The chief executive of Kāinga Ora has resigned as changes the Government is making at the state housing corporation are “not what [he] signed up for”.

Andrew McKenzie will leave the agency at the end of October, chairman Simon Moutter said in a statement this afternoon. Moutter himself was appointed chairman as part of these changes.

McKenzie will get a $365,500 payout when he leaves as he is contractually entitled to a payment worth six months of his base salary.

Moutter said: “The Government has made a number of significant changes to Kāinga Ora’s role in the wider housing system through its Budget 2024 and signalled further changes in response to the independent review that will reduce the breadth and level of activity the organisation undertakes.

“Those changes are material to the chief executive role, reducing its scale and accountabilities significantly, and that was not what Mr McKenzie signed up for when he agreed with the board to extend his employment contract last year.

“As a result, Mr McKenzie and I have agreed that he will leave the organisation at the end of October this year and that his departure will be treated as a redundancy consistent with the terms of his employment agreement due to a material reduction in the accountabilities of his role.”

In May, Housing Minister Chris Bishop announced the Government would be embarking on a multi-year shake-up of the state housing agency after a highly critical report found the debt-laden agency was facing annual deficits of $700 million.

Andrew McKenzie, the chief executive of Kāinga Ora until October.

The report, led by former Prime Minister Sir Bill English, found Kāinga Ora exploited its easy access to Government credit, bingeing on borrowing without giving sufficient heed to the fiscal discipline taking on such immense debts would require.

Bishop said the report found Kāinga Ora was “not financially viable without significant savings as well as funding and financing changes”.

In May, Housing Minister Chris Bishop announced the Government would be embarking on a multi-year shake-up of the state housing agency after a highly critical report found the debt-laden agency was facing annual deficits of $700 million. Photo / Mark Mitchell

“We have significant concerns about the governance of Kāinga Ora,” Bishop said at today’s post-Cabinet press conference.

“One of the problems has been that Kāinga Ora has had very easy access to debt.”

He indicated a total refresh of the Kāinga Ora board but ruled out a mass sell-off of state houses.

Meanwhile, in his statement to the Herald today, Moutter said McKenzie had “done an excellent job as chief executive... over the last eight years. During that time, he established the new Kāinga Ora organisation [replacing Housing New Zealand], led it through Covid [and] improved tenant outcomes”.

“[He also] built New Zealand’s largest housing construction programme and delivered land that will see tens of thousands of new homes built over the next decade. I wish him well for his career beyond Kāinga Ora,” Moutter said.

Raphael Franks is an Auckland-based reporter who covers breaking news. He joined the Herald as a Te Rito cadet in 2022.