Housing Minister Megan Woods compares KiwiBuild to First Labour Government's state housing scheme

Housing Minister Megan Woods has defended the Government's attempt to get more houses built, saying even the First Labour Government took two years to get the first state house built.

Dr Woods recently took over housing from Phil Twyford, and has thrown out targets for the ambitious KiwiBuild scheme that have been in place since Labour first adopted it in 2012. 

"When we had a look at what wasn't working with KiwiBuild, what we found was the targets were driving perverse outcomes," she told Newshub Nation on Saturday.

"They were meaning that we were going for quantities in an effort to meet those targets, rather than thinking about what is the right house in the right place for KiwiBuild buyers, who are essentially first-home buyers."

The plan was to build 1000 homes in the first year, 5000 in the second and eventually ramping that up to 100,000 in a decade. So far only 258 have been completed, and some of those are now up for sale on the open market, with first-home buyers not interested in homes built far from where they work and live.

"When I see a target that's driving perverse outcomes, not as a way of holding a policy accountable, then I am willing to call time on it, because our fundamental aim has to be building homes that are suitable for first-home buyers, rather than just buying as many as we can to meet a target," said Dr Woods.

Instead she'll publish monthly figures on builds and consents. 

"Let's bear in mind the previous Government had a target of 39,000 houses through their Special Housing Areas, they delivered 3100," said Dr Woods. 

Megan Woods.
Megan Woods. Photo credit: Newshub Nation

The Government said in March the Special Housing Area scheme would end in September because houses built in them were on average costing 5 percent more than homes outside. 

"That wasn't a success," said Dr Woods, who went on to compare KiwiBuild to the First Labour Government's pioneering state house scheme. 

"If you compare the First Labour Government - who's probably held up as the epitome in New Zealand history of a Government that built houses - it took two years for them to get the first state houses up and running, and tenants moving into them." 

That Government, led by Michael Savage, didn't initially have plans to build state houses when it took power in 1935. Instead it set up a low-interest loan scheme, but realised in 1936 that wasn't working and only then decided to start building homes. The first was opened in Wellington in Septemeber 1937. 

Dr Woods rejected a suggestion from Newshub Nation host Simon Shepherd that voters could not trust Labour's promises anymore, after wiping the KiwiBuild targets and ruling out a capital gains tax.

"Well, voters can trust us because, actually, what we're saying is that we need this to work... we haven't had enough houses in the affordable end of the spectrum coming through, and we're willing to say that we're going to do everything we need to do to fix it."