A new report by the New Zealand Initiative’s Dr Bryce Wilkinson comprehensively exposes KiwiBuild as an incoherent mess, says ACT Leader David Seymour.

“ACT understands why KiwiBuild exists – it’s a vote-winner. But it’s also a massive distraction from the real issue of land supply.

“Dr Wilkinson shows why KiwiBuild won’t add to the supply of new homes or bring down the cost of housing. And, despite Phil Twyford’s claims to the contrary, it shows the taxpayer is being used to subsidise new homes for relatively well-off New Zealanders.

“The report relies on Treasury modelling to show KiwiBuild is likely to have no effect on house prices or quantities as public investment crowds out private investment. If KiwiBuild removes one homebuyer from the market, the private sector will build one less house.

“Phil Twyford insists KiwiBuild homes are not subsidised. Why, then, Dr Wilkinson asks, does the Government need to ration them via a ballot? If homes are unsubsidised, why would developers participate when they can operate in the private market without all the bureaucratic nonsense?

“The fact is that KiwiBuild houses are a form of welfare – they represent a transfer of wealth from taxpayers to developers and those lucky enough to be successful in the ballot.

“The report recommends what ACT has long campaigned for: the Government should tackle the housing crisis by cutting red tape and supplying more land in order to bring down its cost. This doesn’t require the government to be a builder.

“In 2012, the Productivity Commission found that the value of land just inside Auckland’s metropolitan urban limit was nine times greater than the value of land just outside, showing restrictive land use policies push up house prices.

“2016 Phil Twyford understood this. He said we should remove the metropolitan urban limit and let Auckland city grow. 15 months on from the election, he hasn’t acted on this commitment. 

“ACT would remove cities from the Resource Management Act and introduce urban planning legislation focussed on increasing land supply. Urban environments should not be regulated in the same way as undeveloped natural environments.

“We would also share a portion of GST revenue collected from the construction of new housing with councils to incentivise them to approve planning of new homes. The shared revenue would help cover the cost of infrastructure.

“ACT has long campaigned – alone at times – for reducing red tape and increasing land supply. Labour must heed that message if it doesn’t want to share the National Party’s fate.”