Government launches independent review into Kāinga Ora
Monday, 18 December 2023
The Government is launching an independent review into Kāinga Ora, led by former Prime Minister Sir Bill English.
Prime Minister Christopher Luxon and Housing Minister Chris Bishop outlined the review at the final post-Cabinet press conference before Christmas.
National’s 100-day plan included beginning the “Kāinga Ora clean-up by commissioning an independent review into the organisation’s financial situation, procurement, and asset management”.
Bishop said English would lead the review team alongside “vastly experienced financial expert, Simon Allen, who helped deliver ultrafast broadband to New Zealand, and Ceinwen McNeil who brings significant experience in the role of the construction and urban development sectors”.
Bishop described Kāinga Ora as “the country’s biggest landlord”, with its operations having a significant impact on the Government’s books.
“I am deeply concerned about the operating deficit which is already at $520 million in 22/23 and which is forecast to continue increasing”
Bishop also said they had received “further worrying advice” - but would not disclose what that was due to commercial sensitivity.
He said as the review examines the financial situation, 'we will look to release as much as we can'.
“Since coming to office, ministers have received further worrying advice about the financial situation of Kāinga Ora. We are not releasing that information at this time as it is commercially sensitive, but it confirms that an independent review is the right course of action at this time.”
He said the independent review would build on work already done by Treasury and the Ministry of Housing and Urban Development and provide a report to the government by the end of March.
Bishop said they chose English as he was a former minister of finance and housing, he has “extensive expertise… frankly turning around struggling finances”.
“He brings to the job a unique appreciation of the interesting role Kāinga Ora plays in the housing eco system.”
Bishop said they were “keen to explore embedding social investment within the wider housing framework”.
The government in January 2020, before the Covid-19 pandemic reached New Zealand, allowed Kāinga Ora to more than double its capacity to take on debt in order to build new state houses.
Last year, the previous government agreed to increase Kāinga Ora’s borrowing capacity by NZ$2.75 billion for the 2022/23 financial year.
Earlier in the year, a briefing by the housing ministry into the finances of Kāinga Ora, formerly Housing NZ, revealed that rising construction costs and interest rates meant it would be unable to pay its billions in debt by 2081.
At the time, the agency’s debt was expected to peak at $28.9b in 2033. By 2081, there would still be $8.9b to pay off.
Labour's housing spokesperson Kieran McAnulty accused the previous National government of leaving the social housing stock “decimated”.
“Labour delivered over 14,000 additional public homes since 2017, more homes than any government since the 1950s.
“Christopher Bishop and the National Party have no credibility on public housing,” he said.
Green Party’s housing spokesperson Tamatha Paul said the Government had its priorities wrong, and the review “should be focused primarily on building enough houses to make sure everyone has a warm, dry, and affordable place to live”.
“I can tell you now that the financial situation at Kāinga Ora is not the primary concern. The problem that needs solving is the fact that thousands of people across Aotearoa do not have a safe and affordable place to live.
“Right now, there are 25,000 households on the housing wait list. The Government’s priority should be on clearing this and making sure everyone has a place to call home as soon as possible.”