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Government confirms First Home Grants to be scrapped

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The government has confirmed it plans to scrap the First Home Grants scheme, with applications ending from Wednesday.

This would recoup about $245 million over four years.

It has also announced $140 million in new funding for 1500 new social housing places from July next year, to be provided through Community Housing Providers rather than Kāinga Ora.

Housing Minister Chris Bishop announced the moves this afternoon at a media briefing called with just half an hour’s notice.

“Kāinga Ora is no longer accepting new applications for First Home Grants. They will still process applications that have already been received,” he said.

“If you’ve gone through the system and you’ve been approved for a first home grant or you’ve been pre-approved or you’ve currently got approval, and you’re going out there and looking for your first home – that can last up to six months, all of that will be honoured.”

Housing Minister Chris Bishop confirms the government is scrapping First Home Grants, and spending a similar amount of money on new social housing places.

Housing Minister Chris Bishop confirms the government is scrapping First Home Grants, and spending a similar amount of money on new social housing places. Photo: RNZ / Samuel Rillstone

He confirmed the government was retaining the First Home Loan scheme, saying the evidence they had seen was it was a more effective way of supporting first home buyers.

He listed the Salvation Army, Emerge Aotearoa and CORT as some providers that could be contracted to provide the social housing places, and said that would be managed through a process run by the Ministry of Housing and Urban Development.

He said the government was filling a hole for social housing places left as a “fiscal cliff” by the previous government.

“We are now filling that hole that Labour left us and that gives them some pipeline certainty.

He said the First Home Grant was an “expensive and inefficient way to support first home buyers” and had gone from covering about 10 percent of a standard deposit when it was introduced in 2010, to just over 4 percent of a standard deposit in 2024.

“Evidence shows the grant brings forward the purchase of a first home – but in most cases it does not make a difference to whether someone can buy a home or not,” he said.

He said the government would be happy to provide that evidence.

“The First Home Grant is a programme that ultimately we think – in comparison to social housing places – is lower value expenditure at a time when the social housing waitlist has 25,000 families on it and we have a big demand for New Zealanders in need.

“We have had to make the tough, but I think the right, decision to discontinue the first home grant and reprioritise that money to social housing places.”

“The first home grant is a programme that ultimately, we think in comparison to social housing places is lower value expenditure at a time when the social housing waitlist has 25,000 families on it and we have a big demand for New Zealanders in need.

He said it was expected to have “minimal effect on home ownership rates”.

He acknowledged the change would “cause some pain for some people, but we are doing the right thing to support our most vulnerable New Zealanders”.

“If we’re honest about it, the first home grant started as a demand side measure to try and help some people into first home ownership when the wider system was not being fixed.

“We need to open up land at the edge of our cities, we need to densify in our cities – and I’ve made a decision around that in the last couple of weeks … we need to fix our infrastructure settings and we need to incentivise councils.”

Bishop said Kāinga Ora would not be provided with further funding to provide social housing places until a turnaround plan had been signed off by the government in the wake of the independent review carried out by Sir Bill English.

In Parliament in 2021, National’s then-Housing spokesperson Nicola Willis – now the finance minister – framed the scheme as one of National’s success stories and urged its expansion.

‘Shattering the dream of home ownership’: Other parties react

Labour leader Chris Hipkins said the government was “shattering the dream of home ownership for an entire generation of New Zealanders”.

“Whilst giving $2.9 billion of tax cuts to landlords, they’re cutting one of the schemes a lot of New Zealanders rely on to get that deposit together to buy their first home.”

He said National could scale up the First Home Grant scheme and increasing social housing places with the money being spent on those tax cuts.

“They’re tilting the playing field in favour of wealthy landlords who can afford to buy multiple properties and get tax breaks, and be rewarded with tax breaks for that, whilst a generation of New Zealanders won’t be able to buy their own home.

“Sure we need to increase the supply of housing, but in the meantime I’m not willing to shut an entire generation out of the ability to even get a deposit together to buy a house.”

Green Party co-leader Chlöe Swarbrick similarly pointed to tax deductibility changes and the bright line test.

“There are decisions that can be made to implement values and evidence-based policy to meaningfully bring house prices down,” she said.

“What the government has knowingly done and as has been reflected in the financial sustainability report from the Reserve Bank, is that its decisions around tax deductibility and the brightline test will only bid up the cost of housing in this country, putting it further out of reach for first-home buyers.”

ACT leader David Seymour campaigned on removing the scheme and said first home grants did not solve the problem of a shortage of housing.

“Unfortunately this government is under real pressure,” he said.

“The first home grant does not solve the problem of a shortage of housing, all it does is help some people while the shortage of housing remains for everybody else. The only solution to a shortage of housing is to build more homes.

“That will be a blow for people, but we also have a government inheriting very tough fiscal times and we actually cannot do everything that we’re supposed to do.”

Te Pāti Māori co-leader Rawiri Waititi said many Māori were living in intergenerational homes, and he thought the scrapping of the grants was poor policy.

“Our people are already struggling to get into homes, Māori make up 50 percent of the social housing waiting list,” he said.

“It’s very, very difficult for people to get into homes and to live the Kiwi dream of owning a home, so I think that is a very very poor policy and to rob Peter to pay Paul type Budget I think that’s something for Aotearoa to think about. This is what you voted for.”

Labour’s housing spokesperson Kieran McAnulty earlier said removing the grants, while also restoring interest deductibility for landlords, would make things even harder for renters to get on the ladder.

VIA RNZ

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Police guarding scene after Massey house fire overnight

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Seven fire trucks were required to put out a blaze in an abandoned house in Massey overnight.

The fire on Don Buck Rd was first reported around 10pm, with multiple calls coming in from the public, said Fire and Emergency NZ northern shift manager Carren Larking.

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Mother of missing Marokopa children posts letter she says is from their fugitive dad

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The mother of the missing Marokopa children has published a letter which she says was written to her by the children’s fugitive father, Tom Phillips.

Police have been searching for Ember, eight, Maverick, nine, and Jayda, 10, since December 2021, when they were taken by Phillips to an unknown location – though police believe it was in Western Waikato within Marokopa or the surrounding areas.

Tom Phillips does not have legal custody of the children and there is a warrant out for his arrest.

A picture posted by Cat on social media which she says is the last birthday we got to celebrate with Jayda as a family.

A picture posted by Cat on social media which she says is “the last birthday we got to celebrate with Jayda as a family”. Photo: Supplied

Posting on Facebook, their mother, known as Cat, said she was “well aware of the hateful rumours being spread around” and asked that people knew her before judging her.

She said she was sharing the letter to show that all was not as it seemed and to assure people that the children would be coming home to a loving and stable family.

Cat said she along with their two sisters, grandparents, aunties and cousins would be waiting for them.

The handwritten letter – which is not dated or signed and which RNZ has not been able to verify – describes the writer’s love for Cat, apologises to her and says he has a good heart and means well.

“I know if I ever give up trying to make things right I will regret it forever,” the letter says.

“Im sorry for everything I have ever said or done to hurt you,” it says.

The letter goes on to say that “although I make multiple f*** ups I have a good heart and I mean well”.

“We have an awesome family and thats worth fighting for,” is the last line of the letter.

Cat said she had not spoken out earlier because she did not believe it would bring her children home, but the fact that police were now offering a substantial reward had given her the courage to break her silence.

On Tuesday Cat broke her silence to make a video appeal provided by police for people’s help in returning the children to her.

Police have offered an $80,000 reward for information that would help discover the whereabouts of three children and lead to their safe return.

RNZ has contacted the police to verify whether they knew about the letter and whether they can confirm it is from Tom Phillips.

 

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Nicola Willis challenged over climate change, cancer drugs

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Finance Minister Nicola Willis has revealed new details about the timeline for cancer drug funding, and faced a barrage of questions over climate under questioning from MPs.

Willis appeared before the Finance and Expenditure Committee on Wednesday as part of Parliament’s first Scrutiny Week, a new initiative which allows for extended questioning of ministers over the government’s spending.

She quickly came under fire from Labour’s Finance and Climate spokespeople Barbara Edmonds and Megan Woods, and the Greens’ co-leader and Finance spokesperson Chlöe Swarbrick.

Cancer drugs

The election policy of funding 13 specific cancer drugs had been a glaring broken promise from this year’s Budget.

Willis told the committee MPs that as the Budget for this year was formulated, the cancer drugs policy “did require more work”, and she outlined how the government intended to pay for the drugs using money from next year’s Budget while still working to supply the promised drugs.

“It was not resolved in time for Budget 2024, so we agreed it would be a priority for funding set aside in Budget 2025,” she said. “So we are now working diligently on the policy delivery ahead of Budget 2025, with a view to making a decision on it shortly.”

However, she soon clarified that “we will be funding those drugs this year”, and the reason the policy was not funded in this year’s Budget was “we still had significant policy choices to make as we worked through the problem. And so it wasn’t appropriate to set aside a contingency until those fundamental policy decisions had been made”.

She later explained under questioning from Woods that people would be able to access at least some of the drugs before 2025.

“We will be making an announcement that will ensure that some of those medicines are funded this year,” she said.

Woods questioned if that would mean funding for the drugs this year, and Willis agreed.

Under questioning from Edmonds she said expressed confidence that the government would find the money, noting the government had already approved health funding from the 2025 and 2026 Budgets.

“As the member says, budgets are about priorities – and we are confident that, because this policy is a priority, we can and will fund it.”

She later told reporters at Parliament the word “some” was “just a use of a word, we will be funding the 13 medicines, we’ve made that commitment, we’ll be making announcements on it shortly”.

When pressed, however, she would not confirm whether that meant all 13 specific drugs listed in National’s policy would be funded and available before 2025.

“We’ll make a full announcement with the details of how drugs will be accessed and what dates in due course. I’m not making that announcement today.”

She also refused to shed light on how exactly the drugs would be funded.

Climate change

Swarbrick focused in on the Budget and its effect on climate change, asking how Williis could account for the $700m her Budget assumed would be coming from Emissions Trading Scheme revenue when today’s unit auction appeared likely to fail.

Swarbrick highlighted that at an expected $58 price point they would fall short of the $60 lower limit at which the units would be permitted to sell, and asked what would happen if the units failed to sell, but Willis said she was “not going to go into a hypothetical”.

“We have a requirement for approximately $2.9b in terms of your numbers stacking up here for revenue from the emissions trading scheme,” Swarbrick said, “but you’ve also have presented a Budget which cuts approximately $15m from market governance and integrity of the emissions trading scheme, so I’m wondering if you could help us reconcile those things”.

“It is very important … that I not in any way influence auction behaviour,” she said. “We want it to be a functional, effective, reliable market.”

When Swarbrick pushed her on why the funding had been cut from the efficacy and market governance, Willis said the government did not consider that funding necessary to improving the market’s operations, and rejected Swarbrick’s characterisation there was “next to no meaningful regulation of the ETS market, for example insider trading is technically legal”.

“We do not have concerns about the current way in which the ETS is regulated,” Willis said. She noted the government was yet to release the second Emissions Reduction Plan, due in December. That plan would set out how the government intends to achieve the emisssions reductions set out in the Emissions Budget, in line with international obligations.

“The government is doing its own work on the emissions reduction plan and we envisage the ETS will play a critical role,” Willis said. She also pointed to some initiatives the government had not scrapped in this year’s Budget including the rollout of electric vehicle chargers and the purchase of electric buses for local councils to buy.

Swarbrick earlier asked whether the decisions in this year’s Budget would increase or decrease emissions. Willis acknowledged climate impact policy assessments had showed they “won’t make a significant material difference to emission period 1. Over the second two emission periods, they will have an impact of potentially increasing emissions”.

However, she questioned whether those reports were “as good as they could be”, and pointed to the emissions impact report having included policies like more police on the roads, and upgrades to Defence Force equipment and infrastructure, as examples of where the reports were questionable.

“My point is it is not always appropriate to narrowly look at a policy based simply on its emission impact, because I don’t think there is a New Zealander who would say ‘I don’t want you hiring more police because it might add to emissions’.”

She later told reporters the assessment only looked at a subset of 40 initiatives.

Swarbrick also asked about the $3 billion to $24b the government is estimated to need to fork out in “offshore liability” – buying foreign climate credits to make up for the lack of domestic emissions reductions, and whether Willis had budgeted for those expected costs this year.

“No, I have not,” Willis said. “That has not been a priority in this Budget.”

VIA RNZ

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