The debate about privatising state assets has reared its head again, with calls by the ACT leader for the government to sell off more assets to help balance its books and the Prime Minister’s now typical vaguely ambiguous, non-committal response.

However, it is largely yesterday’s debate, more reminiscent of the late 1980s and early 1990s than today. At that time, there was a case for the government to divest itself of many assets and businesses that successive governments had acquired over time, only to see their performance fail to improve significantly under government ownership.

However, those days have gone. Many of those entities have been sold, but that process has been the subject of ongoing criticism because the sales themselves were botched.  The net result was often a worse business and service outcome. In some instances – railways and Air New Zealand, for example – a subsequent government has had to buy back the assets to prevent their total collapse.

In any case, as many analysts, including Sir John Key, have pointed out, there are not that many assets remaining that it would appropriate to sell in part or in whole, and that the economic impact of doing so is unlikely to be substantial. So, all we are really left with is what Sir Michael Cullen would have described as an “ideological burp” from the ACT Party.

However, that is not to say that there is not a strong case for considering the performance of some of the government’s largest business assets. That performance can certainly be improved.

Housing is a good example. There has long been a tradition, famously initiated by the first Labour Government in 1938, of comprehensive public housing provision by the state to help people in need. Today, the government’s housing agency, Kāinga Ora – Homes and Communities, owns around 72,000 rental properties across New Zealand. It is the country’s largest landlord. In addition, local authorities own around 14,000 rental properties. Taken together, central and local government agencies provide rental accommodation for around 400,000 people.

But the system is not without substantial problems. Although the waiting list for public housing has been declining, Ministry of Social Development figures still show more than 22,000 people waiting an average 344 days to get into public housing. Differing eligibility criteria between Kāinga Ora housing and local authority housing mean the situation is uneven across the country. Because of those variable standards, the quality of accommodation provided is also often uneven and not well-suited to the needs of tenants.

The original premise of state housing was that it would transitory, to help people through difficult circumstances. That has been long lost sight of. Concessional rental rates and non-fixed-term tenancies mean that for many tenants public housing has become a long-term way of life, rather than a transition, often shutting out deserving cases on the waiting list.

Maintenance of the housing stock has been a perennial problem, leading previous governments and councils to sell properties, rather than invest in their upgrading. Successive governments have sold more than 31,000 state houses in recent years. On the other hand, more than 16,000 new houses have been added to the government’s stock since 2017, and a further almost 2,700 are planned to be built over the next eighteen months, with 3,000 existing homes being upgraded. Even so, total public housing stock is still declining.

All this raises the question of whether there is a better way for managing the country’s under-pressure central and local government housing stock more consistently and even-handedly. Consideration should be given to bringing the entire central government and local government public housing stock under onje organisation – a revamped Kāinga Ora – Homes and Communities. The new Kāinga Ora could then be more sharply focused as a property management company. It would be required to utilise the skills and expertise of the private sector home construction companies, advertising the homes of one’s dreams on television every night, to help better manage the existing stock and plan the future development of public housing in New Zealand.

This is not a new idea, even if it has fallen into disuse in recent years – it was, after all, a partnership between Fletcher Construction and the first Labour Government that enabled the design and building of the state housing programme from the late 1930s.

The same model of involving the private sector in the operation, management and upgrading of government property could equally be applied to other areas where the government is struggling to manage and maintain substantial property portfolios – schools and hospitals, for example. Here again, the government could establish a separate property management company, drawing on relevant private sector asset management expertise to maximise the government’s return on its health and education assets and improve overall economic performance.

The focus on this new entity would be on the buildings and would exclude the delivery of health and education services and staffing so as not to compromise the continued public ownership of those services. It would be solely about managing public assets better.

Discussion around these concepts, and how they could be applied to the contemporary public benefit, appeal as far more relevant than reverting to yesterday’s ideological prescriptions the way the ACT Party is.  

This week, the rituals that herald the start of each Parliamentary year begin.

Both the major parties are holding their traditional two-day start-of-year Caucus retreats. National is meeting in Hamilton and Labour is in Palmerston North. Caucus retreats rarely yield anything of value but are useful mechanisms for demonstrating Party bonhomie and outward unity, especially after tough times like a Cabinet reshuffle, or a demoralising return to Opposition after years in government. The overriding impression both parties will want to leave after their retreats is that they are fired up, confident and ready to face the challenges of the political year which begins in earnest when Parliament resumes next week.

But before too much of the hot air generated at the retreats fades away, the parties will dutifully trek to Ratana Pā for the commemoration services this weekend of the 152^nd anniversary of the birth of Tahupōtiki Wiremu Rātana, founder of the Rātana Church and political movement. Again, the process follows a set ritual – the separate formal welcome of the government and opposition parties onto the marae, followed by the often-frank speeches on the paepae, refreshments and the farewell.

When Parliament resumes next week, the first item of business will be the presentation of the Prime Minister’s Statement, which is supposed to set out the broad thrust of the government’s legislative plans for the year ahead. That is followed by a debate, lasting up to 13 hours, and spread over several days, ostensibly on the Statement’s contents, but wide-ranging over any aspect of the government’s performance, and other matters besides.

That process will be more drawn out this year because after resuming next week, earlier than in recent years, Parliament will go into a one week recess the following week to allow for the annual Waitangi Day Commemorations to take place.

At the end of the debate on the Prime Minister’s Statement, there will be the first vote of confidence of the year, which the government will need to win to continue in office. Then, both the House and the select committees can settle into their respective work patterns for the year ahead. As this is the second year of the government’s term it is also likely to be its busiest. Last year was about a new government settling into its work and developing the legislation necessary to give effect to its policy programme. Next year will be about tidying up loose ends and battening down the hatches before the election, due sometime in the latter quarter of the year.

This year will also be the time when Members of Parliament start to think about their futures and whether they wish to seek a further term at next year’s election. Typically, around a quarter to as third of Parliament stands down (either voluntarily or involuntarily) at each election. It will therefore not be unexpected to start to see a stream of upcoming retirements announced from around the middle of the year.

There is an added complication this year. In March, the Representation Commission is due to release draft new electorate boundaries for the 2026 election for public consultation. They will be finalised by August. The law currently fixes the number of electorates in the South Island at 16. However, this year because of the increase in the South Island’s population recorded in the 2023 Census, the number of North Island electorate seats will be reduced by one to ensure North Island electorates remain approximately the same population size as their South Island counterparts.

There has been speculation that because of wider population changes in Wellington and Auckland either the Epsom or Ōhāriu seats may be abolished, which would have implications for both the sitting members for those electorates. In Wellington, the three existing electorates of Rongatai, Wellington Central and Ōhāriu are all under the new electorate population quota making it difficult to see how all three can be retained. It is a similar story in Auckland with Epsom and its near neighbours all below the new quota.

Whatever happens, there will be ramifications beyond the electorate eventually chosen for abolition, which nearby MPs will weigh up when deciding whether to stand again, unless of course they are able to flee to the safety of a good place on the party list. From the end of the coming year, all parties will be starting to reveal the new candidates they have attracted to run both in electorates and on the party list in 2026.

There are two other unusual features to watch for in the first half of 2025. Around the end of May, pursuant to the Coalition Agreement, David Seymour will replace Winston Peters as Deputy Prime Minister until the next election. While that transfer is expected to go smoothly, the interesting point to watch will be whether it leads to any change in the dynamic of relationships within the Coalition, particularly since Peters, with a clear eye to the next election, has promised to be more assertive in pursuing New Zealand First’s interests once freed of being Deputy Prime Minister.

Second, and over the same period, will be the select committee process regarding the Treaty Principles Bill. How that proceeds, both in terms of how the submissions eventually chosen to be heard by the committee are treated, and the nature of the evidence presented, will be extremely testing, even if the Bill remains headed for eventual defeat. Unless it is carefully and wisely managed, the process has the capacity to completely dominate and thereby derail much of the rest of the government’s programme.

Once those items have been dealt with, the second ritual aspect of the Parliamentary year – the procedures around the presentation of the Budget and the scrutiny and accountability processes associated with that – kick in and will see Parliament through until it rises just before next Christmas.