The Government is now officially politically incompetent when it comes to dealing with housing.

Its response to the crisis/challenge has been useless for a while now, but it has reached all new levels with Nick Smith's claim there is "diddly squat" evidence that foreign buyers are a problem.

To use Nick Smith's own bizarre language, the Government looks as if it is doing diddly squat on housing.

Its response is chaotic, and it appears out of ideas.

I have never seen this Government so out of sorts.

We all know the housing issue is big and complicated. But instead of being honest with the New Zealand public and accepting there is a problem, the Government instead fudges and parries and denies. It looks dishonest -- it looks as if it is making things up.

I agree with the Government that there is no silver bullet on housing.

So let's forget about the philosophical issues about what exactly it should be doing, and look purely at the political approach where the Government's normally slick communication is failing abysmally.

It appears to have a siege mentality when it comes to housing. It looks under siege and it acts as if it is under siege. It looks as if it has no plan; it acts as if it has no plan.

On the political communication front, John Key remains the Government's MVP and it is obvious that with even the shortest stint away from the news cycle the wheels fall off. The Government's other great political communicators Bill English, Steven Joyce and Paula Bennett are getting totally belted too.

Labour Housing Spokesman Phil Twyford is having a field day, owning the Government and trouncing them.

The Government's brains trust of John Key, Bill English, Steven Joyce and Gerry Brownlee must be worried by its appearance of total blunderbuss.

The only thing saving grace the Government has is their housing fail is causing absolutely no problem in the polls.

There's a couple of obvious reasons for this.

Firstly, the "mortgage belt" centre voter is gorging itself on low interest rates and ballooning capital gains. They are totally happy with John Key and give him a vice-like grip on the centre-ground.

The only thing that could really damage this is a significant downward correction in the housing market which would destroy people's personal finances and rip the social fabric of New Zealand.

Secondly, Labour and Andrew Little are weak. It seems dominated by what I call "Urban Craft Beer Socialism" and doesn't go hard enough on things that matter like housing.

Instead of hammering housing, Labour agonises over whether it should support the TPP or not. Instead of hammering housing, Labour spends it's time whining about the Panama Papers.

And the one time it really tried to hammer housing with the leaked Barfoot and Thompson sales figures, it completely botched it by using a lazy, racist and patently wrong algorithm based on Chinese-sounding names.

John Key innately knows where he and National need to be.

Andrew Little does not know where Labour needs to be.

Andrew Little showed some signs this week that he and Labour are hardening up by revisiting the population issue and the effect its having on jobs and housing but doing it without talking about banning foreign chefs. He still seemed nervous and worried though, as if Labour's Urban Craft Beer Socialists were going to give him a telling off.

So what next on housing?

Well, the Government could get the key people together, have a housing summit that could clear the decks. It could come up with a clear plan and clear communication about what it's going to do. It could swallow a bit of pride and look at demand side measures it's ruled out or even build a few houses. It could appoint one of its most senior ministers into a Housing Czar-type role as an uber-Housing Minister, with responsibility for Auckland planning issues. It could start to look in control again.

Or it could just muddle on, looking like it is doing diddly squat.

Newshub.