Monday, June 19, 2017

How convenient

Last month the government released its new housing affordability measure, which it used to claim that housing affordability wasn't so bad really. Now it turns out that the numbers are dodgy and it overstates affordability:

The Ministry for Business, Innovation and Employment ignored advice from the Reserve Bank over its new housing affordability measure, and made houses appear to be more affordable than they actually were.


But emails obtained by RNZ show that on 8 May, two days before the ministry publicly released the measure, the Reserve Bank warned it should be using a higher mortgage lending rate in its calculations.

The Reserve Bank said it was discontinuing its effective mortgage rate series, which MBIE was using in the measure, and "this probably wasn't the best measure to be using anyway".

It said the new customer mortgage rate was "more relevant for assessing affordability" whereas the effective mortgage rate was "the average rate on all outstanding mortgages".

So, four months out from an election, an "error" makes the government look better than it is on a major election vulnerability. How convenient. And despite knowing about this "error", they publish it anyway. That's beginning to look a little more than "convenient", and into the realms of an SSC investigation. Because it naturally raises suspicions that the books were cooked for the electoral advantage of the government of the day, and our public servants need to be seen to be above such things.