Photo: RNZ / Angus Dreaver
Labour's leader Chris Hipkins says Kāinga Ora is an efficient house builder and he suspects the government is trying to "manufacture a crisis" and stop the house building programme.
National's Housing Minister Chris Bishop says the government's review of the social housing agency is not about selling off state housing, and the government intends to increase the number of houses and housing places.
Bishop on Monday announced the government's independent review of Kāinga Ora - promised in its coalition deals - would be led by former prime minister Sir Bill English and report back at the end of March.
He said he was concerned about the levels of debt - which were expected to rise - and the operating deficit, but he had also received new concerning advice from Treasury about the agency's operations since coming to office.
The government would not release those details yet as it was commercially sensitive, but planned to release as much as it could when the review was being finalised.
There were also "worrying trends in the financial performance", he said, and homes built by the agency cost more than the market average.
Speaking to media on Tuesday morning, Chris Hipkins said Kāinga Ora was an "efficient house builder" and he did not know what problems in it Bishop was referring to.
"I suspect he's just trying to manufacture a crisis. Kāinga Ora have borrowed more money, because they have built record numbers of new homes," he said.
"We wouldn't have been in this position of needing to build that number of houses that quickly if the previous [National] government had actually maintained a steady housebuilding programme."
Bishop had been trying to talk up a crisis in Kāinga Ora since he was in opposition, Hipkins said.
"So I know the National Party made a big thing about the headcount at Kāinga Ora for example. If you look at the number of people employed by Kāinga Ora relative to the number of new houses they've built, it's about one person for every two new houses ... when National was last in government it was two people for every one new house built.
"I think basically what they want to do is stop the house building programme, that's just going to set us back to square one, it's going to make sure the problem continues. We actually need to be building more public homes.
"The National Party, whenever they're in government, reduces the number of public houses, they don't increase them. We've built over 12,000 new public homes because we knew that that's actually how you're going to meet the need."
Hipkins said there were good reasons a Kāinga Ora home might cost more than other new builds.
"It depends on the nature of the build. So in many cases these are brownfields developments not greenfields developments, so they're basically removing existing homes, dealing with land contamination and so on before they can start building.
"They also build them to a different standard, so they have a resilience standard that is higher ... the fixtures and fittings and everything that are used in a Kāinga Ora house.
"And they're often also built to a disability accessibility standard, which a private home might not be built to."
Bishop said he would stick to his commitment to the current track of house building set under the previous Labour government.
"We want to grow the number of social housing places, we also want to grow the number of social housing actual physical houses," he said.
Chris Bishop announced the review into Kāinga Ora at the post-Cabinet media briefing on Monday. Photo: RNZ / Samuel Rillstone
"We are going to take the time to work systematically through all of the issues affecting housing in New Zealand - and Kāinga Ora's performance is part and parcel of that.
"We have a social housing crisis in New Zealand in the same way as we have a housing crisis. So I'm hoping the review will give us a pathway forward as to how we fix the housing crisis more generally but also in terms of social housing.
"The public housing increase stops after 2025, that's one of the fiscal cliffs left to us by the last government, so the public housing track stops after 2025 and that's actually one of the things I want the review to look at - is how we get a more sustainable funding path for social housing."
He said the review was not about selling off state housing.
"No, it's not about that, I mean Kāinga Ora, by the way, sells houses right now, the last government sold or demolished over 4000 state houses in the last six years.
"One of the issues we're dealing with is that the funding structures around social housing - both for Kāinga Ora but also the community social housing sector - are extremely opaque. And I've had advice to that effect - and so that is part of the reason we're doing the review."
Labour's Housing spokesperson Kieran McAnulty defended the organisation.
"Got to remember that Kāinga Ora was pretty much set up from nothing, there was pretty much no agency there," he said. "New Zealand Housing at the time basically spent their time selling off houses under the previous National government.
Kieran McAnulty Photo: RNZ / Samuel Rillstone
"We had to build it up from scratch, that's why there's 1500 more public servants, that's why over that period of time it cost a lot of money to get things established - but houses have started to really crank out now and are being built efficiently. So I don't actually accept the claim that they're making."
The party's Finance and Infrastructure spokesperson Grant Robertson was also unaware of what Bishop was referring to.
"There were always issues with every agency but not the kind of unstated 'alarm bells' ... I mean Chris Bishop said yesterday 'there are things I can't tell you' - well that makes it pretty difficult to know what he's talking about.
"Obviously we always monitor Crown entities and we keep a close eye on them. I'm not going to speculate on anything that they might be looking at now but we continue to work with Kāinga Ora to make sure they deliver the houses we were asking them to deliver.
He said there was a massive deficit but argued it had been "caused by the fact the previous government was selling state housing off. So yes, clearly money was borrowed to do that".
Bishop said the new government was keen to eventually move the social housing system to a social investment approach, a method of using data and evidence to support investments in social services - including through third-party providers - and adjusting them according to what the data said.
"Over time, we're not going to be able to do everything straightaway, but that's a direction of travel for the government."
The social investment approach was championed in the previous National government by Sir Bill English.
