Former Prime Minister, Sir Bill English, is set to lead an independent review into the asset management, procurement and financial situation of Kāinga Ora, the Government had announced today.
Housing Minister, Chris Bishop said Kāinga Ora was the country’s “biggest landlord” and its operations have a significant impact on the Crown’s books.
“The Crown Entity has total assets of $45 billion and annual expenditure of $2.5 billion,” Mr Bishop said.
A recent report by the Treasury and Ministry for Housing and Urban Development found that Kāinga Ora’s level of debt had grown from $2.7 billion in 2018 to $12.3 billion in June of this year.
Advice released last year suggests that if Kāinga Ora continues on its current trajectory, their debt would reach $28.9 billion by 2033, the Housing Minister said.
“I am deeply concerned about the operating deficit which is already at $520 million in 22/23 and which is forecast to continue increasing. This deficit has a direct impact on OBEGAL and continues to put pressure on the return to OBEGAL surplus,” he said.
“Since coming to office Ministers have received further worrying advice about the financial situation of Kāinga Ora. We are not releasing that information at this time as it is commercially sensitive, but it confirms that an independent review is the right course of action.”
Minister Bishop said the independent review will build on work already done by Treasury and the Ministry of Housing and Urban Development and provide a report to the government by the end of March 2024.
“Former Prime Minister Bill English will lead the review team alongside vastly experienced financial expert, Simon Allen, who helped deliver ultrafast broadband to New Zealand, and Ceinwen McNeil who brings significant experience in the role of the construction and urban development sectors.”
“The Kāinga Ora Board is currently being consulted on the Terms of Reference, which will be released later this week once this consultation is complete.
“It is critical that Kāinga Ora is focused on efficiently building social houses for people in need while also delivering value for taxpayers’ money, and this review will be able to provide recommendations to ensure that these objectives are being met,” the Minister said.