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Insights 39: 17 October 2025
New Report: Owning Less to Achieve More: Refocusing Kāinga Ora, Dr Bryce Wilkinson
 
NZ Herald: Dr Bryce Wilkinson on how refocusing state housing would lead to better outcomes
 
Newsroom: Dr Oliver Hartwich warns the EU cannot muddle through another monetary crisis
You do not have to own someone's house to help them
Dr Bryce Wilkinson | Senior Fellow | bryce.wilkinson@nzinitiative.org.nz
You do not have to own someone's house to help them, so why does Kāinga Ora's Reset Plan envisage continuing to own around 78,000 housing units? 

This week, The New Zealand Initiative published my report "Owning less to achieve more: Refocusing Kāinga Ora". It addresses this question. 

The foreword to the publication was written by the Right Honourable Sir Bill English. He chaired the Independent Review Panel inquiry into Kāinga Ora in 2024, which showed that it had become a financial basket case. Hundreds of millions of dollars have been written off. 

Under the previous government, operating surpluses became deficits and debt spiralled from open chequebook spending. Problems emerged of chronic rent arrears and insufficiently addressed intimidating behaviour and property damage. 

The foreword's key point is that ownership is not critical. More important is how to best meet people's needs for support and provide the right house in the right location. 

The report itself documents why continuing dominant government ownership intractably puts taxpayers at risk of excessive costs while disempowering tenants by restricting their housing choices.  

Political pressure will inexorably cycle between fiscal profligacy and belt-tightening. These cycles make consistently good landlord performance unattainable. 

Even in prudent times, the government’s incentives to control costs are weak compared to those of private landlords. The report provides evidence that Kāinga Ora's operating costs could be approaching twice those of private sector benchmarks. 

Government ownership also creates conflicts with its regulatory and funding responsibilities, favouring the state provider at the expense of broader public interest – an intractable problem. 

International practice demonstrates that government financial assistance does not require dominant government ownership.  

The Netherlands provides 75% of rental housing through independent housing associations. When Britain transferred 1.7 million council homes to housing associations and owner-occupancy, housing satisfaction increased. Germany uses time-limited subsidies to private providers rather than perpetual state ownership. 

Greater use of housing vouchers, reliance on localised housing associations and private landlords, and less land hoarding offer more sustainable approaches. 

Tenant choice empowers people to move from unresponsive landlords or dangerous neighbourhoods. Competition between providers reduces costs and improves service. 

The efficacy of government assistance should be assessed through the greater use of the social investment approach to find which programmes produce the best results. 

Asking whether government needs to continue owning 78,000 houses to help people is not uncaring. It asks how government can help people most effectively. 

To learn more about Bryce's research, read the full report, watch the webinar and listen to our podcast.
Elections boost the case for Localism
Nick Clark | Senior Fellow | nick.clark@nzinitiative.org.nz
My stat of the week is 38 percent. This is the provisional voter turnout at the 2025 local elections.  
 
Huge rates rises. Crumbling infrastructure. Worsening services. Dysfunction around council tables. Fractious relations between central and local government. New Zealanders have endured it all over the past term. 
 
Yet once the final results, including special votes, are announced today, turnout will probably remain lower than 2022’s 42 percent. Around one in eight council positions were uncontested.  
 
It would be easy to say people are happy or they do not care. Rather, I think it reflects a broken system. The public knows something is wrong, but many cannot see how their vote can make a difference. 
 
The concerns about turnout have sparked a debate about the future of local government. But it does not follow that councils should be merged or that more activities should be centralised.  
 
On the contrary, local democracy must be strengthened. 
 
Small councils are often better connected to their communities, with mostly higher turnouts in rural districts than in big cities. Auckland’s provisional 29 percent turnout compares to a median of 53 percent for small rural councils. Bigger is not always better. 
 
There should be an examination of which tier of government (national, regional, and local) is best placed to deliver specific services. But it is incorrect to assume that central agencies or having fewer, bigger councils would be automatically more responsive, efficient, or effective than having many smaller ones.  
 
The debate needs to go deeper and address incentives and power imbalances.  
 
Councils need funding tools that enable them to reap the benefits of growth and development rather than just being lumbered with their costs. Voters should be able to authorise major discretionary spending through referendums. 
 
Meanwhile, council chief executives and staff have significant information and process advantages over elected representatives.  
 
Mayors should have real authority to advance their policies. Auckland’s mayoral office, with its own budget and independent staff accountable to the mayor, should be made available to other councils.   
 
Councillors should have more support and better tools to inform decision-making and scrutinise performance. Mayors and councillors should not be muzzled by stifling codes of conduct.  
 
Changes like these should attract more and better people to put themselves forward. That should, in turn, boost turnout. 
 
The question is not whether local government needs change. It is what view will prevail on how best to fix its problems. 
Why did the chicken cross the road? A Nobel attempt
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
I must confess, I am something of a literary philistine. So, when I heard this week that László Krasznahorkai had won the Nobel Prize for Literature, I had no idea who he was. 

Intrigued, I discovered this Hungarian novelist writes apocalyptic fiction about worlds in decay. His works are monuments to despair and existential futility. That naturally appeals to me as a German-born economist. 

But what truly caught my attention was his extraordinary style: Krasznahorkai crafts vast, unbroken sentences that stretch for pages. One of his novels consists of a single, relentless sentence that never pauses for breath. 

Perhaps this technique might lend some gravitas to my own writing?  

I decided to give it a go and asked myself: “Why did the chicken cross the road?” Here goes: 

For to even ask why the chicken crossed the road is to reveal a profound and pitiable misunderstanding of the universe, a desperate human need to impose a narrative of purpose onto what is only a blind, mechanical spasm of existence, as if this creature – this pathetic collection of mud-caked feathers and twitching sinew, its eyes like beads of black glass reflecting a perpetually overcast sky – were an agent of its own destiny, making a conscious choice to abandon the familiar desolation of the muddy verge on one side for the presumed sanctuary of the other, when in fact it was driven not by hope but by an inexorable, neurological compulsion, a mindless glitch in its primitive wiring that commanded it to move, to simply go, launching its frail body into the path of roaring, indifferent machines that slice through the landscape like thunderous apparitions, their passage leaving behind only a brief shudder in the air and the stench of burnt fuel, a chaotic gauntlet through which it scrambled not with courage but with the sheer, witless momentum of a thing that cannot comprehend its own annihilation, its every frantic step a testament to the utter absence of reason in a world that offers only the illusion of destinations; and so it crosses, it endures this meaningless, harrowing transit across the black gash on the face of the earth, surviving the shadow of oblivion by sheer, dumb luck, only to arrive, trembling and exhausted, on the other side – a place that is, upon inspection, identical in every conceivable detail to the one it has just fled: the same grey mud, the same dying weeds, the same oppressive silence. 

I await Stockholm’s call. 
 
On The Record
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