Incoming PM’s first task is to manage expectations
Factors that will put early runs on the board for housing policy success are arguably already in place.
OPINION: For the 43.2 per cent of the population who voted for the Labour or Green parties, the change of government ends the political equivalent of a nine-year political migraine.
Expectations are running very high that this Government represents not only a generational change of political leadership, but a decisive shift in economic, social and environmental policy focus.
The ‘‘end of neo-liberalism’’ is widely trumpeted, and misleading headlines play up the idea that Jacinda Ardern claims that capitalism has ‘‘failed’’.
What she said was that leaving housing affordability to the market had failed.
So did numerous interventions by the previous Government, but that doesn’t fit a narrative that seeks to claim the change of government means ‘‘the end of neo-liberalism’’.
Certainly the new Government intends to have much more ambitious interventions for housing. To name but three: the KiwiBuild policy to build 10,000 affordable homes a year; allowing local governments to issue infrastructure bonds; and abolishing the Auckland urbanrural boundary.
The latter is a free-market approach that would have been damned as ‘‘promoting urban sprawl’’ if National had proposed it ,but Labour’s Phil Twyford scored a massive, unsung coup when he slid that into Labour’s policy last year.
Yet factors that will put early runs on the board for housing policy success are arguably already in place.
House price inflation has stalled on a combination of Reserve Bank lending restrictions, trading bank caution at highly indebted households, sheer unaffordability in some parts of the country, and an evaporation of mainland Chinese buyers facing foreign exchange restrictions.
Add in lower immigration numbers, and the slowly gathering pace of new homes and apartments to the market, and the conditions for the housing affordability and supply crisis are to ease anyway.
There are also very high expectations for social policy – including income redistribution – and environmental policy.
The former will be dealt with early by cancelling National’s April 2018 tax cuts for high-income earners, and delivering higher Working for Families and accommodation supplement payments for low-income households.
The minimum wage, which would have risen anyway, will increase and be counted a victory.
Child poverty measures will be introduced as policy targets. How much of Bill English’s social investment approach survives may depend on the quality of the advocacy from the nongovernment providers that it sought to empower.
The urge to assume the state is best at delivering social services is deeply embedded not only in Centre-Left politics, but also in the bureaucracy.
On environmental policy, both the expectations and challenges are huge: cleaner rivers, a climate change policy that bites, and an approach to land use that discourages further dairy intensification are all on the agenda.
The new Government’s challenge here will be to avoid distractions. Legislation to form a Climate Commission should proceed swiftly and give focus to a carbon price capable of spurring behaviour change.
However, as the Environmental Defence Society warned last week, the intention to hold a freshwater conference within its first 100 days risks ‘‘returning to the days of position-stating that is all a big forum would deliver’’.
‘‘Fixing freshwater demands a high degree of technical expertise and sophisticated policy development, building on where we have got to,’’ said the group’s chief executive, Gary Taylor.
This is as close as he will as he will ever come to saying that Nick Smith was on the right track with his new ‘‘swimmable’’ standards.
The nexus between land use and freshwater is potent, but technically mind-boggling. The urge to throw out the baby with the bathwater should be resisted if the expectations in this vital area are to have any realistic chance of being met.