Kerre Woodham: I'd love to be shocked by the Kainga Ora figures

The scathing review into the government's public housing landlord Kainga Ora, which was led by former Prime Minister Sir Bill English, was released yesterday and it was every bit as bad as those with half a brain had expected. 

It found the social housing system is not socially or financially sustainable. As a result, the board has, in effect, been sacked and a new chairman has been appointed. 

New incumbent housing minister, Chris Bishop says it's bad. 

“It was fairly alarming, to be honest, I'm probably understating that a little bit. I mean this is an organization that, $45 billion company, owns 70,000 houses, bit more than that actually, running massive deficits. So, $500 million in the 2022-2023 financial year, forecast to grow to $700 million a year. That's all deficits that are paid for by taxpayers by the way. Massive debt, so it was about $2 billion in 2017-2018, it's now forecast to increase to $23 billion by 2028. So it's just not sustainable, as a review finds by the Bill. It’s not sustainable, but the Crown continues to fund it and we're going to have to take action, that’s what we announced yesterday.” 

So everything now is up in the air and National, no doubt will get the blame, or the coalition government will get the blame should anything be halted, delayed, or scrapped entirely. But alarm bells over the level of KO’s expenditure practices and debt have been ringing for years. The sound of squawking and the flurry of feathers are just all the chickens coming home to roost. Now it's official. 

We had Megan Woods on the show a number of years ago about anecdotal stories of Kainga Ora outbidding local buyers, paying over the odds for homes at auction. She said, oh, she didn't know anything about that, there was nothing official, there were no official complaints. So yeah, look sorry, you know, without the details, she couldn't do more. At the time we had to accept that. But as it transpires Kainga Ora spent $750 million between 2018 and 2021 on buying property across the country to turn into state homes. They weren't building any new ones at that time. 

They were, these were 1000 homes that had been bought at auction, in private sale, under the noses of first home buyers who were going for exactly that sort of house. 1,053 homes that the government agency bought by outbidding Kiwis. People who would struggle to put together a deposit and to get a loan permitted were having to go up against Kainga Ora who had bottomless pockets because we, the taxpayer were funding them. 

Then we had the leaked document two years ago that advised Megan Woods not to grant any future money to Kainga Ora over fears of unsustainable debt levels. We've talked about this ad nauseam that the debts are going to have to be paid by Kiwis who aren't even born yet. There were fears then that the government would be unable to completely repay the increase in debt over the next 60 years, and even if the new debt can be repaid by the then 2081 forecast, there'd still be nearly $9 billion outstanding. 

It's been in trouble for a very, very long time. 

I'm not surprised that the board has been, what were they doing when you looked at the numbers? Did they think the money machine was just going to keep churning out this money forever? Did not one of them have an ounce of common sense, or just caution and say, look, you know, seriously, look at this debt level. I suppose you had somebody on the other side saying, yeah, but look at the housing stock, get into trouble, we can just sell it off. 

Was, I have no idea what the thinking was on that board at all, or how you could keep approving budgets that, that showed debt that was basically unsustainable. I mean, where on earth do you go from here? 

I've heard from people who were involved in building Kainga Ora homes that each one was architecturally designed, and bespoke, and beautiful. And they do, many of them look absolutely lovely. You know, they’re homes that you would want yourself, and that's great, but why wasn't one architect tasked with the job of putting up, say three different designs, family homes, apartments, the like, and cookie cutter them? 

So many people have told me over the years that they could do a whole lot more with a whole lot less. And just because it's, it's government money, taxpayer money, everybody loads the invoices, everybody thinks that the money train is just gonna keep rolling in. The more sensible among us, we're warning, no, at some point, this is going to have to be paid. 

But the, the thing that really rips my nightie is that it's Kiwis who aren't even born yet who are going to be paying for this mismanagement, this incomp