Treasury view is wrong, says PM

Prime Minister Jacinda Ardern says her housing minister was wrong to call Treasury officials ‘‘kids’’ – but has sided with him in disagreeing with their view that the Government’s Kiwibuild promises are too ambitious.

But rather than get personal, the Government would ‘‘just get on and build houses’’ to prove Treasury wrong, Ardern said.

Housing Minister Phil Twyford last week slammed the ‘‘kids at Treasury’’ over an analysis that halved the impact Kiwibuild would have on residential construction, which contradicted a sunnier forecast from the Ministry of Business, Innovation and Employment.

In the Budget documentation on Thursday, Treasury analysts reduced the amount of additional residential investment they believe the Government’s flagship Kiwibuild policy will bring in by 2023, down from $5.4b in December to $2.5b last week.

The prediction does not point to the number of homes actually being built, but does look into the value of additional residential investment as part of the homebuilding scheme – value that mostly comes from actual home construction.

Twyford called Treasury ‘‘kids’’ who were ‘‘fresh out of university and they’re completely disconnected from reality’’.

Ardern said she and Finance Minister Grant Robertson also disagreed with Treasury over its Kiwibuild forecasts. ‘‘In fact MBIE take a different view from Treasury and that’s not unusual ... we often have two government departments with competing views. One of the things Treasury hasn’t taken into account, for instance ... some of the elements of Kiwibuild which include buying off the plans so there are some different mechanisms they’ve used to make those forecasts.’’

Twyford’s comments upset the public sector union. The PSA national secretary Glenn Barclay said it was disappointed by the ‘‘personalised’’ comments.