Finance Minister Grant Robertson’s first Budget didn’t contain any surprises, but it did commit to building 6,400 new state houses over the next four years at a cost over $4 billion.
Part of the funding for this will come from $234.4 million in operating funding allocated in the Budget 2018.
The other part of the funding will come from making Housing New Zealand borrow up to $2.9 billion from third parties and invest a further $900 million from its operations.
Housing & Urban Development Minister Phil Twyford says the plan will mean that 1,600 new state houses are build a year.
This exceeds the Government’s earlier commitment to build at least 1,000 state houses each year.
Twyford says this commitment is critical because too many New Zealanders are hurting because of the housing crisis.
Many are locked out of the Kiwi dream of home ownership while others are homeless or suffering the health effects of poor-quality housing, he says.
“The single most important thing the Government can do to solve the housing crisis is to build more affordable homes. The best way to tackle homelessness is to build more public housing.”
This announcement is on top of the $2.1 billion committed as funding for the KiwiBuild programme and to set up the Housing Commission in December’s mini-Budget in December’s mini-Budget, Twford adds.
In today’s Budget, the Government also committed to increase funding to allow Tenancy Services to continue delivering its current services and to implement and monitor the Healthy Homes Guarantee Act 2017 and collect data on housing quality over the next four years.
Additionally, the Budget also committed another $142 million over four years to extending a scheme which gives homeowners grants to insulate their homes.
It comes after the passing of the Healthy Homes Guarantee Act which requires landlords to upgrade the insulation in their rental properties to modern standards.
But perhaps the most relevant reference for investors from all the Budget announcements came from Revenue Minister Stuart Nash.
He says new initiatives to make the tax system fairer and a crackdown on tax dodgers are expected to provide the Government with an extra $726.3 million of revenue over the next four years.
“These include the ring-fencing of rental losses which will mean speculators and investors can no longer offset tax losses from residential properties against other income to reduce their tax liabilities.
“This is expected to boost revenue by at least $325 million over four years and further dampen property speculation, while encouraging investment in the productive economy.”