Labour leader Chris Hipkins is defending the country's crown housing agency after a scathing review found it is not socially or financially stable.
A recent review into Kāinga Ora - Homes and Communities raised alarm bells over its level of debt and general financial management.
The Government-commissioned independent review looked into the Crown agency's financial situation, procurement and asset management. It was led by former Prime Minister Sir Bill English and other panel members included investment advisor Simon Allen and strategy advisor Ceinwen McNeil.
It found the agency is not "financially viable" or sustainable, pointing to high levels of debt which had grown from $2.7 billion in 2018 to $12.3 billion in June 2023.
Prime Minister Christopher Luxon lashed out at the Government agency in response to the review.
"There's a whole bunch of issues here which is essentially poor management of the assets, poor financial controls around the spend that has been taking place and obviously weak governance as a result," Luxon told AM on Tuesday.
He said Kāinga Ora homes are some of the costliest to build and there are smaller community organisations that can build houses for those in need much cheaper.
But leader of the Opposition Chris Hipkins is defending the agency and his government's management of it.
Hipkins told AM's Lloyd Burr on Wednesday the agency took on debt because it was building thousands of houses in an effort to fix the housing crisis.
"They [Government] seem to be talking about the fact that because we built 13,000 additional houses, Kāinga Ora has more debt and they seem to be talking about that as if it's a terrible thing," he said.
"If you're building 13,000 more houses the money from that doesn't come from nowhere. Like anyone else who is doing significant housing developments, they will borrow money to fund that and then they will pay that off.
"I think the fact that we've built 13,000 extra homes is actually something we should be proud of."
But Hipkins did acknowledge that there are "probably" things in the review that are constructive.
"I do think we need to look at the costs involved in Kāinga Ora developments and see if there are ways we can do that cheaper, I don't think that's an unfair thing for the government to be looking at.
"But the idea that they've built more houses and have more debt as a result, that somehow there is a crisis, I don't agree with that assertion."
Hipkins accused the Government of manufacturing a crisis over Kāinga Ora's debt when it was actually just a result of efforts to ensure people have homes.
"Actually the reality is we need Kāinga Ora to be building more houses – about one in six of our current state houses that are for rent now were built during our time in government – that's the fastest home building rate of any government since at least the 1960s.
"I am absolutely proud of that and I think if every government showed that level of commitment to building state houses, we wouldn't have a waitlist for them.
"We have a housing crisis and the way you deal with a housing crisis is to build more houses, if you don't want to build more houses you won't have more debt but then who pays the price for that? it's the people who don't have a home."
Watch the full interview above.
