Bernard Hickey has a post up about the clusterfuck that’s socioeconomics in New Zealand, Dawn Chorus: The scandal of worsening housing-and-power-driven child poverty
We all knew the housing supply and winter power crunch for poor renters was awful, but the latest revelations emphasise the need for even more massive new supply of housing and a root and branch restructure of the electricity market.
It is a scandal that the Government is not building many, many more homes — or at least signalling hundreds of thousands in the years to come — while at the same time prioritising ‘keeping a lid on debt’ in its spending plans. And all at a time when real interest rates on Government debt are negative, and going lower.
It is also a scandal that state-controlled power companies are allowing an independent power retailer specialising in helping poor families needing power in winter to shut its doors while selling cheap power to a smelter. More on that below.
Read the whole post for details. We’re now buried under examples of how the housing crisis isn’t being managed.
We have a Government that has $40b cash in its bank account and is headed back to surplus within a couple of years deciding to pull funding from social housing providers because it wants to save money. At the same time, it is not building enough houses because it believes to do so would ‘break’ the Government’s ‘keeping a lid on debt’ aims.
Meanwhile, the state-controlled power industry has sat by while independent retailers who have helped keep retail power prices from rising much in recent years have gone to the wall because of a wholesale market judged dysfunctional in a Labour Government report two years ago.
And all at the same time, real interest rates on Government bonds are negative. Overnight US 10 year government bond yeilds hit a record low of minus 1.127%. The Government is sitting on its hands as poor kids without power for heating are getting poorer, it is cutting funding to social housing providers helping to look after those kids.
All the while, the next generation faces a housing affordability and climate catastrophe that the Government is reluctant to do much about because it fears a group of mostly older (multiple) property-owning median voters who don’t want change.
Here’s Labour’s dilemma: how many Labour-voting home owners are willing to sacrifice capital gains in order to solve the housing crisis? How many voters of any ilk are willing for New Zealand to have a lower standard of living and stop running the economy off the back of an out of control property market?
Because most left voters and a large chunk of swing voters wanted this government in 2017 and 2020. We might get lucky and National still don’t have their shit together by 2023, Labour gets another term but that just leaves us with treading water in the neoliberal swamp while the sea levels are rising. Which is frankly weird, given the Greens have excellent progressive policies and a strong willingness to work with Labour.
I love the idea of Labour leading on actual solutions to the housing crisis, but Labour breaking left seems significantly less likely than National becoming old school conservative. Which means the solutions must be found elsewhere. Balls in our court then.