Govt rushed $1b infrastructure fund, Labour claims

Building and Housing Minister Nick Smith (Simon Wong / Newshub.)
Building and Housing Minister Nick Smith (Simon Wong / Newshub.)

The Government's flagship $1 billion housing infrastructure fund was devised in just a month, according to official statements given to the Labour Party by ministers.

The policy was unveiled at the National Party's annual conference in July.

There was no consultation with councils regarding how much money they needed, and they only found out about the initiative two days before it was made public.

It didn't pass through a Cabinet committee before being signed off by Cabinet, which happened just five days before the conference.

What's more, Housing and Building Minister Nick Smith only received his first briefing paper on the fund just nine days out from its announcement in the form of a Cabinet paper from the Ministry of Business, Innovation, and Employment.

Dr Smith took the lead on consultation with councils, but confirms they were not asked how much funding was required.

Govt rushed $1b infrastructure fund, Labour claims


Prime Minister John Key unveiled the fund on July 3, which allows councils in Auckland, Tauranga, Hamilton, Christchurch and Queenstown to borrow money interest-free in order to build much-needed infrastructure for new housing developments.

The timeline of how the policy was devised is revealed by both Dr Smith and Finance Minister Bill English in answers to written questions from the Labour.  

It shows Mr English was first briefed on the fund on June 3, just one week after he delivered the Budget, which made no mention at all of an infrastructure fund for councils.

Labour leader Andrew Little says it's proof the Government rushed out the policy following intense criticism at the Budget's lack of housing initiatives.

"The Government is in complete disarray when it comes to housing and what we see now is, having delivered a Budget that said nothing at all about housing, they then scrambled around over a matter of two or three weeks to put together a policy they could announce at their conference," he says.

"This is hopeless, this is not the way to run a housing policy, or to address New Zealand's housing crisis."

Govt rushed $1b infrastructure fund, Labour claims

Mr English denies it was a rush job, saying it had been in the pipeline for years, and not just devised in the space of a month.

"That is wrong. There've been ongoing discussions particularly so Government can understand just what challenges councils faced because in the past, we didn't really used to understand that", he says.

"We'd been talking to councils informally for quite some time, probably over a couple of years because infrastructure has been an increasing challenge for them. The $1b number was arrived at around when we made the decision."

That explanation doesn't cut it for Mr Little, who says there's no way it's been in the pipeline for years.

"This is meant to be a fund for councils, so you'd think the first thing you'd do is go to councils. They didn't do that, they rushed it together because they're on the back foot," says Mr Little.

Mr English says it's "not really" unusual for the policy to skip the process of going through a Cabinet committee before going to the entire Cabinet for signoff.

"Once we were clear on what we wanted to do, we just decided to get on with it, partly because of the strong public interest in housing."


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