Housing minister admits his KiwiBuild comments 'went too far'

"The kids in Treasury are fresh out of university and they're completely disconnected from reality," the Minister had previously stated

By Ksenia Stepanova

23 May 2018

Housing Minister Phil Twyford says he accepts that his comments regarding the Treasury’s KiwiBuild forecast went ‘a little too far’.

The Treasury slashed its forecast progress rate on KiwiBuild this week by fifty percent, projecting approximately $2.5 billion in KiwiBuild investment over the next five years. Twyford vehemently disagreed with the forecast, calling Treasury experts ‘kids’ who were ‘completely disconnected from reality.’

Twyford admitted on Tuesday’s Question Time that his remarks had not been appropriate.

When asked by National’s housing spokesperson Judith Collins if he stands by his reported statements regarding Budget 2018, Twyford answered “Yes, except my description of Treasury officials.”

“I accept the Prime Minister’s advice that this went a little too far,” he stated. “But I agree with the Prime Minister and the Minister of Finance that the Treasury’s forecast is wrong.”

The Treasury has stated that there is a high degree of uncertainty around KiwiBuild policies, but Twyford claims it should come as no surprise that with a policy as large and complex as KiwiBuild, different government agencies were going to come up with different views. He also stated that the Treasury hadn’t taken all pertinent factors into account.

“Treasury previously assumed that the $2 billion appropriation would be spent in two halves over the next two years and recycled thereafter,” he explained. “MBIE estimate that KiwiBuild will generate between $4.8 billion and $11.6 billion in additional residential construction investment over that period. MBIE, who are implementing this policy, have pointed out that the Treasury’s assumption excludes that the KiwiBuild capital investment will be recycled repeatedly, they’ve included those homes that will be paid for on completion or built because of the KiwiBuild underwrite, and they’ve ignored the actual expenditure plan of KiwiBuild.”

Nonetheless, Prime Minister Jacinda Ardern says she has ‘made it clear’ to Twyford that his comments regarding the Treasury were not appropriate.

“We disagree with the forecasting around KiwiBuild – and in fact, MBIE take a different view than the Treasury, and that’s not unusual,” Ardern stated to the media.

“You’ll often have two Government departments with competing views. Where I have been clear though is that even when we disagree, I would not characterise our public servants in that way. I have made that clear to our Minister as well.”

“Ultimately, I think what people expect is for us to just get on,” Ardern concluded. “The best way for us to demonstrate that Treasury is wrong is to get on and build houses.