The Post: The government promised to eliminate waste, but has piled it up instead

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For a bunch of people notionally committed to ending “waste”, our Government sure likes some low-quality spending.

Attacks on the previous government’s “wasteful” policies have provided the soundtrack to National’s assumption of power. And no-one sensible doubts that Labour, ill-prepared for office, sometimes spent unwisely: the senseless polytech mega-merger, Te Pūkenga, was a case in point.

But look at how much waste the new Government has served up in just the last week.

Exhibit A: the Cook Strait ferry debacle. While ministers were right to be wary of cost over-runs on the $3 billion-and-growing iRex project, their decision to scrap it could now prove immensely wasteful. There’s the likely $300 million spent just to break the contract. Then, thanks to cost inflation, a potential $900m bill for two non-rail-enabled ferries instead of the agreed $550m on two rail-enabled ones.

The costs pile up: $420m spent planning iRex, down the drain; hundreds of millions of dollars to maintain the old ferries until the new ones arrive at a much slower pace than Labour planned; and no upgrades to substandard ports at both ends. We could still spend $2b and get far worse outcomes: sounds like waste to me.

Then there’s Wednesday’s announcement that the Justice Minister, Paul Goldsmith, will force judges to impose longer prison sentences. Soon our jails will be bursting with prisoners incarcerated at an annual cost of $193,000 each, the sort of thing Bill English once denounced as a “moral and fiscal failure”. Given that half these prisoners, post-release, will re-offend within two years, this looks a lot like waste.

And it keeps piling up. Ministers confirmed this week that billions of dollars will be spent on what satirists call Roads of National Party Significance. On the list is Auckland’s East West Link, the costs of which were, in 2017, estimated to potentially outweigh its benefits.

“From an economic perspective,” consultant economist Donal Curtin noted, “the country would be better off if the [road] were not built.”

No more recent assessment is available, but construction inflation in the last seven years has been brutal, and National now insists these roads must be four lanes wide and grade-separated. Presumably the cost-to-benefit ratio has only worsened. And that’s without contemplating the carbon emissions the roads will induce, the more frequent storms and sea-level rises that result, and the spending required for clean-ups and managed retreat. Waste aplenty.

Still on the roading beat: the Government plans to force councils to reverse reductions in speed limits, even though in Auckland those lower speeds have been found to reduce serious injuries by 15% and deaths by nearly half. Abandoning these exceptional achievements will be – to put it mildly – wasteful.

This week also brought news of a Government-appointed panel to review “methane science”, even though the Parliamentary Commissioner for the Environment has pointed out that the science here is settled.

More generally, the much-touted cuts to “back office” public servants are already hitting foodbanks and budgeting services. Which, considering the good work those organisations do, seems rather wasteful.

It’s striking that, despite the Government’s coalition agreements loudly proclaiming a commitment to “rigorous cost-benefit analysis”, scores of decisions have already been made with no – or indeed negative – assessments of their merits.

It’s almost as if the talk of eliminating “waste” was just ... talk. Decisions, it turns out, are determined not by what’s wasteful, but by what will play well with the Government’s base.

And it’s not just a matter of what such conservative governments do: it’s also what they don’t do.

Consider the issue of obesity, where the latest global obsession is the weight-loss drug Ozempic. It does, admittedly, show impressive results, and experts argue that making it widely available here could help reduce rates of diabetes, heart attacks and strokes.

But think about the equation that then unfolds. We continue to allow junk-food companies to spend millions of dollars, and indeed generate millions of dollars in revenue, by pushing deeply unhealthy food on consumers. And we then, as taxpayers, spend millions of dollars on drugs like Ozempic to clean up this mess.

The alternative, surely superior, would be to tackle the problem upstream. Label food products with clear information about their salt and sugar content, a move the industry has consistently thwarted. Ban junk-food advertising to children. Bring in sugar taxes or whatever else has been shown to work. Make it easier for people to walk and cycle and to exercise in local parks.

Conservatives fixate on the – often minimal – expense of such measures, while failing to spot that their own reluctance to properly regulate markets, and to confront big business, ends up costing far more in the long run. So too does ignoring the effects of climate change, locking people up for longer, and reflexively scrapping the transport projects of a previous administration.

Far from eliminating waste, this government spreads it around with gay abandon.

The Spinoff: Bishop’s house price comments show the mood is shifting. Will we see actual change?

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House prices must always rise. For as long as I can recall, this has been one of the core assumptions of Kiwi politics. It has seemed like a long-run item of faith, a central tenet in the national religion of property investment.

Metiria Turei learnt this to her cost in 2016, when the then Greens leader told Morning Report prices needed to halve – over a period of time, but halve nonetheless – if homes were to become affordable once more. Labour leader Andrew Little called her “irresponsible”, and the public, according to Greens I spoke to at the time, “freaked out”. More recently, Jacinda Ardern sought nothing more alarming than a “sustained moderation” in prices.

But on Monday, the housing minister, Chris Bishop, dipped his toe into these dangerous waters. Asked by Herald reporter Thomas Coughlan if prices should fall, he simply replied: “Yes.”

“Average house prices to the average household income are too high by any objective measure. They are severely unaffordable by international standards,” he added. “The flipside of house prices falling for people who own homes is that they become more affordable for people who don’t.” 

So far, Bishop’s laudable comments have not brought the proverbial house down upon his head. On the Stuff story carrying his remarks, the responses were mostly – though not universally – positive. 

Possibly this is because Nats can get away with saying things Greens can’t. But it could also represent the slow movement, from the fringes to the mainstream, of the view that house prices are just too high, and therefore must fall. As indeed they’ve done in the past. Relative to incomes, house prices declined sharply from the mid-70s to the mid-80s. And in the last few years they have dropped from their ridiculous pandemic-era peak.

Crucially, though, Bishop hasn’t been explicit about what he wants. When most people hear “house price falls”, they think of a scenario where a house that’s valued at $800,000 one year is worth, say, $790,000 the next. But if house prices increase at a slower rate than inflation, that still counts as an “inflation-adjusted” or “real terms” fall. If, in other words, a house valued at $800,000 sells for $808,000 (that is, 1% higher), but inflation is 2%, the value of the house has “fallen” relative to the costs of other goods. 

When The Spinoff asked on Tuesday which scenario he meant, Bishop’s office said only that he “stands by his comments yesterday and all previous comments around housing affordability”. Which reveals nothing – except that he isn’t taking up the opportunity to say, “Yes, absolutely, I want the actual dollar value of homes to drop.”

One might ask: so what? There is no knob marked “house prices” that the government can turn up or down with infinite precision; only the broad aim matters. And that’s a partially fair point. It’s helpful – encouraging, even – to have a housing minister talking about house price falls of any kind. 

But still the distinction does count. First, it’s the difference between really facing down anxious homeowners versus still not wanting to frighten the horses, à la Ardern. The scale of government action needed to achieve the two scenarios is also somewhat different.

The distinction, finally, matters for the path back to affordability, usually defined as prices being only three times incomes. The average house-price-to-income ratio, according to interest.co.nz, has fallen from its 2021 peak of 9.3 to a mere (!) 6.9 today. That’s because the average house is now valued at $790,000, and assuming a prospective house-buying family of two 30-year-olds, 1.5 incomes and one child, the average income available is $115,000. (Other assumptions give higher ratios.)

If one then projects that incomes will rise 2.5% above inflation each year, as they did in the decade pre-Covid, what does that mean for the “real-terms fall” scenario in which house prices increase by 1% but inflation by 2%? It means at least a two-decade wait before we get back to a situation where house prices are three times incomes. Such slow-and-steady progress would nonetheless represent a long wait for those currently locked out.

If house prices freeze (in actual dollar terms), affordability might return a little quicker: in 15 years, say. But to get back to the three-to-one ratio within a decade, prices would have to fall something like 3% a year in actual dollar terms. 

That may not sound like much, but it is. A house that’s worth $790,000 one year is only worth $721,000 (in actual dollar terms) after just three years of 3% falls. By the end of the decade it is worth only $580,000.

These are all rough numbers: a spreadsheet not a detailed model. Nonetheless those are the kinds of projected falls to make homeowners, well, freak out. Some would soon owe the banks far more than their houses are worth. Those with their retirement hopes pinned on an investment property would – rightly or wrongly – be in some trouble. And if the “wealth effect”, in which people spend more when their house value rises, is real, the economy would slow. 

Nor is it clear how far public opinion has shifted. It’s true that, for some time now, polls have shown support for house price falls as a concept: in 2022, three-quarters of New Zealanders backed the idea. Last year they were far more likely to be “optimistic” rather than “worried” about price drops.

But that is very different from saying that one’s own house price should fall – and the last time that, as far as I know, the public was asked that specific question, just one-quarter responded favourably. This is probably why, as Hayden Donnell and others have noted, any media mention of falling prices is related in the same tone one might use to announce the death of a beloved relative. 

This may change: the “aspirant homeowner” and “parents of aspirant homeowner” demographics may come to outweigh the “hands off my house price” cohort. Media coverage may shift. But if not, any real assault on prices would require National to face down two-and-a-half years of negative headlines before the next election – and, as above, countenance some startling declines in house values.

This is the problem with having allowed prices to rise to such insane heights, over so many years: the unwinding is liable to be either painful or slow. And it’s worth noting that Bishop has publicly pledged only to achieve house prices of “three to five” times incomes – which provides some wriggle room. Merely freezing prices could get us to the upper bound of Bishop’s target early next decade. 

Of course no one can predict exactly how prices will respond to any given set of government actions or wider economic shocks. And Bishop is a canny politician: if he’s willing to publicly discuss house price falls, something in the debate has clearly shifted. But a gentle stasis is still much more likely to be National’s dream scenario than anything that brings affordable housing more quickly into view.

The Post: Beware the politician talking up a crisis

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Crises are a double-sided coin: terrible for a public, but an opportunity for sharp-eyed politicians. As the Obama staffer Rahm Emanuel once said: “Never allow a good crisis go to waste.” Such events can be used to justify extreme measures that the public would not normally tolerate.

So powerful, in fact, are crises that some people will manufacture them. As the fortieth anniversary of the 1980s Rogernomics revolution rolls around, its architect, Roger Douglas, has popped up to claim that we’re now in “as much trouble” today as we were in 1984, and that we once more need a hard-right shift.

Where to start with such stupidity? First, Douglas exaggerates the economic situation we faced in 1984 following Robert Muldoon’s near-decade in charge. While one specific policy – the refusal to devalue the New Zealand dollar – was exhausting our stocks of foreign currency, and the economy was massively over-protected, the nation was hardly about to go bankrupt.  

A slow and steady reorganisation could have got things back on an even keel without widespread social destruction. Instead Douglas and co used the “crisis” narrative to justify slashing taxes and launching a fire-sale of state assets. 

His successor, Ruth Richardson, attacked the living standards of the most vulnerable, cutting benefits and helping crush trade unions. Wages for many workers plummeted, while the deepest forms of poverty doubled overnight. Now, every day, the New Zealand state has to pick up the pieces of this economic and social vandalism, as it deals with the damp and dangerous housing, the third-world respiratory diseases, and the devastating consequences of the long-term unemployment and loss of hope bequeathed to us by the likes of Roger and Ruth.  

The reforms also did little to solve our long-term economic shortcomings. Our productivity is now further behind that of our rivals than it was when Douglas took control. Hardly surprising when you consider what a drag poverty and poor health are on economic performance. Douglas’s solution would be to double-down on privatisation and deregulation. “Beatings will continue until morale improves,” as the trade unionist Craig Renney likes to say. 

The crisis-mongers were wrong then, and they’re wrong now. New Zealand is not broke, nor about to be. Public debt, at around 20% of GDP, is low by global and historical standards, and although tax revenues remain insufficient, the government’s books are still heading back to surplus in a few years’ time. 

This week, infrastructure minister Chris Bishop has been trying out a subtler version of the narrative that the government is broke. User-pays and part-privatisation – toll roads, water meters, private financing of infrastructure – are inevitable because, he argues, decades of underinvestment have left a deficit “we cannot buy our way out of”. 

User-pays, though, doesn’t magically create more money to “buy our way out”: it just shifts the cost, from taxpayers as a whole to individual users. Which isn’t the right direction. Our government may not be heavily indebted, but we as individuals are: private household debt, most of it mortgages, is a staggering 166% of disposable income.  

The poorest households in particular are not well-placed to take on more costs. Yet broad-brush user-pays – tolling roads, for instance – will take a bigger chunk from their budgets than it will from richer ones. 

While user-pays may have a limited role – water charges for the largest properties, or tightly targeted congestion charging – it should not be the default. If we need to raise petrol costs to reduce climate-change emissions, that must be offset by increased cash transfers to poor households. Generally speaking, infrastructure that advances basic rights – freedom of movement, or access to water – is a collective good, something people are entitled to as citizens, and should where possible be funded from the collective purse. 

Private funding for infrastructure doesn’t stack up, either. Because firms face higher borrowing costs than the government does, it is more expensive upfront. And since that private borrowing has to be later repaid by the state, it cuts into our ability to fund more infrastructure in the future. Nor is there compelling evidence that private-sector efficiencies will offset those costs. 

We must, of course, do better as a country. We need bipartisan agreement on a shared infrastructure pipeline, and far tougher procurement by central government. The proposed National Infrastructure Agency could – if well-directed – help there.  

And, while there is no crisis, we do have grave and long-standing economic problems to solve. But they are mostly about under-investment: in basic infrastructure, of course, but also in retraining and upskilling, in productivity-boosting capital, in the machinery that drives our factories and in the people who work alongside it. Some of that investment – in skills, especially – must come from individuals and firms, but much of it from the state. The solutions to our economic problems involve the state stepping up, in a more active and smarter manner, not stepping away.

The Spinoff: Are New Zealand’s youngest voters really shifting right?

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Quite apart from the overall defeat it delivered, last year’s election seemed to spell bad news for the left in one key demographic: the youth. A Guardian Essential poll, taken in August 2023, showed just one-third of voters under 35 were backing Labour and the Greens, against one-half supporting National and ACT. The “youthquake” that in 2017 helped propel Jacinda Ardern to power had been replaced with frustration over a lack of social progress and “an overwhelming sense of exhaustion” among young voters, Green MP Chlöe Swarbrick argued. 

The poll also seemed to echo trends offshore. In the UK, after 14 years of calamitous mismanagement, the Tories may be so hated that they can command the support of just one in seven young people. But US president Joe Biden has lost vast swathes of young voters discombobulated by the first inflationary crisis of their short lives. One survey has Donald Trump winning the Gen Z vote by 43 points to 42. North of the border, a poll taken last year put Canada’s left-wing Liberals, led by Justin Trudeau, some 12 points behind the Conservatives among voters under 30. 

So are New Zealand’s young voters shifting right? The answer to this question starts with data from polling firm Talbot Mills, which shows that, two decades ago, voters aged 18-24 – and to a lesser extent 25-29 – were solidly left-wing. Some 62% of the youngest female voters, and 50% of their male counterparts, backed Labour or the Greens. Older voters, by contrast, were increasingly conservative, at least until age 60.

Fast-forward to 2024, and the pattern is broadly the same. Although young women have shifted even further left, nearly three-quarters of them backing either Labour, Greens or Te Pāti Māori, their male counterparts are exactly as left-wing as they had been two decades before. The kids may be alright, but they are certainly not all right. If rising conservativism is visible anywhere, it is in the older age brackets: left-wing support among men aged 70-74, for instance, has cratered, from nearly one-half to just one-quarter. Nor should this come as a surprise, given the number of older men publicly venting their objections to co-governance and cancel culture.

How, then, can we explain last year’s Guardian poll? Turns out young voters are less independent than one might have thought. Talbot Mills has data right back to 1991 on what might be called the youth’s leftward bias: the lead that left-wing parties have over right-wing ones among the under-30s, broken down by gender. For the most part, it follows the path carved by the wider electorate. The left’s lead among young voters soars in the early 2000s, as New Zealanders as a whole flock to Helen Clark’s Labour; it falls again when the country becomes captivated by John Key, then rises once more as Jacindamania takes over. Last year’s dip just reflects the generalised, and perhaps temporary, dissatisfaction with Labour. Already the young female vote has rebounded to within its normal range; the young male vote appears to be following suit. 

Across all the data, young men are noticeably more right-wing than their female counterparts. (Similar results are reported by other polling companies, including Curia and Roy Morgan.) At first blush, this seems to reflect divergences detected overseas. The trend is especially stark in the US, where young women are rapidly shifting left: in the last decade, Democrats have increased their lead in that demographic from 26 to 38 points. At the same time, the Democrat lead among young men has fallen, from an already-slim nine points to just five. This divergence seems to be driven by the culture wars: young women are alarmed by rising anti-abortion sentiment on the right, while half of US men under 50 believe feminism “has done more harm than good”.

No such yawning chasm, however, can be detected here. In part, this is because young Kiwi males aren’t shifting right. Talbot Mills has charted the left’s lead among young males, repeating their line from the graph above, against the left’s lead across the whole population. Whereas, before 2004, young men were slightly more right-wing than the country at large, they have for the last two decades been slightly more left-leaning. The culture wars haven’t left Kiwi males untouched – the uber-misogynist Andrew Tate, for instance, has a following here – but the impact on voting appears negligible. If there is any polarisation in the New Zealand electorate, it lies – based on this data – in the contrast between increasingly left-wing younger women and increasingly right-wing older men.

It is not inconceivable, in fact, that New Zealand’s youngest voters could get swept up in a different Western trend: the waning correlation between conservatism and age. Traditionally, voting behaviour seemed to validate the proverb, erroneously attributed to Winston Churchill, that if you’re not a liberal when you’re 25, you have no heart, but if you’re not a conservative by the time you’re 35, you have no brain. Voters typically became more conservative as they aged and acquired wealth they wanted to defend against the taxman.

Recently, though, research by the Financial Times has found British and American millennials bucking that trend. Historically, a typical 35-year-old was already just five percentage points less conservative than the whole-population average, and becoming more conservative over time. People in that age group today, however, are roughly 15 points less conservative than the average – and showing no signs of shifting right. This makes them, the Financial Times declared, “by far the least conservative 35-year-olds in recorded history”. And, given what four decades of economic conservatism has bequeathed them – gaping inequalities, runaway climate change, insecure jobs and homes – no-one should have expected anything else.

The Post: Housing – and the unhoused - left out in the cold

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In this week’s Budget, housing was the dog that didn’t bark.

Initial analyses of Budgets focus on what was in them. As the dust settles, it becomes clearer what wasn’t. And housing wasn’t, to an extraordinary degree.

One rough measure of a government’s Budget Day priorities is what it deems worthy of a press release. Housing didn’t get one. Its only overt mention, in fact, was one line in a press release on infrastructure.

It’s a deeply unimpressive line, too: $140m to fund the running costs of 500 new social houses a year, built by NGOs. That’s it.

It’s not entirely unreasonable for the government to divert that funding from first-home-buyer grants, as trailed last week, since the latter tend to push up house prices. But the Budget pledge remains an oddly inadequate move at a time when we have 25,000 families on the waiting list for a state home, and housing is a colossal political issue.

Meanwhile, the Budget predicts rents will keep rising at a remarkable clip. Seems like very little of that $2.9bn landlord tax cut will trickle down to tenants.

When quizzed at the Budget press conference, the housing minister, Chris Bishop, insisted he had a clear long-term plan for private house-building, at least. He will, in theory, require councils to zone enough land for 30 years’ worth of construction.

This may have merit – but equally councils may find ways around it, or there may be other issues blocking development, such as a lack of infrastructure. And it feels like a policy for a few years hence, when we have a housing crisis right now.

Many of the government’s actions to date are intensifying that crisis. National has thrown into doubt both the state house-building programme run by the homes and communities agency, Kāinga Ora, and the social house-building programme run by NGOs. Both provide housing where rents are set at a quarter of tenants’ incomes.

Recent news bulletins have been filled with reports of Kāinga Ora freezing developments and NGOs mothballing plans. That’s partly because of National’s unwillingness to guarantee them funding (although the Budget fractionally improves that situation).

Recall that Jacinda Ardern’s government took a Key-era set-up that was selling more state houses than it built, and turned it into one that delivered 2000 social houses a year, albeit some were purchased from the private market. Not everything Labour did was perfect, but it built real momentum. That momentum is in severe danger of being lost.

Bishop’s other key step has been to commission a review of Kāinga Ora led by Bill English, his former boss. The English review’s claims were always suspect, given they made so much of Kāinga Ora’s debt being “unsustainable”.

This debt is, in fact, money spent to create assets: housing for the poor, one of the greatest investments this nation could conceivably make. It doesn’t generate an immediate cash return, but that’s not the point. Nor do libraries, hospitals and schools.

The reputation of the English review, what’s more, has been badly tarnished by the revelation this week that it contained basic errors of fact, did not attempt to corroborate anecdotes, and largely ignored the Kāinga Ora board when it pointed out these problems.

Of course Bishop is entitled to take a different approach to his predecessors. Even good, socially minded developers report finding it difficult to work with Kāinga Ora. A genuinely independent review of the agency’s costs and quality standards could do no harm. But the responsible thing would have been for Bishop to gradually introduce improvements, while ensuring existing developments aren’t damaged.

This matters all the more when, as the Budget shows, housing consents have fallen catastrophically, following interest-rate hikes. A responsible government would be stepping in, ensuring the state’s demand keeps house-building going while private developments struggle. Instead we have the state virtually vacating the field, and a short-term collapse in affordable house-building.

This is all the more egregious given National’s promises in Opposition. Bishop told RNZ last year that National would “build enough state and social housing” to clear the state-house waiting list, which, then as now, sat at around 25,000. Also last year, Nicola Willis, as National’s finance spokesperson, promised 1000 new state houses every year in Auckland alone.

Unless Bishola, as the two are sometimes known, can magic up those homes from somewhere, they are going to be guilty of broken promises. Alan Johnson, one of the housing market’s most experienced analysts, warned this week of a likely increase in “homelessness in the streets and cars and carparks of the country”.

The “hatchet job” on Kāinga Ora, he predicted, would be followed by “the panic button being pushed”, as National came face to face with the slowdown it had engineered. “I think,” Johnson added, “the government will come into the next election lamenting its lack of interest in social housing.” There will, indisputably, be something to lament.

The Spinoff: Budget 2024 is starving the future’s needs to pay for today’s politics

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Evidence of a continued addiction to spending? Or, conversely, a slash and burn approach to the public finances? Neither of these rival interpretations of finance minister Nicola Willis’s first budget can be made to stick. What Willis did, in fact, was to craft a short-term hand-out to key political constituencies – while averting her gaze from the increasingly unmanageable long-term pressures building up in the public finances and, by extension, the social fabric.

First off, it is hardly austerity, in a pure sense, when public spending is projected to rise from $138.3bn this year to $156.4bn in 2028. Over the next four years, billions and billions of dollars will be poured into health and education in particular. In the same period of time, government borrowing will be $17.1bn higher than was expected the last time the books were opened. Small wonder the Taxpayers’ Union is not best pleased.

These spending increases, however, are much less impressive than they seem. As the economy grows, the population lifts, inflation increases and needs multiply, government spending has to rise just to keep up. And because the economy is forecast to grow more quickly than state spending, “core crown expenses”, as they are known, will fall from the current 33.5% of GDP to 31.1% in 2028. The state’s share of the economy – its presence in our lives, if you like – will noticeably decline.

This, of course, is still not slash and burn. For around half a century, the working assumption has been that New Zealand governments “naturally” spend around 30% of GDP. And we are not projected to get back to that mark until the 2030s. Again, it is unsurprising that conservatives are cross.

The 30% assumption, though, is a big problem. There is nothing natural about it. To take a few European examples: German governments typically spend around 38%, Dutch ones 40%, and Austrian ones 42%. (And that’s not even counting the tax-loving Scandinavians.) If we taxed at those overall rates, our government would have around $20-30bn extra to spend each year. The Europeans get those funds by levying wealth, capital gains and inheritance taxes, and payroll taxes to boot; in return they get better public services, reduced poverty rates, and more convincing efforts to reduce carbon emissions.

New Zealanders, in contrast, have champagne tastes on a beer budget: we want those high-quality public services, but aren’t – currently – willing to pay for them. And the problems with that approach, which is mirrored in Willis’s ideological determination to (slowly) get spending down to 30% of GDP, are plain to see in this budget.

Take the $16.7bn that Shane Reti proudly proclaims has been allocated to health. Sounds impressive – until one realises that last year, officials estimated $13bn was needed just to maintain current services, and that this year they said the true figure was probably higher. This is known as meeting “cost pressures” or, less formally, “keeping the lights on”: compensating for inflation, allowing for wage increases, and maintaining service levels to an ageing population. Another $1.8bn of the Reti money goes to Pharmac for new drugs. There could be, in short, just a few hundred million each year to improve primary and hospital services in much of our calamitously over-stretched health sector. Some parts of that sector may even find themselves going backwards financially.

It is a similar story in education. A $2.9bn package over four years sounds good, but most of it ($1.5bn) is just to maintain and repair creaking school buildings. The actual operating grants to ECE centres and schools are probably only in line with inflation, broadly speaking – and this in a sector that has been hammered by rising costs in recent years. The much-touted “structural literacy” drive to improve the way children learn to read, meanwhile, gets a grand total of $67m over four years. Again, the funding needed for a real overhaul of a struggling sector – for investment in an array of new programmes and a serious step-change in teaching – is nowhere in sight.

This picture repeats across the whole of the public finances. In the Budget documents, the Treasury warns that the money Willis has set aside for new spending in 2025 and 2026 – $2.4bn in each case – is not even enough to compensate for inflation and maintain existing services. Something, surely, will have to give.

There is, of course, money in the budget to appease the constituencies National thinks are vital to winning again in 2026. Landlords, as well-trailed, get a four-year, $2.9bn tax cut via the restoration of their ability to deduct mortgage interest from their tax bill. Around $10bn will go on raising tax thresholds and expanding the independent earner tax credit. Some $700m is spent on childcare rebates. If you are a middle-income family with kids, and in particular if you also happen to own a rental property, National has your short-term interests covered.

The country’s long-term interests, however, are neglected. Infrastructure spending rises sharply this year, to around $18bn, but falls to under $10bn in 2028, even though the population will grow significantly in that time, and we already have massive under-investment to make up. Because the budget’s “squeezed middle” policies – including tax cuts and raising the in-work tax credit – explicitly exclude beneficiaries and do almost nothing for minimum-wage workers, child poverty rates are projected to rise or, at best, stagnate. Funding cuts will slow Commerce Commission work that could help break up the oligopolies that push up prices and stifle innovation. There is no extra support to help retrain the tens of thousands of people made redundant in our anti-inflation drive. The government seems to have closed its eyes to these long-term realities; it appears unwilling to make the needed investments in our long-term prosperity.

As Willis’s “sinking lid” slowly pushes spending back towards 30% of GDP, in other words, short-term political desires are met – but long-term public needs continue to boil away. As the population ages, the demand – and need – for healthcare spending will grow. Climate change mitigation and adaption – managed retreat, in particular – will demand billions of extra dollars. The lifetime costs of leaving tens of thousands of children in poverty will keep mounting up. The 30% spending target never made sense, but it is getting increasingly unsustainable. Willis looks very much like someone trying to hold down a heavy lid on a huge pot that, heated with ever greater intensity, boils harder and harder, threatening to blow the top right off.

The Spinoff: The real meaning of tax relief

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The American pollster and strategist Frank Luntz is famous – or infamous, depending on your point of view – for coining the phrase “death tax” to describe estate duties. He also promoted the use of “climate change” rather than “global warming”, the former being less likely to frighten people into action; later, he tried to frame attempts to widen healthcare coverage as “a government takeover” or “coup”.

Luntz is not, evidently, on the side of the angels. But he understands, better than most, the power of language to shape reality: to evoke emotions, to elicit certain responses, to change the very way we see the world. “Death taxes”, reportedly, engender far more resentment than “inheritance taxes”. No wonder Luntz’s bestselling book was called Words That Work.

Closer to home, the clearest current attempt to manipulate language in this way is National’s thus-far successful campaign to rebrand tax cuts as “tax relief”. This phrase may have stood out as you scanned the news; more likely, it slinked its way into your consciousness unnoticed, blending into the background. What it does, subtly but unmistakably, is position tax as a bad thing: something from which one needs to be relieved. “Less tax? Oh what a relief.”

This is hardly a neutral way to describe matters. Not everyone, admittedly, fills out their tax return, or contemplates their PAYE details, with joy in their heart and a song on their lips. But most of us are at least partly pleased to pay tax, to fund all the good things government does. Even though I am not, in general, an especially high earner, I don’t feel relief at the thought of my taxes being cut: I’m much more worried about how those less fortunate will cope if the cuts lead to weaker public services.

National, of course, will keep using the phrase, as is its right. But no-one with the job of describing politics neutrally or accurately should do so. Except for direct quotes, the media should not, and in particular RNZ – our state broadcaster – should not. Especially when there is an indisputably neutral and accurate alternative: tax cuts.

Words, in short, matter. Just look at the lengths to which National went to get the phrase “ute tax” into the vernacular. The ultimate prize, in this game, is not simply to say things your own way, but to get others – in particular the media – to say things your way.

Journalists might argue – with some justice – that Labour, when in government, didn’t necessarily play fair with language either. National’s “ute tax” was, in Labour’s original hands, the “clean car discount”: the positive inverse of National’s negative. Some more neutral term was needed: though clunky, the “feebate” – half fee imposed on polluting vehicles, half rebate for cleaner ones – was probably the best candidate.

The closer one looks, the more these linguistic sleights of hand become apparent. It’s not just “tax relief”: the state’s levies are often described, even in ostensibly neutral publications, as “the tax burden”. A wholly negative word is, once again, used to describe something that isn’t so. The “tax take”, or “tax obligations”, would be nearer the mark.

Reframing can, of course, be a force for good. One of the most successful campaigns in recent memory foundered when marching under the banner of “gay marriage”, but enjoyed far greater success when recast as “marriage equality”. Here, happily, language and accuracy went hand-in-hand: the fundamental moral point of the campaign was not that a specific group should get some specific privilege, but rather that something of value should be made universally – and equally – available.

None of this is to suggest that language is all-powerful. Something desperately unpopular isn’t going to become suddenly beloved just because it’s given a new name. Sometimes progressives make that mistake, thinking, for instance, that a capital gains tax will magically become more acceptable if renamed a “speculators’ tax” or similar. It won’t, not least because there is only so far words can be pushed: over-stretch them, and one strains credulity as well as language. The public, rightly, won’t take the bait, and the media won’t either.

It’s better, surely, to make the obvious point about a capital gains tax: that income is income. (This would echo the “love is love” tagline from the marriage equality campaign.) Income from selling investment properties is income; income from a salary is income. We should tax it all equally. And wouldn’t it be great if we did so? Now that is something that – although I wouldn’t expect the media to use this term – I really would find a relief.

The Post: The memorial we owe to those who died at Loafers Lodge

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Kenneth Barnard. Liam Hockings. Peter O'Sullivan. Melvin Parun. Mike Wahrlich. These five men died in the Loafers Lodge fire, a year ago this week, and their city, and perhaps the country at large, made an implicit pledge not to forget their names.

That, at least, was the message sent when the local mayor said it had been one of the city’s “darkest days”, the prime minister talked of “an absolute tragedy”, and multiple inquiries were urgently launched. Things wouldn’t be allowed to stay the same; we wouldn’t forget.

And yet we have. Thursday, the anniversary of the fire, brought a raft of commemorative stories. But all sounded the same theme: how little has changed, how quickly the deaths have passed from our minds.

The basic facts of the fatality are these. Loafers Lodge, situated on Wellington’s Adelaide Rd, was a boarding house, defined in law as a private dwelling with more than six tenants, each renting separately and long-term. There are at least 800 such establishments nationwide, probably more. Some are unremarkable. Others, though, are cramped, down-at-heel, dangerous places that cater to people who might otherwise be sleeping rough.

I first encountered this world in 2012 when I went undercover in a Wellington establishment called Malcolm’s, in order to write about it for the Listener. Malcolm’s housed 14 people, many of them alcoholics, in rooms that were sometimes foul-smelling, dirty and damp. I vividly remember Bob, an elderly Scottish man, telling me that the window in his room didn’t close properly, so in wet weather the rain “just comes hosin’ thru”.

The building boasted only one working shower, with a cracked concrete floor; there was no washing machine and no hot water in the handbasins. And even then, 12 years ago, the rent was $150 a week, with no bond, no tenancy agreement, no paperwork and, I suspect, no tax paid.

Thankfully Malcolm’s was bulldozed some years back. But other boarding houses stay in business. As another tenant at Malcolm’s told me: “I’ve got nowhere else to go.” Most landlords won’t rent to elderly alcoholics and their fellow strugglers.

Boarding houses do also serve working people locked out of our country’s woefully inadequate and over-priced rental market. But these are hospital orderlies and the like, not accountants or lawyers.

These are not, in other words, middle-class people leading standard middle-class lives. And that’s why the memory of the Loafers Lodge fire has so quickly faded. Had the victims been bright young middle-class men and women, we would have had a year’s worth of media and political activity: heart-rending family photos shared, campaign groups set up, parents rightly using their cultural capital to bring about change.

Instead we have the news, announced in March with no real fanfare, that a review of 37 other boarding houses nationwide found 134 defects, some potentially life-threatening. Smoke detectors either missing their batteries or absent entirely; fire alarms not monitored; wires cut or systems switched off because of bills unpaid. Routine violations of basic standards for weather tightness and warmth, and no interest from owners in compliance.

Other inquiries will establish who is to blame for the Loafers Lodge tragedy. But we already know it could all too easily recur. After the fire, the Listener reprinted my 2012 article in full, because essentially nothing had changed. And here we are again, with essentially nothing changed.

Our politicians have agreed to toughen penalties for negligent inspectors who certify dangerous boarding houses as safe, and to review the fire safety provisions in the Building Code. But that is, at best, half the story.

The deeper problem is that boarding houses aren’t meaningfully regulated. The government doesn’t always know where they are. Responsibility for monitoring them is spread across multiple laws and multiple agencies; the checks are of the once-over-lightly kind; inspection generally is under-resourced. Tenants are scared to complain lest they be evicted. Owners face minimal penalties for non-compliance. ACT’s David Seymour wants to deregulate the country; the irony is that large swathes of it are desperately under-regulated.

Our politicians also know that, if they put the worst boarding-house operators out of business, the homelessness crisis will worsen. Bad as they sometimes are, boarding-house owners are picking up the pieces left by an inadequate welfare state and a failed housing market.

On Thursday night I walked past the grey concrete hulk of Loafers Lodge, the fire damage on its façade looking like infected flesh, its upper-storey windows gaping open as if people were still trying to escape. Down below, the boarded-up entrance spoke of a desire to forget.

But just around the corner, by the Te Whaea bus stops, a memorial plaque to the victims had been unveiled. And I can imagine a better memorial still: a change in our laws, and in the way we care for each other, of such magnitude that these tragedies can never reoccur.

The Guardian: One year ago, a deadly boarding house fire shook New Zealand. We must prevent another tragedy

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One year ago, Wellington’s mayor said her city had endured one of its “darkest days” after a fire broke out at the Loafers Lodge boarding house, killing five people. On that day the air in New Zealand’s capital filled with black smoke and soot, and the city later mourned the loss of some of its most vulnerable residents.

Twelve months on, not enough is being done to prevent another such tragedy, experts believe.

Official data suggest there are at least 800 boarding houses in New Zealand. Predominantly multi-storey dwellings, they often house people who would otherwise be sleeping rough.

Loafers Lodge was a four-storey, 92-room hostel, described by visitors as a “rabbit warren”. Constructed in 1971, it was exempt from having a sprinkler system. Under New Zealand law, older buildings don’t have to automatically meet current safety standards, and even new ones don’t generally have to install sprinklers if they are under 10 storeys. A 48-year-old man has been accused of arson and charged with murder, and is due to stand trial later this year.

After the disaster, the government launched an investigation into safety and compliance at boarding houses across New Zealand. The findings released in March were alarming, identifying 134 breaches of fire safety and rental quality standards at 37 boarding houses. Loafers Lodge wasn’t part of the investigation.

The breaches included fire safety systems that were often severely inadequate, rendered useless by missing parts or certified compliant despite not being so. Fire alarm systems were frequently “damaged, obstructed, or not working”. Smoke detectors were sometimes missing, and only about half of those installed “were found to be in good working condition”. In many cases the battery had been taken out or was dead, or the alarm mechanism had been removed, leaving only the case.

Half of the buildings’ fire alarms, meanwhile, were not monitored. In one instance, the wires connecting the alarm to the monitoring company had been cut, while another building had repeatedly had its monitoring discontinued because the owner failed to pay the bill.

Despite being non-compliant, many fire safety systems had been signed off by the private inspectors who act as the first line of regulation. The report also noted that local councils struggled to even determine what counted as a boarding house, owing to “a lack of consistency” in the definitions used.

Clare Aspinall, Wellington-based housing researcher at the University of Otago, said boarding houses were “a very sad, very classic example of a systematic failure of policy and practice”. Responsibility for regulating them is “scattered” across multiple agencies and enforcement often underfunded, she said.

Aspinall, whose Master’s thesis examined boarding house regulations, said some of the failures highlighted in the March report had been raised with authorities as far back as 2010 – and little action had been taken.

In 2019, the then Labour-led government contemplated introducing tougher standards specifically for boarding houses, but focused instead on wider reform of residential tenancies and rental quality, according to documents released under the Official Information Act. Although these reforms notionally applied to boarding houses, the March report found a widespread “lack of basic compliance” with the new standards.

Now, steps are being taken to address some boarding house defects. Government officials have asked local councils to ensure the 134 breaches identified in the March report are fixed. Progress will be reported this month.

The Ministry for Business, Innovation and Employment (MBIE) said in a statement that Cabinet had agreed to create a new offence for private inspectors who incorrectly certify defective boarding houses, with a maximum fine of $150,000. The minister for building and construction, Chris Penk, will review the fire safety provisions in New Zealand’s building code. Consultation on potential changes is expected later this year. MBIE is also investigating five of the boarding houses identified in the investigation for potential non-compliance with the Residential Tenancies Act.

Still, not enough is being done, many believe, and authorities are moving too slowly to protect vulnerable residents. Experts have called for a full register of boarding houses, simplified legislation that makes one public body clearly accountable for regulating them, and more resources for inspections.

Politicians have long been deterred from introducing tougher standards by the country’s lack of affordable housing, which could leave tenants homeless if their boarding house closes. But Aspinall argues that, alongside an increase in affordable housing, there must be “more responsibility and accountability” placed on landlords, especially those found to repeatedly flout the rules, and the worst ones should be “weeded out.”

But with seemingly little to guarantee the safety of the next set of boarding house tenants who find themselves at risk, the need to act more quickly appears clear.

The Spinoff: A record-breaking year for political donations is no cause for celebration

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A couple of years ago, a National Party contact told me it had “never been easier” to get big donations from businesses. Anger about the Covid-era “fortress New Zealand” policy, combined with an instinctive distrust of Labour, meant wallets were opening wide for the political right.

All this could be seen in the recent publication of political donations returns for 2023. In these returns, parties set out everything from anonymous gifts of $100 at a church hall fundraiser through to the $500,000 that manufacturing magnate Warren Lewis gave National.

Christopher Luxon’s party, unsurprisingly, led the way with a $10.4m total haul. Act, meanwhile, scored $4.3m – a startling sum for a small party, and a reminder of how it was kept on life support throughout the 2010s by dollops of cash from the likes of 80s corporate raider Alan Gibbs. The last of the coalition parties, New Zealand First, declared $1.9m, marking a distinct change from its pre-2020 strategy of using something called the “New Zealand First Foundation” to channel gifts of hundreds of thousands of dollars from wealthy supporters to the party, without actually going to the trouble of – you know – notifying the public.

On the left, meanwhile, Labour pulled in $4.8m, a respectable sum but half National’s amount, while the Greens declared $3.3m. Te Pāti Māori received just $160,000. All up, the left’s tally, $8.2m, was almost exactly half the $16.6m that the right harvested. The trade unions, which in right-wing mythology somehow balance out big business’s influence, contributed a princely $335,000 – less than that single Lewis donation to National.

Why does any of this matter? Because, in politics as elsewhere, money talks. It potentially generates undue influence: giving a political party large sums can induce it to look kindly on you. While there is little evidence of cash directly buying favours, one National donor, interviewed by myself and my Victoria University colleague Lisa Marriott in 2022, said donors had “more opportunity” to get a meeting with ministers.

In the same interview series, another donor, after insisting he enjoyed no special influence, noted that one party leader had come to his house, another was a social contact, and a third “popped in a couple of times and had a chat about life”. This was mentioned nonchalantly – as if the rest of us are constantly fending off politicians’ attempts to come round for dinner – but in fact bespoke a cosy world, evident right throughout our interviews, in which party leaders, fundraisers, MPs and donors constantly rubbed shoulders, with no firewall between decision-makers and coffer-fillers.

Consider this example. Last year, Chris and Michaela Meehan gave National over $100,000. Also last year, their company, Winton, sued the government for refusing to fast-track its Sunfield property subdivision in South Auckland. Also also last year, National MP Chris Bishop issued a press release backing Winton but not disclosing the donation. (Bishop says he was unaware of it at the time.)

Fast-forward to this year, and Winton is one of the companies specifically told it could apply to have its projects expedited under the government’s highly controversial Fast-track Approvals Bill. One of the ministers who would sign off on the fast-tracked projects is Chris Bishop. Another is Shane Jones, who has taken over $50,000 from individuals associated with Kings Quarry, yet another firm on the list for potential fast-tracking. The prospect of ministers ruling on projects run by the people who funded their election campaign seems – how can I put this? – suboptimal.

Donations can also tilt the political playing field. It’s not the case that great wealth can just “buy” an election: a Labour strategist once told me they’d rather have a great candidate with a great message and no money, as opposed to a terrible candidate with a terrible message and lots of money. National’s 2020 election campaign (relevant components: Judith Collins; “Demand the Debate”; more donations than Labour) bears this out.

But, the strategist said, all things being equal, they’d rather have more cash. National’s pollster, David Farrar, concurs: “You always want more money than less, because it gives you options,” he told RNZ last year. Money buys not just advertising but also polling, political consultants, voter databases, travel, venue hire and field organisers. No wonder, then, that the latest international research finds that more money tends to lead to more votes.

It’s worth noting, too, that when it came to donations under $1,500, Labour and Green fundraising ($4.6m last year) largely kept pace with National and Act’s efforts ($5.4m). It was in donations over $5,000 where the right ($6.5m) really smashed the left ($3.1m, a good chunk of which came from their own MPs). It’s that class of donor that made the difference in parties’ reach.

This resource imbalance may also be accelerating. In the three electoral cycles leading up to 2020, National pulled in $19.3m in donations (albeit we have no solid data on donations under $1,500 for that period). In just three years since, it has raised $16.5m. This is, as Farrar acknowledges, “unprecedented”.

It’s unlikely, though, that anything will be done about the problems donations pose. The answers – as set out in the report that Marriott and I wrote in 2022, Money for Something, and reiterated by last year’s Independent Electoral Review – are intellectually straightforward. Cap the amount that anyone can give at around $10,000 a year, ensure that only individuals (not organisations) can donate, disclose the names of more donors, give the Electoral Commission stronger powers to investigate fraud, and spend about $1 per New Zealander each electoral cycle to publicly support political parties.

The problem is that it’s not in National’s interest to implement such reforms, and Labour doesn’t want to wear the right-wing backlash that would greet any such attempt on its part. So we may be left with this stark example of inequality: late last year, Warren Lewis’s workers, many of them on or around the minimum wage, went on strike, asking for a pay rise. That’s New Zealand now, a country where the wealthy can find $500,000 for a party that will advance their interests, but won’t pay their workers a living wage.