So here we are in April and apart from a quarter of the year having disappeared, the Government's Homestart package has come into force.

It was in part the Government's answer to the so-called housing crisis and was a popular part of their election manifesto.

Kiwisavers can now get grants of up to $20,000. If you're building a new home and the welcome home loans system can now lend on homes up to $550,000.

But there's trouble. The Reserve Bank don't like it and they don't like it because they've become obsessed with the price of houses in Auckland and they'd rather people didn't borrow, didn't buy, and god knows what else.

But back in the real world there the Government lives, they saw and quite rightly young people in particular getting locked out of the housing market by the Reserve Bank LVRs.

So the irony we now have is competing policies that are in effect partially cancelling each other out.

The Government has the issue of young frustrated house buyers, while the Reserve Bank is competing against a Government trying to get them into a house.

The upside they can probably agree on is that the Homestart package deals with new builds and one thing that is obvious is we are short of new homes, so if a young couple build instead of simply buying, it's not all bad.

But what these policies show is the downside of the Reserve Bank being independent. Not that they shouldn't be, because they should, but in this instance you have two powerful groups of people suggesting by their policies that they disagree with each other.

You know I side with? The Government.

Why? Because they're right and the Reserve Bank isn't.

The Reserve Bank's policy of LVRs have done nothing for housing prices, as investors have merely replaced first home buyers. So much so, the Reserve Bank is looking to invent a rule around them. You'll note despite all the talk, they haven't done so yet. Indicating perhaps, that reality is harder than theory.

In other words, the ways around new rules are many and varied, and a new rule is only a good rule if it's effective and I doubt the Reserve Bank is going to be able to come up with one.

But back to the Homestart scheme...thank god the Government understands the market and has its head screwed on, and that this policy will get at least some young couples into a first home.

Because locking them out leads to inter-generational issues, like a life of renting, and that economically and socially is a disaster.