Thanks for a really informative piece. Where I do think the Government deserves criticism is around the politics.
They’ve done a poor job at shaping the narrative. If as you say the plan has morphed somewhat since Shearer’s time, I bet most of the public wouldn’t know it. Whilst some of the opposition will be principled, some purely partisan, a lot is going to be driven by the disconnect between what Kiwibuild is in the Governments mind (and it seems in reality) and what people’s perceptions of it are. That’s what National is exploiting, and whilst many would oppose any market intervention on principle, I think much of the public would be onboard if they had a better sense of what you very clearly explained.

A racist sexual predator that has openly declared that he'll instruct the military to commit war crimes is President of the US, a fascist may become President of France, far right parties are surging across Europe, England is basically a one party state, Scotland Labour is a distant third, and Key will almost certainly win a forth term. But let's talk about 'close', and suggest there's nothing that links the consistent failure of the left to connect with the electorate. If we want to talk of 'troll farms' then fine, but at some point people might want consider that millions of people in many countries that once would be the left's nature constituency don't think you care more, or are achieving 'social justice', they just think you're self righteous narcissists that have nothing to say to them about their lives.
There's been people on the left pointing out for years the problems with the western left, and after all this and all that's happened in 2016 if people want to pretend there's no crisis, then don't be surprised when more 'Brexits' keep occurring.

It's undoubtedly correct that a Managerialist 3rd way left is dead, and that's partly due to not really standing for anything, but largely because it took for granted so many left behind by a globalisation it embraced.
However, so is comfort blanket of big state old left socialism. The idea that Corbyn is or can ever connect with the working class voters Labour has lost is a joke. He's leading Labour to an utter catastrophe and the best it can hope for is to avoid oblivion. The surge in membership from the activist classes just hides the extent to which its completely out of touch with the electorate.
I suspect had people got their wish and Sanders had run they'd discover the same thing. The idea he'd have easily defeated Trump seems largely based on a few polls from months ago.
I'd like to know what exactly 'talking to the base' means as if it's not prepared to re-engage with a significant section of the electorate that think it has nothing to say and nothing to offer, it's a waste of time.
Sadly the activist left shows no inclination it needs to question its own self righteous or theories, and even less inclination it has any interest in listening to or engaging with anyone who may disagree or not already see the world exactly as they do. They appear to remain convinced that lecturing people from a position of their own certainty and shouting down any dissent will herald an era of social justice if only everyone else would shut up and get on board.
From a perspective of winning power and affecting change things aren't getting better for the Left any time soon.