It enables Ministers to sidestep the Housing New Zealand
Board in order to sell or lease Housing New Zealand properties for
the purpose of social housing reform – a provision which is
intended to smooth the way for transaction implementation in a way
that is unprecedented in New Zealand statute.
Treasury took a long hard look at whether the existing
Ministerial direction provisions in the Crown Entities Act 2004
would do the job but these are confined to requiring that public
sector boards implement a government policy objective – not
that they perform a specific act, in this case, selling a
particular property at a particular price and providing ancillary
or transitional services in favour of third parties as part of a
transaction brokered by Treasury.
In short, Ministers will be able to authorise and enter into
social housing reform related transfer transactions in the name of
Housing New Zealand (and its subsidiaries) analogous to an attorney
acting under a power of attorney - in this case, a power of
attorney with a very broad scope that is set independently of what
the Housing New Zealand Board might think.
The only real limit is a necessary link to the social housing
reform programme objectives. Treasury itself has acknowledged that
this sort of transaction mandate is 'an unusual legal
mechanism' but, given the legal uncertainties and challenges of
the current legislative framework, the best available option for
enabling the reform programme to move forward.
Labour, the Greens and New Zealand First voted against the Bill
not only because of objections to the policy underpinning the
direction of the reform programme but equally because of the
extraordinary powers it confers on Ministers. However, MPs did not
bring much focus to this issue when Housing New Zealand appeared
before the Social Services Committee earlier this month.
This suggests that the legislation may survive a change of
The Act also:
clarifies that the "offer-back" obligations in the
Public Works Act do not apply, and have never applied, to land
vested in Housing New Zealand
enables Ministers to sign up Housing New Zealand to provide
transitional services to third parties as part of the transfer
process, including to ensure that the needs of tenants continue to
be met, and
requires that any use of the directive powers by Ministers must
be notified, gazetted and presented to the House.
Chapman Tripp comments
Although any transactions entered must be for state housing
purposes there is no requirement that the sale involve either a
registered Community Housing Provider or a sitting tenant.
This is consistent with media
reports that Finance Minister Bill English, when talking to a
finance sector audience this month, held out the prospect of
private companies providing social housing in return for guaranteed
subsidies within five years. Mr English drew a comparison with the
role played by the likes of Ryman Healthcare and Summerset Group
Holdings in the retirement village, aged care sector.
The market is now waiting to find out which consortia have been
shortlisted to receive RFPs for the initial transfer transactions
the Crown is looking to execute for stock in Invercargill and
Tauranga. Those RFPs are expected to be released to parties on the
short list late next month.
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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