Ministers seem at odds over infrastructure fund

Housing Minister Nick Smith (Simon Wong, file)
Housing Minister Nick Smith (Simon Wong, file)

Two of the ministers tasked with solving the housing crisis appear to be at odds with each other over whether the $1b infrastructure fund can be used by councils for existing developments.

The fund allows councils in Auckland, Tauranga, Hamilton, Christchurch and Queenstown to borrow money interest-free from the Government for housing infrastructure like roads and sewers.

Housing Minister Nick Smith and Finance Minister Bill English don't seem to agree on whether the fund should only be for new housing developments and subdivisions - dubbed "greenfield areas" - or if it can be used in existing urban areas - dubbed "brownfields".

Both ministers were sent a written parliamentary question from the Green Party asking: "Will loans from the new Housing Infrastructure Fund only be able to be used to fund infrastructure in new "greenfield" areas?"

Mr Smith replied: "Yes."

Mr English replied: "No. It will be possible for the fund to be used to build infrastructure in existing urban areas provided councils can show that significant amounts of new housing will result from that investment and the other criteria are met."

Ministers seem at odds over infrastructure fund

Dr Smith has tried clarifying the blunder, saying his answer is wrong because of an administrative blunder.

"The question I was answering didn't have the word "only" in it, and I don't know if that was because my staff misread it or if it came through like that," he says.

"Either way, I'll be sending a correction through so the record is updated," he added.

Green Party co-leader Metiria Turei says the inconsistency in the answers is baffling and embarrassing, and she isn't buying Dr Smith's explanation.

"I'm sure Nick Smith has staff to help him with questions, and he must get these things right. If he doesn't think this fund can't be used for urban infrastructure, that's a real problem, especially for Auckland.

"They made the policy up on the hoof, because they're under such pressure over housing and this is what you have - disagreement between ministers over it," she says.

It comes after Newshub revealed the fund was conceived and announced in the period of just one month, and only signed off by Cabinet five days before it was made public.