Budget 2018 NZ allocated an extra $1 billion for housing, including $369 million in capital funding which will be borrowed by Housing New Zealand.
Where will the rest go?
State houses will get about a quarter of it. Over the next four years, the Government plans to build 6400 state homes across New Zealand, or around 1600 a year, by 2022.
The total cost of that – which will flow into the construction sector – is said to be $234 million.
Between now and 2024, $300 million in capital will be made available for Tamaki Regeneration Company in the North Island. This will build 1400 houses to go on the open market, and 700 public housing units.
But that’s it for new builds. Additionally, $43.9 million will be spent creating 550 extra spots for New Zealanders in the Housing First programme, which aims to fight homelessness. The key cities of focus are Auckland, Christchurch, Tauranga, Hamilton, Wellington and Lower Hutt.
What’s more, the Green party influence on the Labour-led administration has paid off, as low-income owner-occupier homes will now be eligible for insulation grants. This will reduce the energy costs and environmental effects low-income homes create, and runs in a similar vein to a grant programme that was run under John Key’s National party more than five years ago. The total cost of insulation grants is $124.5 million.
Such a spend is small in relation to the other areas that will see funding allocated to them through Budget 2018. Health gets $18.1 billion, education $14.7 billion, Superannuation $14.5 billion, social security and welfare $14.4 billion, government services $5 billion, law and order $4.4 billion, finance costs $3.4 billion, and $11.2 billion for “other” (housing is included in other, making this allocation $12.2 billion in total).
The Government announced a $3.1 billion surplus, which came as a surprise to many. Whether or not this means the Labour administration can keep its campaign promise of “no new taxes” remains to be seen.