KiwiBuild funds should be reallocated to social housing, and employers should be accredited before being able to hire migrants, a new report suggests.
The 2019 OECD Economic Survey of New Zealand has determined that wellbeing in New Zealand is "generally high" and economic growth has stabilised, but "more needs to be done on housing".
OECD deputy secretary-general Ulrik Vestergaard Knudsen announced the findings in Wellington on Tuesday alongside Finance Minister Grant Robertson.
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He pointed to the survey highlighting that house prices in New Zealand have risen, affordability has dropped and homelessness is high.
"More needs to be done to increase housing supply and to improve affordability," Knudsen said at the Beehive in Wellington.
"Growth in housing supply has lacked far behind demand, especially in Auckland, resulting in skyrocketing house prices relative to Canada, Australia, and most strikingly against the OECD average."
The OECD has recommended "reallocating funding from KiwiBuild" to increase social housing provision in areas with shortages.
"Social housing supply is low by international comparison and there are poor outcomes for at-risk groups, including overcrowding, low-quality housing and high homelessness," the report says.
It said the issue could in part be achieved "by reallocating funding from KiwiBuild, which would help better target those in need".
The OECD also thinks KiwiBuild should be refocused towards "enabling the supply of land".
"Re-focussing KiwiBuild towards enabling the supply of land would direct Government efforts towards key bottlenecks and allocate risks to developers where they are better placed to manage them."
Prime Minister Jacinda Ardern said there is "actually a lot of work being done to try and encourage developers to build in the space where we have the gap at the moment and that is affordable housing".
Ardern told media before her Cabinet meeting: "That previously was only making up about 5 percent of what was being built - and that just wasn't sufficient for the demand that we have."
She recognised the OECD's other recommendation for additional support for people on low incomes.
"That's something we absolutely agree with and you will have seen we already made an investment, in Budgets gone-by, around investing in public housing."
Looking at KiwiBuild, Robertson said the premise of KiwiBuild is about first-home buyers, "so it actually isn't necessarily aimed at the very low-income people - we never said that's what KiwiBuild was for".
Robertson added: "What we need to do is make sure KiwiBuild is fulfilling its potential along with the rest of the Government's housing programme to provide the full suite of houses being built.
"That's why we need to do a reset, to make sure that it is fulfilling that."
The OECD has also suggested "improving wellbeing through better migration policy" - requiring employers to be accredited before they can recruit migrant labour.
The report said it should be easier for migrants on employer-assisted temporary work visas to modify their visa so that they can more easily change their employer.
OECD's other recommendations
- Agree on Maori rights to water
- Increase user charging for water and roads
- Increase social housing provisions in areas with shortages
- Slow minimum wage increases if it impacts negatively on women and youth
- Introduce deposit insurance to a specified limit (the Government has proposed this)
- Increase the price of emissions
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