete agreement between Labour and National that there neds to be massive housing density in apartments and that Councils particularly Auckland should be forced to accept a massive private investment signal to achieve this, through re-zoning.
At the recent Building Nations infrastructure conference, Minister Bishop said he saw his role as housing minister as “carrying out Phil Twyford’s legacy.”
"Twyford was the first major politician to realise that local governments generally can’t be trusted to enable enough growth. He passed the NPS-UD, which required councils to allow six-storey apartments around train stations and eliminated car parking minimums.
Minister Bishop has taken Twyford's stance even further – and with a sense of uncontained glee.
He scolded Christchurch for delaying its plans,
required Auckland to zone for 15-storey buildings around City Rail Link stops,
changed wording to prevent councils from getting cute about the definitions of walking catchments and whether trains are really trains, and
passed legislation specifically to allow the demolition of the Gordon Wilson flats."
Windbag: Beating the Bish and the strange, shifting politics of housing | The Spinoff
Complain all you like about Twyford, but some politicians actually break the pack ice for the rest to follow through.
I'm not complaining about Twyford. I believe he was genuine and passionate about delivering KB. Although from memory I first heard about from KB from David Shearer at an NZEI meeting.
Like you I am heartened by the consensus between our major parties on the building supply side.
The big shift was the passing of Auckland's Unitary Plan when three quarters of Aucklands urban land was upzoned, By the end of Labours last term the volume of construction has changed Aucklands built landscape. And this model has been replicated around NZ. Most councils plans now permit easy densification.
The Right keeps banging on about Twyford's dumb comment from 8 years ago and retracted soon after.
The reality is that there was a house building boom under Ardern's Labour, including many state houses. Luxon's Nats have crashed building. In particular it is building no state houses apart from those that were unfinished when they took power.
Talking of dumb promises, the COC government has continually promised to bring growth back to the economy and sort out the cost of living crisis….so much for that… I wouldn't let any of them near my lawns or fences.
https://www.rnz.co.nz/national/programmes/morningreport/audio/2019001648/political-panel-with-national-and-labour
On RNZ this morning, Carmel Sepuloni commented on "the massive reduction in the number of public houses that have been built, a massive pause on infrastructure and building in this country, with 18,000 fewer jobs in the industry…". She referenced Chris Bishop acknowledging that this government has built only 45 new state houses. Nicola Willis disagreed, claiming the current government "has built thousands of new public homes". When challenged that these were houses commissioned and paid for under Labour, Willis dismissed this, saying "it's all taxpayers' money". She said the government wants to build thousands more public homes.
Willis relies on creating false impressions by twisting truth, omitting fact, blaming the previous Labour government for the state of the economy, speaking in generalisations and talking over people when they challenge her.
The article in this link provides details of this government's recent decisions on state houses. ttps://newsroom.co.nz/2025/06/24/the-big-state-housing-sell-down/
by Jonathan Milne 24/06/2025
"…On Thursday last week, Kāinga Ora … confirmed it would abandon 212 big and small housing developments, totalling nearly 3500 planned homes. About 40 hectares of the land is being sold to private buyers; the rest is being land banked….
Dropping the plans for nearly 3500 homes comes at a cost to the taxpayer of up to $220m – and at an unquantified cost to those seeking a home.
Because a new report from Stats NZ, published last week, shows state rentals are far cheaper than private rentals, and cheaper also than rentals provided by community housing trusts – this Government’s preferred means for delivering social housing.
What the affordable rents mean is there’s more demand than Kāinga Ora can sustain; 27 percent of state homes are overcrowded, yet there are still thousands more on the waiting list…".
Fantastic! For some NZ pollies, lying is a natural reflex – be better, Nicky No Boats.
This was the peak for building consents
1974 39,000
2004 32,000 closest before 2017 Labour government
2017 31,000
2018 33,000
2019 37,000
2020 39,000
2021 49,000
2022 49,000
https://www.stats.govt.nz/news/annual-number-of-homes-consented-down-7-9-percent/
It was about 10,000 more houses per year.
@Kat
State housing in New Zealand. Cedric Firth (1949)
https://wellington.recollect.co.nz/nodes/view/8479
https://teara.govt.nz/en/biographies/5f6/firth-cedric-harold
Yes great stuff…….I have attached the Foreword from Cedric Firths 1949 publication State Housing in New Zealand below to share with everyone…….it is just as relevant today…….
FOREWORD
Housing is to-day a major issue. This is as true of New Zealand as it is
of most other countries. Probably never before have so many houses been
wanted so quickly. And perhaps never before has the problem been so
complex.
The close connection between happiness, health, and housing needs
little proof, and one of the principal tasks of the next decade should be the
provision of a decent house for every family in New Zealand. This is a
huge job, but when planning is followed by action on the part of Govern-
ment and private industry there is a reasonable chance that the objective
will be reached.
This report owes its origin, in the main, to the inquiries received from
overseas and local sources concerning the activities of the Housing Division
of the Ministry of Works.