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The government panicked, Labour says

NZ NewswireNZ Newswire 11/07/2016 Peter Wilson

Mr English says the agency revised its financial plan because it needed more money for social housing. © Getty Images Mr English says the agency revised its financial plan because it needed more money for social housing. The government is being accused of desperate policy-making after a surprise announcement that Housing NZ won't be paying dividends this year or next.

Economic Development Minister Steven Joyce was the first to mention it on Monday and that was quickly followed by confirmation from Finance Minister Bill English, who is responsible for HNZ.

Labour announced on Saturday it would turn HNZ into a ministry and stop taking dividends from it.

"After years of insisting the dividend was necessary to ensure the corporation was financially disciplined, Bill English suddenly decides - two days after Labour announced it would forego the dividend - that it's not needed," said finance spokesman Grant Robertson.

"The finance minister has been forced to make one of National's biggest-ever U-turns... this is panicked and desperate policy on the hoof."

Mr Robertson said the May budget forecasted HNZ would pay a $38 million dividend this financial year and $54m the following year.

Mr English has a different explanation.

He says the agency revised its financial plan because it needed more money for social housing, and the figures Mr Robertson referred to appeared to come from older HNZ numbers dating from almost as year ago.

"After budget forecasts were finalised we were advised by HNZ that it is now forecasting a tiny surplus in financial year 2016/17 and is proposing that no dividend be paid," he said.

"Due to the ramping up of HNZ's social housing programme, it will require more capital and we do not expect to receive a dividend in financial year 2017/18 either."

The Greens say it's a backdown.

"Just a couple of months ago Bill English said HNZ needed to pay a dividend to stay `disciplined'," said co-leader James Shaw.

"So I'm pleased National is recognising that the most important thing HNZ can do right now is build more houses."

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