Twyford’s dilemma: Wrong treasury officials or wrong MBIE officials

As the clubbing of Twyford in the house continued yesterday I did a bit of research into his housing commitments and various reports from treasury and MBIE.

Judith Collins had him all at sea over costings and eligibility for KiwiBuild homes plus the revelation that Auckland Council are set to slam developers with a $50,000 per section charge that will increase house prices even further.

Just last week Phil Twyford was abusing treasury officials, calling them kids fresh out of university. This was after their report that suggested his claims and plans were rather heroic. Quote:

Housing Minister Phil Twyford has called Treasury officials kids “fresh out of university” who have got their figures wrong on the impact of Kiwibuild on residential investment.

In Treasury’s Half Year Update it had forecast around $5.4 billion of additional investment in the period to 2023 associated with the Government’s house-building programme in the period to 2023.

In yesterday’s Budget Economic and Fiscal Update 2018, Treasury had halved the figure over the same period to $2.5b. While it said the investment activity was not lost, it believed it would take longer.

“This activity is not lost, but instead a greater proportion is assumed to occur outside the forecast period.”

Asked how Treasury could have got it wrong, Twyford told reporters: “I just think some of these kids in Treasury are fresh out of university and they’re are completely disconnected from reality.”

I don’t agree with Treasury’s numbers. They’ve made some very questionable assumptions,” Twyford told reporters today.

“Unfortunately, the bean counters in Treasury are somewhat disconnected from reality. The officials in MBIE, who are much closer to the industry and are actually involved with making Kiwibuild happen, they actually estimate that the impact on investment could be as much as $11 billion for the same period,” he said. End quote.

He got told off for that. Note he said that he valued officials from MBIE above those from treasury. Yet, just two months ago, he was slamming MBIE officials for wrong advice on KiwiBuild:?Quote:

Housing Minister Phil Twyford has dismissed figures from his own officials suggesting KiwiBuild homes will be much less affordable than the Government has claimed.

Ministry of Business, Innovation and Employment (MBIE) documents released to Newshub Nation last week under the Official Information Act suggested first-home buyers would need a household income of $114,000 a year to afford a so-called affordable $600,000 KiwiBuild home.

That’s above the average nationwide household income of $98,000, and just shy of the Auckland average of about $120,000.

Mr Twyford had previously estimated $60,000 would be enough.

I just don’t think the MBIE modelling was very accurate or true to what’s going on,” he told The AM Show on Friday morning.

“It depends how you do the modelling – it depends on interest rates, the term of the mortgage, the price of the house. It depends on those assumptions.”

He said he trusts data from property analysts CoreLogic over that from MBIE, calling it “much more true”.

I don’t agree with all the advice we get from officials.”?End quote.

It certainly looks like Phil Twyford doesn’t trust MBIE either… despite his later assertion that he did.

The other possibility is that both treasury and MBIE are right and that it is the minister who is wrong.

Unfortunately, he is so vainglorious that he will never admit he is wrong.