Bill English’s housing review was more partisan than "independent"

State housing in this country is about to be heavily reformed. The Government is selling these reforms as being based on an “independent review” of state housing provider Kāinga Ora. The problem is that the review was not actually “independent” of the Government but instead carried out by former National Party Prime Minister Bill English, who was also Housing Minister in the last government.

The significant changes coming to the housing area, which will have a massive impact on the housing sector and market, are, therefore, based on a less-than-scientific or neutral review. Instead, the English report is gaining a reputation as a “hatchet job” carried out by reviewers with ulterior political motives.

How Bill English came to run the “independent” review

Newshub’s political editor Jenna Lynch has uncovered the original text messages between new Housing Minister Chris Bishop and English, in which the deal was done to appoint the former prime minister. The texts were mostly redacted, but the following exchange was part of the release:

English: Chris will there be a review of KO.

Bishop: We are going to do an independent review into finances, performance, cost, etc. Commence it asap, hopefully get terms of reference and reviewers sorted before Christmas. 

English: I could help with that.

Bishop: Excellent lets do that.

Lynch suggests that because these texts were exchanged weeks before Cabinet agreed to the appointment, there are questions about whether Bishop followed proper processes in setting up the review – see her report, Revealed: The simple texts between Sir Bill English and Chris Bishop that led to Kāinga Ora review

Bishop has rejected notions of anything being amiss, saying he “absolutely” followed the proper processes. However, Jenna Lynch reports that the Public Service Commission says that there aren’t any rules on such appointments: “When it comes to these reviews, there doesn't seem to be any kind of guidelines or any kind of rules that they need to follow – basically, it is just the responsibility of the minister to handle the review – it is the responsibility of the minister to find someone to do it and they can just do that however they want.”

Given this lack of rules, there will be ongoing suspicion about the integrity of using a former PM, especially given that the new administration has appointed many other former National ministers (Steven Joyce, Paula Bennett, Murray McCully, Roger Sowry, and Simon Bridges).

The source of funding for the English review is also unorthodox and questionable. Newshub’s Tim Murphy has discovered that $500,000 was allocated for the exercise, of which about $274,000 has so far been spent, with the money coming out of funding allocated for the “provision of transitional housing places” – see: Govt paid Kāinga Ora reviewers out of urgent housing fund

Kāinga Ora was sidelined from the review

The definition of an “independent” review is entirely undefined in the New Zealand political system. Traditionally, it has meant that it is carried out by a disinterested party with qualifications of neutrality, such as a high court judge. For Bishop, however, “independence” means that it is not a case of the agency reviewing its own work.

In this regard, Bishop indicated he didn’t want to involve the agency in the review, texting English to agree that the process shouldn’t involve public submissions or field trips. But just “Three people. You and two others... No involvement from KO. Independent.”

Ultimately, the agency was given very little ability to engage with the review process, just as Bishop and English wanted. After they saw the draft, the Kāinga Ora governing board wrote to English, “There was relatively limited engagement with our organisation, leading to some review conclusions appearing to be based on analysis informed by anecdotes.”

This raises questions about whether English appropriately consulted and got adequate input into the review from those at Kāinga Ora. Lynch reports Labour housing spokesperson Kieran McAnulty saying: “It doesn't sit right and everything suggests that this was a stitch-up and that the outcomes were predetermined”.

Similarly, Labour leader Chris Hipkins told Newshub, “It's not an independent report, this is Chris Bishop texting Bill English saying, ‘I want a review on Kāinga Ora, I want it to say this, I don't want you to talk to Kāinga Ora’… It's a political hit job, it's a piece of spin dressed up as an independent report” – see: Labour leader Chris Hipkins lashes out at 'political hit job' Kāinga Ora review by Sir Bill English

The English review got facts wrong, ignored the Kāinga Ora board

When the English review was made public, it created many headlines and commentary about the extremely egregious state of Kāinga Ora. The gist of media coverage, based on the review and how Bishop presented it, was that the agency was headed for financial insolvency and that the governance had been scandalously inadequate. In particular, the housing agency appeared to have taken on too much debt.

However, questions have since arisen about the correctness of this narrative. Part of the problem appears to be that English didn’t adequately inquire into the nature of the agency's debt and assets. The agency board says that they were not adequately engaged on this issue, and when they gave information to counter English’s perception, this was ignored.

This is best reported by Newsroom’s Tim Murphy, who writes this week that “Doubts over the depth and rigour of Sir Bill English’s review of public housing agency Kāinga Ora are heightened by scathing confidential feedback over errors, omissions and using unverified hearsay” – see: Maligned board hits back over Kāinga Ora report

Essentially, the problem seems to be that the Kāinga Ora board was given the draft report to comment on just four days before English submitted the final version to the Government. When the board gave him feedback about his misunderstandings of the finances, including instances where he got facts wrong, he chose to ignore these.

This was covered much more comprehensively by RNZ’s Tom Kitchin this week in his mini-documentary, A crisis at Kāinga Ora

In this, financial journalist Bernard Hickey is interviewed, explaining that any conclusions about the state of Kāinga Ora seem to rest on “your political and ideological views”. He says, “This accusation that it's not financially sustainable, that relies on some big assumptions about how big you think the size of government should be [and] how big you think the size of overall government debt should be”.

Basically, Kāinga Ora has taken on more debt to build more state houses, and its asset base has been growing fast, especially due to the rise in house prices, which leads Hickey to say, “if you valued Kāinga Ora like any other home, you'd say to yourself, actually, it's been a stonking financial success over the last five or six years, because the value of its homes, in particular the value of its land, has risen much faster than the value of its debt”.

What does National want to do with state housing?

It is not yet entirely clear what the new Government will do to ensure the adequate provision of social housing. Kāinga Ora’s future is currently in doubt, and it appears that National wishes to help the community sector of social housing grow much bigger.

This was the agenda of the last National Government under English’s direction. Critics, therefore, suspect that the new government is simply laying the groundwork to continue that agenda by getting the former national leader to do the review. Bernard Hickey explains this approach: “National have a particular view to try to reduce the size of Kāinga Ora's housing stock, relative to the total housing stock – i.e. to reduce the size of government and to take housing more and more back into the private sector and that is an ideological approach.”

So, is the Government attempting to push a private sector model or even privatise state housing? Unsurprisingly, several housing and leftwing commentators think so. For the best examples of this, see Alan Johnson’s The Kāinga Ora review avoids the big and obvious questions and Gordon Campbell’s On the privatising of state housing provision, by stealth

There now needs to be much more debate about the future of social housing. This should involve considerable critique and evaluation of Kāinga Ora’s performance and whether it is fit for purpose. National is certainly right to rethink the whole provision of social housing and consider whether there are better models than the status quo.

The problem is that the public can’t rely on the Bill English review to be a credible and disinterested participant in that debate. The analysis that his review has come up with needs to be taken seriously but not given as much weight as has occurred in the last week. It would be better, instead, if English’s review is seen as a National Party input into the debate. Partisan reports like this have their place but shouldn’t be assumed to be independent, accurate, or fair.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

This article can be republished for free under a Creative Commons copyright-free license. Attributions should include a link to the Democracy Project (https://democracyproject.nz)