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Govt blames outdated Budget figures for Housing NZ dividend U-turn

Monday 11th July 2016

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The government no longer expects to receive dividends from Housing New Zealand, despite forecasts just six weeks ago of $38 million and $54 million over the next two years.

Finance Minister Bill English's office released a statement on request from media saying the figures in the May 26 Budget "appear to be based on older HNZ numbers dating from almost a year ago".

The disclosure came after Labour Party MPs accused the government of making housing policy "on the hoof" when Associate Finance Minister Steven Joyce revealed that dividends were no longer expected from the government-owned housing developer and landlord.

The disclosure followed Labour's announcement over the weekend that, as part of a wider package of initiatives to accelerate the availability of affordable houses, it would no longer require HNZ to pay a dividend.

"After years of insisting the dividend was necessary to ensure the corporation was financially disciplined, Bill English suddenly decides - two days after Labour announced it would forego the dividend - it's not needed," said Labour finance spokesperson Grant Robertson. "This is panicked, desperate policy on the hoof from a government that has failed miserably to solve the housing crisis."

Labour attacked last year's HNZ dividend of $118 million, arguing the funds should go into building more homes.

In his statement, English said HNZ "has recently been working on its forward financial plan, which has been updated to reflect and increased focus on increasing the stock of social housing."

"This revised financial plan proposes significant new capital for building houses. As is usual for public entities requiring new capital, the investment will be funded by retained earnings and fresh equity injections."

The corporation had advised after Budget forecasts were finalised that it was "now forecasting a tiny surplus in financial year 2016/17 and is proposing that no dividend be paid" and no dividend was expected in 2017/18 either.

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