The Government has delivered a KO blow to the board of Kāinga Ora. It's just announced a new chair, former Spark boss Simon Moutter, and accepted a recommendation to refresh the board of the state housing agency.
It's in response to former Prime Minister Sir Bill English's Government-commissioned review, which revealed the agency was "not financially viable" and in need of more than $21 billion of government cash over the next four years.
But Housing Minister Chris Bishop has ruled out a mass state house sell-off to get them out of trouble.
Kāinga Ora's foundations are crumbling.
"Kāinga Ora is underperforming and not financially viable without significant savings," Bishop said.
A review into the state housing provider is damning. It found the agency's debt ballooned four-fold over the past six years to $12 billion, and business as usual without savings or significant investment meant it was financially unsustainable.
If it were to continue the way it was, Kāinga Ora would need $21 billion of government money over the next four years.
"This is equivalent to every New Zealander paying about $4000 each to keep Kāinga Ora going," Bishop said.
"It's like they only just realised it costs money to build houses. They talked about the increase in debt, they didn't once talk about the increase in assets," Labour's housing spokesperson Kieran McAnulty said.
Kāinga Ora manages more than 72,000 properties and houses about 185,000 people - but in a deep housing crisis there are many more waiting.
More than 25,000 are on the state house waitlist and the average time taken to house someone on the register is 206 days - more than six months.
"The truth is that for every dollar Kāinga Ora doesn't manage properly, that's a dollar that isn't going towards providing a good housing outcome for a person or family in need, and that's where we need them to be focused on," Bishop said.
The review, led by Sir Bill English, found the board had insufficient focus on fiscal discipline, and signed off on budgets that were not realistic, assuming that new lending of several billion dollars from the Government would be approved.
So, a major renovation job at the agency is needed - beginning with the board.
"We are appointing a refreshed board," Bishop said.
The new board's first job is to deliver a total turnaround plan by November.
"I can rule out a mass sell-off of state houses," Bishop said.
Treasury advice showed Kāinga Ora planned to sell off 10,200 public homes to raise $6 billion for the public agency - Bishop put the kibosh on that too.
"It's not about transfers, that was literally they had to sell them in order to keep the ship afloat, keep the lights on so to speak. We are ruling that out," Bishop said.
But he's not ruling out a mass transfer of state houses to community housing providers - or the idea of setting up community housing associations as recommended in the report.
"We will be considering that, we are not committing to that today. Today is about fixing the finances of Kāinga Ora," Bishop said.
"He's being very clever with his answers. He didn't rule out transfer from government books to community housing providers - that's what happened last time," McAnulty said.
Labour thinks that's a sell-off in disguise.
