Key starts to flesh out poverty & housing plans

John Key has dug his toes in as he refuses to listen to some of the expert advice on poverty reduction, but more interesting is where he's indicating he will move

You'd hardly call it skin on the skeleton, but John Key's comments today about his plans to tackle child poverty and sell-off state housing at least put some sinew and muscle on the bare bone rhetoric he has been using since his win in last month's election.

John Key is a Prime Minister at the top of his game and the peak of his powers. After a hard, unpredictable and nasty campaign during which he was unusually off-balance and at times dishonest (especially the days immediately after Dirty Politics was released), he is looking fresher and more confident, and since election night he's hardly put a foot wrong.

Every word since winning his third term has been in aid of winning a historic fourth; he's been notably humble, inclusive and has used his political capital not to move further to the right, as some predicted, but to extend his hold on the centre (a little to the left and a little to the right).

You can see that in two policy priorities he's identified: selling off state housing and taking more decisive action to tackle poverty.

In the campaign he said he was proud of his government's record on child poverty. He, Paula Bennett, Bill English and others have spent years refusing to measure poverty, disputing figures, generally trying to say 'nothing to see here'. What Key seems to have heard on the campaign trail is that many New Zealanders are genuinely concerned at what's happening to our poorest neighbours and he's hinted enough now at serious action that he's committed to more than a token approach to the issue.

This morning on The Nation he still ruled out raising benefit levels and extending the in-work tax credit to families living on a benefit, depsite all the serious experts in the field insisting those were two essential moves. Key likes to say that the gap between life on a benefit and life in work must be maintained. The problem with that argument is two-fold.

First, Jonathan Boston, the man who literally wrote the book on the subject, has done the numbers and says that the gap between those in work and those on a benefit has increased 25 percent in a generation. Remember when Ruth Richardson and Jenny Shipley cut benefits with exactly that justification? Well the gap has increased by a quarter since then, as wages have risen and benefits have only kept pace with inflation.

So if the gap then was wide enough for Shipley and co, why does it need to be 25 percent bigger to incentivise people into work? The fact is it doesn't and the benefits are too low for a family to live on. An increase is due.

Second, two out of five families in poverty are also in work. So simply getting into work is not in and of itself a path out of poverty. Sure, it's a start. But possibly only the start of a very long path -- and poor kids need help today, not in a few years. Wait those few years for their parents to work their way up the ladder and you're missing out on crucial opportunities for them to get on a healthier, smarter, more aspirational path.

So the truth is that both benefits and wages are too low and more direct, immediate action is required. It's a tough political choice, but the evidence is pretty clear.

Having made that criticism of what Key won't do, it's interesting to look at where he does seem willing to act. Two big hints came out of today's interview. First, housing costs for the very poor. He said "we need to address" the fact that so many poor families are paying too much for their housing. Given most of them don't own their own home, that means some sort of rent relief or accommodation support. (Given English has identified the accommodation supplement in the past as a huge suck on government funds and a bit of a rort for landlords, that's unlikely to be the mechanism).

Two, he said:

"...there might be ways we could put more money directly into those youngsters and make sure it actually reaches those youngsters and isn't just part of an overall pot which delivers a certain level of support”.

That seems to be a quest to get past putting money into the pockets of the mums and dads, and more directly into the needs of kids. Maybe childcare programmes? Maybe exam and study fees? They certainly would fit within National's ideological fences, as they are helping kids help themselves. He won't be precise, but the hints are there.

As for the sell-off of state housing, he played down the figure of $5b used extensively this week. This is a policy that gives some red meat to the base; it's a form of old-fashioned privatisation. But one of his problems is that the last time he sold around $5b of state assets (the power companies) he often leant on the fact he had a mandate from voters. But National said nothing about ramping up its state house sales in this past campaign, so he cannot make claim now.

It looks sneaky and even tricky.

What's more he won't commit to spending the money made from any sales on new houses. But here's an interesting point. What he did say was that "they key test of the policy is to increase the overall level of housing". So if there aren't more social houses as a result of this sell-off, he will have failed.

There's obviously more work to be done on these issues, but we're starting to see a an outline emerging. The question now is will it be a functioning body of work or little more than a rhetorical straw man?