18   The House that Jack Built

Stan Fitchett

National Party Leader John Key was raised by his mother after his father died. They had few luxuries, and lived in a State house in the Christchurch suburb of Bryndwr. That meant John Key could progress to University - before student loans were introduced - and went on to become a multi-millionaire in the "finance industry".

John A. Lee - who was usually known as "Jack" - was also raised by his solo mother after his father abandoned her in the early 1900s. No State house for them. They lived in desperate poverty in a squalid cottage in Dunedin.

"Jack" Lee was a school dropout at the age of 13, became a street kid, was sent to borstal, became a swagger, casual labourer, and worked on farms around Southland.

Although he lived in a rough underclass of violence and drunkenness, he was a voracious reader, and became a socialist, angry at the greedy capitalists who exploited the working man.

In 1916 he joined the Army, fought in France where he lost an arm in the Battle of Messines - and was awarded a Distinguished Conduct Medal.

When he returned to New Zealand he joined the Labour Party. He was a forceful, fluent speaker who rose rapidly, and became a Labour member of Parliament in 1922.

In early 1930s New Zealand was in the grip of the Great Depression. There was mass unemployment, and the government of the day had no idea what to do about it. Just before the 1935 election, the then Prime Minister George Forbes said, "The Government had expended every effort in balancing its budgets. ... All it had done was to follow the methods of sound finance. "

Labourís senior members had been miners, labourers, and union activists. Although very few of them had gone beyond primary school, they had enough Kiwi common sense to see that "the methods of sound finance" were major causes of New Zealandís desperate economic situation..

Labour campaigned vigorously for a reform of the monetary system, and its leader Michael Savage declared in the 1935 election campaign, "Labour proposed a money system which would equate credit with the goods produced The ideal was that the people should be able to utilise their own credit system and complete public works without incurring public debt."

After Labour won that election, it conducted a housing survey which found that 27,000 dwellings were beyond repair. At that time there were 58.000 men unemployed in New Zealand. Ten thousand of them were carpenters - idle and destitute at a time when there was such a desperate shortage of decent housing.

In 1936 the new Labour Government resolved " ... to provide modern houses of a decent standard to be let at reasonable rates to people in the lower income groups."

It appointed John A. Lee as Director of Housing - and it couldnít have found a better go-getting man for the job. His department knew that interest on bank loans is normally the major composition of ordinary rent, so Lee demanded - and got - Reserve Bank credit at one per cent to finance the housing scheme. Lee was a man in a hurry. His administrator, Arthur Tyndall, later recalled one occasion when Lee dumped a pile of correspondence on his desk with a note saying " Go for your bloody life Mister Tyndall."

Within six months of Leeís appointment 3220 new houses were started. That provided real work for thousands of builders, plus thousands more jobs in the sawmills and factories that supplied the materials. By 1949, 33,766 houses had been built.

The vision and drive of Lee, and his uneducated colleagues brought New Zealand out of the Depression faster than any other country in the World. In 1935 there were 58,000 men unemployed men (and that didnít include women and youths). Just two- and-a-half years later the number of unemployed was 13,600.

The State housing programme is one of New Zealandís great success stories. By 1970, 72,498 houses had been built by the State " ... to provide modern homes of a decent standard to be let at reasonable rates for low income groups." The reason rents could be "reasonable" is found in "State Housing In New Zealand" published by the Ministry of Works in 1949.

"To finance its... proposals the Government adopted the somewhat unusual course of using Reserve Bank credit, thus recognizing that the most important factor in housing costs is the price of money - interest is the heaviest portion in the composition of ordinary rent"

John Key is portrayed as having had an austere early life. But he was a lot luckier than "Jack" Lee who grew up in poverty, became an M.P., and launched the State housing programme that provided John Keyís family with "...a modern home of a decent standard ... at (a) reasonable rate..."

It is hard to believe there is any sound reason why the same thing cannot be done today, and so ... utilise (our) own credit system and complete public works without incurring public debt."

Perhaps we need more pick-and-shovel labourers managing New Zealandís economy as they did in the 1930s - and fewer over-educated "experts".

Guardian Political Review, Issue 52, 2007 - Page 13