We don’t have a government like the Labour government that formed in 1935. And back in the day the Ministry of Works were peripherally involved at best.
So while plenty of lefties prefer to soak their marching feet in a warm steaming vat of nostalgia, let’s take a moment to separate out what the Ministry of Works was really like, and where all the new housing under Labour really came from.
For those who believe that there was a time in which the levers of the state were strong enough and reflexive enough to be operated like a steam shovel or a moniac machine, in fact in early 1935 the Ministry of Works that was very weak, next to useless, and close to closing down entirely. In the 1920s it was renowned as an organisation widely respected for its technical expertise. But by 1931 it was down to 5.5 million Pounds, in 1932 cut to 1.2 million Pounds, and any future works for Relief purposes only. All railway construction had stopped by October 1931 with the exception of a bit in Stratford and Wellington’s Tawa deviation. All electricity generation construction had stopped except Waitaki.
From June 1931 the MoW cut wages for all labourers. This was also right across the board: Premier Forbes had made big cuts to all public servants in 1930, with the National Expenditure Act imposed cuts on all staff members between 5 and 12.5%. os putting workers at MoW on “relief” rates meant a general reduction of 20% for them. Yup: austerity.
The National Expenditure Commission made itself really clear to all including MoW: “We are definitely of the opinion that the time has arrived for a halt to be called in public works expenditure. We consider that a return to the contract system of carrying out public works is of prime importance, and that the Public Works Department should be reduced to a staff of Advising and Inspecting Engineers, as was intended when the Departments was first inaugurated.”
By 1932 the head of the Ministry of Works was getting roasted in the Legislative Council for the way the MoW was even running its work camps. The Hon. C. J. Carrington was quoted as saying of the GM Mr Furkert that:
It has become evident to many observers that the department has become top-heavy, and it is suffering from what might be called departmental blight … There are many young engineers whose efforts are stultified through the fact that everything has to go through the under-secretary, who, by the aid of an electronic button and a rubber stamp, can control the department”.
Furkert “retired” a few months later.
By that point in 1932 the department’s activities consisted almost entirely of back country roads, bush felling, stumping and logging, marram grass planting, hedge cutting, and clearing boulders from farms. It had been reduced completely to being a relief agency soaking up the unemployed with something – anything – to do. You can get a lot of this historical detail in Rosslyn Noonan’s history of the Ministry of Works “By Design” (1975).
So for the next few years what the MoW did was organise relief camps. By mid-1934 things began to pick up and they started surveying out new aerodromes in places like Wigram and Westport. In 1935 construction was underway on 30 of them. But not housing.
Yes, a lot changed for the Ministry of Works in mid-1935 with the election of Labour and Bob Semple as the new Minister of Public Works all the way through to the end of 1949. He was an improver, not a revolutionary in any sense.
But we have to be really clear how deep a low point the Department was in, and all the steps that had to be taken to get it even functioning. His first step was to abolish relief work, reclassify all Public Works Department jobs as standard works, so everyone got a big pay increase. By 1936 he had an agreement with the New Zealand Workers Union that they would get a 40 hour week, 5 days a week, and some holidays. And compulsory unionism on all public works projects. Again that wasn’t particularly radical – it was endorsing the cooperative contract system as it had operated for 40 years previously. But it was reversing austerity.
You get a sense of the stuff they then started to attempt if you look at the Mohaka Viaduct job. In that link there’s a nice little historical film as well.
Another typically hard example of their work is the construction of the Homer Tunnel in Milford Sound. To give you an idea of what that meant: vehicle access stopped 18 kilometers away, the site was over 1,000 metres above sea level, surrounded by mountains 2,300 metres high, subject to heavy snowfall, picking and blasting a tunnel that sloped hard down into granite.
The first public car didn’t go through until 1954: yes, 19 years.
By the end of 1936 as a result of improvement in conditions of employment on public works projects, complaints were being received from the private sector that the department was attracting workmen who had jobs elsewhere. That’s the spirit team.
So other than preparing sites for construction, the Ministry of Works didn’t build masses of housing.
No, this was under the auspices of the Housing Construction Department, in turn controlled by the State Advances Corporation. Now, this was a corporation that got the power of the market working with the state. It’s widely believed that this housing programme earned James Fletcher the founder of Fletcher Construction a fortune. In fact Fletchers initially incurred heavy losses on the contract as a result of tendering too low and were saved from financial collapse only by the Government’s willingness to guarantee a company overdraft. You can get a lot more detail on James Fletchers’ role in housing in this era in Brian Easton’s The Nationbuilders (2001).
Here’s a quick potted timeline of our state housing.
It was also from 1936 after a survey of New Zealand houses that it was found that 15% were classed as unsatisfactory or totally unsatisfactory. In the 1935 election Labour had highlighted the grim details of the central Wellington slums and corrugated-iron shanties. But its manifesto didn’t talk much about housing construction and concentrated mostly on protecting existing mortgage holders and protecting tenants.
But when they got their feet properly under the desk, what the Labour government did to improve housing was a complete social revolution, and W. B. Sutch’s Poverty and Progress in New Zealand (1941) has as good a summary as any concerning their effect on housing demand and supply:
As many more people were now getting a living wage and those who had deliayed marriage could now afford to get married, the demand for houses increased rapidly, so much so that the Government had to set up two state factories to increase the rate of supply of joinery. The quality of materials in the houses was improved and New Zealand sources were, as much as possible, used for these materials and the necessary equipment. This in turn assisted New Zealand industries to provide kitchen stoves, baths, roof tiles, wallboard, paint, fibrous plaster, and bricks; and the housing contracts meant continuous jobs for contractors and building tradesmen in place of alternations of unemployment and employment.” (p. 239).
Private building for those wishing to own their own home was encouraged by expanding lending by the State Advances Corporation. For every one house built in 1933, three were built in 1937. By 1940 2 out of every 3 houses were built by the state and a substantial part of private housing was financed by the state, and the builders were really getting the hang of quick builds.
The real magic occurred between the new government led by Michael Savage with an urge to eradicate poverty, and the intelectual drive to make markets in housing and in finance work more efficiently, spearheaded by the Secretary to the Treasury Bernard Ashwin who was a fiscal and political conservative and the permanent undersecretary for housing Arthur Tyndall who got a lot of the institutional mechanisms really cracking.
The real test for housing quality was totally egalitarian. Bill Sutch writes:
Ministers decided what they and their wives would like for a house would seem a reasonable standard for New Zealanders as a whole.” In doing so they set a floor for quality for all new Zealand-built houses, right there.
This full social effort is nicely rounded off by by Margaret McLure in her history of social welfare in New Zealand ‘A Civilized Community” (1998):
The vision of the state’s responsibility for the welfare of the many and security for all was paralleled in the anti-class ethos with which Labour advocated for the design of state houses which ‘should not look like “workers dwellings”‘, and health benefits which should provide ‘a service for ourselves and for our equals’. Labour therefore planned a co-ordinated range of schemes in education, health, pensions and employment to achieve a ‘pervasive’ welfare that would symbolise citizenship and unite all citizens.”
While it wasn’t the Ministry of Works that got New Zealand housing rolling out the new nappy suburbs, there’s no doubt Labour invented new institutions that enabled a lot of market actors to work together to achieve all of this.
Do excuse my own slide into sickly nostalgia for a moment, but this Archives NZ film shows the difference that government made in housing for that young nation:
Aye, that was a government.