MEDIA RELEASE: KiwiBuild Spending Mostly Crowds Out What Would Be Built Anyway
14 DECEMBER 2017
FOR IMMEDIATE RELEASE
By the next election, the Government will have spent two billion dollars on KiwiBuild, but only a little more than a third of that will have translated into additional houses according to Treasury analysis pointed to by the Taxpayers’ Union.
New Zealand Taxpayers’ Union Economist Joe Ascroft, says, “Treasury has highlighted capacity constraints that means only 35% of the two billion dollars being spent by the Government will translate into additional housing by the next election.”
“When there are only so many builders, and so much land, big Government building schemes just take away from private investment and construction. That’s exactly what we’ll see for at least the next three to four years.”
“While residential investment is expected to increase over the long term, that relies on a number of assumptions, including increased work visas for foreign workers, and the use of foreign firms to encourage greater competition. That alone is totally inconsistent with Treasury’s assumption used for its financial modelling that net migration will reduce from 75,000 per year down to 15,000 by 2022.”
“Reform to the RMA, and freeing up contrants on building, would lead to a much larger increase in housing investment, and wouldn’t cost anywhere the two billion dollars Labour have budgeted for KiwiBuild. Better for the Government to get out of the way, rather than throw $2 billion of our money into a fund which will raise the costs of construction for such little gain.”