Govt buys more motels; Auckland housing costs rise, Bartlett's betrayal

Ii was all smiles when Kristine Bartlett and Jonathan Coleman signed the $2 billion pay equity settlement for aged care and support workers on May 2, but Bartlett is unhappy with the Government's legislation. Photo by Lynn Grieveson.

In today's email we look at the way housing dominated the penultimate question time before the election, and discover why pay equity advocate Kristine Bartlett is feeling betrayed.

1. Govt buying more motels

Homelessness and housing costs are among the top issues to be debated in this election campaign, which was emphasised yesterday in the second to last question time of this Parliament.

Labour housing spokesman Phil Twyford and social development spokeswoman Carmel Sepuloni both questioned the Government on housing and Auckland housing in particular.

After last winter's Auckland housing shortages sparked coverage about people living in cars (led by The Nation's Mike Wesley Smith), the Government eventually unleashed NZ$354 million in spending on transitional and emergency housing.

Sepuloni asked Social Housing Minister Amy Adams about the Government's motel purchase programme, which has been one part of that package.

Adams confirmed the Government had bought four motels and planned to buy two more. She said the Government had spent around $34 million on emergency housing special needs grants, which she said were different from spending on motels.

"When we purchase motels, it is not for emergency special-needs grant, short-term placements," Adams said.

"It is for creating a brand new class of housing, called transitional housing, which is not just about putting a roof over people's heads. It is about ensuring they have somewhere safe and secure to stay while they wait for a long-term placement and ensuring they have wraparound social services to support them," she said.

"That has never been done before. This Government has added it into the social housing options, and we are very proud of that."

Adams doubled down on the defence when asked if the spending had been good value for money.

"I think the people of New Zealand are very pleased that this Government has made a commitment to support homeless people in a way that never happened under Labour, where they, frankly, were happy to leave them sleeping in cars, in parks, on park benches, and under trees," she said.

The Government's response to Auckland's housing crisis will be a major topic in the campaign, and in particular whether it has been caught behind the curve after dropping the ball on housing supply between 2009 and 2012 when then Prime Minister John Key saw falling to dormant house prices as a sign supply was not a problem.

2. Record high Auckland housing costs

MBIE yesterday published an updated and tweaked version of its Housing Affordability Measures, which are the Government's attempt to come up an official set of measures of affordability to go with the unofficial ones from and Massey University.

The headline measure looks at the percentage of households with below average income after housing costs, both nationally and for the major cities.

But I think the easiest to understand measure is the one that measures the percentage of households that spend more than 30 percent of their incomes on housing. The 30 percent threshold is often used as a threshold to indicate housing stress.

It shows around 50 percent of buyers nationally now spend more than 30 percent of their income on housing, while just over 25 percent of renters do. The renters figure is broadly unchanged since the series began in 2003, but the buyers level is up from around 40 percent in 2013 (although down from a record high of 67 percent in 2008 when interest rates were over 10 percent.)

The most relevant of the indices though is the one that looks at the percentage of households now spending more than 30 percent of their income on housing in Auckland.

The latest HAM measure shows a record high of more than 70 percent of buyers are spending more than 30 percent of their income on housing, while the percentage of renters spending more than 30 percent is relatively stable at around 30 percent.

3. Why Kristine feels betrayed

Newsroom has had a Massey University journalism student, Andre Chumko, in our Parliamentary office this week. We asked him to take a look at the new Pay Equity Bill that had its first reading last week.

Andre Chumko spoke to Kristine Bartlett, the woman behind that case that led to the Government's $2 billion settlement package for aged care workers in April. He also looked at the first reading debate and found the initial excitement from April has dissolved into bitterness and a feeling of betrayal.

The size of the pay increases and the apparent precedent led many to conclude there would be a ripple effect into other industries that would boost wage inflation specifically and inflation generally. But Andre found the Government's pay equity legislation appears aimed at making the Bartlett settlement the first and last big one.

Bartlett, unions and the Opposition are now accusing the Government of reneging on that promise with the bill just read in Parliament. They say the Government has effectively pulled up the drawbridge behind Bartlett to block similar deals by forcing pay equity claimants to firstly compare their wages with men in their own businesses and sectors.

"We all feel very, very let down. Totally let down," Bartlett told Newsroom.

"They’ve reneged on what the initial agreement was when they set the principles and pay rates, and made it so much harder if ever there’s other guys go for it," she said.

"That’s the disappointing part. I was so so happy knowing that when this went through, when mine was put through, I was so excited thinking now all these other low paid women-dominated industries or workplaces can now go and put claims in. And of course that’s all stopped at the moment. So it’s back to the drawing board again."

Here's Andre's story on Newsroom Pro.

4. Quotes of the day:

Jacinda Ardern talks about Julie Bishop's grumpiness over the Barnaby Joyce situation while launching Labour's mental health policy in Christchurch:

"Politics is a constant rock and a hard place - I'm currently wedged between Ayers Rock and New Zealand."

Bill English in Parliament on the Julie Biship/Barnaby Joyce situation:

"I would imagine that as emotions have cooled we will be able to have the relationship on an even keel. This will pass. Cooler heads now will get the issues resolved."

John Key, who was knighted yesterday, talking on TV3's The AM show about Jacinda Ardern:

"The camera likes Jacinda. Paul Holmes once said to me 'on TV they see your heart' - she responds well to that so that works really well for her. I don't think that will be enough to get them over the line obviously but I think she'll do substantially better than Andrew Little would have."

5. Numbers of the day:

2.4 percent - The increase in GDP per hour worked in total since 2012. This was the figure used by Steven Joyce in answering a Parliamentary question from Grant Robertson about New Zaland's productivity record.

Their final exchange is a good summary and a preview of one the debates we will see repeated in the coming election campaign:

Robertson: "After 9 years of a National Government, is it not time for him to admit that he has squandered an opportunity to deliver to New Zealanders a fair share in prosperity, and instead he is drifting along delivering stationary real wages, weak productivity, and rising wealth inequality?"

Joyce: "This might be a slightly longer answer, given all the inaccuracies in the member's question. So, firstly, real wages have grown at about double the rate of inflation in this country since 2008. I know it is not in your talking points, Mr Robertson, but it happens to be true. Productivity is also growing, and, in fact, it has actually been growing faster than the equivalent period under the previous Labour Government.

"I can say something else to the member, which is that if you voted for tax changes, then, actually, New Zealanders would be a further $26 a week per family better off on 1 April of next year, and I note that the Labour Party voted against those. Finally, if the member thinks that adding taxes on the productive economy is a way to improve productivity, he is sadly, sadly mistaken."

6. While you were sleeping

The fallout from Donald Trump's extraordinary press conference continued overnight. His main council of top corporate leaders disbanded after they met to discuss Trump's repeated defence of neo-nazis. Then Trump disbanded his manufacturing council and his strategy and policy forum. "Thank you all!" he tweeted. (NY Times)

7. Coming up...

Wellington Council is expected to announce later this morning it will be the first local authority to introduce a voluntary warrant of fitness scheme for rental housing. Mayor Justin Lester is expected to announce a scheme with the University of Otago.

Parliament sits today for its final day of this term of Parliament. The house rises this afternoon and then the election campaign officially begins, and the Government goes into caretaker mode.

8. One fun thing

Trump's extraordinary news conference sparked plenty of black humour last night, including by the US late night comedians, who are turning into essential commentators on the Trump era. (NY Times)

Jimmy Kimmel thinks America should make Trump a king:

“England has a queen. She lives in a palace, everyone makes a big deal when she shows up, she has no power at all. In the morning, they put a crown on her head, she stands there and waves, she goes back to bed — that’s it. If the queen were to walk out on the balcony and open her shirt, nothing over there would change. The queen could be completely bonkers — it would make no difference at all. She’d still be queen, it would still be fine. That’s what we need to do with Donald Trump. We need to set him up in a castle, maybe in Florida, lead him to the top and then lock the door to that castle — forever.”