Week in Politics: Was this the government's worst week?

By Peter Wilson*

Analysis - The government takes a beating after scrapping KiwiBuild and ministers launch a water clean-up plan that's already drawing fire.

Judith Collins said it was a total failure, the Dominion Post described it as a home-building fantasy and Newsroom's Bernard Hickey wrote that Wednesday was easily the government's worst day since it took office.

Those were just some the reactions that followed the announcement that KiwiBuild had been scrapped because the target of building 100,000 affordable homes in 10 years couldn't be achieved.

Ms Collins wasn't exaggerating. It was a flagship policy and it has collapsed. It was a fantasy sold as an election promise.

KiwiBuild was announced in 2014. Labour had no idea how it was going to build those homes but it was a popular policy, easily remembered because the numbers were simple.

So it just kept putting it in front of voters, despite the building industry warning that it couldn't be done. In Parliament it hammered the previous government for failing to tackle the housing crisis.

"Just build some bloody houses," Labour MPs shouted across the debating chamber.

The rubber hit the road when it won the 2017 election and faced reality. The industry was stretched and couldn't deliver, and even if it could there was nowhere near enough land.

Although it was obviously failing and interim targets couldn't be met, ministers insisted the target was achievable - until Wednesday, when KiwiBuild was canned. The homes it has managed to build, many in areas where there is low demand, will be sold on the open market.

Megan Woods, who replaced Phil Twyford as housing minister and was put in charge of the KiwiBuild "reset", made the best of a bad situation. The target had been "overly ambitious" - a laughable understatement - and she had something to put in its place.

A $400 million allocation would be made to help low and middle-income Kiwis buy homes through schemes such as shared equity and rent-to-buy, and the deposit needed for a government-backed mortgage would be reduced from 10 per cent to 5 percent.

That makes a lot more sense than trying to build 100,000 homes and it will help, although initial reaction has been that there isn't enough money in it to help a significant number of families.

It could be a sound start, however, and Woods is a capable minister. With the cabinet behind her, she could build on it and get some really worthwhile schemes operating.

The announcement was made while Parliament was in recess, which was unlikely to have been a coincidence. The opposition hasn't had much of a chance to lash the government over this, but it will when the House sits on Tuesday.

The day after Ms Woods' announcement, Environment Minister David Parker and Agriculture Minister Damien O'Connor released the government's Action Plan for Healthy Waterways. It's a significant piece of work which sets out proposals to clean up lakes and rivers within a generation.

A deteriorating situation will be turned around within five years by imposing stricter rules on nutrient outflow and a raft of other remedial measures that will be spelled out in a national policy statement. The government is confident it has the overwhelming public support.

Much of this is still in the works. The government will make final decisions later this year or early next year, with new requirements coming into force in June next year. By 2025, all councils must have plans in place to deal with wastewater and stormwater. A comprehensive discussion document has been released and the consultation period runs to October 17.

None of it is set in concrete, but the scenarios set out in reports and documents are already provoking doomsday predictions.

At the announcement, both ministers were careful to praise farmers for their proactive environmental protection work and emphasised that most were getting up to speed and would be able to handle the new regime. They want those farmers to share their knowledge with others who need to change their ways, and the government will work alongside them as well.

It is proposals to reduce nutrient outflow that are causing the problem. Proposed reduction rates will vary depending on the state of the soil and the waterways, and in some areas reduction could be as high as 50 per cent or even 80 per cent, although it's not going to have to happen quickly.

Federated Farmers said that would end pastoral farming, which the ministers described as a ridiculous statement. National's Todd Muller told Morning Report the scope of the proposed changes was severe.

"Farmers I've been talking to say they're going to have to sell up," he said. "You can't farm your way to reducing nutrient by 80 per cent, you have to shut up shop." He could foresee the Canterbury Plains covered in pine trees.

Those are worst-case scenarios, and the ministers are confident they won't happen. But the problem with farmers isn't going to go away because many of them, perhaps most of them, feel they're carrying an unfair burden and that people in the cities just don't understand their problems.

If making a living from the land becomes too hard, they could start walking away from it.

*Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as parliamentary bureau chief for NZ Newswire.