Newsroom Pro's 8 things at 8 am: Finally, the HIF arrives; Labour's income package

Announcements on the first projects to use the Government's Housing Infrastructure Fund will be made today. Photo: Lynn Grieveson

In today's email we detail the arrival of the first projects to use the Housing Infrastructure Fund (HIF).

1. Finally, the HIF arrives

After a couple of hiccups and months of back and forth between councils and the Government, they are set to finally announce the first projects to use the Housing Infrastructure Fund (HIF) later this morning.

Prime Minister Bill English announced at his post-cabinet news conference yesterday he would be travelling to Hamilton today to detail the first projects to use the $1 billion fund.

The Auckland Council is set to announce its first projects this afternoon at an event in Auckland.

The fund was first announced in a hurry in July last year after the 2016 Budget was criticised for having insufficient measures to deal with an infrastructure funding blockage for new housing at the council level, particularly in Auckland.

The calls for central Government help for councils reached a crescendo through late June after Housing Minister Nick Smith announced a National Policy Statement on urban development that served only to highlight the problems Auckland and other high growth councils had with funding infrastructure needed to build new housing. Many are up against their debt limits and cannot afford to pay upfront for the water, transport and other infrastructure needed for extra housing developments.

I wrote in June last year that Smith's announcement ignored the 'elephant in the room' of infrastructure funding. Within three weeks the Treasury and the Government created the Housing Infrastructure Fund policy and it was announced by then Prime Minister John Key at National's annual conference on July 3.

Subsequent Treasury documents showed how the policy was rushed through in the space of 33 days, as I wrote in October last year.

The biggest unintended consequence was that Councils were wary of borrowing from the fund, or being seen to borrow from the fund, because it would be deemed as extra debt by Standard and Poor's and therefore would fail to solve the debt limit problem -- particularly for Auckland.

Since then the Government has talked about lending the funds through special purpose vehicles that would effectively move the debt off the council balance sheets from a credit rating agency point of view.

English and then Steven Joyce were also frustrated early in the process that councils had either simply asked for funding for existing plans, or did not have specific plans available.

"Initially the councils talked about their very pressing needs," English said yesterday.

"It turned out their planning processes had to be changed a bit to accommodate growth and not just get the Government to pay for things they were going to do anyway," he said.

English's tone was more positive yesterday about the council's plans.

"We've been impressed, as I hope they've been with central Government, with the strong common sense of purpose about getting more housing supply and getting it boiled down to specific projects and specific dates and specific costs, and it's been really quite successful," he said.

"Not just for allocating the $1 billion, but for getting Government to understand the pressures councils have to deal with, and some of the weaknesses in their systems. And councils understanding the over-riding need for more housing supply in a growing economy."

I asked if, therefore, the Government would increase the size of the fund. He would not rule it out and said we'd have to wait and see.

Smith said last month that councils had submitted $1.5 billion worth of projects to use the fund.

We will cover the announcements on Newsroom Pro later today, and Newsroom Co-Editor Tim Murphy will cover the announcements in Auckland.

2. Labour's family incomes plan

Labour will be competing for attention today too with an announcement of its own version of the Government's family incomes plan.

Newsroom's National Affairs Editor Shane Cowlishaw will cover it for Newsroom Pro later in the day.

But Labour previewed part of the plan last night with an announcement of a winter energy payment for superannuitants and people on the main benefits. The payment of $700 for couples and parents with kids at home and $450 for single people would be paid in monthly instalments from May to September to help pay for heating bills.

Labour cited an AUT/HRV survey showing four out of 10 people turn off their heating in winter to reduce their power bills, and that 1,600 people die each year because of cold housing.

3. A new charter school

Now that the Lions tour is over and Parliament is in recess, the parties are clearly gearing up for election mode and rolling out their policies.

ACT is expected to announce a new charter school in Rotorua later today, having been a driving force in the drive to create charter schools.

4. 'Hydro plants not covered'

Green Co-Leader James Shaw moved yesterday to deflect National's accusation that its resource rental plans for water would also include charges for hydro-electric power generation.

Shaw told Newsroom that Bill English's suggestion that hydro schemes might have to pay under the Green plan was incorrect as power companies did not remove water from the system.

Elsewhere, told Shaw Newsroom the 10c/litre levy announced on Sunday only applied to bottled water and would be an interim measure until a more comprehensive pricing plan was created.

Shaw said their goal is to establish a working group to resolve “issues around rights and responsibilities that this government has avoided talking about for the past nine years."

The working group would work with the public, industries and iwi to construct a variable price structure that took into account different industries, times of the year and how scarce or abundant water was in each region.

5. Winston's woolly plan

Meanwhile, New Zealand First Leader Winston Peters was also in policy announcement mode as he visited Gore on his regional tour.

He announced yesterday he wanted Government funded buildings carpeted and insulated exclusively with New Zealand wool. Peters said the NZ wool industry could be worth $1.5 billion, but made only $531 million in the 2017 financial year because of “donkey-like leadership and crony contracts that favour the few”.

English said many industries would like a government assisted boost, but “New Zealand hasn’t operated in that way for a long time, and we’re not about to start now”.

“It is an unrealistic conversation, because Mr Peters has no idea whether it is commercially viable on the Government's terms or not,” English said.

6. While you were sleeping

President Donald Trump's problems with inquiries into collusion with Russia in the election campaign deepened overnight after the New York Times reported that his son, Donald Trump Jr, was promised damaging information about Hillary Clinton before agreeing to meet with a Kremlin-connected Russian lawyer during the campaign. Trump Jr changed his initial story upon being approached by the Times.

Also, Trump tweeted that he had reversed his position on creating a cyber-security unit with Russia after severe criticism from both sides of politics. "The fact that President Putin and I discussed a Cyber Security unit doesn't mean I think it can happen. It can't-but a ceasefire can,& did!," he tweeted.

US newspapers showed how desperate they were overnight in their battle for advertising revenues against Facebook and Google by asking Congress for anti-trust exemptions to negotiate collectively with the two digital advertising behemoths. (New York Times)

7. Coming up...

The Government and Hamilton Council are scheduled to announce their first Housing Infrastructure Fund projects later this morning. Auckland Council is expected to announce some of its projects this afternoon.

Labour will announce its family incomes package in Auckland today.

8. One fun thing

It is a golden age for cartoonists, thanks to Trump et al. David Rowe's cartoons in the AFR are exquisite, including this one of Russian nesting Dons.