Volume 690 Week 42 - Thursday 16 May 2013Text is incorporated into the Bound VolumeVolume 690 Week 42 - Thursday 16 May 2013[Sitting date: 16 May 2013. Volume:690;Page:10017. Text is incorporated into the Bound Volume.]Thursday 16 May 2013Mr Speaker took the Chair at 2 p.m.Prayers.Appropriation (2012/13 Supplementary Estimates) BillProcedureHon BILL ENGLISH (Minister of Finance): I hereby present the Supplementary Estimates of Appropriations for the Government of New Zealand and supporting information for the year ending 30 June 2013 (B.7).Mr SPEAKER: That paper is published under the authority of the House.Appropriation (2013/14 Estimates) BillProcedureHon BILL ENGLISH (Minister of Finance): I hereby present the 2013 Budget Minister’s Executive Summary the speech the Fiscal Strategy Report (B.2) the Economic and Fiscal Update (B.3) the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2014 (B.5) the information supporting the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2014 (B.5A Volumes 1-10) and the departmental statements of intent.Mr SPEAKER: Those papers are published under the authority of the House.First ReadingHon BILL ENGLISH (Minister of Finance): I moveThat the Appropriation (2013/14 Estimates) Bill be now read a first time.Bill read a first time.Budget StatementBudget DebateHon BILL ENGLISH (Minister of Finance): I moveThat the Appropriation (2013/14 Estimates) Bill be now read a second time.It’s my privilege to deliver the National-led Government’s fifth Budget.When I stood up to deliver the Government’s first Budget in 2009 New Zealand faced challenges I think we’re only able to fully appreciate with the passing of time.The world had entered the worst financial crisis since the Great Depression from which it has yet to fully emerge.The New Zealand economy had been in recession for more than a year and some economists were predicting the unemployment rate would go higher than 10 per cent.The previous government had increased its spending by 50 per cent over the previous five years and that was simply unaffordable.The Treasury told us that if we kept the policy settings we inherited we’d never see another budget surplus again and government debt would increase to levels we’re currently seeing in Europe.That wasn’t the end of it. Few at that time anticipated how difficult the global recovery would be. And no-one anticipated the Canterbury earthquakes which apart from the terrible loss of life have been one of the most expensive natural disasters in history.So starting in Budget 2009 we set out our plan to get New Zealand out of a deep hole.We were prepared to run deficits for a few years to support the fragile economy preserve jobs and protect the most vulnerable New Zealanders including families with children from the worst of the recession. That meant increasing government debt.But at the same time we set out a credible path back to surplus and a plan to start paying back this debt.That plan involved reining in expenses and getting on top of the longer-term drivers of government spending.We also set out a comprehensive programme to build a more productive and competitive economy that supports higher incomes and more jobs.This has included our tax package in 2010 our on-going resource management reforms the introduction of 90-day trials investment in infrastructure building on our international trade deals and a significant investment in skills training and apprenticeships.We have been driving for better results from public services. And since the earthquakes we have been working hard to support Cantabrians through the aftermath of their disaster and through the rebuilding of their city.Mr SpeakerThe Government’s plan has not involved radical change. We’ve done what we said we would do and we’ve taken people with us.And that plan – using sound and proven economic policies – is working as international bodies like the IMF have recognised.New Zealanders can look to the future with well-earned confidence and optimism.The New Zealand economy grew 3 per cent last year which is almost the same as Australia and higher than almost every other developed country.Wages are growing cost of living increases have been modest and interest rates are at 50-year lows.There are 50000 more jobs in the economy than two years ago although unemployment does remain too high and attracting new investment that creates jobs is a particular focus for the Government.The fiscal outlook has improved markedly as a result of the Government’s sound management and we are on track to post a surplus in 2014/15.These are real achievements that are benefitting New Zealanders and their families.Budget 2013 is about building momentum in this programme.But there is a risk that all the gains we are now making could be lost in the future by going back to policies that have failed in the past.We know what these are – high and wasteful government spending more costs and more taxes on households and businesses and more state control of the economy that chills private sector investment and destroys jobs and growth.New Zealanders were conditioned in the 2000s to believe that Budgets should be about the novelty of new expensive spending programmes that held out promises of economic and social transformation arranged by the Government.Those promises were illusory. There was no sustainable revenue stream to pay for the increased spending and there was nothing genuinely transformational to show for it.In contrast this Government believes that Budgets are about careful stewardship of public money and investing wisely in programmes to improve people’s lives and help grow the economy.In the end it is the effective use of public money not the amount of it that makes a positive difference to the lives of New Zealanders and their families.Mr SpeakerThe Government has four priorities this term:responsibly managing its finances;building a more productive and competitive economy;delivering better public services; andsupporting the rebuilding of Christchurch.Across our programme we are working constructively with the ACT United Future and Māori parties and I want to acknowledge their support and assistance.I intend to talk about each of the Government’s four priorities in turn. But first I want to summarise the economic outlook for the next few years.The Budget forecasts show annual growth of between 2 and 3 per cent over the next four years.These forecasts include the impact of the recent drought which is expected to reduce economic activity by 0.7 percentage points in 2013.Low interest rates increased activity resulting from the Canterbury rebuild and strong commodity export prices will all contribute to growth. And across the Asia Pacific region growing numbers of consumers will be demanding the goods and services New Zealand produces.The New Zealand economy is expected to grow more strongly over the next two years than many other developed economies including the United States Canada the United Kingdom Japan and the Euro area.Budget forecasts also show an improved outlook for jobs and for wage growth. As a result household disposable income is forecast to rise by almost 20 per cent over the next four years.The current account deficit is forecast to rise gradually to over 6 per cent of GDP in the next few years driven by stronger investment by businesses and households including investment in the Canterbury rebuild. If investment in the rebuild is excluded the current account deficit remains below 5 per cent of GDP.New Zealand’s net offshore liabilities will worsen slightly as insurance pay-outs for Canterbury continue. However national saving is expected to rise led by the Government getting its finances in order. Household saving rates are expected to retain the gains made over recent years following the large dissaving over much of the 2000s.In summary New Zealand is well placed.However a number of risks and challenges remain. The recent drought for example may have a more persistent effect than expected and rapid house price growth if sustained may place more pressure on the domestic economy.Internationally risks for the global economy appear to have receded over recent months although global conditions continue to place upward pressure on the New Zealand dollar.Budget decisions have been made with this economic context in mind.Mr SpeakerI want to talk now about the first of the Government’s four priorities which is to responsibly manage the Government’s finances.The Budget shows that the Government is on track to meet its two key fiscal targets.We are on track to get back to surplus by 2014/15.And we are on track to reduce government debt to 20 per cent of GDP by 2020.Budget forecasts show an operating surplus before gains and losses of $75 million in 2014/15.We are achieving this while still spending $5.1 billion on new initiatives in the current year and over the next four years in Budget 2013 – funded in part by reprioritising existing spending.A surplus is forecast because tax revenue is picking up and the Government is continuing to restrict growth in expenses. Core Crown expenses are forecast to drop below 31 per cent of GDP in 2014/15 – down from 35 per cent of GDP just two years ago – and then remain well under that level.The Government’s return to operating surplus is not dependent on the Mighty River Power share sale. The share offer programme effectively swaps one type of asset for another – electricity company shares for cash – so its primary effect is on the mix of assets and debt that the Government owns rather than on the operating balance.Budget forecasts also show net core Crown debt peaking at 28.7 per cent of GDP in 2014/15 and declining thereafter. Longer-term projections show net debt dropping to 17.6 per cent of GDP by 2020/21 in line with the Government’s target.This is a remarkable turnaround in the books. Projections in Budget 2009 for example showed that if the Government had maintained the spending track it inherited and hadn’t made policy changes net debt would exceed 60 per cent of GDP by the early 2020s.But I would remind everyone that forecasts and projections are by definition about the future. While the fiscal outlook has improved markedly over the last few years a lot of work is needed to make the forecasts a reality particularly when it comes to reducing debt.Taking on more debt has been appropriate to support the economy and cushion New Zealanders and their families from a number of major shocks including the recession the global financial crisis and the Canterbury earthquakes. And as a percentage of New Zealand’s GDP our level of debt is still well below most of the countries we typically compare ourselves with.But in dollar terms net government debt is still rising by around $130 million a week and is expected to reach $70 billion in 2016/17 which is the equivalent of around $15000 for each and every New Zealander.As households around the country know carrying substantial debt is neither comfortable nor financially prudent. Annual interest payments on our debt will this year cost about as much as total spending on the Police early childhood education and the Unemployment Benefit combined.A sizeable debt also risks keeping interest rates and the exchange rate higher than they would otherwise be and in turn crowding out the internationally-competitive sectors of the economy.So the Government is firmly focused on capping then reducing its debt.And alongside debt reduction future surpluses will also give us more choices. These choices will include for example investing in public services reducing costs on businesses and helping families get ahead.Mr SpeakerThree key changes have been made to the Government’s fiscal parameters.First the operating allowances for new spending have been slightly adjusted.The operating allowance is $900 million in Budget 2013 compared with the $800 million signalled in the most recent Budget Policy Statement and will be $1 billion in Budget 2014 compared with $1.2 billion in the BPS. From 2015 onwards operating allowances will grow by 2 per cent per Budget.This change to future allowances will mean bigger surpluses and a greater ability to pay down debt.In addition new capital spending in this and the next three Budgets will continue to be funded from the Crown’s balance sheet including from the proceeds of the Government’s share offer programme.Second the Government intends to delay contributions to the New Zealand Superannuation Fund until the long-term debt target is reached – that is until net debt is no higher than 20 per cent of GDP.This means Super Fund contributions are now expected to resume in 2020/21. This is two years later than was projected in the most recent Half Year Update but is the same time as was expected when contributions were initially suspended in Budget 2009.I want to stress that this change in no way affects New Zealanders’ entitlement to New Zealand Superannuation either now or in the future.The choice for the Government is whether to use future cash surpluses to reduce debt to more prudent levels or whether to put money into world sharemarkets while holding higher debt. The first option is clearly more responsible.Third and finally the Government is now satisfied there is scope for significant reductions in ACC levies.I will outline these proposed changes in a moment. The impact on the Government’s books however is to reduce total Crown revenue and therefore the total Crown operating balance. This has already been built into the Budget forecasts.Mr SpeakerI now want to turn to the second of the Government’s priorities which is to build a more productive and competitive economy that supports higher incomes and more jobs.The Government’s plan for building a more productive economy is set out in the Business Growth Agenda.This focuses on six key elements that businesses need to grow: access to export markets innovation infrastructure skilled and safe workplaces natural resources and capital markets.Each of these areas involves government investment and regulation and with regard to the second of these I acknowledge in particular the contribution of Regulatory Reform Minister and ACT Party leader John Banks.The Budget adds a number of new initiatives to the Government’s existing agenda.In particular the Budget contains a $100 million-a-year internationally-focused growth package.This growth package acknowledges New Zealand’s need to pay its way in the world through increased trade and investment which in turn creates jobs and opportunities for New Zealanders.The largest part of the package is a $200 million boost in funding over four years for science innovation and research.This extra funding will be invested in expanding current business R&D grants as well as establishing a new repayable grant for start-up businesses to assist them to become investment-ready. There is also new funding for the National Science Challenges and the Marsden Fund.The internationally-focused growth package also provides a significant boost for tourism as the Prime Minister recently announced.The Government will invest $158 million over four years to attract more visitors to New Zealand particularly high-spending visitors. This includes funding to attract high-end visitors from emerging markets and funding to attract international business events to New Zealand.The growth package also includes additional funding of $40 million over four years to market and promote New Zealand’s international education sector which already contributes more than $2 billion to our economy each year.Mr SpeakerWhen the Government took office in 2008 we were confronted with significant financial problems at ACC and we took action to rebuild its long-term sustainability.The Government is now satisfied there is scope for significant and sustainable reductions in ACC levies.We have therefore made an allowance for levy reductions of around $300 million in 2014/15. Final figures will be determined after ACC consults on levies later this year.ACC’s improved performance and an on-going review of its funding policy mean the Government has also allowed for levy reductions to increase to around $1 billion in 2015/16.When combined with the $630 million reduction in levies in 2012/13 these proposed changes amount to around 40 per cent lower ACC levy rates for households and businesses.Mr SpeakerThe Budget also confirms a number of revenue measures and I want to thank Revenue Minister and United Future leader Peter Dunne for his work in this area.These measures include proposals to let loss-making start-up businesses claim tax losses on R&D expenditure together with proposals allowing tax deductibility for certain types of ‘black hole’ expenditure.Changes to thin capitalisation rules will help to ensure that multinational companies investing in New Zealand contribute their fair share of tax.And Inland Revenue will receive additional funding of $7 million a year so it can better pursue tax compliance in the area of property investments. This is expected to return about $45 million a year in additional tax revenue.Mr SpeakerProceeds from the Government’s share offer programme – including from the Mighty River Power float last week – are being placed in the Future Investment Fund and will be used to pay for new public assets.The Budget confirms another $1.5 billion of investment from the Fund.$426 million will be invested in redeveloping Christchurch and Burwood Hospitals which as previously announced will be the biggest building project in the history of New Zealand’s public health system.Contingencies totalling over $700 million have been set aside for key projects that include new modern schools Christchurch’s justice and emergency services precinct and Canterbury tertiary education institutes.The rest of the $1.5 billion investment includes $50 million for school network upgrades $94 million for the fourth year of KiwiRail’s turnaround plan and $80 million for irrigation infrastructure.Overall across multiple Budgets the Government intends to spend a total of $1 billion from the Future Investment Fund on 21st Century schools and classrooms and $1 billion on priority health investments.Mr SpeakerInvesting in hospitals schools and other public assets depends on money coming into the Future Investment Fund through further share offers.Today I can announce that Meridian Energy will be the next company to be prepared for a partial share offer in the second half of 2013.As with Mighty River Power New Zealanders will be at the front of the queue for shares in Meridian and we will be targeting widespread New Zealand ownership.The Government’s share offer programme remains important for the Government’s books and for the economy.As well as raising money to invest in new public assets it benefits the companies themselves through greater market discipline. In addition the share offer programme gives New Zealand savers the opportunity to invest in large New Zealand businesses.Mr SpeakerHousing can be made more affordable in New Zealand by focusing on the key areas that actually make a difference: land supply consent processes provision of infrastructure and productivity in the construction sector.The Government is working with councils on these issues because the decisions they make about housing affect the entire economy. High housing costs affect financial stability and create an increased demand for housing assistance.Today we are introducing legislation to speed up the provision of new housing in areas where the pressure is greatest and housing is least affordable.Special housing areas will be designated under accords between the Government and councils. Council approvals for new housing in those areas can then be managed under a streamlined process.Where agreement cannot be reached or targets are not met the Government will be able to issue the consents itself.This legislation which will apply for three years is an immediate response to housing pressures in areas facing severe affordability problems.It gives time for the Government’s resource management changes to bear fruit and address land and housing supply issues in the longer term.Mr SpeakerAlongside the Budget the Government is confirming measures to help ensure New Zealand’s financial stability.Earlier this week the Reserve Bank Governor and I signed a memorandum of understanding that gives the Reserve Bank the ability to require banks to:hold additional capital on their balance sheet as a buffer during an economy-wide credit boom;hold additional capital against loans in specific sectors if risks emerge in those sectors;use more stable sources of funding to avoid short-term funding shortages; andrestrict high loan-to-value ratio lending in the housing sector.These measures will be available – if required – to help protect the economy and the financial system from boom and bust cycles.Mr SpeakerThe Government’s third priority for this term is delivering better public services within tight fiscal constraints.Spending restraint is not a handbrake on providing better public services. In fact big increases in spending have often been a measure of failure rather than a measure of success.Our approach has been to spend well not always to spend more.The Government’s spending increases have been modest and focused on programmes that will achieve results and improve the lives of New Zealanders and their families.Last year the Prime Minister set 10 challenging results for the public sector to achieve over the next few years in areas such as reducing long-term welfare dependency supporting vulnerable children boosting skills and employment and reducing crime.These results span the public sector and the Budget contributes to meeting all of them.Mr SpeakerI want to start with the Government’s support for vulnerable children and families. This is already very substantial with billions of dollars spent on income support as well as targeted support for families with complex needs.The Ministerial Committee on Poverty was established under the confidence and supply agreement between the National and Māori parties and I want to acknowledge my fellow Minister and Māori Party co-leader Tariana Turia for her support.The Budget confirms several important initiatives in this area.Funding of $100 million over three years has been provided for the Healthy Homes insulation programme targeting low-income households with children or high health needs. The extended programme is expected to insulate around 46000 additional houses.More than $21 million has been provided over the next four years for rheumatic fever prevention.Another $1.5 million has been provided next year for budgeting services for low-income families on top of the $8.9 million that is already provided.The Government is also exploring a warrant of fitness programme for social housing and will investigate and pilot a low and no interest loan scheme for low-income borrowers.Some of these initiatives were included in the Children’s Commissioner’s child poverty report which the Government will be responding to in the next few weeks.Mr SpeakerIt is widely acknowledged that paid employment is the best way to lift vulnerable families out of poverty.That’s why the Government is focused on helping those families by creating conditions where businesses are prepared to invest and to take on new staff. And it’s why the Government’s welfare policies have an unrelenting focus on supporting people into work.The Budget provides $189 million over four years for the next stage of welfare reform.This includes funding for more intensive case management for people who are able to work and means that Work and Income staff will be actively working with over 40 per cent of beneficiaries.Mr SpeakerDespite the Government’s $15 billion investment in housing some people cannot get social housing assistance when they need it. The provision of social housing is also dominated by Housing New Zealand with relatively few other providers.The Government is therefore announcing three major changes.First we will begin developing pathways for New Zealanders in social housing to regain independence and self-sufficiency in housing as their individual circumstances permit and as alternatives allow.Reviewable tenancies which already apply to some Housing New Zealand tenants will then be progressively extended to all social housing tenants.This will mean people can be in social housing when they have high needs and for as long as those needs persist. But they will be given support to move into alternative housing when their situation improves and they are in a position to take that step to independence.This will free up houses for other people and families with high needs who would otherwise be shut out of social housing.The Budget contains funding of $47 million to support this policy starting in 2015/16.Second the Government is increasing its spending on income-related rent subsidies by $27 million over four years and will make this available as a capped pool to community housing providers.Opening income-related rents up to community housing providers puts them on an equal footing with Housing New Zealand and opens the door for much greater participation in the social housing sector.Finally housing needs assessments will be shifted from Housing New Zealand to the Ministry of Social Development. This means needs assessments will be independent of any housing provider and people seeking different types of government assistance can get it from one organisation.Mr SpeakerThe Government has made frontline health services a priority and this is benefitting many more New Zealanders and their families.Elective surgery procedures for example have increased significantly emergency room waiting times have dropped more MRI and CT scans have been performed and more children have been immunised.The Budget continues the Government’s focus on better healthcare and prevention.It includes $1.6 billion over the next four years for new initiatives and to meet cost pressures and population growth.$1 billion of that funding over four years will go to district health boards to cover demographic growth and cost pressures. $70 million has been set aside for aged care and dementia services $48 million for more elective operations $36 million for heart disease and diabetes care and $25 million for preventative screening services.The Government is also providing $92 million over four years to pay family members who care for their disabled adult children.The additional funding in the Budget takes the total health budget next year to $14.7 billion.Mr SpeakerThe Government is helping more New Zealanders get the skills they need to build successful careers and fulfil their potential.We are lifting student achievement at all levels of the education system making more information available to parents and lifting the quality of teaching and professional leadership in schools.We have set ambitious targets for student achievement. In particular we want to have 98 per cent of school entrants having participated in early childhood education and 85 per cent of 18-year-olds achieving NCEA Level 2 or equivalent qualification.The Government’s total investment in education will next year increase to over $9.7 billion.Over the next four years the Budget provides new operating funding of $173 million for early childhood education and $215 million for schools including nearly $80 million for operations grants. It also provides $134 million in capital for new school property.Our particular focus is on supporting children who have too often missed out on educational opportunities. The Budget therefore provides $41 million to support vulnerable children to participate in early childhood education and $6 million for a new mentoring programme to help vulnerable students achieve NCEA Level 2.Mr SpeakerThe Budget also includes over $130 million of new investment and reprioritised funding in tertiary education over the next four years.Extra funding is provided for Māori and Pasifika trades training to boost science and engineering courses and to increase the proportion of young people with higher-level qualifications.The Budget also confirms funding to support the new and expanded apprenticeship system the Prime Minister announced earlier this year.The reprioritisation of tertiary funding includes initiatives to increase repayments of student loans from overseas-based borrowers and reduce defaulting.The Government is also reining in big rises in student allowance costs by focusing on younger learners and on people studying for their first degrees. People aged 40 and over will be restricted to 120 weeks of student allowances while people aged 65 and over will no longer be eligible for an allowance.Students of all ages will continue to have access to the interest-free student loan scheme.The Budget also invests in expanding the Māori cadetship programme which will increase the number of cadets from 250 to 350 each year. I want to acknowledge Māori Affairs Minister and Māori Party co-leader Pita Sharples for his leadership and support in this area.Mr SpeakerOver the last four-and-a-half years the Government has had a comprehensive programme of reform to protect communities prevent crime and put victims first.This is delivering results.Reported crime has fallen by almost 17 per cent over the past three years.And our justice agencies are focused on areas that will get the best results in the future.The Department of Corrections for example is investing $10 million over two years to reduce offending by prisoners after they are released.And as previously announced the Police are investing more than $160 million over a number of years to give frontline officers access to new technology such as smartphones and tablets which means they can deal with issues on the street without having to return to the station to do paperwork.Mr SpeakerThe Government’s fourth priority is to support the rebuilding of Christchurch.Since the first earthquake almost three years ago the Government has made it clear that it will stand beside the people of Canterbury as they rebuild their lives and their communities.I want to pay tribute to my colleague Canterbury Earthquake Recovery Minister Gerry Brownlee and the many public servants community organisations and families who continue to work so hard to help each other through the many challenges that remain in their community.Considerable progress is being made. The SCIRT Infrastructure alliance has completed $700 million worth of work with another $400 million under construction. The demolition of nearly 1000 buildings in the Christchurch CBD has almost finished and the cordon will be removed at the end of June. And by the end of this month the Earthquake Commission will have completed 38000 repairs and paid out more than $5.3 billion in claims.The Treasury has recently increased its estimate of total rebuilding costs from $30 billion to $40 billion – the equivalent of almost 20 per cent of New Zealand’s annual GDP.The Government’s share of that total cost will be significant.On current estimates around $7.6 billion will be incurred by the Earthquake Commission and other Crown entities.Direct government support amounts to another $7.6 billion making a total Crown contribution of around $15.2 billion.Of the Government’s direct support $5.5 billion has already been allocated through the Canterbury Earthquake Recovery Fund which was established two years ago and is now fully committed.This Budget confirms an additional $2.1 billion of operating and capital spending to further support the rebuilding of our second-biggest city.Over $900 million of this funding comes from the Future Investment Fund for projects including redeveloping Christchurch hospitals establishing a justice and emergency services precinct and supporting tertiary education institutes.The Government is also investing $300 million in anchor projects for the Christchurch city centre. And almost $650 million of additional capital funding from departmental balance sheets will be used for health and education projects in Canterbury.Mr SpeakerNew Zealand is on the right track.The Government’s books are the envy of most developed countries.The economy is growing and families are benefitting from that.The country is seeing the benefit of improved public services that are focused on getting results.Things haven’t always been easy. But as a nation we have coped with adversity and we’re now making real progress.We are seeing the benefits of the Government’s programme of sensible responsible change.There are a lot of opportunities ahead of us as a country.Providing we stick to the plan the Government has set out I’m confident we will grasp those opportunities and keep building the brighter future New Zealanders deserve.Mr SpeakerI commend this Budget to the House.DAVID SHEARER (Leader of the Opposition): This is a blackjack Budget. This is a Budget where Bill English holds all the cards but has stacked the deck against ordinary hard-working New Zealanders. It is a game of winners and losers and those who lose out are the millions of Kiwis slogging their guts out every day. Those people are the backbone of this country and the engine of our economy and they deserve a Government that is better than this. Do not get fooled by the scraps that are falling off the table in this Budget. This is and always has been a Government for vested interests for casino giants for movie moguls for investment bankers and sharebrokers and for big noters self-promoters and National Party no-hopers. If there was any doubt about that we see today that Mighty River Power executives are getting $1.2 million in share bonuses—just a few hours ago. That is whom this Government stands for. That is why I move an amendmentThat all the words after “That” be omitted and substituted with the words: “this House has no confidence in the National-led Government because it has failed to deliver on its promises and because it has put vested interests ahead of the interests of hardworking New Zealanders.”This is not a Budget for the people. It is certainly not a Budget for the couple that I know of who are approaching 40 with two kids who still cannot get into their own home—afford their own home—because they do not have parents who can stump up with the deposit. That is becoming the way and the only way you can get into house ownership in Auckland. I know another family whose soccer fees are $100 for each kidwhich means that only the eldest of their three will get to play this season. These are parents who are well educated who are hard-working but who no longer believe that things are going to get better for them because under this Government all they have seen are broken promises. They have been let down by what has become a game show Government with host John Key glamorous assistants John Banks and Peter Dunne and together you will see them on your TV screens at night hosting “Fire Sale of the Century”. On “Fire Sale of the Century” everything is up for sale: farmland Mighty River Power Genesis Meridian Energy Air New Zealand labour laws gambling licences—you name it. It has all got to go.We have even hadDeal or No Deal with special guests of course Skycity. Big prizes are on offer. We have got hundreds of new pokies gaming tables and a one-time-only 35-year extension to a gambling licence if you happen to know the right people—if you happen to know the right people. To the taxpayer what do we get? Well we get a convention centre—except that Skycity still owns that as well. And it does not stop there. John Banks takes over the showWould I Lie to You and he is playing it as an in-court special. Peter Dunne stars in the ultimateSurvivor. Sometimes he outplays; he never outwits but somehow he always seems to outlast.Behind this game show there is actually a very tough and serious reality in our country. I have criss-crossed this country over the last year meeting thousands of people. They are decent people and they cannot understand why when they are doing everything right when they are doing what their parents said would get them ahead they still feel like they are failing. They are starting to understand that John Key cares more about his mates than their mates because the only time they have seen this Government stand up for anything is when it is fighting to protect its own privileges; not for those working hard—like the cleaner I know of who was working 40 hours at a hotel on a minimum wage. She was not able to make ends meet so she took on extra hours at a hotel down the road. But she was told that she could not do that because it was a conflict of interest. She is cleaning toilets for heaven’s sake. What conflict could there possibly be? But that is why this Government wants to be “more flexible” with our labour laws. It is easier to squeeze the little people like her who just want to get ahead with their families.And what about our vulnerable kids? Well I am like everybody else: I am surprised. Why? There is no food in schools in this Budget. It is because John Key would rather spend $40 million on private schools than spend it on kids who need to go to school with full stomachs. That $40 million would go a long way to feed a lot of vulnerable kids.But I have to say it is welcome that the Government has finally woken up to the fact that there is a housing crisis—woken up after we announced KiwiBuild’s plan to build 100000 affordable homes. But when you go through this Budget there is nothing in there that will guarantee more affordable homes—more homes for National’s mates but no more affordable homes. So if you are a first-home buyer or wanting to be a first-home buyer out there today watching this Budget I am sorry but it is nothing but disappointment in front of you. The only way to guarantee Kiwis affordable homes is to roll up your sleeves and build them. That is the only way you are going to get more affordable homes. We have had 4 years of this Government fiddling with the Resource Management Act and nothing has changed. House prices are continuing to skyrocket and the Government will do nothing to tax the speculators—the speculators who are making a killing pushing prices up.This Government’s only plan for getting ahead is to sell New Zealanders what they already own—already own. In 2017 because of the sale-down of our assets our books will be in worse shape financially than they are now because the dividends will havegone. Just a week ago or 2 weeks ago Mighty River Power was 100 percent Kiwi owned. Now 2.5 percent of owners own half of our asset. The reality is that this is a Government for the well-heeled and the well-connected.The reality is that this Government has been exactly that from the time that it came to office. This Government gave $2.25 billion in tax cuts to those people at the very top—at the very top. That is 40 percent of the cuts to the top 10 percent of New Zealanders and while other Kiwis are doing it tough—so tough that just last week the 200000th Kiwi got on a plane and flew to Australia with a one-way ticket. Two hundred thousand Kiwis have gone to Australia since that Government came into office because they cannot see a future here because the only future John Key is worried about is Skycity.When it comes to the future of millions of New Zealanders it is just too hard and he is too busy. Let me give you an example of that on why he will not be able to secure superannuation: “2020 is a long way away and there are a lot of things on my plate that I need to deal with in the here and now rather than things in 2020 and beyond.” He knows things need to change but he will not do anything about it because it is just too politically expedient to sit on his hands. In 2 more years according to this Budget our superannuation bill will exceed our education bill—in 2 years—and this Government will do nothing about it.So what does he think is more important than that? It is payouts bailouts and golden handshakes. It is breakfast with Ian Fletcher a cup of tea with John Banks and dinner with Skycity. Every time that man sits down for a meal with anybody they get something out of it. There is something in it for their mates. Just like the MMP review—if it is not about protecting John Banks and Peter Dunne then what is it about? He has ignored what New Zealanders actually voted for and there is a word for that—there is a word for that—and the word is “arrogant”.This Government is mired in broken promises. Budget after Budget its promises simply have not stacked up. In 2010 John Key promised a step change with 170000 jobs but since the last election the National Government has come up with only 8000. In 2011 it promised unemployment would be at 4.8 percent; it is at 6.2 percent. For 3 years we have been promised wages would grow by about 4 percent. Last year it was 1.7 percent and nearly half of Kiwis got no wage increase at all. Every year National promises a brighter future and every year New Zealanders are let down. This year will be absolutely no exception because National has created a two-speed economy: a fast lane for property speculators and a slow lane for first-home buyers; a fast lane for power company bosses and a slow lane for people who are struggling to pay their power bills; a fast lane for foreign and corporate investors buying our assets and a slow lane for our manufacturers and our exporters. Bill English keeps on saying that we are on the right track but quite frankly it is a track to nowhere.What we have heard today in the Budget is about tinkering. It is about pilot projects. There are more pilots in this Budget than in the entire population of Air New Zealand—Hon Shane Jones: Soon to be sold.DAVID SHEARER: And soon to be sold. We needed to hear today a Budget for every New Zealander—one that would have made a difference to everybody’s lives and one that would have given people real hope. That is what a Labour Government is committed to doing. We have the courage to make the big changes. We have the bold and innovative ideas that show what a smart active hands-on Government can really achieve because I want to create and build not just trade and sell off. Our ideas are practical they are responsible and they will change people’s lives for the better.Here is what Labour will do. We will bring down power bills for Kiwi families. National says: “No electricity prices aren’t too high.” apparently. We will reduce power prices for businesses so they can invest and create more jobs. National says: “Nojust let the prices go up.” We will build 100000 affordable homes. What does National say?Hon Members: No.DAVID SHEARER: Exactly—“No get back to us after the election.” We will tackle the high dollar that is crippling employers and what will National say about that? “No. You exporters you’re on your own. You get off and you are on your own.” We will expand KiwiSaver and secure New Zealand superannuation and what does National say to that? “That’s just too hard—that just doesn’t suit our vested interests.” We will raise the minimum wage to $15 an hour and champion a living wage. What does National say to that? “No we’re happy with a low-wage economy actually.” We will pay employers the equivalent of the dole to take on an apprentice but what does National say to that? “Let’s cut young New Zealanders’ wages instead.”We will live within our means. Has National been able to live within a budget for the past 5 years? No it has not. For 5 years it has run a deficit—unlike Labour which produced surpluses 9 years in a row. How is this Government going to get to surplus this year? By overcharging you on your petrol tax and overcharging you on your ACC levies. So the next time you fill up with petrol just remember where that surplus is coming from. It is coming out of your petrol tank. Our Budgets will get in behind hard-working Kiwis create jobs and they will grow the economy. People are doing their bit and they expect the Government to do its bit as well. That is what should shine through every Budget year after year. That is what I am committed to.In a minute you will hear from John Key and we will hear the one-liners the weak excuses and the scaremongering and most of it of course will focus on the Labour Party with little about what he will do although I am sure he will try to convince us about the nirvana that is waiting at the end of the tunnel after we sell off all our assets. But at the very heart of this Budget there is another deficit and that deficit is one of ideas because what this country really needs is a Government that has the courage to take on the big changes a Government that will give hope—a Labour Government. We have had enough of the game shows and the “Wheel of Misfortune”. Someone should give John Key a vowel because his Government is “O for awful”.In the immortal words of Aaron Gilmore and General Patton: “Lead follow or get out of the way”. Well John Key you have had your chance. Follow Aaron Gilmore and get out of the way because I will lead a Government that puts the interests of New Zealanders first ahead of vested interests—a Government that puts people first. Thank you.Rt Hon JOHN KEY (Prime Minister): That was truly awful. It was like watching MY SKY on half speed. I found myself desperate to change the channel but under Labour you are allowed to watch only one channel. That is the way it goes. That contribution from the Leader of the Opposition was a contribution he made after he recently returned from his economic fact-finding mission to North Korea. You see I thought that the days when a Labour leader no longer wanted New Zealand to be a Polish shipyard were gone but in fact it is quite the contrary. Mr Shearer yearns for New Zealand to be a Polish shipyard. But I have got a bit of bad news for Mr Shearer. Firstly Poland has already moved to partial privatisation. It has abandoned the single buyer of electricity and by the way it has a convention centre. Anyway credit where credit is due.The Labour Party has finally adopted one of the very sensible policies of the National Government and that is the mixed-ownership model. That is right. These days the Labour Party is 51 percent owned by Labour and 49 percent owned by the Greens. Yes these two parties have come together in this happy little place where fruit meets loop. That is where they are. Like one of the most famous combinations of all timeSherlock Holmes and Dr Watson it is “Sherlock Shearer” and “Dr Norman” in search of solving the mystery and this one isThe Hound of the Baskervilles. According to them Bill English is the devil-beast that haunts the moors that New Zealanders live on. Sadly for our two would-be crime solvers it turns out that the devil-beast is not only a thoroughly competent Minister of Finance but the envy of the Western World. Far from being someone who wants to haunt the moors he wants to build tens of thousands of homes well-insulated and affordable on the moors. He has got this funny quaint little notion. He wants New Zealand to earn money not print it. That is the way he wants to go. He wants to support enterprise. He does not want to regulate for monopoly. He is a man who supports businesses big and small. He is a person who cares about individuals rich and poor and that was on display in his Budget here today. Like all great Sherlock Holmes mysteries there is a twist in the tale and the twist is as simple as this: the devil-beast is the Opposition not the Minister of Finance.Let us have a little history lesson because you did not get any of that in David Shearer’s speech. We came into Government in late 2008. This is the fifth Budget that has been delivered by a National Government and by Bill English. It is a sensible and thoughtful Budget and I do want to start by thanking the Government’s support partners John Banks and the ACT Party Peter Dunne and United Future and of course Tariana Turia Pita Sharples and the Māori Party who have worked hard for solid stable progressive Government in this country.But let us put a bit of a reality check into this debate. The Opposition members have got their heads down because they do not want to acknowledge the facts. They have got their heads down because they do not want to know what really happened. We came into Government in late 2008 and Treasury said to us: “This is what’s happening—there is a global financial crisis.” Actually it turned out to be the worst crisis since the Great Depression. That is what happened. We came in and inherited basically a decade of mismanagement by the previous Labour Government and wasteful spending it could not afford. We came into office when economists were saying the unemployment rate would rise to 10 percent or maybe 11 percent. And all of that happened before the Christchurch earthquakes which we now know cost the economy north of $40 billion overall. That was before there were droughts before there were floods and before there was a recession so deep that it claimed yet another victim in Europe earlier this year in the form of Cyprus.So what does Budget 2013 tell us? It tells us that this Government and this country will be back in surplus by 2014-15. Actually next year the deficit will be under 1 percent of GDP. This is a country that will have a deficit of $2 billion. In case no one noticed I point out that a couple of days ago in Australia they announced a Budget deficit of $20 billion and they have had commodity prices rising much faster than we have had in New Zealand.But it gets a little more interesting than that because when we came into office—and Labour members know it; that is why they are looking in their books because they are trying to work out where they went wrong—Treasury said: “This is the way it is: a decade of deficits. You’ll never be back in surplus. Debt to GDP in this country will be 60 percent by 2020.” What does Budget 2013 tell us? Under the economic leadership of Bill English this country will be back to having a debt-to-GDP ratio of 20 percent—not 60 percent but 20 percent. So when David Shearer says that Bill English and the National Government do not care about the people of New Zealand well guess what? We care enough to make sure that they do not have an additional $60 billion or $70 billion worth of debt around their necks. That is how much we care. We care enough to ensure that we have now got an unemployment rate that is 6.2 percent—the 11thlowest in the developed world. We have a growth rate that was 3 percent last year and ispredicted to be 2.5 percent or 3 percent. We have an inflation rate under 1 percent and we have interest rates at 50-year lows.Mr Shearer had the audacity to get up and try to argue that under a Labour Government New Zealanders got more money. Well no they did not. It all went away in inflation—the whole lot. They paid interest rates twice as high as under this Government. They went backwards. The only reason Labour could finance its wild spending patterns was that New Zealanders borrowed tens of billions of dollars. The party is over and it is New Zealanders who are having to pay it back because they did not get any progress under a Labour-led Government. You did not hear David Shearer saying what external analysts think of this National-led Government—not a word not a peep not a sound out of him about what the rest of the world is saying. When Christine Lagarde the chief executive of the IMF came out and said: “I like what this Government is doing. This Government is getting the big issues under control.” there was not a word from David Shearer about that.The week before last something pretty interesting happened. Standard and Poor’s said this country is the ninth least risky country in the world to hold Government debt in—the ninth least risky. That does not sound like failure to me.So let us just take a moment to talk about some of these policies. Let us go to housing and I mean a real solution to housing not some illusion that is purported by people who started at one position said something was affordable and they would deliver at one rate and backtrack within 5 minutes before they could even get anywhere near there. No no I am talking about a real comprehensive solution. So what has the Government announced today?Phil Twyford: Tinkering with the RMA.Rt Hon JOHN KEY: Well OK let us talk about that then. So now we are going to have a National-led Government that with the support of Auckland Council will produce 39000 new dwellings—real dwellings—in the next 3 years. That is way above what is currently being delivered. In terms of social housing and helping people in need Labour reckoned it cared about those people but it did not care enough to insulate their homes. It did not care enough to make sure there was not mould on the walls. It did not care enough to make sure they were actually upkept. Labour members just said: “We’ll come into the Parliament and tell people we’ll build a few more houses and we will just forget about the fact that 70000 people are living in homes that are not fit to be lived in.” Labour members did not care about those people.This week this Government announced Project 324. You did not hear that from David Shearer but this Government stood up and said we will be building 2000 extra bedrooms on existing houses in Auckland which will help ensure that larger families have more accommodation so that issues of overcrowding and rheumatic fever can be dealt with. It is worth hundreds of millions of dollars. This Government cares about all New Zealanders. This Government when it came to the issue of insulation did not just talk about it. We did not just talk about it. Oh Labour had plenty of money to spend on all sorts of wasteful things but when it came to New Zealanders being warm oh it did not care about that. It had 9 years in Government and did basically nothing. This Government will have 230000 homes insulated in 4½ years. And what is more $100 million in this Budget with the support of the Māori Party is going out to the most at-risk families in New Zealand with 46000 extra homes to be insulated. But oh no that did not get a mention from David Shearer because he does not want to admit to those families that actually a National-led Government cares about all New Zealanders—it cares about all of them.If we want to talk about homeownership the fastest way to ensure that someone can afford a home is to make sure that they can afford their mortgage and to do that youneed good fiscal management. You need to make sure inflation is under control. You need to make sure that interest rates are low.This is a Budget that cares about growth. It puts $158 million into tourism and attracting more tourists from new emerging markets like Latin America Indonesia and China—high-end tourists tourists coming for business tourists coming to a convention centre. So let us just talk about that convention centre. That is right. Labour had 9 years where it sat around and did very little. Oh that is right—no it did do one thing. It built a convention centre which Helen Clark went out and opened which was paid for by 230 pokie machines and Labour members all celebrated because of the economic measures. But when National gets one which by the way is three times larger and a way better deal it is an outrage—an outrage. I will tell you what: Helen Clark will come to the opening of this one if she is in town because she knows that it is good for the economy. She knows that it is good for New Zealand.Hundreds of millions of dollars in this Budget will be pumped into science and innovation—for example to Callaghan Innovation. Right across New Zealand $200 million over 4 years will be put into science and innovation. There will be more money for research and development grants for National Science Challenges and for the Marsden Fund.Let us move to the mixed-ownership model and what a success the float of Mighty River Power was. What a success. We hear all this nonsense that New Zealand has given some asset away. New Zealand has given New Zealanders a chance to invest. Majority control has been retained by the Crown. By the way it is the same model under which Air New Zealand has been operating established under a Labour Government. It never ever campaigned to buy back the bit that it did not own even in the 2011 election. Mighty River Power has more retail investors in it than any other stock on the New Zealand Exchange. And where do we want those New Zealanders to invest? Well I say New Zealand. I say New Zealand. David Shearer wants them to invest in Australia. He wants them to invest in other markets. He does not want them to invest in New Zealand.The doozy of all the statements in his speech came when he said: “Oh by the way the accounts are going to get worse because the Government won’t be getting the dividends.” Does he remember that about 3 weeks ago he announced a policy with his mate there “Dr Watson” that he is giving away the dividends? They will not be arriving in any form to a Labour-led Government. Oh yes the Labour members talk tough about Mighty River Power Meridian and the other shares but will they talk tough to the people of Christchurch who are getting a state-of-the-art hospital facility? No no no no no—that is all OK. That magically appears when Russel Norman prints some money. That is all fine. It does not really matter.What about the $50 million that is going into internet connections for our schools up and down the country so that young learners can get internet connections? You will not see David Shearer or Grant Robertson going out to those schools and saying: “Hey kids you can just have dial-up.” Because that is what you would get under a Labour-led Government. It is like MY SKY on half speed. Do not worry because the Labour Party will not mention that. You will not get the $80 million going to irrigation around New Zealand. There is a lot happening in this Government.Let us look at health and education for just a moment because they are critical issues. In health this is a Government that has delivered. This is a Government that has hired 1000 extra doctors and 2000 extra nurses. There is more money for rheumatic fever more money for maternity care and more elective surgical operations. This is a Government that has spent health dollars well. This is a Government that has gone out there and said that we care about that. This is a Government that is also going out thereand saying to the most at-risk New Zealanders that we care about them. There will be insulation for their homes. We will be making sure there is money for rheumatic fever. Yes there will be some money for hungry kids. Yes there will be money for better budgeting services. Yes there will be a whiteware procurement policy that helps people out.This is a Government that says to business that we will get on top of those ACC costs that you inherited under the mismanagement of Labour and we will cut them to the tune of $1.5 billion. And in education we will carry on the great work we have done of getting more kids into early childhood education and more kids into National Certificate of Educational Achievement making sure that our schools have 21st century learning capability and literacy.Let me finish with this. Budget 2013 shows that after 5 years of a centre-right Government this is what building a brighter future looks like delivering for New Zealanders. And by the way guess what happened today? That is right. The manufacturing numbers came out and the Performance of Manufacturing Index showed that the sector is expanding again month after month after month. The only crisis I tell you is not in the manufacturing sector; it is in the leadership of the Labour Party. But do not worry because there is only 51 percent of its leadership. It has got 49 percent over there with Russel. And speaking of Russel Norman when the unemployment rate dropped to 6.2 percent from 6.8 percent he said that that was an epic failure. I would hate to think what he thinks success is. It is as simple as this: the election will be fought in 2014 on the economy. Bill Clinton once said: “It’s the economy stupid.” People will be looking at a Government that has managed to work its way through by making sure that this country earns more money and does not have to borrow it or print it.This is a Government that has delivered competitiveness to our economy. This is where real jobs are delivered and where real growth takes place. The election will be about National versus that devil-beast. I know whom I will be voting for and it will not be the devil-beast.Dr RUSSEL NORMAN (Co-Leader—Green): That was a particularly angry and bitter Prime Minister for a Prime Minister who has just delivered a Budget but there you have it. I guess when you are the Prime Minister of a Government for the 2 percent and of the 2 percent that is how you feel about your Government.The Government gifted billions of dollars in tax cuts to the top 2 percent. It then transferred ownership of Mighty River Power from the 100 percent of New Zealanders to the 2 percent. The other 98 percent—well they got to pay higher GST and higher electricity charges while the 2 percent—[Interruption]Mr SPEAKER: Order! The level of noise from the corner over there is too loud and unreasonable for the member trying to give his speech.Dr RUSSEL NORMAN: Thank you Mr Speaker. National Party members do not like the truth. They do not like to hear the truth—that National is a Government of the 2 percent for the 2 percent. It was 2 percent of New Zealanders who got given ownership of Mighty River Power and it was 98 percent of New Zealanders who lost ownership of Mighty River Power and who have to pay higher taxes higher GST and higher electricity charges.The three key challenges facing the New Zealand economy are how to deal with the growing current account deficit how to deal with the growing environmental deficit and how to deal with the growing social deficit. This Budget makes all three deficits worse. It is another triple deficit Budget. New Zealand’s external deficit with the rest of the world is now over $10 billion a year and rising under this Budget to $17 billion a year by 2017. We are funding that by more offshore borrowing and by selling assets to foreigners.Our environmental deficit can be seen in our growing greenhouse emissions and the widespread contamination of fresh water from Northland to Southland. Groundwater in Canterbury is now so contaminated with dairy runoff that it could literally kill an infant if they drank it according to the medical officer of health. Our social deficit is seen in the rapid growth in inequality and poverty Third World diseases like rheumatic fever and an impossibly expensive housing market. This Budget from the Government of the 2 percent makes economic environmental and social deficits worse. But before I deal with these critical issues facing the New Zealand economy more broadly I want to discuss the Government’s much-lauded possible return to surplus by June 2015.After the National Government’s record $46 billion borrowing spree to pay for amongst other things tax cuts for the wealthy and pork-barrel motorway projects the National Party is slowly finally getting its out-of-control borrowing under control. But Bill English still plans to borrow $70 billion by 2016-17—that is right $70 billion. That is $15000 for every person in the country under this big-borrowing Government. Future New Zealand taxpayers will pay dearly for this borrowing spree one of the worst in the OECD.Since the global financial crisis the increase in net Government debt as a percentage of GDP by this Government is worse than Australia worse than Poland worse than Italy worse than Denmark worse than Canada worse than the Netherlands worse than Chile worse than Austria worse than Belgium worse than Hungary worse than Estonia worse than Germany worse than Mexico worse than Korea worse than Finland worse than Israel worse than Switzerland worse than Sweden worse than Turkey and worse than Norway. I suppose we should take heart that National did not borrow quite as much as the Governments of Greece Spain Portugal and Ireland. National inherited Government accounts that had virtually zero net debt.The previous Labour Government had paid down Government debt against the opposition of the National Party who said that the surpluses should be used to pay for tax cuts for the rich rather than to pay down the Government’s debt. The Labour Government did not do so well on current account deficit but on Government debt reduction you really could not fault it. If the then National Opposition had had its way the New Zealand Government would have hit the 2008 global financial crisis with high Government debt and hence less fiscal headroom to buffer the effects of the global downturn.So after opposing the reduction in Government debt Bill English came into office inheriting zero Government debt. The first thing Key and English did was to give away $2 billion a year to upper-income earners. Then they came up with a wish list of $12 billion in pork-barrel new motorway projects without business cases—they just picked them for electoral reasons. The Government books then turned savagely into the red and National started to build up Government debt once again.It then told us after the big tax cuts for upper-income earners that there was not enough money in the Budget so there would have to be cutbacks there would have to be asset sales and it would have to increase GST for middle and lower income New Zealanders. So there were cuts to night classes cuts to the Department of Conservation and we were told that we had to sell electricity assets to pay for school buildings and for irrigation subsidies for National’s donors.Today the Nats crow about the projected potential Budget surplus. Only in an Orwellian world would the party that did everything to undermine the Government’s accounts get any credit for any potential return to surplus. But the more important issue is whether the Government’s Budget balance is the biggest issue facing the New Zealand economy anyway. Bill English certainly did not think so in the past. He said in his Budget 2010 speech: “New Zealand’s largest single vulnerability is now its largeand growing net external liabilities.” He said that the growing interest bill from that rising debt was a drain on our incomes and a drag on the economy.Later that year he promised more saving less debt-fuelled consumption and a continued shift away from leverage property investment. Well we saw what came of that in the housing market. He used a Treasury chart—because Treasury backed him on this—to show how the tradable sector the internationally competitive part of the economy comprising exports and import-competing industries actually shrank in the 5 years from 2005 to 2010. By contrast the non-tradable sector the spending part of the economy grew by 15 percent.All these statements from Bill English highlighted the imbalances in our economy as a major problem that National planned to fix. We publicly agreed with Bill English’s analysis of the problem even if we were sceptical of his solution. Of course the Greens had been calling for action to rein in the current account deficit for many years before with the then Labour Government when the country also had massive current account deficits. Today after 4½ years of a National Government we are holding National to account. Has National’s management of the economy produced a rebalanced economy?Treasury and Bill English no longer produce the tradable versus the non-tradable graph—surprise surprise—so we had the Parliamentary Library update it. It turns out that things are getting worse. If you look at the spending side of the New Zealand economy according to Bill English’s graph that is growing at a great pace while the internationally competitive part of our economy has stagnated. In fact in the last quarter of 2012 the tradable sector actually contracted. So using Bill English’s own favourite measure of responsible economic management—that is the tradable sector versus the non-tradable sector—it is clear that economic rebalancing is failing. That is the real story of this Budget. As a country New Zealand is borrowing to fund its consumption and as with so many things National has no idea what to do about it. National figures that as long as the top 2 percent are getting richer it does not matter whether the country as a whole is getting poorer.The metric that effectively aggregates all measures of rebalancing across the economy is the current account. The current account is the key economic measure of the success or failure of the broader economy. It is a far more important measure than whether the Government is in surplus or deficit because it tells a story of whether the country is in surplus or deficit. Today we see that the country’s deficit is getting much much worse. New Zealand’s current account deficit is one of the worst in the OECD second only to that of Turkey. It is currently 5 percent of GDP and projected by Treasury to continue to widen to 6.5 percent of GDP in 2017. The average deficit within the OECD is less than 1 percent.The International Monetary Fund estimates that New Zealand’s current account deficit will be the worst in the OECD every year until 2018 which is the end of its forecast period. There are only two ways to finance the country’s massive current account deficit: either through further overseas borrowing to pay the interest on the money that we have already borrowed or through selling assets to foreigners. Borrowing must be serviced by future generations of New Zealanders. Selling assets means that we are literally selling the productive capital and land out from under our feet. It is no surprise that the Budget today projects that the net debt position of the country will increase to 81 percent of GDP by 2017. That is over $200 billion in net debt that we are going to owe to the rest of the world or around $43000 for each and every New Zealander. That will be the legacy of this National Government.This Government has not made the hard smart and courageous political decisions for the long-term good of our nation. It is our children who will ultimately inherit a country that is less economically secure increasingly owned by foreigners and offeringfewer opportunities for those children to be the dynamic creators of their own destiny. They will leave as so many have before particularly under this Government. But I want our best and our brightest to have a reason to come home again.In 2010 I found myself strongly agreeing and supporting Bill English’s vision for a rebalanced economy even if we did not believe that his tax cuts for the wealthy would deliver that rebalancing. So now we find ourselves in the slightly unusual position of wanting to finish the work that Mr English identified and then abandoned—that is the work to rebalance our economy. Economic rebalancing will be a key priority for the Greens in Government as you cannot have a smart Green economy without it being economically sustainable. Genuine rebalancing can be difficult because you have to manage the economy with a long-term view in mind not just the next election. Genuine rebalancing is not for politicians focused on the short term. Genuine rebalancing is as far as the Green Party is concerned the only responsible way to run an economy.So how do we propose to rebalance the New Zealand economy? We have a package of solutions but today I want to focus on just three. Firstly the Green Party has the courage to implement a comprehensive tax on capital gains excluding the family home. We have been advocating a capital gains tax for years and it is heartening to see Labour coming on board. A capital gains tax would drive investment from property speculation into the productive economy assisting rebalancing. A capital gains tax would help take some of the heat out of the rising house prices in Auckland while simultaneously helping the Government to balance the books. A capital gains tax would lower demand for mortgage borrowing partly funded from overseas easing upward pressure on the exchange rate.Secondly we also have to address monetary reform if we want to deal with the housing bubble and the overvalued currency that is destroying the tradable sector. We would give the Reserve Bank a broader legislative mandate to look beyond just inflation and look at the external imbalances. This would enable a lower official cash rate to take pressure off the currency helping the export and import competing sectors. We would work with the bank to accelerate the use of new tools for managing non-tradable inflation and asset bubbles. The announcement in today’s Budget is a case of too little too late.Furthermore nearly every central bank in the world is getting active about defending their economies many by using quantitative easing or publicly created money. Having considered all the feedback on our proposal to use quantitative easing or QE to help bring down the value of the New Zealand dollar I still think there is value in running a trial programme of refilling the Natural Disaster Fund with offshore assets paid for by using quantitative easing. The private banks are allowed to create money for private profit; I do not see why the central banks should not be able to create money for public benefit.At the moment our Natural Disaster Fund is completely empty. In fact it is negative. If there is another disaster soon there will be literally no funds to cover the cost meaning we would need to borrow to pay for it and of course we would be borrowing freshly printed money from offshore central banks—the irony. Using quantitative easing in this targeted way is a good way of measuring how effective it can be at putting downward pressure on the dollar while putting the resource into an important area where it is needed—funds to pay for a potential disaster. The Reserve Bank has finally conceded that you cannot be a pacifist in a currency war and is currently using its limited reserves to intervene in the currency market in an underpowered attempt to lower the dollar. It needs more firepower and quantitative easing can provide that firepower.Thirdly we need capital market reform. Ninety four percent of our banking sector is foreign owned and constitutes the single largest component of capital drain out of New Zealand. Record bank profits are strip-mining the country of much needed capital. The Government has a market mechanism to slow down the capital drain from New Zealand. It is called Kiwibank. We would strengthen Kiwibank—thanks Jim Anderton—by allowing it to retain more of its earnings so it can grow faster. We would also add further capital injection if necessary so that it can scale up to really take on the Aussie banks. We want to help build Kiwibank into a sophisticated retail and commercial bank so that it can compete. A stronger Kiwibank is great for economic rebalancing.I want to move from the economic deficit to the social deficit. When Bill English unveiled his centrepiece tax shift in Budget 2010 he promised it would work to rebalance the economy. We now know that was not true. We do know however that the tax cuts for the wealthy and the GST increases for the rest have made New Zealand more unequal. The gap between those who have a lot and those who have a little is now the widest it has ever been. New Zealand has gone from being one of the most equal countries in the developed world to being one of the most unequal. This is a dark social and economic legacy one that hurts us all but falls heaviest on our children especially those unlucky enough to be born into the most vulnerable families.One quarter of all New Zealand children are growing up in poverty—that is about 270000 kids. They are our friends’ children. They are our neighbours’ children. They are the children of our colleagues and acquaintances. They are our nieces and nephews. They are our mokopuna. They are our children. Bill English told us this week that he does not know how to fix child poverty even though he knows how to create child poverty. The Budget delivers virtually nothing to address poverty. It is more important to National to deliver a 0.05 percent surplus than to deliver for our poor kids. Budget 2013 feels more like crumbs for kids rather than an honest meal and maybe it is not even crumbs.There are solutions to child poverty if you have the courage to find the ways to fund and implement them. We need a finance Minister who understands the economic cost of not addressing child poverty. Child poverty costs $6 billion a year. This is a conservative estimate and it does not cost that much to end it. To implement our solutions to bring 100000 kids out of poverty would cost approximately $360 million a year for the next 3 years. A more equal New Zealand is a happier less divided place to call home.Then there is the environmental deficit. If you love spending weekends at the beach exploring our national parks or swimming in your local river this is not a Budget for you. National is funding the rapid expansion of irrigation before establishing strong environmental standards around water. Since 2007 an area the size ofLake Taupō and Lake Te Ānau combined has come under intensive irrigation. National is planning to increase it by the same amount again. National is toxic to our rivers. National has rolled out the red carpet to foreign oil companies to drill for deep-sea oil before it even knows how to plug a deep-sea oil well if it goes wrong. National is toxic to our oceans.The Department of Conservation is being forced to cut jobs. In total 161 Department of Conservation jobs have gone under National’s watch. The jobs are from the front line—the jobs of the people who work to protect our biodiversity. National is toxic to our wild places. The taxpayer subsidies being paid to greenhouse gas emitters mean that New Zealand’s emissions are continuing to increase even as the global level of carbon dioxide hits 400 parts per million. National is toxic to the climate.When National took office it told us that a key measure of its success was the rebalancing of the economy. Now 4½years later we can definitively state using itsown figures that National has failed to rebalance the economy; that is why the word was never mentioned in the speech. Budget 2013 has focused on the potential end in sight for Bill English’s borrowing binge. I guess that is a good thing but stripping it back a layer we see that this possible fiscal surplus is a house built on sand. Tax cuts for the 2 percent and asset give-aways to the 2 percent are not smart ways to run an economy for the long term.A smart Green economy would involve making some of those courageous decisions that would shift our economy on to a more sustainable and resilient footing. A smart Green economy would protect our environment because our economy depends on our environment. A smart Green economy would see our growing rates of child poverty as unconscionable. The Greens have the courage to run an economy in the long-term interests of 100 percent of New Zealanders but more than that we care not only about the 100 percent of New Zealanders today but also about the generations yet to come. Thank you.Rt Hon WINSTON PETERS (Leader—NZ First): Our first reaction to this Budget was to call the Serious Fraud Office. Never in the history of this country has a Government so blatantly cooked the books and it was not even clever. This is financial deceit on a grand scale. The boast about balancing the books would see a company accountant in the court being prosecuted for fraud. Any balance towards the black out of the red is achieved first by selling assets like Mighty River Power and soon Meridian Energy in October this year with more State assets yet to come; and second by not spending significant amounts in last year’s Budget on key items like health education and overseas aid as well as deliberately delaying Treaty settlements promised in last year’s expenditure. So why would anyone trust today’s announcement? Last year for example the Government got up and said that it was going to spend so much on all these items. Well this is what happened. NZAID which is our international standing underspent by $96 million—a massive amount—deliberately so. Then you have got the Ministry of Business Innovation and Employment—a massive $91 million underspent. Education—a massive $64 million underspent. Health—underspent by a massive $57 million. It was item after item of non-expenditure on items promised last year to give you some artificial surplus promises in 2013 1 year later.Mr Key Mr English and Mr Joyce will claim that this Budget is responsible prudent fit for our times brings gains after 5 years of pain is next year’s surplus and is a confidence booster but I notice that there are a lot of nervous MPs right now sitting in their offices because they know that this rescue craft will not get them home in 2014. That is what they claim of the Budget—that it is responsible prudent fit for our times brings gains after 5 years brings next year’s surplus and is a confidence booster. Not one of those claims is true. Here are the facts. This Budget is consistent with every Budget since 2009. But if that has any merit why since the 2008 era of the three financial stooges have more than 200000 mainly young New Zealanders left New Zealand? Not one of those backbenchers or Ministers can front that bald glaring stark fact. What has happened to the 170000 jobs in 4 years promised by John Key in the 2011 campaign? What has happened to the export-led growth promised in the “rebalanced economy”? If any of today’s claims had merit there would be positive answers to those three simple questions.Over 200000 Kiwis have left New Zealand because they cannot get a job in their own country. Of the 170000 jobs promised Mr Key Mr English and Mr Joyce have found 8000—8000. As for export-led growth well the difference between our income from exports against our payments for imports and interest payments is a giant black $10 billion hole unparalleled in any other First World economy. It is worse than Portugal worse than Ireland worse than Greece and worse than Spain. PortugalIreland Greece Spain—the so-called PIGS. Well if they are pigs what has National made New Zealand? We know and we will tell you. Again “The Three Stooges” claim that there will be GDP growth. In short the economy has grown by somewhere between 2 and 3 percent. Much of that is from the Christchurch rebuild. I notice that now we are second in the Pacific Island countries after Australia. Australia is first way ahead of us then it is New Caledonia on 3.4 percent and then New Zealand. How did that happen? Much of the growth would come from the Christchurch rebuild but apart from Fletcher’s who is getting the benefit of this growth? Who is benefiting? An elite handful domestic and foreign or the mass majority of ordinary everyday Kiwis? The answer is clear. Since 2008 the per capita income—that is wages or earnings per person—has barely moved. Ordinary Kiwis are struggling. Meanwhile the cost of everyday living has skyrocketed. Electricity rates insurance the shopping basket—you name it; it has all gone up. And do not boast about interest rates. Kiwis are paying four times the home interest rates of the US Britain Japan and Europe and paying twice the credit card rates.So what pray tell me have these geniuses Mr Key Mr English and Mr Joyce turned us into? They have created an economy that reduces the mass majority of New Zealanders to the status of mice on a treadmill. They have created an economy that reduces the mass majority of New Zealanders to the status of mice on a treadmill. It is a bit like this treadmill here you see? It is a bit like this. They have to run faster and faster to stay in the same place. The rich and powerful elite who run the world’s financial system created a global economic crisis. I know that some of my National Party critics recognise the animal on this treadmill. It is called Steven. It has got hair so it must be a young Steven. But I know what they recognise. There is something that they see an affinity to.New Zealanders have to run faster and faster to stay in the same place. Ordinary people pay the price. This is a Budget devised by the rich and the powerful for the rich and the powerful. The rest of us stay like a mouse on a treadmill.Hon John Banks: You’re the mouse.Rt Hon WINSTON PETERS: The rest of us stay like a mouse on a treadmill. Mr Banks never even got up to clap for his leader. Oh he was strangely silent. Oh mind you so was the Māori Party and so was United Future. There they were all sitting not prepared to salute their leader. The rest of us stay like a mouse on a treadmill. If we look back at our recent history the road New Zealanders have been forced to follow has always led to this treadmill. Like a mouse chasing a bit of cheese—David Bennett: You always have been going round in circles Winston so it won’t make much difference.Rt Hon WINSTON PETERS: Look just because you can see your relation do not get so excited. It started with Roger Douglas. You know in the 1980s when Labour threw New Zealanders to the wolves of the world goaded by the half-baked theories of mad monetarists those monetarists came to the conclusion—Hon John Banks: Winnie who wrote this?Rt Hon WINSTON PETERS: Now Mr Banks for you it is “Sir” over here. I mean we are staying here after the next election; you are going. You are a goner. Mr Banks your party is toast. They came to the conclusion these mad monetarists that the only road to success was to secretly restructure the place and sell it. What they actually did was start the first run of the treadmill.In the 1990s the National Party promised—Mr Banks was there—to stop the treadmill but in reality we made the treadmill spin faster. New Zealand First slowed it down in 1996 when we came to power and to be fair a reformed Labour tried to keep the brakes on between 1999 and 2008. But of late the same rogues are back in place andthe treadmill has started again and it is picking up speed. We have to stop the treadmill take New Zealanders off it and give them a real economic and social future.Our once great history was one of nation building and looking after our people. This Government is selling Mighty River Power and Meridian Energy to put money in a Future Investment Fund. It is all there in the Budget speech. That fund is used to pay for schools health and the like. Those things used to come from the consolidated fund. That means that past generations are paying now to keep the country afloat. So thanks Grandad and Grandmum—you built those power stations now you are going to build all these new things while these people try a giant creative accounting fraud on the people of New Zealand. Do not forget the surplus next year is created by swallowing up nearly all the Mighty River Power float. The surplus is $75 million for 2014-15. What was the price of Mighty River Power? It was $1.7 billion. So it is $1675 million short and the Minister of Finance has the audacity—as a Treasury-trained person with a fiscal responsibility bill before a select committee—to get up here and think he can pull that con on the country.How did we lose our great vision? Why is New Zealand today a high-price low-wage economy? Many of our workers are in jobs that pay wages upon which they and their families cannot survive. Recently this Government gave the Mighty River Power directors pay rises of 70 percent or more than $45000 a year. The workers were given a rise of 25c an hour—another spin on the treadmill Mr Banks. There was a time when lead managers of New Zealand power operations got four times the workers’ wages. Today it is 30 times the workers’ wages. If I was in the Māori Party or the ACT Party or the United Future party or if I was a National Party backbencher I would not laugh at that because all I can see is electoral suicide when I hear those figures and you will hear more about that as the months roll by. No wonder these egregious self-serving few are cheering from the rafters due to a few crumbs thrown to the mice today. Even the mice have to be kept alive.It is really hard for the strugglers. We have already shown the plight of the workers. Not only do they have to survive on low wages but they have to compete against a flood of cheap imports made by cheap labour—[Interruption] If I was going to court shortly to explain why I got 42 cheques and cannot remember one of them I would keep my mouth shut. I would spend all my time with my barrister. I would get myself a psychologist to try to explain deliberate amnesia. I would not be here barracking the fastest-growing political movement in New Zealand called New Zealand First.Hon John Banks: Oh Winnie you’re deluding yourself man.Rt Hon WINSTON PETERS: Oh we all know that it is true. Half the ACT Party people wanted to come and join New Zealand First and I said no we will not have fascists.Hon John Banks: Name one.Rt Hon WINSTON PETERS: Families are hit with higher food costs. Name one? What about the man called Eckhoff who was an MP for the ACT Party? He wanted to join us.Hon John Banks: Who—who?Rt Hon WINSTON PETERS: That man Eckhoff who was an MP. John Banks does not even know him because when Eckhoff was a good member for the ACT Party John Banks was not even a member of it. He is only a temporary fill-in. We know that. Mr Banks keep quiet. You never were any good at this game.The household disposable income forecasts in this Budget are an illusion. What about the manufacturers and exporters running to stand still on a treadmill of soaring costs and an overvalued dollar? You know sometimes you have got to have luck on your side because today our Reserve Bank member’s bill got drawn again for thesecond time in 2 years. This is an all-time record and we feel that the force is with us. Our message to the manufacturers and to the exporters is “Hang on men and women out there in manufacturing and on farms help is on its way.” What about small business—what about small business? Go to the industrial suburbs of our cities like Pētone. There are streets of empty warehouses and factories. What about the police? We gave them an extra 1000 front-line police when we last had the reins of power. National is cutting these numbers back. The crime industry is being contracted out to the criminals. Everyone knows except the ninth floor of the Beehive that Whānau Ora provides funds to the Mongrel Mob. We all know that. What about health services? What about home help for the elderly? Everyone is on a treadmill except the Government’s fat cat mates. They live off the struggle and the sweat of the mice on the treadmill.The housing crisis continues with a few patchwork and piecemeal ideas revealed in this Budget. The very idea of cheap infill housing sends a shudder through everybody and anybody who has seen the industrial housing estates of Britain and Europe. The Government’s idea of infill housing will create giant transit camps across Auckland. The results overseas show that these housing estates become breeding grounds for crime poverty and misery. What about the elephant in the room about which nobody in this country will speak except New Zealand First? We know that mass immigration is being used to prop up New Zealand’s consumer demand on our economy and to replace the mass of Kiwi flights abroad. Most of these new arrivals are going straight to Auckland. Auckland has got a giant housing infrastructure and roading problem—none of which our biggest city will ever solve—Jami-Lee Ross: We’re solving it.Rt Hon WINSTON PETERS: —until we address the elephant in the room that a sea of political correctness dares not face. We do not want the young pup from out there in Howick telling us: “We’re solving it.” This fellow knows nothing about these issues. You know I have seen so many people like you my good friend who have come and gone like lightning. I will make you a guarantee. I will be here long after you are gone. I will be here long after you are gone and I will not have to be here very very long—Mr SPEAKER: Order! Order! You are bringing the Speaker into the debate.Rt Hon WINSTON PETERS: I do not intend to stay here for ever but I guarantee that I will be here long after he has gone. What has this Budget done for heartland New Zealand—the engine room of the economy and the place that feeds New Zealand’s wealth? Nothing. Doughnuts. The Government’s economic policies are geared to shift the population to Auckland. What about Northland Hawke’s Bay Otago Westland and Southland—the places that used to have vibrant thriving communities? What about Wellington? The genius Steven Joyce the Minister for Economic Development has been so dynamic that he has destroyed the economy of the capital city. His leader says that it is dying. The regions keep New Zealand afloat but this Government ignores them.Last week it was gloating over unemployment figures down from the record quarter before that and again clutching at straws. What is the Māori unemployment rate? It is about 14 percent. And Pasifika unemployment? It is 15 percent. The teenage unemployment rate? Twenty-six percent of people aged 15 to 19 are unemployed. What is the National Party’s answer today backed by the Māori Party? For these thousands of young Māori who cannot get a job and Polynesians and Europeans and all other people in this country there are 100 more cadet places up from 250 to 350 places—not hundreds not thousands; oh no just 100 more places. They are standing on the dole still waiting to go on the treadmill.For the majority of New Zealanders this Government has done nothing. It is pinning its hopes on asset sales and pandering to rich tourists. While ordinary people struggle the Government gives cash to casinos and handouts to Hollywood. While Kiwis leave the Government is repopulating this country from everywhere else and they are all going to Auckland. The current account deficit is a disaster—the worst in the First World. It is a staggering sum our Government debt. It is $57 billion now and going towards $70 billion and private debt is a nightmare. There is nothing in this Budget that starts to develop a pathway out of that debt. It exposes just how incapable the Government is of coming to grips with the economic challenges facing New Zealand. The GDP growth is actually very average given our low performance in the past. There were some sweeteners trotted out today but it keeps the mice on the treadmill. It keeps the fat cats feeding on them and the Ministers keep cooking the books.Against the cacophony of the clapping of the clowns on the Cabinet benches and the braying of the backbenchers—it would be funny if it were not so serious—we notice that the cling-ons remain strangely mute strangely silent. We want to make an appeal to the National Party rank and file members. I want to talk to those members of the National Party who were there when I was once a member of a great party called National. I remember that party when it had great policies great principles and great practical politicians and leaders and when even its enemies used to respect it. But this National Party is not the party of Hamilton. It is not the party of Holland. It is not the grand old party of Holyoake. This is the National Party of Madoff Merrill Lynch and money speculators. We appeal to those left with a conscience in the National Party to remember when Keith Holyoake stopped Rupert Murdoch buying theDominionnewspaper. He said we had to own our own country and we still do. We urge people in the National Party out there to remember what the country was like when their party was great—it is no more. My challenge to them today is this: are we men and women or are we mice as the National Party and its cling-ons would make us? We are men and we have a spirit. New Zealand First makes this promise here today: back us and we will guarantee an outcome that gets you off the treadmill. Back us and your young people will have hope. Back us and you will get to decide the outcome of the 2014 election. No other political party can make that promise. Back us and we will hold the balance of political responsibility and we will use it properly.Hon Dr PITA SHARPLES (Co-Leader—Māori Party): The Māori Party is pleased to acknowledge the initiatives in Budget 2013 that are aimed at addressing some of the inequalities present in our society. I am talking about the many announcements that have been made across all portfolios that focus on increasing housing supply upgrading housing standards addressing educational underachievement addressing health inequities addressing the issues of unemployment and many more. These issues directly tie into the drivers and symptoms of poverty.It is one of the nation’s greatest shames that as a First World highly privileged country we continue to have great levels of disparity and marked inequitable outcomes for many of our whānau. It was for this very reason that when the Māori Party was invited to become a partner to this Government we placed a high priority on addressing the needs of our most vulnerable whānau and citizens. We pushed to establish a Ministerial Committee on Poverty. Today as Budget 2013 has shown we are heartened by the commitment made by all Ministers across the House who put their money where their mouths were and delivered for our low-income whānau.I believe that ultimately there are two primary fronts on which we must tackle this issue if we are to address this in the long term. They are through education and training and secondly through supporting people into jobs. I am particularly pleased with the announcement already made by Tariana and Minister Joyce that 3000 trade trainingplacements will be established for Māori and Pasifika peoples. Not only is this initiative about upskilling people and encouraging them into skilled trade positions; it will go a long way towards addressing the disparity in the unemployment rate between Māori and Pacific and the rest of the country.Although the unemployment figures are showing a downward trend both the Māori and Pacific unemployment rates remain at an unacceptable level—more than twice that of the rest of the people of our nation. Māori unemployment sits at 13.9 percent and Pasifika unemployment at 15.2 percent. Before anyone in this House is quick to point the finger on this I would remind everyone that Māori and Pasifika unemployment has been an issue for many generations. Whenever there has been a recession a downward trend in the economy or job cuts at a major factory it is usually the Māori and Pasifika people who are the most vulnerable—often the first off and the last back on to work.I am pleased to tell this House that Budget 2013 has extended the Māori Affairs cadetships—and it is all very well for Winston to say “another 100”—to 350 a year. They have been proven to get results in not only getting people into work but keeping them in jobs and moving them up the ladder. Since the programme was initiated in 2009 87 percent of those participants have remained in permanent employment long past the initial cadetship programme which lasts only 6 months. A further 9 percent have gone on to further study. So over the next 4 years our cadetship programme will assist 1400 Māori people into work and that is something I am really proud to support.But let me tell you something else about our trade training and cadetship programmes. What makes these programmes successful is not only finding jobs; it is providing support mentoring pastoral care training and networks. Both of these programmes are marked by a 360-degree programme of support and that is how it should be if we want to build resilience in our communities.Trade training has a special place in the minds and hearts of many Māori. From the 1960s to the 1980s thousands of young Māori were enrolled into the Māori trade training schemes of the time. These programmes were run out of the then Department of Māori Affairs Te Puni Kōkiri and were one of the most successful Māori work programmes ever run in New Zealand. Those who participated in these programmes were taught skills and trades that kept them employed for the rest of their lives. The skills they learnt also supported them to put kai on the table to support their tamariki and whānau and to participate in our communities and ultimately people remember these times as some of the happiest in our collective history. Whānau from throughout New Zealand participated in these programmes. Many of them were sent to other rohe to learn their trades and ultimately many of them settled in these new regions such as in Christchurch and in Auckland where trade training schemes were run.These stories of migration of those who had moved from one rohe to another are remembered in our stories in our whakapapa and in our history. To this day I still come across people and whānau who have been part of this scheme. For example while I was in Christchurch helping to establish He Toki ki te Rika the first modern-day trade training programme down there the old trade trainees who are now employers and managers of building companies came in to support the programme and formed a group that will help young Māori into employment. In fact whenever I go down to Christchurch and see someone who has lived there a long time and who is Māori I just ask whether they are from my place from Ngāti Kahungunu because many of the Kahungunu people now reside there.I wanted to remember this history and I wanted the House to hear this proud history because this is no longer something nostalgic; this is something that this Government is working towards making real again. I particularly want to acknowledge the work that Ngāi Tahu have done in establishing He Toki ki te Rika in Christchurch after theearthquakes. Their trade training model which enrolled the support of the construction industry iwi Te Puni Kōkiri community providers marae and educational institutions was really ingenious. I acknowledge them for their leadership in Māori trade training. I do not know whether it was by design or destiny or what but Christchurch was one of the original sites of the old Māori trade training programmes. I remember when Ngāi Tahu launched He Toki ki te Rika that it was a reminder of a great legacy that they had been part of and indeed that we as Māori people from across the country had been part of.I also want to acknowledge the Minister of Finance the Hon Bill English for his role as the chair of our Ministerial Committee on Poverty—Hon David Cunliffe: Why?Hon Dr PITA SHARPLES: —because of the outcomes that have come out from that. I have lost the last page so I will just talk. Because $60 million for Te Reo Māori initiatives is major; $100 million for housing warm up projects is major; diabetes $35 million—Hon Trevor Mallard: Where’s Flavell today?Hon Dr PITA SHARPLES: Hold on. Listen to what I am saying.Hon Trevor Mallard: Where’s Flavell today?Hon Dr PITA SHARPLES: Flavell is on the road and so is Tariana—we have got a by-election going mate. It is all right—steady. Diabetes gets $35 million rheumatic fever gets another $21 million added to the $24 million that we have already achieved and extending the house sizes—3000 houses—gets $2.9 billion.You see the thing about the Māori Party is it is not going in there just for things for Māori culture; it is about seeing needs for New Zealanders sitting at the table and boring in and getting support for these projects. A lot of these projects have come from us being there present at the table and pushing the case for New Zealand. Kia ora tātou.HONE HARAWIRA (Leader—Mana): Kia ora Mr Speaker. Tēnā tātou katoa te Whare. In 2011 I made the Feed the Kids campaign Mana’s first ever major campaign. I found that whenever I raised it in the House I noticed that although we all know that child poverty exists politicians were retreating behind glib phrases saying nasty things about bad parenting blaming the global financial crisis or going quiet to fit with the party line. They were refusing to deal honestly and openly with what has become a major disgrace in 21st century Aotearoa.Unfortunately whenever they are in Government both major parties struggle to admit that child poverty is a problem but they happily attack those in power about it as soon as they go into Opposition. So would it not be nice if for once just this once both the Prime Minister and the Leader of the Opposition called a joint press conference—and yes Russel Norman Metiria Turei Winston Peters Tariana Turia Pita Sharples and even Peter Dunne could be there too if they wished—to say “On behalf of the Parliament of New Zealand and the people of New Zealand we want to acknowledge a major problem in our society called child poverty. It’s something we’ve been shuffling to the sidelines for too long but today we freely admit that child poverty exists here in Aotearoa. We’re not proud of it—in fact we’re bloody ashamed to admit it—but we’re going to do something about it. And as the leaders of the two major parties in Parliament we want everyone to know that as we move to take up our place as a leading nation in the world we begin that journey by recognising the reality of child poverty and taking steps to eliminate it as the bipartisan priority of the highest order.”Would that not be great? Would that not be something worth cheering for? Would that not be something to be proud of? And just imagine what a difference that would make to those families living on the edge. I mean what value is the trade deal with theUSA or with the military parade in China if when we get home we have still got 270000 kids living below the poverty line?I would love it if we had a Feed the Kids programme at every school in the country so no child missed out with coordinators helping organise local businesses to work with their schools helping families come in to cook and getting people in to teach kids how to make a garden and grow kai prepare kai cook kai and even how to clean up afterwards.To those who say that feeding the kids is the parents’ responsibility I agree with you. But let us agree also that providing the environment where stable families can function well in our society is the Government’s responsibility. The fact is that in 2013 we have whole communities locked into long-term intergenerational unemployment and facing crippling welfare cuts. They are having to deal with rising electricity prices medical charges school fees food bills house rentals and fuel costs. They are worrying themselves sick lest one of their kids gets ill the car breaks down there is a cold snap or they miss the Work and Income New Zealand appointment. On top of that we also have the Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty telling us that poverty is costing the country $6 billion to $8 billion a year that we have 270000 children living in poverty and that some 100000 kids go to school hungry every day.These are not problems caused by bad parenting. These are problems caused by decades of bad economic choices and flawed decision-making at a Government level. Remember it was not the poor who caused the global financial crisis caused the banks to go belly up or bailed out the banks and failed finance companies with taxpayer money. No those were all macro decisions; big-picture choices made not by bad parents but by bad Governments. That is why Governments must honour their responsibility to provide for our most vulnerable citizens the kids until families are able to once again take care of themselves and their children.I would have been happy to support any effort to eliminate child poverty however small because feeding even one child is a good idea. That is why given all the positive comments from the Prime Minister over the past few days and the bragging from the Māori Party about how hard it is fighting for the poor I am bitterly disappointed to see that this Budget has set aside not one cent to deal with child poverty. If I could I would organise Feed the Kids gigs like we had in Ōtara last month right across the north—from Moerewa to Mitimiti from Te Hāpua to Te Atatū and from Whangarei to Whangaparāoa. Then I would take them on the road right across the country just to see happy kids. Nothing beats seeing 2000 kids happy just to get a feed see some celebrities jump around sing and play and go back to school with a full lunch. I am glad we have more time to take this kaupapa on the road and to take another shot at convincing politicians that the Education (Breakfast and Lunch Programmes in Schools) Amendment Bill is worth supporting even if it is just to a select committee—thank you Mr Dunne.While I am talking about kids at school let me talk about what is happening in the field of education—specifically Māori education. Yesterday I blasted the Māori Party for voting for ACT’s charter schools when charter schools will have no accountability to whānau to the Reo or to Te Aho Matua no obligation to put registered teachers in front of our kids and no transparency under the Official Information Act or the Ombudsmen Act. And they are going to get heaps more money than kura kaupapa ever got. Yes of course I can hear Māori calling for different options from mainstream schools but why do you suppose they are doing that? It is because the racist education system we have got right now sucks that is why and because for the last 5 years the Māori Party has done bugger all to change it. That is why.The Māori Party does not have any options. Because it does not have the power to get money for kura kaupapa Māori to keep kotahitanga going or to get manaaki tauira reinstated it is left pasting a Māori name on an ACT policy and then trying to sell it to Māori. I mean really? Charter schools will have no accountability to whānau no commitment to the Reo no responsibility to Te Aho Matua and do not have to accept Māori kids. There will be no appeal if they throw Māori kids out and no obligation to put registered teachers in front of our kids after telling all of our nannies that they cannot teach in kura kaupapa Māori until they got a degree—and the Māori Party calls that a good idea.Instead of attacking me why does the Māori Party not—with its millions of dollars in departmental money and hundreds of staff—actually come up with some basic bottom lines like Mana does? Mana wants a formal commitment from the Government on a date to implement the tribunal’s recommendations on kōhanga reo equal funding for kura kaupapa Māori elimination of the racist rules applied only to kura kaupapa Māori compulsory Māori language in schools specific increases in achievement for Māori students at school specific reductions in suspension and expulsion of Māori students from school reinstatement and expansion of the Te Kotahitanga programme to help teachers understand how to get the best out of Māori students and reinstatement of the manaaki tauira funding to help all Māori students get into university.Mana will work with anyone to help grow Māori medium education and develop viable policies for mainstream education but know this: anyone wanting to call themselves a Māori party and talk so much about kaupapa Māori should be ready to be congratulated on their ability and challenged on their inability to deliver on kura kaupapa Māori. The Māori Party got nothing in last year’s Budget for kura kaupapa and to nobody’s great surprise it got nothing in this year’s Budget either.In terms of housing let us be clear: Aotearoa has a housing crisis fuelled by property speculators and supported by this Government’s refusal to impose a meaningful capital gains tax that would force the speculators to offload properties and put houses back on the market. This would lower house prices enable first-home buyers to buy in the affordable housing market that the Government is talking about and allow the Government to build proper homes for those on low incomes—because that is where the real need is—as a commitment to ensuring that every family in Aotearoa has a warm and comfortable home to live in and then develop a home purchase programme based on the same universal family benefit that gave every Kiwi an opportunity to own their own home and made Aotearoa such a great place to live. The need exists at the bottom end and that is where the change has to take place.What is required is a simpler more committed strategy. Impose capital gains tax on those with two or more properties to bring more houses on to the market at a price that enables first-home buyers to get in. Build 10000 State houses a year for the next 10 years for families on low incomes with a policy that encourages tenants to plan for home purchases and enables them to do so through a universal family benefit. Apart from a commitment for more money to fight rheumatic fever this Budget has nothing but crumbs to deal with the massive problems facing Māori Pasifika and Pākehā people struggling to make ends meet or deal with the ever-growing plight of our hungry children. As far as this Budget is concerned all we wanted was to feed the kids. We did not get even crumbs for kids. Kia ora tātou.Hon JOHN BANKS (Leader—ACT): I rise on behalf of the ACT Party and thepeople of Epsom to support the Appropriation (2013/14 Estimates) Bill. ACT will support this Budget and associated legislation over the next couple of days.The Minister of Finance Bill English’s Budget represents an oasis of fiscal sanity in the faceof Opposition parties whose primeval instinct is to spend to regulate to impose new taxes and to print money.The Budget is a good Budget in very difficult times for this country but it is not a great Budget. On the OECD’s measure the Government sector is spending about 43 percent of everything that New Zealanders produce—that is 43 per cent. In Australia it is 34 percent. The Government is taking too much and is making us poorer. We have lost many of our productive young people to Australia because their economy offers a better future. The 2025 Taskforce found that the income gap with Australia was 35 percent in 2008. The latest statistics for 2011 indicate that it has risen to 41 percent. The gap is unprecedented. Unless we close this gap we can expect to see more and more New Zealand grandparents crossing the Tasman to visit their grandchildren. There is no mystery. They are richer in part because more of the wealth of Australia is left in the hands of the people yet the Labour Party wants even more spending. You would have to go back to the 1970s to find a Labour Party less ready for Government. Labour is not serious about addressing the challenges faced by New Zealanders. The future is not about outbidding the “old dudes” and “young fogies” of the Green Party.When I first came to Parliament all those years ago—10 Parliaments ago—the Government of the day was trying a command and control approach to the economy. It did not work then and it will not work today. How does this Budget measure up in terms of getting the Government off the backs and out of the pockets of hard-pressed hard-working taxpayers? Well first the good news. The size of the Government is set to decline under this Minister of Finance providing we can continue to restrain expenditure. Spending growth has been reined in despite the Christchurch earthquakes. This Budget continues that trend. The Government has not blown out the fiscal deficit like so many other countries and the last reckless Labour Government. The Government has stayed the course on partial privatisation despite court action and the dodgy referendum by the Labour Party and its mates the Greens.There have been significant welfare reforms. We are starting to tackle the culture of dependency and hopelessness. There is no tampering with the Reserve Bank of New Zealand Act. There is a willingness to improve the quality of regulation. We will have a regulatory standards proposal for this House to consider in the very near future. There will be meaningful change to the Resource Management Act. The Government recognised that house prices are too high because land values are too high. The Government is moving to free up the supply of land which ACT has long called for.In education partnership schools are on the way. The Budget provides just under $19 million over the next 4 years for partnership schools. Partnership schools will be a paradigm shift in education and opportunity for our poorest families. I want to thank Cabinet and the Minister of Education for making partnership schools happen. The Government will spend $9.7 billion on education in this Budget. The annual funding for partnership schools makes up less than 0.5 percent of that $9.7 billion. From 1999 to 2008 Labour increased spending on education by 47 percent. It spent billions and had no significant impact on the tail of underachievement in our schools—47 percent increase in spending by the Labour Government and no significant increase in the outcome for our most vulnerable the bottom 20 percent who are consigned to oblivion.Partnership schools are a new and innovative option specifically focused on raising achievement for our most disadvantaged students and I am glad to be associated with that. The only fear that the trade unions in the school movement have and schoolteachers up and down this country have is that partnership schools could be a great success. Anyone who opposes spending less than 0.5 percent of the total education budget on a new initiative to raise achievement for our most disadvantaged students is playing petty politics—petty politics.So now for the not-so-good news. The macro outlook—growth and unemployment—is still mediocre. We look good because most member countries of the OECD look bad. We will not close the gap with Australia without lifting growth and productivity. The balance of payments outlook points to an international competitiveness problem. Taxes are too high because of wasteful and unnecessary Government spending. The more expensive the Government the poorer the citizen. Let me say that again for the record: the more expensive the Government the poorer the citizen. The Government needs to roll back Labour’s poor-quality programmes—interest-free student loans and Working for Families to name just two.Here is what the ACT Party will be urging National to do in a great Budget. We regard $78 billion of gross public debt to be far too high so we need to reduce debt through less spending as the first initiative—less Government spending. We need to put the “avgas” into asset sales programmes. I welcome the announcement that Meridian Energy is up next. Air New Zealand is performing well. Running an airline is a risky and tough business. We do not need to issue a prospectus. Why not sell the Government’s shares immediately? National should dump the Cullen fund. Let us use it to pay off our debt. No one has savings in a bank account at home while they have a big mortgage on their house. Progressively raising the age of eligibility would help make superannuation much more affordable. If you want to save $1.7 billion a year every year year after year then raise the age of eligibility for superannuation from 65 to 67.We have stopped the growth in Government spending. That is good. It is time to start tackling the size of the Government. We have to aim for around 30 percent of GDP on OECD measures. That means confronting middle-class and corporate welfare. We need to confront middle-class and corporate welfare. The 2025 Taskforce found that given the surpluses at that time reducing core Crown operating expenses to 29 percent of GDP as it was in 2009 would allow a top personal and company tax rate of 20 percent.The Budget projections through to 2017 start to make this lost opportunity available again and that is good. That is a long haul but it is a goal worth pursuing. Spending reductions and partial use of surpluses could fund tax cuts. Tax cuts would improve economic growth and international competitiveness. The risk with future surpluses is that they simply are used to expand the size of Government.Finally this House needs to be more brave on regulatory reform. Further regulatory reform would help New Zealanders to understand how dopey policies like the nationalisation of electricity would be. Regulatory reform would highlight how poor policies lead to poor laws and that results in poorer citizens. We have the Regulatory Standards Bill on the Order Paper and that is on its way. The ACT Party and the people of Epsom back this Budget. We say it is a good Budget in difficult times but in order to tackle the challenges New Zealanders face we need great Budgets. Unfortunately the most significant risk we face is from bad policy and bad politics generated from the Opposition benches. My job indeed is to ensure that they do not get their hands—that is the Opposition parties—on the levers of power.Hon PETER DUNNE (Leader—United Future): This afternoon I sat through the 30th Budget that it has been my privilege to hear presented in this House. There has been a range of Budgets over the years. I think that in terms of my involvement there are two Budgets that stand out. The first was the 2006 Budget delivered by the Hon Dr Michael Cullen. That stands out because it introduced the concept of KiwiSaver the long-term national savings scheme and in many senses it put an end to what had been three very ugly decades of debate on the superannuation issue.The second Budget that stands out is the Budget presented earlier this afternoon by the current Minister of Finance for an entirely different set of reasons. Unlike Sir Roger Douglas’ “great rescue Budget” of 1984 which had to deal with the excesses ofMuldoonism—in other words the internally generated problems in having the most regulated economy at that time outside the communist world—today’s Budget deals with positioning New Zealand for the future in the context of an international situation that has been far from certain in recent years.We have been through as the Minister of Finance pointed out in his speech the greatest international economic crisis since the Great Depression. If that is not bad enough if that is not something any of us have any direct experience of previously add to that the greatest natural disaster the country has ever seen and in terms of cost one of the greatest natural disasters the world has ever seen in the form of the Christchurch earthquakes and the Government’s problems compound dramatically. But it does not stop there. We have just been through a summer of enormous drought which is expected to make a significant impact on GDP and on our economy.So when you put all those factors together I think it is a remarkable achievement that today in the Budget we see the Minister of Finance project with confidence a return to a Budget surplus of modest proportions in the next financial year but considerably stronger in the out-years from there. When one bears in mind all of those upheavals and the fact that that process of change is occurring in just 5 years that is a remarkable transformation for this economy.For those who say that we have not seen the benefits I think that part of the problem in a funny sort of way is that we never got to the pits of despair. We never saw the depth of recession in New Zealand that we are seeing in France at the moment that we have seen in Cyprus and that we have seen right through Europe. We never got to the depths of despair that we are now starting to see even in Australia where earlier this week a strong projected Budget surplus has suddenly amounted in election year to a massive Government deficit.New Zealanders through prudent management over the last 5 years have been insulated from the worst of those economic impacts. Although unemployment has moved upwards and is still unacceptably high it is about half what it was projected to be and it is about a third of what it is in most other countries of our type the world over. We are still none the less now well-positioned for the challenges that lie ahead. I think they contain some opportunities and some risks.Let me deal with the risks first. We heard in the speech of the Leader of the Opposition this afternoon—one of the weakest Opposition leader’s speeches I have heard in recent times I might say but be that as it may—what was essentially an ideological prescription such as it was for the nation’s cures such as higher taxes picking on certain groups of the population and setting them against each other; the politics of envy returning. And I have to say with the greatest of respect to my colleague to my left that there were overtones from a different perspective of an ideological approach in his remarks just a few moments ago.The reality is that we actually live in a post-ideological age and there needs to be a level of pragmatism and studied care in terms of the management of economies and the transitions out of the situations we have seen New Zealand in in recent years and moving forward. There are some lessons to be learnt which I think the Government is learning and I acknowledge the work of the Minister for Canterbury Earthquake Recovery and the Minister of Finance in particular in terms of what is going on in Christchurch. When those events occurred the rule book went out the window in terms of how you recover and how you restore—in that case—a regional economy. There was no guiding set of principles. There was no ready reckoner or reference book to go to. The Government had to act pragmatically as the circumstances dictated. A lot ofthings happened that were completely foreign to the way in which public services were delivered previously.The challenge now as we move forward is to capture those good innovations and use them in terms of the way in which we manage the public sector of the New Zealand economy as a whole. It is not about that old competition for resources as much; it is about the smarter use of the resources that are available. I think one of the themes in this Budget is very strongly about the smarter and better use of available resources rather than that constant David Copperfield - like clamour for more and more and more.The next thing I want to say in respect of that change is that the initiatives announced this afternoon with regard to housing are I think a superb example of that approach at work. We all know and have known for too long that the proud State housing system which is really part of the New Zealand national tapestry is creaking. We have people who are trapped in those houses people who cannot get access to State accommodation when they need it and this peculiar notion which has been allowed to build up that the houses that people were occupying were effectively theirs for life even when their circumstances had moved on.The changes that this Budget foreshadows will make it easier for people to transition to different types of accommodation more suited to their needs at particular points in their lives and also make it easier then for the people who might need the three and four-bedroom homes at an earlier stage to have access to them. I acknowledge the work the Minister of Housing has done in this sense. I think it is smart and I think it is innovative. I think it is working within the system to achieve positive gains a better use of the assets better rewards for the people whom we serve and fundamentally a more pragmatic approach overall—equally so with the decisions that we will make a little later in this sitting with regard to the housing permits concept where again with a problem that we all know successive Governments have struggled with this Government is achieving cut-through.So when you look at the Budget you can play the traditional political game if you like and sort of do the unders and overs and say that it is not fair or this sector has not gained as much as that one. But I think those days are past. I think what people look at now—whether it be the public sector the non-government sector or the private sector—is who is best placed to deliver services to deliver the things that people want and how we work with them to facilitate those opportunities.For example in the health sector—and I will give the House two examples with which I am directly involved—we launched a new mental health plan at the end of last year. For the first time we will be actively engaging with the 300-odd NGOs in the mental health sector to make sure that they can be part of the solution not constantly left to one side as advocates for something better. Shortly we will announce a new suicide prevention action plan and again that same principle will apply. It is not about a clamour for more resources. It is about saying: “How can we much more smartly and intelligently use what we have to advantage to serve the people well?”.Hon Member: Are you all right?Hon PETER DUNNE: I almost seem I should be in need of the health system but it is that time of year. Can I simply conclude by saying that this is a pragmatic sensible well-shaped Budget—one that is adequate for the times.Hon GERRY BROWNLEE (Leader of the House): I moveThat the debate be now adjourned.A party vote was called for on the questionThat the debate be now adjourned.Ayes64New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.Noes56New Zealand Labour 33; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Motion agreed to.UrgencyHon GERRY BROWNLEE (Leader of the House): I moveThat urgency be accorded the introduction and first reading of the Housing Accords and Special Housing Areas Bill and its referral to a select committee; the introduction and first reading of the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill and its referral to a select committee; the introduction and passing of the New Zealand Public Health and Disability Amendment Bill (No 2); the introduction and passing of the Crown Minerals Amendment Act 2013 Amendment Bill; and the introduction and passing of the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill.This suite of bills is all part of the Government’s Budget as announced today. They each have a particular part in delivering on that Budget. The two housing bills are related particularly to areas where there is a great deal of shortage and in particular to the Auckland market where the Minister of Housing has done a great deal of work with the Auckland Council to get some speed into the way in which some of the housing issues up there might be resolved.The New Zealand Public Health and Disability Amendment Bill (No 2) clarifies the Government’s position on paying families who look after disabled adult children. There is $92 million set aside in this year’s Budget for that and this bill will give effect to that expenditure.We also intend to pass the Crown Minerals Amendment Act 2013 Amendment Bill through all stages. This is an amendment to the Crown Minerals Amendment Act. This bill makes necessary corrections to the amendment Act before it commences on 24 May. It would therefore be appropriate that it go through all stages in this session of urgency. New Zealand of course does increasingly benefit from its petroleum and mineral resources.Finally the Customs and Excise (Budget Measures—Motor Spirits) Amendment Bill increases the petrol tax by 3c a litre for each of the next 3 years. These increases come into effect on 1 July so it is important that we pass this small and technical bill through all stages this evening.The bills to be considered under urgency are normally laid on the Table at the start of the urgency session. That will occur today once the vote is taken but I do want to make it clear that copies or advance drafts of those bills have been provided to all parties so they have had some time albeit short to consider their positions.Phil Twyford: About 10 minutes.Hon GERRY BROWNLEE: Well no. Actually it was really almost 3 hours. We know that 3 hours is a long time in politics.A party vote was called for on the questionThat urgency be accorded.Ayes64New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.Noes56New Zealand Labour 33; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.Motion agreed to.New Zealand Public Health and Disability Amendment Bill (No 2)New Zealand Bill of Rights Act ComplianceHon CHRISTOPHER FINLAYSON (Attorney-General): I hereby present a report on the rights and freedoms contained in the New Zealand Bill of Rights Act 1990 in relation to the New Zealand Public Health and Disability Amendment Bill (No 2).Housing Accords and Special Housing Areas BillFirst ReadingHon Dr NICK SMITH (Minister of Housing): I moveThat the Housing Accords and Special Housing Areas Bill be now read a first time. I nominate the Social Services Committee to consider the bill. At the appropriate time I intend to move that the Housing Accords and Special Housing Areas Bill be reported to the House by 26 July 2013 and that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 188 and 191(1)(b) and (c).This bill is a core part of the Government’s work to improve housing affordability. It confronts the reality that homeownership rates have been in decline for a quarter of a century; that house prices have soared unsustainably over the past decade; and that far too many families’ housing whether they buy or rent is unaffordable. There is no silver bullet for this huge issue. It will not be solved with gimmicks or slogans but with substantive sound policies that address the real issues that are driving up house costs for New Zealanders. We have founded our housing work on the comprehensive report produced last year by the Productivity Commission.We are particularly focused on the issue of land supply being addressed in this bill. We have got work under way on infrastructure costs announced in February in respect of the review on development contributions. We have got work on materials costs under way with the inquiry that we announced at the weekend. We are making changes to get compliance costs down. We are investing heavily in skills in this Budget to improve the productivity of the residential construction sector.It also has to be acknowledged that interest rates play a huge role in housing affordability and homeownership trends. Anybody who looks at the homeownership issue post World War II will see that it is very simple—homeownership goes up when interests rates are low and it goes down when interest rates are high. I am very proud to be part of a Government with an exemplary record on interest rates—the lowest since I was in nappies in the mid-1960s. We are determined to keep them as low as possible for as long as possible. That highlights the broad reason that we need this bill. We all know that house prices are going silly—up 12 percent in Auckland in the last year. When that happened in the last decade the Government did nothing. The Reserve Bank wound up interest rates up went the Kiwi dollar and there was permanent damage to the NewZealand economy. This bill is about avoiding a repeat of that negative economic cycle. The message from the Reserve Bank from the IMF from the OECD and from the Productivity Commission is that we must confront and address these land and housing supply issues.Some people are refusing to accept the link between rigid land supply policies and high house prices. I challenge them to look at the evidence. We have seen the availability of sections in Auckland plummet over the past 10 years and the price of a section has increased over the last 5 years from $100000 to $325000. The study by the Motu Economic and Public Policy Research Trust showed that raw undeveloped land in Auckland inside the metropolitan urban limit is 10 times the value of land outside the metropolitan urban limit. We are currently building only 4000 homes per year in Auckland when we need 13000 per year to keep up with population growth.This bill is a circuit-breaker to get some pace and some momentum in addressing housing supply. It recognises that councils control a very important lever with their land supply and housing development policies. It makes provision for accords with local authorities where there are affordability issues. It requires the Government to work with councils in good faith to secure such agreements like those we have achieved with Auckland but also to enable intervention if we are unable to make progress.The essential mechanism in this bill is the creation of special housing areas. These will be both greenfield and brownfield areas that are suitable for residential development where infrastructure is available or can be built and where there is demand for new housing. Within these areas qualifying developments will be able to be approved by way of a streamlined process. There is a special limited notification process for only those affected. Council panels will be required to make a decision within 6 months on greenfield developments and within 3 months on brownfield developments. That compares with the current situation where it takes up to and sometimes more than 3 years.In the Auckland context this bill enables the council to get some real progress in implementing its Unitary Plan in areas that are the least contentious. This is a 30-year plan for 400000 homes. It enables a robust process for hearings on controversial projects like high-rise apartments but enables us to get on and build the first 10 percent of houses in that plan. It is a balanced agreement and I wish to especially acknowledge Mayor Len Brown for his pragmatism and support in coming to this accord. It is an ambitious agreement and sets out a plan to consent 9000 homes in the first year 13000 homes in the second year and 17000 homes in the third year. That will have us consenting three times as many homes over the next 3 years as have been consented over the last 3 years. I have been encouraged by the response to the accord. Already a developer has come forward and has said that it will enable him to bring forward 1000 sections next year that he otherwise would not have brought forward. ANZ National Bank economist Cameron Bagrie said that the accord “hit all the right notes”. The Employers and Manufacturers Association chief executive has described it as “infinite common sense”. He says that it will unlock the logjams to getting houses built and that it is so refreshing to see Auckland Council and central government finding common ground on this difficult issue.The accord is good news for households it is good news for Auckland and it is good news for New Zealand. Enabling the development of 39000 new homes will take the heat out of the Auckland housing market. It is going to give some hope to families looking for a home whether they want to rent or buy. The $20 billion build is going to create thousands of jobs. And the relief for the rest of New Zealand is that this increased housing supply in Auckland will take pressure off an early rise in interest rates and upward pressure on the Kiwi dollar. I would also note that the accord specifically makesprovision for more affordable housing. We have shown how to do that with the Hobsonville development where we have required 20 percent of new homes to be in the affordable range and targeted to first home buyers. I was advised by the Hobsonville development company that it is not getting 20 percent; it is getting 27 percent of houses sold in that range. A similar approach is required here where consideration must be given to providing lower-cost new homes when approving qualifying developments. This legislation gives us the tools to implement that accord. This is an interim measure. My colleague Amy Adams is progressing a comprehensive plan of Resource Management Act reforms that will be legislated in time and then with planned changes will be able to assist with the long-term challenge of housing affordability.I cannot help but conclude this debate by challenging the Opposition on a few points. First it has had more positions on the Auckland Council than the Kama Sutra. It has rallied against the formation of the Auckland Council and in the next breath it has rallied to the council’s support and demanded that the Government not intervene on housing issues. Now it opposes the accord that we have successfully negotiated with the council. Secondly it has consistently opposed any measures through Resource Management Act reform or in this bill to free up new land. I have a simple question for the Opposition: how can it promise Aucklanders tens of thousands of homes at $300000 each when the average section price in Auckland right now is $325000? The idea that the only way to build more affordable homes is for the Government to build them is an idea that it must have got from the same North Korean economics school that it got its electricity policy from. If it truly believes this nonsense why stop nationalisation at the housing and the power sectors? Let us have cheaper food by the Government taking over all the supermarkets or cheaper cars by having the Government buy them all for us! My greatest worry for homeowners is what the Labour-Greens policies will do for interest rates. Sound economic management and a comprehensive approach to housing affordability in all those areas is the best way that we can make homes more affordable for New Zealanders. That is what this Government is about and I call on the House to support this sensible bill.PHIL TWYFORD (Labour—Te Atatū): What a disappointing contribution that was from the—Grant Robertson: No typical.PHIL TWYFORD: —a typical response—current National Minister of Housing. The Labour Party will be voting for the Housing Accords and Special Housing Areas Bill at its first reading and we will be voting for its referral to the Social Services Committee. We do that in the knowledge that one does not lightly support a bill like this which overrides key elements of the Resource Management Act.This bill is the latest piece of legislation from the National Government that takes powers away from local councils and local communities and gives them to central government. It is one of a long line of provisions we have seen under this Government that actually strip powers from local communities. So in that knowledge we support it at this stage only in terms of its referral to the select committee and we support it because the provisions in this bill represent a partial victory for Len Brown and the Auckland Council in the face of the most extraordinary drama queen behaviour from Nick Smith over the last few months.Nick Smith turned up in Auckland 3 months ago accusing the mayor of killing the dreams of Aucklanders. He said that planning laws in Auckland and the Auckland Plan were strangling the lifeblood out of housing development in Auckland. And we had all sorts of dramas and histrionics from Nick Smith the “Minister of Housing Shortages” as he tried to create the same kind of crisis the same kind of drama he has created inevery portfolio area he’s had over the last few years. ACC was perhaps the worst and he has brought exactly the same approach to housing.What is very clear from the announcements about housing that we have seen from the Government over the last week is that it is utterly spooked by Labour’s policy Labour’s KiwiBuild policy to deliver 10000 affordable starter homes for first-home buyers. That has completely spooked the Government. We know that because we know that theNew Zealand Heraldopinion survey in January showed that 70 percent of New Zealanders supported Labour’s policy of putting 100000 Kiwi families into their first home. That has spooked the National Party and we have seen a flurry of desperate announcements as it tries to recover lost ground. So that is the context for this bill coming to the House today—the National Party’s troubled relationship with our country’s biggest city Auckland.National is offside with Aucklanders. Gerry Brownlee is completely offside with Aucklanders when it comes to public transport and the city rail link. Nick Smith has kindly offered himself as Len Brown’s opposition in this year’s mayoral election. No one else of any substance is willing to stand against Len Brown so Nick Smith gallantly offered himself and I think he has actually done a pretty good job of alienating Aucklanders on an issue that they desperately care about—affordable housing.So what is the result of all this drama queen activity from Nick Smith over the last few months? What we see today is a cherry-picking of some elements of the Auckland Plan. That is why I say it is a partial victory for Len Brown and the Auckland Council. But to be honest Nick Smith could have saved everybody a lot of grief if he had simply gone along with Auckland Council’s proposal to give the Auckland Unitary Plan legal weight upon notification. So once the plan was notified in September this year a lot of grief could have been saved and the Government could have saved a lot of political face if it had given the new unitary plan which includes the measures contained in this bill legal weight in September just as the plan would have had under the pre-2009 resource management law. But no Nick Smith has put everyone through a whole lot of drama.So what does the bill do? It creates the framework for the Government to negotiate accords with regional councils around the country. It has negotiated one with Auckland Council. That accord allows special housing areas to be set up with fast-track consenting and it will have the effect of bringing new greenfield land into the supply of the Auckland housing market which I think as most people recognise is one of many factors behind the high cost of new houses in Auckland. But the National Government would like to think that land supply is the be-all and end-all when it comes to solving the housing affordability problem and that deregulating the planning laws is the main solution. I think most people realise that it is not.House prices have gone up 36 percent in Auckland since National came to office and this bill is the best that National can do. It is rearranging the deckchairs on theTitanic tinkering with planning regulations and a whole raft of other things that we will debate over the next couple of days in relation to State housing. It thinks that by simply tinkering with planning regulations under the legislation that allows these so-call housing accords it will solve the housing affordability problem. That is the fallacy that underlines this bill.This bill will do nothing to guarantee that one more affordable house is built in Auckland. It simply opens up new greenfield land in the supply of land and fast-tracks the consenting procedure. The numbers that National bandied around for tens of thousands of new houses are simply targets for consenting. They do not guarantee a single new affordable home. I think Aucklanders will see through this. They will seethat this is a desperate attempt by the National Party to regain ground on the housing affordability problem.The housing market is failing. It is failing to build enough affordable homes. It has basically seized up because there is no money to be made currently for developers and builders in building affordable homes. Fast-tracking consenting and bringing new land into the system may be part of the solution but it will go nowhere near guaranteeing and assuring Aucklanders that they are going to see the production of new affordable houses.We saw yesterday the unveiling of the new development at Long Bay an hour’s drive from the central city. We saw houses costing between $750000 and $1 million. Is that National’s definition of affordable housing? We have seen Hobsonville where the Minister talked about affordable housing. Does he really think that $700000 houses an hour’s drive from the city an hour’s drive from where all the jobs are is National’s solution to the affordable housing crisis? It is simply just not credible.I want to point to one of the biggest problems with this bill and that is the very very weak language contained in the housing accord about affordable housing. The accord itself starts by acknowledging that improving the affordability of housing is a complex issue it requires consideration of wider issues not all of which will be able to be addressed under this accord. Well you got that right.Listen to this language which is actually in the accord itself. It is talking about when developers are seeking consents for new housing developments. “All Qualifying Developments are … required to give consideration to the provision of affordable housing”. They do not have to build affordable houses; they simply have to give consideration to the building of affordable housing. “Conditions of consent may include requirements for a proportion of the development to include affordable housing”. They may have to give them; there is nothing in here that requires builders and developers to build affordable housing. It is a joke. It is a charade.If the Government was serious about dealing with the affordable housing problem it would roll up its sleeves and actually work with the private sector and local councils to build affordable housing which is exactly what Labour will do under its KiwiBuild policy. Look at Hobsonville. Look at the Long Bay development. All the economic incentives in the building and development industries are telling developers to build houses that sell for three-quarters of a million dollars because that is the only way they can make a decent cut a decent margin on those developments.This bill will be supported by Labour as far as the select committee but we have reservations about it. We have reservations that will require considerable scrutiny at the select committee about the constraining of the rights of appeal under the Resource Management Act and we are very sceptical about whether this will do anything to achieve more affordable housing. It is typical of National’s weak tentative and timid approach to dealing with the issue of affordable housing. It pretends that tinkering with the Resource Management Act will result in more affordable housing for Aucklanders. We doubt that it will. It requires a serious response by the Government. It should pick up a hammer and actually build some affordable houses.Peseta SAM LOTU-IIGA (National—Maungakiekie): Talofa lava. It is a pleasure to stand to take a call on this bill the Housing Accords and Special Housing Areas Bill because this bill is critical to the agenda that our Government has to help those in need to help deliver quality services and to help provide an environment where jobs and opportunities are readily available.I support the extensive work that our Minister of Housing the Hon Dr Nick Smith is doing in this area. He has outlined some of the key steps around reforming housing in this country. I am also glad that Mr Twyford is supporting this bill. I do not knowwhether Mr Twyford is really supporting the bill or whether he is following instructions from Mayor Len Brown to support his part in this accord.You will hear the cries of protest from Mr Twyford and the other Opposition members. These simplistic creatures as the Attorney-General calls them wish to attack that which they do not understand. But what New Zealanders understand is that over the course of the last Labour Government house prices ballooned interest rates skyrocketed and ordinary Kiwi families were pitched further and further out of the housing market.From 1999 to 2008 interest rates went up from just under 3 percent to over 8 percent. Inflation went from just above zero in 2000 to over 3 percent in 2008. Median house prices in Auckland went from $235000 in 1999 to almost double—$450000—in 2008. So it is no wonder hard-working New Zealand families were unable to get on the ladder of property ownership under the last Labour Government. Let us compare that with the John Key - led National Government. We have delivered the lowest interest rates for over 50 years and the lowest inflation since 1999—it is under 1 percent. We have continued economic growth on the back of a global economic crisis. That is better than many of our trading partners across the globe.But those members opposite have a shameful record on housing leaving some of our most vulnerable families on the scrap heap of inadequate old cold and mouldy State and social housing. That is their record. That is their legacy from the last time they were over here on the Government benches and I would say that Michael Joseph Savage would be disgusted at the contempt that the current Labour front benches—Grant Robertson: What Michael Joseph Savage would hate Sam is a Government that sold 50000 State houses.Peseta SAM LOTU-IIGA: —like Mr Robertson—have for hard-working New Zealand families. I have seen it in my own electorate of Maungakiekie and in Tamaki where our National Government has had to transform the local housing stock to make it warmer cleaner and larger for those in need Mr Robertson. The Warm Up New Zealand: Heat Smart programme has provided insulation for over 230000 families. I see that the Hon Gerry Brownlee is here. He was instrumental in improving the lives of those families across this country and this Budget improves the lives of 40000 more. You cannot trust Labour on housing—[Interruption]—The ASSISTANT SPEAKER (H V Ross Robertson): Order!Peseta SAM LOTU-IIGA: —just like you cannot trust Labour on the economy.In 2005 and the Speaker knows it the Labour Party was talking about sustainable housing supply affordability and housing quality yet it did nothing. It issued reports it had a bunch of meetings a couple of hui workshops and policy discussions and all the time that Grant Robertson Jacinda Ardern and Chris Hipkins were merrily skipping around the Beehive tugging at the apron strings of “Mother Helen” real New Zealanders were hurting real New Zealanders wanted some action and real New Zealanders got nothing.Real New Zealanders wanted a Government that cared about the issues that mattered to them. They got that in 2008 when they installed this pragmatic stable and forward-looking National Government. National has a busy programme of housing policies that will make a real difference to New Zealanders. We are addressing the root causes as the Minister alluded to and freeing up land supply through this bill. We are launching an inquiry into building materials and construction costs and substantive changes to the Resource Management Act are coming up. We are working on development levies and better coordination of core infrastructure.We cannot say the same about the Labour Party. It has come up with this gimmick of a policy called KiwiBuild—100000 homes in 10 years all at the plum price of$300000 per home. Well Mr Twyford says that we are spooked by that but what New Zealanders are really asking is how the Labour-Green plan will be able to build a house in Auckland for $300000 when the average land price alone is $350000. [Interruption] What are they going to put on these sections Mr Twyford? A tent? Maybe one of those playhouses from Toyworld.With respect Labour members’ slogans will not meet the needs of real New Zealanders looking for real homes. Unless they address the issue of land supply which this bill does their policy like many of their policies will be consigned to the depths of the nearest recycling bin. On the other hand our Government is clearly working with the Auckland Council so that we can address land supply and housing affordability issues and get that across the line in the near future. Our Minister has laid out our expectations for the housing sector and we are not ashamed to be ambitious but also realistic.What the Productivity Commission talked about in its report are current land restrictions charging for infrastructure and looking at excessive building costs and low productivity. The International Monetary Fund Treasury and the Reserve Bank have all said so much and that is why we are acting right now. This Government stands on its record. The Budget delivers more for all New Zealanders ensuring a bolder brighter and better future. This bill will deliver New Zealand’s largest city with the opportunity to meet the housing needs of thousands of families who need affordable housing. I commend this bill to the House.GRANT ROBERTSON (Deputy Leader—Labour): That was a shabby speech from Sam Lotu-Iiga because his side of the House has to take some responsibility for turfing out 13000 households from State housing in the 1990s. That is what Sam Lotu-Iiga’s National Government did. In the 1990s people lost their homes under National—13000 State houses were sold off and it takes years and years Mr Lotu-Iiga to come back from that kind of shabby policy. So do not lecture this side of the House on Michael Joseph Savage’s legacy. What Michael Joseph Savage stood for was actually looking after people not turfing out people into the street like National has a record of. This party on this side of the House stands proudly on its record on social housing. That side of the House has no idea whatsoever about what social housing is about and we will not be lectured by Mr Lotu-Iiga and his colleagues on that.Once again National has come to this House with a programme of tinkering to try to solve a housing crisis because that is what this is about. Yes availability of land is an issue but availability of land is only one small aspect. It will not deal with the greatest element of the housing crisis and the issue that the National Government should be focused on in this legislation today and that is the affordability of housing. Mr Lotu-Iiga and his colleagues think that a $700000 home 1 hour’s drive from the Auckland central business district represents affordable housing. That is what Mr Lotu-Iiga and National believe and that is wrong. There is nothing in this piece of legislation that will really address the underlying issues around affordability of housing because this Government is not prepared to roll its sleeves up and ensure that there are houses being built. That is what Labour’s KiwiBuild policy is about. It is about actually rolling up our sleeves and saying: “We’ll get alongside construction companies and we’ll make sure those affordable homes are being built.”All this legislation does—all this legislation does—is set up some targets. It does not ensure at any point that there will be affordable housing. All it says is that the land will be there. It does not say anything about affordable housing. Labour has the plan that says we will actually get that affordable housing. This simply does not go there.Melissa Lee: How?GRANT ROBERTSON: They on that side of the House ask how. It is really simple for my National Party colleagues. We build houses—10000 houses a year in the affordable frame. Melissa Lee answer me this. Is a $700000 house affordable?Melissa Lee: The average price is $350000 for a section.GRANT ROBERTSON: A $700000 house is affordable. Yes she does believe that a $700000 house in Auckland an hour from the central business district is affordable. It might be affordable for Melissa Lee but it is not affordable for most Aucklanders and that is what is missing from this piece of legislation. It is very important to focus on the fact that what this does is set up special housing areas that will give consideration to affordable housing. [Interruption]The ASSISTANT SPEAKER (H V Ross Robertson): Order! I have a member on my left and a member on my right who are interjecting on each other and they do not have the floor. It is totally out of order and disrespectful to the person speaking.GRANT ROBERTSON: It is important to note that what is set up under this legislation under the accords in the special housing areas is a process that will give consideration to affordable housing. It will not actually ensure that affordable housing is built; it will simply give consideration and that is typical of the tinkering. There is a lot of talk about giving consideration to things in this Budget. National is going to give consideration to warrants of fitness for rental housing. It does not think it will actually do it; it is just going to think about it. This is the Budget about thinking not about doing when it comes to housing. We actually need warrants of fitness for rental housing across the board. It may come as a shock to the National Party to learn that only 20 percent of children in poverty live in State housing. Eighty percent of children living in poverty live in private rentals and that is not covered at all by this.Peseta Sam Lotu-Iiga: Wait for the next bill.GRANT ROBERTSON: We certainly will be talking about it in the next bill. This bill the Housing Accords and Special Housing Areas Bill does enable once an accord is developed between central government and local government a process to go in place that will see some fast tracking and some streamlining of processes within the Resource Management Act.We on this side of the House are saying that we are prepared to see this bill go to the Social Services Committee so that we can debate those issues. But I give fair warning. Sending a bill of this nature to a select committee for a few weeks is completely unacceptable. If the Government is going to propose major changes to the Resource Management Act to the way that the Resource Management Act is implemented when it comes to land we need to know that that has been thoroughly debated. Sending it off for a few weeks will not make that happen. There may well be improvements that can be agreed on between central government and local government in this area but we are not going to be able to give that adequate consideration without a proper select committee process.When we look at the relevant bit of the legislation that covers this what we discover is that under this bill the rights of appeal when there is a special housing area established will be limited to developments of four or more storeys. That fits in with elements of the Auckland Unitary Plan and it is quite clear that the Government has finally got around to working out that it should actually do something to facilitate the implementation of the Auckland Unitary Plan. But bear in mind that this legislation will now cover the whole of New Zealand. It is not just about Auckland any more. Therefore if we are going to be deciding that the limit of four storeys or more is the relevant limit we actually need to think about what that means in other parts of New Zealand. So it is all very well to propose to this House these changes when they are based on what happens in Auckland but that is exactly why we need a full and properselect committee process so that we can actually analyse how this will have impact on the rest of the country. The proposal from the National Government today is to restrict that select committee process to a few weeks up to the end of July and I do not believe that that is acceptable at all.The fact is that land supply is only one part of the equation and if National had a fully comprehensive housing policy that it was bringing to this Parliament it would talk about far more than this. Mr Lotu-Iiga cannot rely on the next bill because that does not do it either. It does not do it either because the National Party has been in denial about housing from the moment it came into office. The Government has finally caught up with the fact that there is a housing crisis. It has finally caught up with it after house prices have gone up by 36 percent in the time that this party has been in office—36 percent. But for the last few years all we have heard from John Key is that there is no housing crisis and along the way people in Auckland have been priced further and further out of the housing market. To come to this House with a bill that tinkers around and says: “Yes we’ll put some things in place that might allow there to be more development in Auckland.” is not enough to make sure that we address that housing crisis.If National was serious about addressing the housing crisis it would add to this a process of how to build more affordable homes. It would put into place a capital gains tax which members on that side of the House have refused to acknowledge is an important part of dealing with the housing crisis. They cannot see why all but two developed countries in the world have a capital gains tax but apparently it is a terrible terrible thing for New Zealand to consider. Taxing capital taxing the National Party’s mates—that would be a terrible thing to consider. A capital gains tax is an important part of a good sustainable housing policy.The housing market has failed. Labour has recognised that with our KiwiBuild policy. National has come to the party very late with a bill here that will address one aspect of the problem of housing in Auckland—one aspect of the problem of housing across New Zealand. This is a bill that needs thorough debate. We are prepared to send it to a select committee because we believe it needs to be analysed. We are prepared to send it to the select committee because the Government has finally caught up with the needs of Auckland and the fact that parts of the Auckland Unitary Plan need to be put in place. But we send it there with significant reservation because this bill changes important aspects of the process of resource management approval. We want to have a thorough debate about those processes. Our support for this bill is not guaranteed past the select committee consideration and the Government needs to give serious attention to a proper select committee process so that we can put in place a proper affordable housing policy. This bill falls well short of the mark of the kind of housing bill that should be coming to this House.HOLLY WALKER (Green): Well I guess we can start on a good point and that is it is good to see that the Government has finally realised there is a housing crisis going on in New Zealand. It has taken it long enough but it has cottoned on and it has cottoned on to the fact that that crisis is particularly apparent in Auckland. We have known for some time and we have been saying in this House for some time that Auckland needs approximately 13000 new buildings—new homes—to be consented and built each year in order to keep up with the growth and the population change and the demand for housing in Auckland and yet over the last several years the average has been between only 3000 and 4000 new homes built each year. That is nowhere near enough to keep pace with the demand for housing in Auckland and that has created a crisis.It means that homeownership is increasingly out of reach for young New Zealanders and first-home buyers. Just last week we had reported the staggering news that the average house price in Auckland is $735000 which is certainly a pretty high bar for your first-home buyers. That is up by 12 percent over the last year.The Minister of Housing when he spoke earlier in this debate talked about interest rates. He said that when interest rates are low house prices are low and he was very proud to be part of a Government that had presided over very low interest rates and yet the average house price in Auckland has increased by 12 percent in the last year. It is now $735000 and it is forecast to reach $1 million in the next 3 to 4 years—$1 million will be the average house price in Auckland. This is a crisis situation and the Government has finally cottoned on. This bill the Housing Accords and Special Housing Areas Bill is its attempt to do something about it.We have been saying for a long time that the solution to this crisis is to increase the supply of housing. The Government has finally cottoned on and it is at least attempting to do something about the supply side in this bill. This bill indeed is the Government’s answer to the lack of supply of affordable housing. The first thing I think we have to say about this bill is that it is nowhere near enough and it never will be enough without a dedicated Government house-building programme and houses that are set aside for progressive ownership by young families and first-home buyers to give them a foothold on the property ladder. Unless this bill incorporated something like that it could never be enough to address the urgent supply crisis that we have.The Green Party will oppose this bill at its first reading but we will listen carefully and contribute constructively to the debate at the Social Services Committee with an open mind. But with the limited time that we have had to consider this bill we cannot support it at its first reading because it raises a number of significant red flags for us. The first of those is that it is modelled as the Minister said in his speech on the Hobsonville model. I thought we could perhaps go into that a little bit because in my submission the Hobsonville model is hardly the model you would want to roll out across Auckland and across the country for the provision of genuinely affordable housing. It could have been when it was first established. Indeed it probably was the model that you would want to roll out because when it was first initiated it was a mandated mix of social affordable and private housing developments with concurrent community development. It was a groundbreaking development and it was a real experiment in creating both affordable homes and a livable neighbourhood in the same area.But tragically this Government axed the social housing component of the Hobsonville development when it came in. In fact the local MP in that electorate—one John Key—said when he announced that decision that it would be “economic vandalism” to have State houses and presumably their riff-raff tenants in such a nice area as Hobsonville. So—Peseta Sam Lotu-Iiga: He didn’t say that.HOLLY WALKER: He did. He said that it would be “economic vandalism” to have State housing in Hobsonville. Look it up. Not only did National axe the social housing component but also it axed the Gateway Housing Assistance loan scheme after only 17 families had used it to buy their first affordable home in Hobsonville. All that is left which is a quota provision for so-called affordable housing puts that affordable housing into two brackets. The first bracket starts at $400000 and the second and larger bracket of affordable housing starts at $485000. I would challenge anyone on the Government benches to go and ask a family in Auckland on the average income who are renting and hoping to buy their first house whether $485000 is affordable for them to buy their first home. They would laugh you out of their overpriced low-qualityrental property. They would laugh you out of their rental property because $485000 might be affordable for some of those on the Government benches but it is not affordable for families on the average income who are looking to buy their first home.As Phil Twyford pointed out in his contribution earlier there is absolutely no requirement in this bill that the new special housing areas that it creates will have to guarantee the provision of affordable housing even using that Hobsonville Point definition of affordable. They will merely have to give consideration to the provision of affordable housing and they may well go on and actually create housing developments that have no affordable housing component at all. There is absolutely no guarantee that this radical trumping of the Resource Management Act process that this bill contains will actually produce any more affordable housing for Aucklanders or for anyone else in the country.The second big red flag for the Green Party with this bill is the powers that it grants to the Government to overrule and override local councils’ planning processes in these new special housing areas. We know that this bill is prompted largely by the crisis in Auckland and we know that it is based on the Auckland Housing Accord which was reached last week between Len Brown the Mayor of Auckland and Nick Smith the Minister of Housing. In the case of Auckland the Government and the council have indeed agreed on the terms of the accord although I might add not without some incredibly heavy-handed tactics by the Minister to begin with. But they got there in the end and they have now committed to work together to implement the housing accord that they have agreed on.But this bill does not apply just to Auckland. In fact although Auckland is the only region specified in the schedule to the bill for now there is the provision that other regions of the country can be added later on based on data from Demographia and Roost Mortgage Brokers about affordability of housing in those areas. Based on that data we might be looking at areas like Waikato the Bay of Plenty Nelson Christchurch and Wellington which could be some of the next areas to have a special housing area. But there is no requirement that the Government reach an accord with the councils in those areas before it goes ahead and sets up special housing areas. There is no requirement that the Government works collaboratively with those councils. There is a requirement that it tries to reach an accord with them but if the Government cannot it can just unilaterally say: “Well we tried but we couldn’t reach an accord with the council. But we think there needs to be a special housing area in this area and we are just going to do it anyway.”In that situation the bill grants considerable powers to the Government to override local planning processes if it cannot reach an accord with those councils. The Government can appoint the panel that will make decisions about the developments in those social housing areas. It can essentially control the process and override local democracy. There are incredibly Draconian amounts of power that the Government can take in that situation if it tried and failed to reach a housing accord in one of these other regions. I suppose we should not be particularly surprised by that given that this is this Government’s modus operandi and we need only look at Christchurch City Council and the former Environment Canterbury to see what the Government thinks about local democracy and the credence that it gives to the local decision makers. So if I was in Christchurch where indeed the housing crisis is almost as bad as Auckland’s I would be very very worried about what the Government was going to come in and do to my city under this bill.We could perhaps have supported legislation to set up special housing areas in areas where a genuine accord had been reached by the Government and the council working collaboratively together but we cannot support the Government coming in over the topand running the process in the way that this bill allows. And there is another risk with special housing areas because since there are no quotas on affordable housing and there is no emphasis on in-fill and brownfield development it is a potential recipe for sprawl. We have seen this Government’s obsession with land supply and opening up the urban fringe and rural land for housing developments which does not actually increase affordability. Indeed with the transport and infrastructure costs it can be a real cost to families.So there are a number of red flags for the Green Party in this legislation. We cannot support it at first reading. We will engage constructively and collaboratively at the select committee but with those red flags about affordability about the Government’s powers to override local councils and the recipe for sprawl that it could potentially represent we cannot support this legislation.MELISSA LEE (National): Ahn nyung ha se yo Mr Assistant Speaker. It is a great pleasure to rise in support of this Housing Accords and Special Housing Areas Bill. Before I begin though I would like to take this opportunity to congratulate the Minister of Finance the Hon Bill English who has delivered a magnificent Budget—a Budget that builds momentum for a brighter future for all New Zealanders.Moving on to the bill. As I get into the bill I would like to give a piece of advice to Ms Holly Walker who just sat down. People who want to get into their first home do not actually pay median house prices. Often they buy at the bottom of the market which is affordable. When you look at the websites that actually sell houses you can buy plenty of houses—The ASSISTANT SPEAKER (H V Ross Robertson): Order! Order!MELISSA LEE: Sorry—members and people can buy lots of houses that are priced well under $400000.Too many New Zealanders however have to spend too much of their income on purchasing their ultimate Kiwi dream. Owning their own home—the piece of land with the house on it—has been a dream for Kiwis for many many years. This situation is bad for people who have these dreams because in Auckland as many members have said we actually do have a crisis and it is a given that having high housing costs means that New Zealanders owe more. The rising house prices affect interest rates and the exchange rate. The lack of housing—an affordable house at a cost people can afford—will mean more demand for State housing assistance as well.The situation is obviously not ideal. This National-led Government is doing something about it unlike the empty promises of the Labour Party claiming it will build 100000 homes in Auckland for under $300000 which is a complete lie because an average section in Auckland costs roughly around $350000.Does Grant Robertson know how to build a house? Does he actually know that you have to purchase a section to build the house on top of it? Does he know that it actually costs money to purchase the materials required for building that house? Does he know that the tools for building the hammers in fact cost a lot more than the $300000 that that party promises New Zealanders it can deliver? I say to Labour: stop misleading the good people of New Zealand who desperately want to dream about getting into their dream home. Stop misleading them because that is totally totally unfair and it is a lie.The National Government however is doing something about house prices. We are going to improve the affordability of homes. This bill provides for a special Auckland housing accord that sets a target over 3 years of 39000 new homes being consented to. This is a greater number than the 3600 homes currently being consented to each year. The accord will allow for greenfield development to be consented to in 6 months instead of 3 years as it is currently. This accord is a great example of how Government can work collaboratively with councils to make housing available.Hon Simon Bridges: That’s right.MELISSA LEE: That’s right Simon. It is collaboration. This bill will allow the same success to be repeated in other areas other centres around New Zealand. Up and down the country this can actually be repeated.The Productivity Commission identified land supply as one of the key areas that constrains housing development. It is the view of this Government that when five key areas are targeted we will improve and achieve affordability of the homes that Kiwi dreams are built on. The five key areas are land supply material costs infrastructure productivity in the construction sector and compliance costs and we are dealing with these five sectors. We are delivering for New Zealand.This bill will speed up the provision of new housing in areas where housing is least affordable. Faster approvals will help meet demand and help to put out a bit of the fire in the overheated housing market in Auckland and that has to be a good thing. I commend this bill.DENIS O’ROURKE (NZ First): New Zealand First considers that there is some good—and some bad—in the Housing Accords and Special Housing Areas Bill but we think it is far too little and we think it is far too late. The basic problem with it of course is that it is reactive to a huge problem that has been suddenly realised—just like a light going on for the National Government. National is impulsive. Like a possum in the headlights it knows it has to move. It is likely to move the wrong way and it is probably moving too late.The bill is based on simple expediency and is ideological rather than balanced in its approach. It favours developers’ agendas and sidelines local democracy. It is ad hoc rather than strategic. It is careless about planning documents and substitutes quick-fix band-aid solutions. It is short term not the enduring long-term plan that New Zealand needs. It is superficial rather than well considered and it is incomplete and inadequate rather than the comprehensive plan we need to solve the housing crisis. And it is a housing crisis in New Zealand at this time. Overall this Government is a bit like the crew of a sinking ship all racing to find a lifeboat instead of actually trying to save the ship itself.I can say to you already that right now as we speak profiteers are buying up land that might be used under the new bill’s provisions. They are out there right now having heard what was said in this Budget trying to buy up as much land as they can. It will be a boom time especially for Chinese investors and other quick-fix quick-dollar merchants.But there is some good in the bill—[Interruption]—and if those people opposite want to know what it is because so far they do not even seem to know their own bill then perhaps they should spend more time listening than caterwauling from the other benches. New Zealand First would support special housing areas as a concept but we would do so only on the basis of a genuine accord with local government we would do so only with appropriate streamlining and we would do so only within appropriate specified time frames for consents. So far we do not see anything in this bill or in anything that members opposite have said that would give us any real comfort about those things.New Zealand First would oppose the general non-notification approach as set out. Our concerns especially with that would be the loss of local democracy with too much power given to developers and the fact that it would lead to ticky-tacky developments which are not the quality developments for housing that New Zealand needs. We do not see any reference or intention to try to integrate these areas into transport health and other plans and what New Zealand fundamentally needs is a much more integrated policy framework for these things.New Zealand First would also oppose the width of the proposals concerning plan changes. We think these are too likely to completely compromise district plans and the proposal needs to be somewhat more limited. They need to be consistent with plan objectives and in this coming from Christchurch I would have to say that we should be learning from Christchurch’s experience. There are far too many developments there for housing in inappropriate areas—housing built on areas that we all knew were subject to liquefaction in an earthquake subject to sea level rise and subject to flooding. The developments should not have gone on in those places. So it is very important that these sorts of proposals for special housing areas should be consistent with the objectives in district plans otherwise we are going to entrench all the mistakes that we saw happening in Christchurch.We would support the Government’s proposals for the go-it-alone provision enabling it to issue its own consents where an agreement has not been reached but we think also that that proposal needs to be more limited. Again there needs to be a requirement for consistency with the objectives of the district plan. We do think that it should require notification where the plan itself had required that.Overall we think that we need to balance speed—and we know that this is an urgent issue—with quality because that is just as important a consideration. We are not seeing much of an assurance in this bill or in anything that the National members have said that would address those issues.Another issue is what the Government is not doing and there is plenty. The first question I would ask is how this plan would help homeowners seeking their first home. How would it help low-income earners approach the problem of buying a new home or finding a section? How would it help them to provide the deposit that is necessary and how would it then help them even if they could find a deposit to finance a new home in this day and age? The answer is that there is actually nothing in this bill or in the Budget or in the Government’s proposals that anything like adequately addresses those issues.The Government’s approach is really a half-baked one. It addresses only availability and only in a limited way. It does not address affordability really at all. It is silent on affordability. Supply alone will not result in solving the affordability issue. That is a separate issue which needs special consideration.Another point is how we fix the problem of migrants arriving in this country under the first tier of the parent category with their half a million dollars buying up land and homes in Auckland. Nothing has been said about that. People in Auckland know that that is a major problem. The Government is also silent about that issue. New Zealand First would put a stop to that and that is what we want to see this Government do too.We do not have only criticisms. New Zealand First also has comprehensive plans for housing and our first objective is to simply see that homes are within the reach of all in New Zealand. We believe that there should be a land bank—land actually purchased by the Government to make it available for housing in appropriate areas in New Zealand. We want to see long-term agreements for sale and purchase made available to people so that they can buy a section without having to come up with the full capital cost upfront. They can then pay it off over time and they can still borrow in that case to build a home on the section.We also think there needs to be a comprehensive New Zealand housing strategy that addresses not only availability and affordability. We want to see things like compulsory insurance quality housing provisions such as earthquake-proofing leak-proofing insulation and a whole range of other issues to be incorporated in such a strategy.In the end New Zealand First will support the bill but only to refer it to the select committee. We think that there is much to be fixed in the bill. If we can see that that islooked at seriously by the Government and we can fix many of the problems in it then New Zealand First will certainly consider supporting the bill further. But as it stands it would not be supportable so New Zealand First will support it only to the select committee stage at this point.Hon PHIL HEATLEY (National—Whangarei): I proudly stand and support the Hon Nick Smith on the Housing Accords and Special Housing Areas Bill because he has brought to us a comprehensive solution to housing here in this legislation. He is not a man of silver bullets like the Labour Party—that is what it comes up with. It always comes up with these silver bullets.We in the National Government have understood that there is a range of things that need to be done to address the housing pressures that we have. No. 1 is to upgrade the houses that we have already got. I do not know why the Labour Party in the 9 years it was in Government did not insulate all State houses. It was pointing around to private landlords saying: “You should upgrade all your houses. You rent poor-quality houses out to people.” and yet the Government’s own 70000 State houses under Labour were not even insulated. This Minister of Housing Nick Smith will finish insulating every State house across this country that can be insulated by the end of the year. We are upgrading all the State houses.The Resource Management Act changes and the Building Act changes are covered under No. 2. Cutting red tape—very important.Our third strategy is having consistently low interest rates. I remember the days of Labour during the 2000s when interest rates reached 7 percent 8 percent 9 percent and 10 percent. With interest rates at 10 percent if you had a mortgage of $300000 that was $30000 a year in interest. Under National interest rates are at 5 percent and 6 percent. Every 1 percent in interest rates on a $300000 mortgage is $3000 a year you keep in your back pocket. The Labour Party does not understand that mortgage rates matter. It would manage an economy that would see 8 percent 9 percent or 10 percent mortgage rates and that is a disgrace.Our No. 4 strategy is take-home pay. The Labour Party would tax you. You would have less take-home pay. You would not be able to sustain a mortgage. The Labour Party does not understand.And now the Hon Nick Smith is going to address the issue of land supply through housing accords and the preference to partner with councils to improve housing affordability. Why partner with councils? Because councils matter and local community opinion matters. But we say this: if necessary the Government will intervene in local authority areas to make sure that land supply is freed if no one does anything. If everyone twiddles their thumbs in the way that the Labour Government did for 9 years we will step in.The Auckland Council will be the first council that we do a deal with. We have already discussed that with the council. Fortunately the Labour Opposition has been contacted by the Auckland Council which said: “Vote for this” and it has subdued itself.Hon Member: Len Brown.Hon PHIL HEATLEY: Len Brown has made the call—Hon Member: Deputy leader—I think he’s deputy leader of them.Hon PHIL HEATLEY: —Len Brown the “deputy leader of the Labour Party” has made the call—and we are absolutely delighted that we are going to be in an accord with the Auckland Council to free up more land for housing.Can I say this: the Labour Party is against freeing up land for more housing. It is all about density. Then we have the extreme people on the right who are all about opening up farmland and all the rest. The National Government is saying: “We need a balance.We need to intensify land that is already in housing and we also need new land for housing.” It is a balanced approach. Greenfields and brownfields—that is our approach.Lastly can I compare that with the Labour Party housing policy. This is Labour’s policy: “Michael Joseph Savage built a bunch of State houses 50 years ago so we’ve got credibility.” Well I say to the Labour Party that it would be a sad day if my son Bryn was to go for his first job and when he was asked: “Why should we employ you?” he said: “Because my great-great-grandfather was a good guy.” and the employer said: “But what have you done?” and he answered—like the Labour members would—“Nothing but Michael Joseph Savage 40 or 50 years ago built a bunch of State houses.” Michael Joseph Savage would be turning in his grave to know that they did not even insulate those State houses during the 9 years they were in Government. What a disgrace.Hon MARYAN STREET (Labour): Listening to that last speaker Phil Heatley who has just resumed his seat makes me want to spit. Quite frankly Mr Heatley had 4 years to start to care about housing affordability and he did not. This Government has now presented its fifth Budget in a row and this is the first time—the first time in five Budgets—it has thought to talk about housing affordability. And why? Because it has been spooked by our policy. It has been spooked by the offer of supply. That Minister who has just left the Chamber—that Minister—The ASSISTANT SPEAKER (H V Ross Robertson): Order! [Interruption] Order! The member knows that we cannot refer to the absence of members.Hon MARYAN STREET: Thank you Mr Assistant Speaker. It took them a long time to respond to that did it not? But the Minister of Housing as he is now is so out of touch with housing needs that he does not even know about a woman with five children living in a garage in his own electorate—in his own electorate. So the reason that woman now has a Housing New Zealand house is that I made a fuss of it and made it a front-page news item. Within a day she had a State house. That is not about the provision of social housing; that is about a Minister being embarrassed that he does not even know the state of homelessness in his own electorate.We have Chris Tremain the real estate agent from Napier sitting over there saying: “People don’t buy houses at the average of the market.” The point is when they are first-home buyers and they live in Auckland they cannot afford even the bottom of the market. They cannot afford the bottom of the Auckland housing market. If your average is sitting at $735000 the bottom of the market is not going to be affordable either.First of all the thing that the Minister and his predecessor have failed for the last 5 years to do is acknowledge that there is a housing affordability crisis. There was a housing affordability crisis in 2007 when I became the Minister of Housing. Housing affordability was a huge problem because of the inflated expectations and borrowing that people had on the back of the wide boys who support the National Party. We know that that housing bubble collapsed—that housing bubble collapsed. We know what the history of that was and we know of the increase in mortgagee sales we have seen since then.We brought in a piece of legislation that was much more meaningful than the wishy-washy accord with local bodies that the Government is proposing in this legislation the Housing Accords and Special Housing Areas Bill. I brought in a piece of legislation that gave local authorities the legal tool in their tool kit to apply pressure on developers to make 10 percent of any residential development affordable housing in exchange for certain trade-offs such as waiving development levies. That was a voluntary piece of legislation. It should according to some arguments have been compulsory but in the end it was a voluntary piece of legislation. But it was much better than this piece of nonsense which says that qualifying developments “may” be required to include—“may” be required; I can hear them crying—affordable housing or may “give consideration” to the provision of affordable housing. These people who do not know the reality of most people’s lives do not know it. [Interruption] And do not tell me Mr Tremain that you do—Mr Tremain who owns 20 properties. I do not believe that he understands that there is a housing shortage and a housing problem.This piece of legislation has come about simply because the National Government has been spooked by what has turned out to be a very popular policy.Peseta Sam Lotu-Iiga: Spooked?Phil Twyford: OK—panicked then.Hon MARYAN STREET: All right “panicked” will do. There are two things that are important in addressing housing affordability amongst the things that the members opposite talk about; that is quite right all of those things are important. But why then did this Government on coming into power in 2008 repeal the legislation that allowed local bodies to get into conversations with developers and provide affordable housing? Why did it axe that legislation? Why did it axe the shared equity scheme that would have allowed people to buy their first home by freeing up State-owned Crown-owned land? By freeing up Crown-owned land we were offering people the property which stayed in the ownership of the State and they could buy the house. Over time as the circumstances of that family improved they could buy the Crown out—they could buy the Crown out. The programme was axed by this Government.But I have to say in addition to axing good legislation and good programmes—including the Welcome Home Loan programme which saw thousands and thousands of people get into their first home once the KiwiSaver limit had been reached. They were able to maximise their contributions and have that matched by the Government and then they were able to get into their first home. No that programme was cut as well. So not only was the Government cutting programmes and repealing good constructive legislation but also it then chose to axe its own programme the Gateway Housing Assistance programme which was meant to assist people—The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the honourable member. Honourable members the time has come for me to leave the Chair for the evening meal.Sitting suspended from 6 p.m. to 7.30 p.m.Hon MARYAN STREET: Tēnā koe Mr Assistant Speaker. Before the dinner break I was railing against this Government’s Budget being its fifth Budget but only its first Budget to consider affordable housing. The reason for that is that the Government has taken fright even 18 months out from the next election because the Labour Party has announced a constructive solution to housing affordability that people have responded to very warmly. Because of that the Government has been spooked into action.In fact I would be grateful if the Government had been spooked into action but all it has got here in this bill is an accord that it can run with local authorities or the Auckland Council that says that qualifying developments building developments may be required to include affordable housing or may give consideration to affordable housing. If this Government cared about housing affordability why did it axe the previously existing legislation which was stronger than this and also addressed the issue of local authorities and their ability to provide affordable housing? Why if it cares suddenly about affordable housing did it axe Labour’s shared equity scheme? Why if it cares about affordable housing did it scale back the Welcome Home Loan programme? Why if it cares about affordable housing has it axed its own Gateway Housing Assistance programme?Why if it cares about affordable housing did it axe the Hobsonville project? The Hobsonville project was to deliver 3000 houses of which only 500 would have been social housing 500 of which would have been modest affordable houses for first-home buyers and the other 2000—how many do they want—would have been for private purchase. There could have been a range of houses of different kinds of affordability built there. But no the Prime Minister said: “No State houses in my backyard.” He called it “economic vandalism”.This Government has come very late to the stage of providing affordable housing. It says that we need to expand the metropolitan urban limits and that we also need to have more dense housing. Well that has been known for the last 5 years. That has been on the programme for the last 5 years. Why has the Government just awoken to it now?We will support this bill in its first reading only because we care about affordable housing not because we think this bill provides any answers. The other reason I want it to go to a select committee is that it has Resource Management Act implications and I do not trust this Government where the Resource Management Act is concerned. It deserves close scrutiny. Thank you.ALFRED NGARO (National): Kia orana. I stand and rise and am proud to take a call on the Housing Accords and Special Housing Areas Bill in its first reading. The intent of this bill is very clear. It is about Government it is about councils and it is about streamlining a consenting process for new housing developments. That is the intent of this bill. That is the sense. This is legislation that will apply for 3 years. The first accord has been signed by Auckland. That should make Mr Twyford happy but it does not. It does not make him happy. Why? Because it was signed by Mr Brown himself who is a member of the Labour Party. What is really quite clear is that what this does for Auckland is ensure that it sets a target of 39000 homes consented over 3 years—far better than the current arrangement which is 3600 homes each year.We have heard a lot of rhetoric. We have heard a lot of calls asking where the plan is. We know that in order for housing development to happen we need to focus on five key areas. The first area is around land supply—land supply.Hon Maryan Street: I know.ALFRED NGARO: So we know about that. But what you do not know—what you do not know Mrs Street—is this—The ASSISTANT SPEAKER (H V Ross Robertson): Order! I do know.ALFRED NGARO: In your place of Nelson—we are talking about the place of Auckland. Let us take the area of Mr Twyford OK? Let us talk about land supply. The talk is that it is unaffordable. Well let us take this: on here right over here now you can go on to TradeMe into the property section and you can purchase a place in Vitex Lane which is in Waitakere behind the Waitematā rugby club with three bedrooms one bathroom and it costs $265000.Here is the rhetoric. They take the average in Auckland which is what? Does anybody know on the other side? Let me just tell you that $675000 is the average. That is correct. But the thing is that as first-home buyers you do not buy at the average price. You buy a home at the entry point. Many of us who have worked hard have done that. Our first home that we bought was not $675000; it was probably what it really is right here: $265000 three bedrooms and in Waitakere. Yes Mr Twyford you would know about that. Here this is really clear. By providing for the issue around land supply you enter in at $400000. What that means is that others can then go on and maybe buy a $600000 home. What does that do? It provides other opportunities for others to enter into the market. That is what it does.Here is the other thing that is really important: material costs. I have another question for the other side: what is the average cost of building per square metre in New Zealandat the moment? Do we know? Do we know? No we do not. Why? I will tell you what if I were to cross to the Greens to the 49 percent members they would be able to tell us. I know Jan Logie would be able to tell us. She knows because the Greens have got a housing policy that everyone is listening to at the moment. The average cost per square metre is $1700. We know that is unaffordable. We know that is unaffordable hence the reason that the second part of the plan is to work on the cost of building. The third part of the plan is around infrastructure. The fourth part of the plan is productivity and construction in the sector. Compliance cost is the big issue. We know that is the big issue hence the reason why this accord is working.But those out there who are listening should not be afraid. This is not about the big Government coming along to take over. What it is saying is that where the council cannot come to an agreement where the accord is not possible the Government will then come in to ensure that the affordability the accessibility to homes is there as well. [Interruption] It is not the scaremongering of the other side. It is No. 1 whether it is accessible to buy and affordable. Yes at $265000 you can buy your first home. I know families and I know people who have done that. Secondly we are reducing material costs. Why? Because at $1700 per square metre it is just not affordable.This bill is addressing the key issues around affordability. It is a plan. But we excuse the other side. You have only just received the bill so you have not actually read it. Instead you just keep talking about one issue. This is a great bill. We look forward to the select committee stage to having the debate and to sitting down with people who actually know about building and planning and about making a difference for our communities. I commend this bill to the House.The ASSISTANT SPEAKER (H V Ross Robertson): Before I call the next speaker I just inform members that this is a split call. The member speaking will get a 1-minute bell.MOANA MACKEY (Labour): Alfred Ngaro the member who has just resumed his seat found one affordable house in Auckland so now there is no housing crisis in Auckland. Apparently there is no housing crisis because he went on TradeMe and found one house that he thought poorer families could afford. So we do not need to do anything—problem solved. That probably explains why we do not see more action from this Government on affordable housing. Government members do not believe that there is a housing crisis because their voters can afford to buy houses in Auckland and around the country so they really do not care about the rest of New Zealand who are struggling to get into their first homes.We had an extraordinary performance from the former Minister of Housing Phil Heatley before the dinner break. We all love the court jester routine we really do but I am afraid I need to correct some of the things that Mr Heatley said. We spent 9 years undoing the damage of the 1990s National Government. We rebuilt 9000 State houses when that lot sold 14000. They did no maintenance the entire time they were in Government. We started that maintenance programme up again. We managed to go a long way to repairing the damage of the 1990s National Government.So what did the National Government do when it came in? When it came into Government we had the global financial crisis. A sensible thing would have been to have housing as a major part of an economic stimulus package. That is what Australia did. It had $5 billion for housing. It kept people in work. It kept income tax flowing. It kept GST flowing and it built a resource that it was desperately short of just like New Zealand was.What did National do? Nothing. It repealed Labour’s affordable housing bill. That was one of the first things it did. It got rid of Labour’s shared equity scheme because of low uptake when the housing Minister Phil Heatley instructed Housing New Zealandnot to advertise it. He said: “Don’t tell anyone about the shared equity programme.” and then National was surprised when there was low uptake. We tend to take it for granted that schemes are more successful when people know they exist but apparently that is not obvious to National.As my colleague said there should be 500 affordable homes and 500 State houses going into Hobsonville out of 3000. There is no social housing because the Prime Minister of this country who trades on his State house upbringing every chance he gets shamefully said there should not be State housing in Hobsonville because it is economic vandalism to have poor families living on sections that have sea views—because God forbid poor children get to look at the ocean as well. That is our Prime Minister. How many affordable houses have there been? A handful because the National—Hon Maryan Street: 17.MOANA MACKEY: Seventeen—seventeen when we promised 500.Hon Maryan Street: And they’re not affordable.MOANA MACKEY: They are not affordable because they were done through the Government’s Gateway Housing Assistance scheme. The wonderful thing about the Gateway Housing Assistance scheme is that the only people who could afford to access it were people who could afford a market home on the day that they entered into the scheme. So it was an affordable housing scheme for people who could already buy a house in Auckland. I know a young woman who is one of those 17 people. The only reason she got into that Gateway Housing Assistance scheme in the Hobsonville development was that her parents put their house up as collateral against the loan. That is not an affordable housing scheme it is an embarrassment for the Government.We had the Kāinga Whenua scheme for Māori housing where the former Minister of Housing Phil Heatley got up and said he had fixed the Māori housing problem—he had fixed it—and the scheme was going great guns. The problem was that the scheme had not actually started yet. When it did start no one qualified for it because the way it was set up did not recognise that the individual families who were applying could not qualify for a Kiwibank loan. And Kiwibank was mightily annoyed that it was being required to turn people away from the scheme because they just simply did not meet the lending criteria while National members were out there talking it up.Then we had charitable status being revoked for the Queenstown Lakes Community Housing Trust. If this Government really cared about community housing organisations it would have moved to relegislate to make it clear that the provision of affordable housing does qualify under the Charities Act. What did Minister Phil Heatley do at that time? He did absolutely nothing. Now every community housing organisation in this country is potentially under threat because of that precedent to have their charitable status removed which means that money that should be going to build affordable and social housing would be going into paying tax that they were not paying before.We need to build affordable homes. As Duncan Garner said tonight: “There is nothing in this Budget for affordable housing.” If you look for it—Maggie Barry: Is he a member of your party too?MOANA MACKEY: No he is not a member of the party Maggie Barry. And you might want to listen to this because it is true. The fact is that we need to build more homes and they need to be affordable homes. The community housing sector which is now being required to be Housing New Zealand on behalf of the Government is where the expertise lies. They are the people who have the expertise and experience in building affordable homes and instead they are going to take over being the social landlord for this Government. Use that sector wisely because it knows what it is doing. It has the ability to make a real difference. It is not there to do the Government’s job forit but as we see in the next piece of legislation that is exactly what the Government is going to have it do.EUGENIE SAGE (Green): Tēnā koe Mr Assistant Speaker. I am pleased to take a short call on the Housing Accords and Special Housing Areas Bill and explain why the Green Party opposes this bill following on from my colleague Holly Walker. We oppose the bill because it fails to provide for affordable housing and because it removes community consultation and local decision-making on new subdivision development. It is another example that this Government does not trust local government. It is not about a partnership with local government. It is about centralised decision-making.This is the same Government that in Opposition made such a fuss talking about nanny State when the former Labour Government sought to introduce energy-efficiency standards for lightbulbs. Nannies care about the people whom they are responsible for. This Government is the dictator State. It does not trust local councils and local communities to think for themselves and to do the land-use planning that they want to meet their needs. This bill is breathtaking in the powers that it gives to housing Minister Nick Smith to override plans to get rid of prohibited activity status and to override consent processes.Now that the Minister is no longer the Minister of Local Government or the Minister for the Environment where he could meddle directly with local authorities and the Resource Management Act he is doing it by the back door. This bill gives him major scope to meddle both with sensible and strategic decision-making by local councils on where the urban limits should be and to trample all over that concept so that it can benefit National’s property developer mates and give them a very easy ride through the resource consent processes for their property development and their new subdivisions on the fringes of our cities.This bill is not a solution to the housing affordability crisis. It is about trapping families in ghettos on the fringes of Auckland and potentially in other cities. Simply extending the urban limits to provide cheap housing will provide windfall profits for those people who have land banked on the edge of the cities but it potentially traps families in those urban fringes. That is because those areas on the outskirts of the cities often do not have public transport because this Government has refused to invest in public transport. They rely on cars. When petrol prices increase it means transport is unaffordable. There are often no job opportunities in those fringe areas so they cannot work locally. They do not have the amenities either. People are forced to commute long distances and it is not affordable. The types of houses that are built there are often large because land is cheaper rather than being compact energy efficient and affordable.Investing in this policy is about investing in ghettos—marginalising people. It is not about providing more affordable housing. We want compact and livable cities where people can connect with good public transport. That means more brownfield development and more medium density small dwellings centred around existing community amenities. It means good public transport close to where people work. That is a much better model for helping the first-home buyer to get a foot on the property ladder rather than this bill.This is another attack on the Resource Management Act. It is because the Government wants a much more permissive approach to planning. The bill provides for the Minister to be able to override prohibited activities. It provides for these special housing area applications not to be notified unless there is an affected neighbouring landowner. What we will see is the community not being involved in new subdivisions. When that happens there is poor planning. We have suburbs in Christchurch new subdivisions where the streets are not large enough to allow buses to go through. Thatis because the developer prevailed. They did not think about the wider community needs. In the same way the Minister goes in to push through new subdivisions without these being properly planned and without them being in the context of the urban limits where we are trying to reduce sprawl and councils are trying to do that. Instead it is about freeing up land to create ghettos for people on the margins of the cities who do not have good access to transport or good job opportunities. It is not about providing affordable housing.MIKE SABIN (National—Northland): We have just heard a very very good example of why the Green Party is probably never going to be more than a 10 percenter. Of course they are a 49 percenter in the mixed-ownership model across there but never more really than a 10 percenter in the view of the New Zealand public.I just want to firstly commend the Minister of Housing for this circuit-breaker. This is a very very complex area. It goes to the heart of the New Zealand psyche in so many ways because the purchase of a house is not only probably the biggest investment that Kiwis will make but also something that Kiwis are very passionate about as well. So we have found ourselves in this most difficult position over years and probably under successive Governments where land prices have become unaffordable.What staggers me is the sort of criticism that we hear from the Labour Party—although it is indicating that it will be supporting this bill the Housing Accords and Special Housing Areas Bill—and the negative and you know “beatings will continue until morale improves” sort of approach that it has become so expert at which really can be summed up in the whole flavour of the Budget debate. Today there has been no greater contrast I think in the two leaders in this political theatre than what we saw from John Key and what we saw from David Shearer. What we saw from David Shearer was a plethora of negativities which we have become used to but scattered in amongst it was only the slightest shred of an alternative way forward for the country. That alternative way forward of course is about a capital gains tax and about “North Korea-ising” the New Zealand power supply. Well I am not sure that that is going to move the hearts and minds of New Zealanders.This first housing accord is about setting a target of 39000 consents within 3 years. It allows for greenfield developments in 6 months not 3 years and brownfield developments in 3 months not 1 year. When we talk about the barriers and the roadblocks if I can use that phrase this is about councils and the Government doing what Kiwis—in particular Aucklanders—need of them. I once again just want to say that this is a Minister who identifies a problem gets on and applies a solution to it. This is something that should be supported across the House. I commend this bill.A party vote was called for on the question that the Housing Accords and Special Housing Areas Bill be now read a first time.The ASSISTANT SPEAKER (H V Ross Robertson): Can I just remind members that when a vote is being taken it is to be taken in silence. Interjections can be seen as intimidation on someone else and can actually lead to a breach of privilege. I just caution members about that.A party vote was called for on the questionThat the Housing Accords and Special Housing Areas Bill be now read a first time.Ayes104New Zealand National 59; New Zealand Labour 33; New Zealand First 7; Māori Party 2; ACT New Zealand 1; United Future 1; Independent: Horan.Noes15Green Party 14; Mana 1.Bill read a first time.Billreferred to the Social Services Committee.Hon Dr NICK SMITH (Minister of Housing): I moveThat the Housing Accords and Special Housing Areas Bill be reported to the House by 26 July 2013 and that the committee have the authority to meet at any time while the House is sitting (except during oral questions) during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 188 and 191(1)(b) and (c). The fact that this bill has secured the support of 104 of the 120 members of this House is really a broad spectrum acceptance that New Zealand has a real challenge around housing affordability and that the provisions that the Government has provided in this Budget provide for a real way forward. I think we acknowledge that the Labour Party had nowhere to go.Hon Members: Ha ha!Hon Dr NICK SMITH: Well it did not. Look if you look at its 9 years—Grant Robertson: Well we don’t want to spend any time with you.Hon Dr NICK SMITH: I challenge the members opposite. If you look at the history of every single Government since this Parliament was formed the truth is that the previous Labour Government had the worst record on housing affordability by any of the measures. So it is important that we get on and address these issues with some urgency.This motion will provide for this bill to have 10 weeks before the select committee. The importance of the timing is this: everybody is aware that the issues of housing affordability are most acute in Auckland. It is also true that Auckland Council is at the moment in the process of working on its draft unitary plan. The council has set down a plan of notifying that plan in September. This bill is closely connected with that. We want to align those processes so that this bill can be passed by August and so that we can get on and make progress on the supply of housing the moment that plan is notified. That is the reason why the report-back date of 26 July is so important.I make one further point. This bill is an interim measure. The Government has substantive resource management reforms being worked on by my very capable colleague Amy Adams. She will be bringing through a bill to deal with the long-term issues that will flow through into the plan changes that give us the capacity to set the right foundation for housing affordability in the long term. If this truly is to be a mechanism that is going to make a difference in the short to medium term Parliament needs to get on and do the work. The select committee is well capable of dealing with this timetable and that is why I ask the House to support this measure to get on and make sure that houses are more affordable for New Zealand as quickly as possible.GRANT ROBERTSON (Deputy Leader—Labour): It was interesting to hear Nick Smith talk about the record on housing affordability of the previous Labour Government when housing prices have gone up 36 percent since his Government came into office.Hon David Parker: In a recession.GRANT ROBERTSON: As David Parker says in a recession housing prices have gone up 36 percent in Auckland under this Government. So Nick Smith wants to lecture the House about housing affordability. The fact is that in this bill which has been referred for a truncated select committee process there is very little that ensures housing affordability at all. The Government has to take it into consideration—yet again another part of this Budget where things are being considered rather than being done. The housing plans may include affordable housing. This bill if it were to do what was needed in affordable housing may need to be rushed through this House. If there were something in this that we could all see was addressing the range of issues that are required to get affordable housing in New Zealand maybe there would be a justification for pushing it through. But this deals with only one aspect of that.It is disturbing to be standing here again only a few days after I last spoke in a referral motion debate where the National Government once again decided that the select committee process on a bill should be truncated in the way that it is. We are down now to a 2-month consideration of this bill. I simply do not believe that that length of time will be sufficient to allow the scrutiny that this bill needs. Dr Smith obviously missed a lot of the speeches from Labour members because he clearly did not understand that our agreement to send this bill to a select committee had reservations attached to it. Those reservations are what need to be explored in a proper select committee process.The regulatory impact statement on this bill indicates why there are issues with such a truncated process. It talks about the fact that the development of the option the Government has put forward under Budget secrecy rules has meant that options have not been consulted on with stakeholders and affected parties outside of Parliament. That is what the regulatory impact statement is telling us—it is saying to this House that because of the way the Government has gone about developing this proposal it has not talked to anybody about it. It has not talked to local government which is critically involved in whether or not this can work and whether or not it is actually possible for there to be specified housing areas. We heard from Nick Smith that he thought it would be a partnership between central and local government. Well local government has not even been consulted up to this point and now it is going to be faced with a truncated select committee process where its ability to actually influence the bill where its ability to raise some of the issues that we are concerned about—about whether or not these housing areas will actually work—will be limited by this referral motion.Once again the National Government has brought a bill to this House having mucked around on this issue for months and months and having ignored the pleas of the Labour Party of Auckland Council and of others to actually get on with helping Auckland to address its housing crisis. For 5 years it has sat on its hands on the issue of housing and it comes to the House today and says: “You’ve only got 2 months. It’s got to go straight through.” Well that is once again this National Government treating this House with disrespect with contempt for the processes of democracy and with contempt for the select committee process.New Zealanders all around the world who are interested in politics and who write about politics talk about the importance of our select committee process. It is quite unique in the world and it is vitally important to this House’s processes. We do not have a second Chamber. We have only one Chamber.Hon David Parker: This is it.GRANT ROBERTSON: This is it. We have to have a robust select committee process in order to give legitimacy and credibility to the work we do here. Law commissioner John Burrows said in 1990 that select committees are “a crucial bastionof democracy in our legislative process.” Every time National brings a truncated motion to this House without good justification although John Burrows says select committees are a crucial bastion of our democracy National says: “We don’t care about that.”Peseta Sam Lotu-Iiga: What would Len Brown say?GRANT ROBERTSON: Sam Lotu-Iiga interjects as he wanders around the House saying “What would Len Brown say?”. I will tell you what Len Brown would say Mr Lotu-Iiga. He would say: “Where was National for the last 5 years when there was a housing crisis in Auckland? What was National doing then? Sitting on its hands doing nothing to resolve the housing affordability crisis having the Prime Minister deny that there even was a housing affordability crisis.” That is what Len Brown would be saying and he would be saying: “I want to see a process where people can have their say.” because that is what we should have in this process.Whenever there is a truncated select committee process I am concerned about the way in which the public will be able to make submissions. This is a bill on which people will have strong views. It does make significant change to the Resource Management Act. It places significant obligations on local councils to work with central government on whether or not there will be special housing areas and it does give significant power to the Minister of Housing where there cannot be agreement on those areas. Those are significantly increased powers and there will be a range of submitters who will want to submit on that—not only local government. The New Zealand Law Society which will often make submissions on these bills when they are making such significant changes to law will be forced into a rushed process as well.Hon David Parker: EDS.GRANT ROBERTSON: There are also environmental NGOs as my colleague David Parker says such as the Environmental Defence Society and others who have provided—Hon Maurice Williamson: Oh those luminaries.GRANT ROBERTSON: Maurice Williamson is not a fan of the Environmental Defence Society. He had better talk to Nick Smith. Nick Smith does like the Environmental Defence Society. We know that and it should be given a chance to have its submission on this bill. Maurice Williamson should be given his chance to have a submission on this bill. The putative Mayor of Auckland Maurice Williamson would want to have a submission on this bill to make sure that he can have a say about what is happening with housing affordability in Auckland. But Maurice Williamson’s opportunity to actually have a say on this bill will be severely limited by this truncated select committee process.I just want to return to the regulatory impact statement in terms of the reasons why a longer process is needed. I have mentioned already the fact that it is noted there that there has been no external consultation whatsoever. It also says that there is insufficient information on land supply restrictions across local authorities in New Zealand. So the select committee is going to need to research that. It is going to need to say what the extent of the problem is elsewhere in New Zealand and whether the things that are in this bill stack up. Are they required? We know quite a lot about what is happening in Auckland around the impact of land supply but we do not have that information about the rest of New Zealand. Although this bill is driven by the fact that the Auckland Council has finally managed to convince the Government to act and support it in its Auckland Unitary Plan it actually applies to the whole of New Zealand. That means that we do need more time at the select committee to be able to get information about what the impact of land restrictions is on other local authority jurisdictions.The regulatory impact statement also says that at the moment there is insufficient detail on the specific operations of how this option will work. We do not actually knowwhat the impact of this will be on the behaviours of landowners or on the commercial decisions of property developers. We need the time at the select committee to be able to analyse whether or not this is the right option and whether or not this is the way this should go. One of the interesting points that the regulatory impact statement makes is that there is insufficient information on the provision of the infrastructure that will actually be required to support the kinds of developments that are being proposed in this bill. That is because the National Government has only just caught up with the idea that it needs to do something about housing affordability. It has put up a bill in front of this House that goes only to some small extent of addressing that. It ignores all the other measures that it would be possible for the Government to put in place and puts up a bill that maybe might consider doing something about housing affordability. It does that in a truncated select committee process that simply will not give New Zealanders the opportunity to have a say. It will not give this legislation legitimacy.Legitimacy in our parliamentary system in New Zealand comes from a proper select committee process. We are not going to see that proper select committee process under the motion that the Minister of Housing has just moved. A report-back date of 26 July is simply not enough time. In the system in this House 6 months is what it should be 4 months is what it often is and 2 months is simply not enough. This Government needs to understand that the people of New Zealand deserve to have a say. Labour had supported this bill to the select committee but we do not support this referral motion. This referral motion is wrong. It is a continuation of this Government’s anti-democratic approach when it comes to lawmaking and particularly when it comes to the role of local government. I urge members in the House to vote against this referral motion so that New Zealanders can have a proper say on this and so that we can actually explore real options for housing affordability rather than this weak limp response from National.HOLLY WALKER (Green): The Green Party shares many of the process concerns raised by the previous speaker Grant Robertson with this truncated process referral motion. Firstly we note that it does seem that the Government is making a habit of referring bills to select committees with shortened select committee processes. As has been pointed out by the previous speaker we do have a unique select committee system of scrutiny in New Zealand which we should be very careful not to undermine with routine shortening of the process.Secondly as has also been pointed out the Housing Accords and Special Housing Areas Bill is a vital bill. Well perhaps the bill itself is not vital but the issue it addresses is one of the most significant social and economic challenges facing the country—i.e. the housing crisis and the crisis of affordability. There is a high degree of public interest in the outcome of this legislation and measures to improve housing affordability and therefore there will be a high degree of public interest in the submissions process on the bill. There are also a large number of affected stakeholders aside from the general public potential homeowners and existing homeowners. There are a large number of institutional stakeholders who deserve the right and the chance to have a decent say on the bill not least of which are the local councils.As has been pointed out the regulatory impact statement makes clear that there has not yet been consultation with local authorities around the country. This is a really important point because although the Auckland Housing Accord has been negotiated and the Auckland Council is certainly on board with the provisions for that accord this bill actually extends the possibility of similar accords and of special housing areas around the country and yet there has been no conversation and no consultation with other councils that are potentially affected. And given that there is a provision for these special housing areas to be rolled out to other regions and the fact that the Governmentis potentially able to dictate the terms for those special housing areas if an accord cannot be reached with those councils it seems particularly important that those local government stakeholders do have the opportunity to fully engage with the select committee process on this bill.Similarly with insufficient information on land supply problems across New Zealand we need to be clear that the Social Services Committee has the right information and enough time to digest and process that information before we roll out a bill that extends a model across the whole country when we have not yet even analysed whether and how it needs to apply in other parts of the country. So for these reasons we certainly oppose the truncated process of the select committee. We think New Zealanders have the right to have their say at the select committee and that it is a complex and technical piece of legislation addressing a very important social and economic challenge and therefore parliamentarians need to have sufficient time to engage with the material as well.The ASSISTANT SPEAKER (H V Ross Robertson): I call the honourable member Chris Hipkins.CHRIS HIPKINS (Labour—Rimutaka): Well that is very fortunate Mr Assistant Speaker Robertson. That is what my parents call me as well. If there is one message that comes out of this particular motion it is that born-to-rule Tory arrogance is back in vogue on the other side of the House. Those members do not really give a stuff about the democratic process or about ensuring that New Zealanders get a chance to have a say on the legislation that goes through this House. The National Party knows best. The National Party knows best. It is going to push through the Housing Accords and Special Housing Areas Bill and not give a stuff about what New Zealanders have to say whether they want to have a say on this process or whether they even want to make a submission. It does not actually care about whether members of Parliament have an opportunity to engage with this and actually do the job of parliamentarians properly.Let us consider what the referral motion actually does. The referral motion more than halves the time for this bill to be reported back to the Parliament.Hon Dr Nick Smith: They don’t like hard work.CHRIS HIPKINS: No we do not like it. That is absolutely true. We do not like it over here. This side of the House actually believes that we have a select committee process and time frames around the select committee process for a good reason: so that New Zealanders get a chance to have a say on the legislation that affects them and particularly when we have got legislation here that gives the Government the power to vary it because by Order in Council the Government can vary the provisions in this legislation. That is something that New Zealanders should be interested in because it hands over more and more power to the born-to-rule Tories over there who seem to think that they know best and that they do not have to have a democratic mandate for the things that they are pushing through this House and for the changes that they are making.What are they going to do? They are halving the report-back time frame in this House and they are allowing the select committee to meet even when Parliament is sitting so members of Parliament who might be participating in other debates cannot do their jobs properly. They are getting very lively over there on the other side of the House because they do not like it. They do not like being hauled up for the fact they are so arrogant. [Interruption] I am sorry. I am not a waiter so please do not shout at me. I am not a waiter so just hold your horses. You will get your chance to have a say in a moment.They do not like it. They do not like being hauled up on the fact that they are riding roughshod over the democratic process. But people up and down the country know thatthat is all they can expect from this Government. This is a Government that cancels elections when it is not comfortable with what the outcome of those elections is going to be. It just decides: “Oh sorry. People might elect a council that we don’t like and isn’t going to do things that we agree with so we will just cancel the election altogether.” That is the approach of members on that side of the House. They do not really mind about that. They will just cancel the elections altogether and when they think that the public might have something to say about a bill that they do not want to hear they will just truncate the process they will shorten it down and they will prevent people from having a say on the legislation. This legislation may well be good legislation but it is bad bad process. [Interruption]The ASSISTANT SPEAKER (H V Ross Robertson): Order! Order! Mr Hipkins is making a hard-hitting speech.Hon Members: Ha ha!The ASSISTANT SPEAKER (H V Ross Robertson): Order! I am on my feet. Some interjection can be expected but not so much that it drowns out the speaker. The Speaker will not allow that.CHRIS HIPKINS: Thank you Mr Assistant Speaker. I was just getting warmed up. Nick Smith in his speech earlier on mentioned the fact that 104 MPs in the House had voted in favour of this legislation and he used that as the justification for preventing New Zealanders from having a say in it. We are supporting the legislation because we do believe that there is a housing affordability crisis in New Zealand and—Hon Member: Oh! Oh!CHRIS HIPKINS: “Oh! Oh!” they say over there. Well they are just waking up to it now. They are just waking up to it now. They have been in Government for 5 years and finally after 5 long years they have suddenly realised that there is a housing affordability crisis in New Zealand and maybe it would be a good idea to do something about it.Louise Upston: I raise a point of order Mr Speaker. I draw your attention to Standing Order 286(3) which is very clear about the scope of this debate.CHRIS HIPKINS: Speaking to the point of order this is a fairly robust debate being held under urgency and I am responding directly to comments that the Minister who moved the motion made.The ASSISTANT SPEAKER (H V Ross Robertson): Well can I just say this to members. This is a debate on an instruction to a committee that it report by an early date and giving certain powers for the committee to meet. The debate is not an opportunity to debate the substance or merits of the bill.CHRIS HIPKINS: I will refrain from doing what the Minister in charge of the bill did when he commented extensively on the substance of the bill in debating this referral motion. I will confine my comments to what an outrageous abuse of the parliamentary process this referral motion is in preventing New Zealanders from having a say on this particular piece of legislation.Reporting this bill back to the House within 2 months of its going to a select committee does not allow the select committee sufficient time to advertise widely to travel if it needs to to hear submissions and to give people the chance to have their say on it. This does not apply just to Auckland. I refer to the very beginning of the explanatory note which states that by Order in Council this can be extended to further regions and districts by the Government with no referral back to the people to have a say on it and there are many provisions in here that allow the Government to extend the powers of it by Order in Council. Therefore many New Zealanders will have an interest in it and will want to have a say on it. But the Government does not want to hear from them. The Government does not want to hear from them. It is quite happy to rideroughshod over the democratic process after 5 years of doing nothing about housing affordability. This referral motion is about the National Government being seen to do something and being seen to do it with urgency without there actually being any legitimate urgency behind it. Actually it is impossible—Maggie Barry: People need housing “Chippy”.CHRIS HIPKINS: “People need housing.” Maggie Barry says. Oh my goodness! Maggie Barry has pronounced. “Let them eat cake!” Maggie Barry pronounces to the House—let them eat cake. “People need housing.”—one of the most profound statements that we have heard in the House today. Maggie Barry says: “People need housing.” My goodness me! My goodness me! She has woken up over there and decided that the people are allowed to live in houses. Goodness me! What an admission from the born-to-rule Tory Government over there.People also have a right to have a say in the laws that affect them and the laws that govern this country. But on this referral motion despite the fact that we support the bill at the current point and we want people to have a chance to have a say in it we absolutely object to shortening the process down so that people do not have a chance to adequately consider the bill. Six weeks roughly is what the committee will get. Actually it is slightly longer than 6 weeks. It will be a bit longer than that. It has flip-flopped around from what we were told earlier on when I wrote “6 weeks” down on my piece of paper here. But that time frame does not allow people a chance to have an adequate say.I do want to respond to something else that Nick Smith said during his speech when he talked about the Labour Party’s track record on affordable housing. Well I say to Nick Smith that Labour managed something that this Government has not managed in 5 years: a booming economy and 9 years of surpluses—something that this Government has not managed to achieve. So to hear Nick Smith lecturing Parliament on housing affordability in that context is a little bit rich.I want to come back to whether or not the parliamentary process will be sufficient if the committee has only until 26 July to consider this piece of legislation. How many parliamentary adjournment weeks are there in that time? Adjournment weeks are when select committees do a lot of their work on a bill like this. How many adjournment weeks are there? Select committees should be meeting during adjournment weeks. They are not time off; they are a time for the select committees to actually do their work. How many adjournment weeks are there doing that period of time?Hon Member: You don’t want no adjournment week.CHRIS HIPKINS: What was that? Nothing. He has gone very silent. Suddenly he has been caught out making inane interjections. That is not unusual for that member over there. Suddenly when he is challenged on them he has not got anything to say. So there will be a question of whether the select committee actually has adequate time to consider the legislation.Of course the Government in the referral motion here has allowed the select committee the power to meet while the House is sitting. This is only about the second or the third time in the term of this current Parliament since the last election that a referral motion of that nature has been put before the House. The Government has not needed to do that before because actually with cooperation particularly with legislation that both sides of the House support there is normally an opportunity for relevant time frames to be met. But this born-to-rule Tory Government does not seem to think providing it can get a wafer-thin majority that it should actually bother to extend the courtesy of allowing members from all sides of the House to participate adequately in the process.Those members know what is best. They are just going to push through everything. They are going to do it under urgency. They are going to abuse the parliamentary process under urgency for bills that do not actually have legitimate urgency. There is nothing in this legislation that suggests it should not be done over a 4-month time frame rather than the 2-month time frame that the Government has promoted.Maggie Barry: People need homes. Let’s get on with it.CHRIS HIPKINS: Oh Maggie Barry says: “Let’s just get on with it.” “Let’s just get on with it.” Maggie Barry says. Let us forget about what anybody says forget about New Zealanders who actually in a democracy might have a view and might want to have a say. “Let’s just get on with it.” Maggie Barry has pronounced that this is the right thing to do therefore we should just forget about letting anybody else have a say. I am looking forward to her contribution in this debate on why she thinks that only 2 months is a sufficient period of time to consider this legislation and to allow the public to have a say.It is an abuse of the parliamentary process. There is no justification for ramming this bill through under urgency and pushing it through the select committee process under the select committee equivalent of urgency. It is a bad referral motion and even though we support the bill we will not support the Government preventing New Zealanders from having a say on legislation that affects them.BRENDAN HORAN (Independent): I rise to oppose the Minister of Housing’s motion in respect of the referral of the Housing Accords and Special Housing Areas Bill to the Social Services Committee. Once again this Government is trying to bypass the democratic process. During the democratic process we hear from submitters and a bill is stretched in every direction. That is how democracy works. At the end of the process hopefully we get a bill that works. Today just over there the Prime Minister stood up and said that within 3 years there would be 39000 houses built. Did anybody do the mathematics there?Mike Sabin: Consented.BRENDAN HORAN: That is what he should have said. He should have said that 39000 would be consented. But that is going to be very difficult too. Who is going to process the applications? Is the council supposed to pay for people to be employed to process those applications? There are many applications. There are many resources. We have got resource consents. We have got building consents. Who is going to build these buildings? Where are the developers? Where have they gone? Well many of them are bankrupt from the recession.Hon Maurice Williamson: That sounds like a song. “Where have all the developers gone?”.BRENDAN HORAN: That is a song. “Where have all the developers gone?”. Who is going to build all these ghost houses? We expect that with the proper—The ASSISTANT SPEAKER (H V Ross Robertson): Order! Can I just remind the member that this is actually a debate on an instruction to a committee.BRENDAN HORAN: Yes Mr Speaker. So we expect to see developers submitting. We expect to see plumbers submitting. Who is going to build these houses? Where are all the plumbers? Where are all the tradespeople? Did you do the maths? It will be $20 billion worth of building projects in 3 years.Tim Macindoe: I raise a point of order Mr Speaker. My point of order is twofold. The first is that the member should realise that he needs to sit down when you are on your feet ruling on a point of order but more important I draw his attention again to the point that you are making to him—that we are debating the question specifically about a truncated select committee process. Nothing that that member has said so far has been relevant and I ask you to ensure that he sticks to the question.BRENDAN HORAN: It is quite relevant to the bill when I am speaking about submitters and the select committee process.The ASSISTANT SPEAKER (H V Ross Robertson): Can I just remind the member that there is an instruction before the House about this bill going to a select committee and about the committee reporting by an earlier date. Also the instruction gives certain powers for the committee to meet. That is what he needs to bring his debate around—that the committee reports by an early date and that certain powers are given to the committee.BRENDAN HORAN: Thank you Mr Speaker. I will get back to what I was saying. We need the correct amount of time for the select committee process and for the submitters. I cannot see how it is going to work and on this side of the House we believe in doing something well and doing it once. [Interruption] Let us have a look at Simon Bridges’ bill that was rushed through under urgency. That is going to come up again very very shortly to fix up the mess. Aucklanders cannot afford to have this Government make a complete mess of Auckland. So please let us have the proper select committee process. Let us follow the rules of democracy that New Zealand has always been proud of. Thank you.The ASSISTANT SPEAKER (H V Ross Robertson): I will go for seniority.Hon MARYAN STREET (Labour): Age before beauty—age before beauty. If the Government wanted to reinvent the wheel why does it not choose to reinvent the wheel properly? What it has done in this the first time it has mentioned housing affordability in five Budgets is choose to send it to a truncated select committee process. Why is it doing that when that is one of the things that offends people the most—not having access to due process around submissions and being able to be heard. We have heard from Government members tonight that this is a complex issue. Then why truncate the process? Why make sure that as few people as possible can get to submit on this? If the Government is going to reinvent the wheel because it has scrapped and repealed every constructive piece of effort made by the previous Labour Government to address housing affordability because we knew it was a problem in 2007 and now it is 36 percent worse—36 percent worse—under the National Government’s watch then why is it not allowing a decent run at submissions for submitters on this bill the Housing Accords and Special Housing Areas Bill?All I can conclude is that the Minister in whose name this bill is the Hon Dr Nick Smith likes urgency. He likes to look as if there is a lot of activity happening. We have seen him almost destroy ACC in that process and now it has to correct that—now it has to correct that. But time is needed because this legislation is half-baked.I will quote John Armstrong in theNew Zealand Heraldwhen he was talking about National’s housing affordability package: “Package? What package? No wonder National avoided over-selling the contents of their plan to make housing more affordable. The plan looks more like a rough first draft.” A rough first draft. So if the Government is going to take this rough first draft to the Social Services Committee the very least it could do is allow a decent period of time for the select committee to polish it to turn it into something halfway useful instead of this limp-wristed lily-livered piece of nonsense that allows the Government to talk with local authorities—Auckland in particular—and other territorial authorities as they choose by Order in Council. It has not worked out what it means. It has not worked out whether or not Auckland Wellington Christchurch Nelson and Queenstown are still the most expensive places in the country to buy a house which is why the shared equity programme was put into Nelson and Queenstown and those three major centres under my watch but which was axed by the incoming Government. It cannot conceive of housing affordability despite Maggie Barry’s protestations about it being a critical issue in more places around thecountry than just Auckland. It is a critical issue. The Minister of Housing who does not know that there was a woman with five children living in a garage in his own electorate wants to rush this bill through the select committee. Surely he could pay people the courtesy of making sure that they have the opportunity to submit properly.I come back to the point I made before in the earlier debate and that is around the Resource Management Act provisions. It is around consenting and it is around the processes that councils have to engage in in order to ensure that affordable houses that are built are fit for purpose are sound are of good quality and will work on the sections that they are intended to be built upon. So in order to make those things happen there may be some room to speed up processes but let us have a proper look at it. Let us have people come to the select committee and represent the concerns that they might have under closer scrutiny. It is typical of this Minister I have to say that things under his watch do not get close scrutiny. When he had the local government portfolio he blew up the figures in that portfolio as well so he had to be shifted out of that. I already mentioned ACC to my colleagues. I already mentioned that every portfolio he touches he seems to cause some kind of explosion in it that requires him to be relieved of it. This one is of the same ilk. If the Minister does not even know what is going on in terms of homelessness in his own electorate how can he be trusted to set down legislation—set down legislation—that is to provide affordable housing hopefully in more places than just Auckland? I ask why not Wellington Christchurch Nelson and Queenstown—and Tauranga which has now been added to the list of the most expensive places in the country to buy a house.People who are renting properties in Nelson are renting at exorbitant rates because the property prices are so high. The rental market is linked in with that. If the Minister is going to address housing affordability let him do it comprehensively and not with this limp-wristed piece of nonsense which is not only—Hon Dr Nick Smith: Why did you vote for it?Hon MARYAN STREET: If the Minister had been in the House earlier he would have heard that we are voting for it because we actually care about housing affordability. We would like to take a sow’s ear and turn it into a silk purse so if we can improve on the legislation it would be good to be able to do that. In the 2-month period that this legislation is going to a select committee it is as John Armstrong said so much “a rough first draft” that most of the drafting of the legislation is going to have to happen in the select committee. It is going to have to happen in the select committee and therefore it requires more time. We will get a bodgie job of housing affordability made by a Minister who has this ripping-and-busting approach to everything he touches and that is not appropriate—not appropriate—when we are looking at one of the most critical crises in our country.Mike Sabin was right earlier: buying one’s own home is part of the Kiwi dream. It is part of the Kiwi dream. He was absolutely right about that. We all agree with that. We all know except perhaps for some that there is a housing crisis. Two months is insufficient time to do justice to this critical issue. Thank you.MOANA MACKEY (Labour): There is a very simple reason why this bill the Housing Accords and Special Housing Areas Bill should be going to a select committee for longer than 2 months. It is that this issue is too important to get it wrong this issue is too important to risk making mistakes and this issue is so complex that 2 months simply is not long enough to actually give the legislation the proper consideration that it deserves.This is something that we have seen from this National Government time and time again—these truncated select committee processes. The Minister of Housing knows all too well what a dog’s breakfast that causes because he sat on the very truncatedEmissions Trading Scheme Committee for legislation that got 7 weeks at a select committee—a similar period of time. It was a complete waste of time. It was a waste of the officials’ time. It was a rubber-stamping exercise. That was clear from the outset. We were deliberating when we had not even received final advice from the officials on key issues and that is not to criticise the officials because they did everything that they could given the absolutely impossible hand that they were dealt by this National-led Government. So that is what happens when you have truncated select committee processes.I find it extraordinary that we are getting these truncated processes on pieces of legislation concerning issues that are so complex and so critically important like housing affordability or New Zealand’s emissions trading scheme. Arguably these are issues that require far more thought and far more information and far more consideration than some of the much simpler pieces of legislation that go to select committees for months on end. So I do not know why the National Government is insistent on ramming this through unless it does not want the scrutiny that a proper select committee process would deliver.The Hon Nick Smith said earlier that the Opposition did not like doing this because we are scared of hard work. It is actually the opposite Dr Smith. No work goes into these bills when they go to a select committee for 7 or 8 weeks. You know that as well as I do because Dr Smith was a member on a committee that had that process. So—Hon Anne Tolley: Of course it does—we work hard. What a lazy member of Parliament!MOANA MACKEY: Anne Tolley says that it is about being lazy. We actually want to do proper work on this bill. We want to have a process that really allows proper scrutiny and consideration. We want to work hard on this piece of legislation; it is the Government that is preventing that from happening by having a process that by its very nature is going to make it far more difficult for people to submit; far more difficult for key stakeholders to submit; far more difficult for the officials to provide an in-depth departmental report; far more difficult for the members on that select committee the Social Services Committee to then challenge aspects of that support to then ask for further information and to then deal with issues that may arise during that process; far more difficult for officials to get the drafting done properly—and the drafting as we all know is key—and far more difficult for members on that select committee to be able to scrutinise that drafting and to make sure that what was being agreed to in terms of what is being put in place is actually what ends up in the drafting. That is the very important work that select committees do and if National members do not value that work then they should just come out and say so. If they do value it then there is absolutely no reason why there should be a 2-month deadline for the select committee.Across the country—and outside Auckland in particular—key stakeholders have not been talked to about this. They have not had time to consider what it means for them and that is critical because although Auckland has its unitary plan and has been talking to the Government this legislation is going to apply across the board. The issues for different councils are going to vary greatly. We need to make sure that we have taken the time to talk to Local Government New Zealand and to talk to the various councils which are now going to have to hurriedly rush and push something together to get it to the select committee. I mean the bill is just the bare bones. We do not really know what it is going to mean for those other councils. We could have the opportunity to actually do that work if we had the bill at the select committee for longer than 8 weeks.The reality is that the Government does not want that work done. It is doing this because after 5 years it is desperate to look as though it is actually doing something about housing. The only reason we are actually passing this legislation is that it wasspooked by Labour’s housing announcement last year because finally the public saw that there was a choice between having a Government that would do something about housing and housing affordability and that would take it seriously and the current Government which in 5 years has done absolutely nothing except repeal every single piece of legislation we had put in place.What a good select committee process would give us the opportunity to do would be to consider what are going to be the likely implications for the various councils because housing affordability is not just as simple as looking at the cost of a house. You actually have to look at the relative income of the places where people are purchasing their houses as well. So something that might seem affordable to people on an income in Auckland—on the North Shore perhaps where Maggie Barry comes from. She has been very vocal in this debate with—Maggie Barry: What’s wrong with the North Shore? You’re knocking the North Shore are you?MOANA MACKEY: No I was not. I was just mentioning that you were from the North Shore Ms Barry. That was all—that was all. Slightly sensitive—just calm down take a few deep breaths. I did not realise that telling people you were from the North Shore was such an insult and that you were so ashamed of it. Now that I know I will never mention it again—never mention it again. You are not from the North Shore. She is not from the North Shore. I withdraw and apologise—I withdraw and apologise.But the issue that I was trying to raise before Ms Barry did what she does was that the average income on the North Shore and the average price of housing is going to be very different from what it is in Gisborne and a house that looks affordable to someone who as you said is looking at the Auckland housing market might not be—Tim Macindoe: I raise a point of order Mr Speaker. I raise the same point of order again. The member is now straying well away from the point of this particular question and I ask you to bring her back to the question or to resume her seat.MOANA MACKEY: No I was not. I was saying why we needed the process.The ASSISTANT SPEAKER (H V Ross Robertson): Well can I just say to members that the debate really is on the point that the committee report by an early date and that the House is giving certain powers for the committee to meet. That is the narrow focus of the debate.Hon Phil Heatley: That’s right.MOANA MACKEY: That is the most sensible thing Phil Heatley has said all night. The point that I was making was of course that 2 months is simply not long enough to consider—Tim Macindoe: You were talking about the North Shore and who lived there.MOANA MACKEY: I was responding to Ms Barry’s interjections just as I am responding to yours now. So if you want me to get back to the substance of the thing I suggest you just zip the lips and then I will do that.So the point that I was making was 2 months on an issue this complicated is simply not long enough. It is simply not long enough on an issue that is this complicated. So I ask the Government what it is afraid of. What is it afraid might come up at the select committee that it needs to truncate the process and not have the adequate time to consider these things? I remember when we were in Government and we had similar issues come up we often had longer time periods. We had inquiries into these kinds of issues. We allowed select committees to do the work that they do. Select committees should be allowed to do the work that they do and when they are given such ridiculously short time frames they simply are not able to do it.My concern is that the truncated time line could actually result not just in legislation that actually does not do anything which is a risk with this piece of legislation but wecould end up with legislation that actually does damage because it is not carefully thought through. Rushed law is bad law. Rushed lawmaking is bad lawmaking. If the Government really wants to take this issue seriously—Hon Phil Heatley: Why do you hate North Shore people?MOANA MACKEY: I know it is all a joke to Phil Heatley—all a big laugh you know. He is all right he has done OK so why should we make sure that the rest of people in New Zealand can have access to affordable housing—[Interruption] What? You have got four houses? Yeah I do not know why you told me that but anyway—that was really random.Anyway the point is that there is a danger that we actually make bad mistakes when we rush lawmaking and that we actually end up with unintended consequences which would not occur if we simply allowed—we are not asking for more time than a select committee normally gets—for the proper course of a select committee consideration to take place. There is a reason why there is a generally understood time frame for select committees. It is because that is what practice and experience have told us is the time it takes for officials to do the work that they need to do; for submitters to be able to find out about the legislation put that work together and send it to a select committee; and for members to actually be able to read the submissions that come in—National Party members might not read the submissions that come to select committees but members on this side of the House do—and then for the officials to go away and do that work; and for the committee to deliberate. That is what they do and over a period of years we have come to an understanding in this House about how long that process generally is.Sometimes we have been happy to support the Government where we have seen that there is a real reason and a cause for a short time frame for the select committee and sometimes there are very real and legitimate reasons why that needs to happen. Where there are legitimate reasons we are always happy to assist the Government in that matter. There is no legitimate reason for such a truncated time frame with this piece of legislation. If we are going to do it let us do it right and let us make sure it is done right. The reality is the Government does not care about doing it right; it just cares about looking like it is doing something.ANDREW LITTLE (Labour): This is a—[Interruption] We can laugh and carry on as much as we like on a motion like this—it might be procedural—but these motions are very important. They raise a very important issue. When matters come before this House whether they are part of the Budget or the appropriations or whether it is through a more considered process putting a matter before this House putting a piece of legislation before this House and calling on this House and the members of it and those who sit on the select committees to give it consideration is a task that should not be taken lightly should not be treated with contempt should not be treated with conceit but should be given due time and accorded due process. That is fundamental—Shane Ardern: I knew it wouldn’t be a problem for this member to talk for 10 minutes about nothing.ANDREW LITTLE: —and whether you are from Taranaki - King Country or whether you actually care about issues in the area that you come from particularly social housing and the shortage of affordable housing which is an issue across the nation and everywhere from the dark hills of Ūruti to the lowlands of Christchurch and Dunedin availability of affordable housing is a big issue for New Zealand.That is why New Zealanders in their droves have come in behind supporting Labour’s policy of a new programme of affordable housing. It is because now through this Budget this Government is calling on this House to consider this issue in this admittedly scant piece of legislation that nevertheless the proper time and resources should be given to consider it. That means time for the officials to prepare theirinformation and their evidence but most important time for members to gather their information to give due consideration to the advice they are receiving and indeed to look at the legislation.It is just possible on any given piece of legislation that comes from the Government that with proper consideration and proper time given for that consideration members on the Government side might be persuaded that change is appropriate that improvement is possible and that a change might be made to the legislation that is better for the citizens on whose behalf we undertake this very important action. So we do not take this lightly. This is an important motion and we are opposed to it. We are opposed to this Government repeatedly now coming to this House with motions calling on shorter and shorter time frames to consider important legislation. It did it just earlier this week on the Government communications security legislation. It wanted a shorter time frame to consider that.These issues are important. We know how sensitive they are to the voting public because the public are in touch with our respective offices the electorate MPs and list MPs alike. They are writing letters to the paper. They are ringing up the talkback hosts on the various radio stations and they are saying that it is not right in a democracy in our country that we should have the institutions of Parliament treated in such a cavalier way. We are opposed to this because members in this House are entitled to demand that any legislation that comes before it is given proper consideration proper time and due process.It comes down to this and I said this earlier this week too. It comes down to the principle of the rule of law. We are a nation that ranks very highly in international comparisons and considerations of the rule of law. That is to say that we are regarded as a nation that respects the laws that we make the rules that we abide by the role of the courts but most important the way laws are made in Parliament which means—in this country—in this House. What happens in this House leads our reputation on that very important institution called the rule of law. And when we treat it with contempt when we treat it in such a cavalier sort of way then our international reputation goes down. Our international reputation suffers. It is not enough for some members to be invited on to international television shows to establish our reputation. That is not what we establish our reputation on. Our reputation is established for anything that counts on the way that we conduct ourselves the way we conduct our business as a nation but most important in this House—the highest court in the land in a Western democracy the ultimate source of law in a Westminster democracy.So we treat with considerable alarm and we look askance at resolutions like this that call upon us to act with a haste that is frankly rude and should not be tolerated if we are to do our job properly and discharge our responsibilities. This Government has demonstrated that it is a Government that has no hesitation in cutting corners when it comes to matters of due process. Its appointments to statutory boards are just one example of that but its treatment of this House is increasingly another example. We are getting these motions and we have yet another one tonight on an important piece of legislation on an important bill dealing with an issue that is of great importance to all New Zealanders. Now we are being told: “Rush through it. Don’t give it your best. Don’t give it your best attention. Don’t care that we’ve got an adjournment week”—2 adjournment weeks 3 weeks in fact it may even be 4 during the course of this bill. It is 4 adjournment weeks while this bill is meant to be being considered. “Rush through it and don’t care what the people want. Don’t care what citizens might think. Don’t bother giving them adequate time. Don’t even care about the NGOs that have a relevant stake in this matter”—the Darryl Evanses of this country and the Salvation Army and Habitat for Humanity; all those who might have something interesting to say about this; theterritorial local authorities which will have something worthwhile to say about this; and Local Government New Zealand. “Don’t give them the time of day. Treat them with contempt.” as it treats the members of the Opposition. That is the attitude of this Government and it is wrong and it is high time that it was called to book. That is the least we can do in debating this motion—make it very clear and emphasise our objection underscore our opposition and say that it is simply not acceptable anymore.We understand that at the time of the Budget there are invariably pieces of legislation that need to be considered in a hurry and that need to be considered under genuine urgency. This is not one of them. This is the opposite. This is an exception. This should not be given a rushed consideration. It should be given proper consideration as should be any important piece of social legislation. It may well be important for this Government to boast that it is giving the appearance of doing something but this is a bill that touches on an issue that affects not only the real lives and the material lives of a growing number of people who cannot get into their first home but actually it affects ultimately every New Zealander.If we do not have a housing market that makes housing accessible and available to people from all walks of life all backgrounds all levels of income then that is a market failure that does deserve the attention of this House. But if it deserves the attention of this House then it should be given the proper attention of this House. That means consideration by the select committee under the proper Standing Orders of this House which means proper consideration and proper time being given. It is totally objectionable it is utterly unconscionable that an issue like this—even at the time of the Budget even at the time of the appropriations—should be rammed down the throats of members of this side of the House; that it should drag in or cause undue and unnecessary inconvenience to those who do have the resources and the means to be consulted and to make a submission on it. That is unreasonable.It is not a good day for democracy in this country. It is not a good day for the conduct of this House. It is time to put a line under it and say we demand better management of this House and of important legislation by this Government. We will remain opposed to this motion.KRIS FAAFOI (Labour—Mana): A “proper job” is an old Cornish saying and I fear that this House is not doing a proper job of giving the Housing Accords and Special Housing Areas Bill the scrutiny that it needs when the Government has asked for the time frame for the consideration of this bill by the Social Services Committee to be truncated from 4 months to around 2 months. This House and we as members of Parliament have a duty to make sure that for a piece of legislation that the Government thinks is significant to bring into the House under urgency—it is one of the major pieces of legislation in this year’s Budget—we give the public and those stakeholders around New Zealand a fair chance and a good period of time to let their feelings be known.My colleague Andrew Little made a very good point in his contribution that the select committee process—and I am sure all members of Parliament right around this House would agree—gives the opportunity for people to come in and make submissions and to improve a bill. Reducing the amount of time that this bill is going to be considered in the select committee to 71 days really does rob the opportunity for many many people to come to Parliament or to visit the select committee to make their views heard.This is a significant piece of legislation as the Minister of Housing said. Before we got to this truncation debate 104 members of this Parliament voted for it. We do realise that housing affordability is a major issue for New Zealanders. It is a bit of a pity that the National Government is about 4 years too late with that. But it has come to a piece of legislation within this bill that needs a good hearing and needs very close securityand as I said the Government needs to give the opportunity for people out in New Zealand to have their say and possibly improve this bill. To reduce it to a 10-week hearing of submissions as opposed to the usual 16 really is not giving people out there enough of a chance to have their voices and their views heard on this bill.We do have concern that this is the second time in 1 week that the Government has come to this House and asked for the select committee consideration of a bill to be truncated under urgency. Another piece of legislation debated last week around the security of telecommunications was brought before this House and we had to do something very similar to what we are doing now. We ask what the rationale is of a significant piece of legislation being brought into this House and ask why if it is so important we are limiting the opportunity for people who think this is a very very important issue to come and have their say in Parliament. We do believe that the select committee consideration is very important in order for the public to have scrutiny around pieces of legislation especially significant pieces of legislation such as this.This is a complex issue. That is why I think the Government has decided to take some action after a very long time of inaction and to take some action in this Budget announcement and to bring this bill to Parliament. Because it is a complex issue we do believe that the public should get that other 6 weeks that they are being robbed of in terms of being able to make submissions to the select committee as has already been stated. It also gives a bit more time for members of Parliament to consider some of the submissions that are made at the select committee to offer up amendments at the select committee consideration and to talk through some of the complexities that are certainly going to be brought up around the complex issue of housing supply and housing affordability.In the explanatory note on the bill the Government says this bill “provides a mechanism for central government to work together with territorial authorities to address housing supply and affordability issues”. By taking time away from a number of local councils and district councils which I am sure will be very interested in this piece of legislation and by taking away 6 weeks from that select committee process I think it robs them of many many opportunities to make submissions and to scrutinise this bill.As I said this is the second time in a week this has happened. This time it is at the behest of the housing Minister Nick Smith—Darien Fenton: Bad habits.KRIS FAAFOI: —who does have a bit of a bad habit around due process. To truncate this select committee process from roughly 16 weeks down to 10 weeks suggests that he does have a bit of form. I am suggesting around the sacking of the Environment Canterbury council—The ASSISTANT SPEAKER (Lindsay Tisch): Order!KRIS FAAFOI: Apologies Mr Assistant Speaker. So we need to make sure that we are not creating a pattern of behaviour in terms of due process in this House because it is very very important that this Parliament have credibility that we make sure that in the eyes of the public we are doing things properly and that we do follow due process. We have got major concerns when as I say we have got two pieces of legislation in 1 week that Ministers have asked to have the time frame for the submissions to the select committee truncated. The Minister has asked for this to be reported back on 26 July which gives 71 days for the public to have their chance to have a say on this rather significant—Andrew Little: That’s shorter than Aaron Gilmore’s term in Parliament.KRIS FAAFOI: It is just a little bit short of Mr Aaron Gilmore’s term in Parliament. But there are 71 days for individuals for companies for organisations and forimportantly those local bodies that will have a huge interest in trying to make sure that people within their communities have a better supply of housing and have much more affordable housing. I am not sure whether 71 days is enough to be able to give these issues that are going to be traversed within this bill enough air time and enough opportunity for every one of those stakeholders who think they can make a good contribution to the process to be able to make their voices heard.This is a serious issue of due process. We are here as parliamentarians. The select committee process is a very important part of the process in terms of making sure the public can have scrutiny and have their say.But truncating this period to just 71 days does not give them the significant opportunity to be able to make a contribution to that. Housing affordability is an issue that is on the radar now because the Labour Party put it on the radar. Credit where credit is due the Government has done something but that is not to say that when you do something you run roughshod over the parliamentary process and truncate the time period in which New Zealanders right around the country will be able to make a contribution to the select committee process. So we would ask that the House not support this motion to shorten the time period for the select committee process. We would ask that this Parliament give that opportunity to the people of New Zealand—all those around New Zealand who have opinions who have views about housing affordability and housing supply. It is a very important issue for Kiwis at the moment. It is going to be a defining issue at the election campaign next year. Those people around the country because this issue is such a big issue need to be given the opportunity to speak their minds to give their opinions to look through some of the details and the data around housing affordability. To be able to do that they are going to need more than 71 days—more than the 10 weeks that the Government is asking for.The views of New Zealanders need to be listened to. The views of New Zealanders need to be listened to. The Government does not necessarily like that—as I say two pieces of legislation in just the 1 week—but the views of New Zealanders should be listened to. They should get their full opportunity to make their views heard on housing affordability. This is a Government that does not like due process. We have seen two examples of it in the last week—Tim Macindoe: You’ve said that five times.KRIS FAAFOI: Pardon?Tim Macindoe: You’ve said that five times.KRIS FAAFOI: Well what do you want? Do you want me to speak about something else and then you raise a point of order? This is a very important issue. The views of New Zealanders around the country need to be listened to and this Government wants to shut the debate down.A party vote was called for on the questionThat the Housing Accords and Special Housing Areas Bill be reported to the House by 26 July 2013 and that the committee have the authority to meet at any time while the House is sitting (except during oral questions) during any evening on a day on which there has been a sitting of the House and on a Friday in which there has been a sitting of the House despite Standing Orders 188 and 191(1)(b) and (c).Ayes70New Zealand National 59; New Zealand First 7; Māori Party 2; ACT New Zealand 1; United Future 1.Noes49New Zealand Labour 33; Green Party 14; Mana 1; Independent: Horan.Motion agreed to.Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) BillFirst ReadingHon Dr NICK SMITH (Minister of Housing): I moveThat the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill be now read a first time. I nominate the Social Services Committee to consider the bill. At the appropriate time I intend to move that the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill be reported to the House by 1 October 2013. This bill implements a substantive shift in Government housing assistance from a State housing model to a social housing model. We all know that New Zealanders are facing increased pressures from high housing costs that poor housing contributes to poor health and education outcomes for children and that the old model of massive State housing estates does not work. I want to acknowledge the work of the Housing Shareholders’ Advisory Group and its thoughtful and substantive report on which this reform is based. The easy politics in the area of Government housing assistance is just to demand that more public money be spent. A Government would never balance the books with this approach. This reform is all about getting the maximum social dividend from the Government’s investment and spending on housing assistance.The first big change is to say that the level of assistance should not be based on whether the Government owns the house. It should be based on the needs of the family the income of the family and the quality of the house. This bill enables the hundreds of millions of dollars spent each year on the income-related rent subsidy to be available to approved social housing providers. So if a high-needs family is housed by the Salvation Army an iwi the IHC Access New Zealand or the like the Government will pay the same subsidy as if it were a Housing New Zealand house. The real advantage is the capacity for these organisations to provide alongside housing support the specialist wraparound services that are support for those families. It might be family support services it might be mental health support it might be alcohol and drug support or it might be disability services. We all know that integrated support works best.A more diverse social housing sector also provides for greater innovation. We already know that community social housing providers do a better job of helping people back on to the pathway to housing independence. We are a Government that does not think all the answers lie with politicians and officials and we welcome the opportunities a more diverse social housing sector offers. I note that in Australia the community social housing sector has more than doubled in size over the past decade and nowrepresents 20 percent of its social housing. In Canada it is over 50 percent. They are getting better social outcomes than from a monolithic State house approach. We are behind the pace with a very small community social housing sector and this reform is designed to grow it.Providing housing for all our most disadvantaged and needy families is difficult for social organisations to finance. These families just cannot pay full market rents. The game-changer in this bill is that having the Government pay approved social housing providers the difference between the market rents and what can realistically be paid by those tenants makes it a far more viable proposition. This is not the only support the Government is providing to social housing providers. We know the sector is small and needs a kick-start to grow. That is why we have set aside $140 million in the Social Housing Fund to help investment in non-government social housing provision. Next week I will be announcing the next round of grants.This change of opening up the income-related rent subsidy to other social housing providers beyond Housing New Zealand requires a parallel reform. Housing New Zealand currently does the needs-assessment for families needing State housing and income-related rent. This will not work in the new multi-provider social housing system so responsibility for this role is to be transferred from Housing New Zealand to the Ministry of Social Development. This makes common sense. I can recall so many frustrated constituents who were being pushed from pillar to post from the Ministry of Social Development to Housing New Zealand as they struggled to establish whether their housing needs were best met either by a State house or by receiving the accommodation supplement. From April next year there will be only one assessment. It also makes sense that a person’s or a family’s housing need is assessed alongside their income and other social needs.The second substantive reform in this bill is the legislative provision for reviewable tenancies. This is all about ensuring we use our social housing for the people most in need. This policy approach started with new tenants from 1 July 2011 now covering 10000 of those in Housing New Zealand homes. Reviewing tenancies will now be applied to all State house tenants and tenants of community housing organisations who pay an income-related rent. The review of tenancies will be undertaken with common sense. We understand the importance of certainty for tenants particularly those with serious and long-term needs. This policy involves developing pathways to housing independence and will be focused on those tenants paying market rent. This is about social housing being available for people while they have that high housing need and as their needs change—they secure a better job the children leave the nest—they can then free up that house for a new family of higher need.The reforms in this bill need to be considered alongside Budget 2013. It should be noted that providing income-related rents for community social housing is not coming at the expense of Housing New Zealand and $27 million of additional money is being provided to fund that change. Nor is the policy of introducing reviewable tenancies a money-saver. Having high-need families replace those on market rents in State houses actually increases the cost to the Government and that is why we have set aside $47 million in the Budget for that purpose. We are also increasing the income-related rent subsidy for Housing New Zealand tenants to take into account the increase in housing costs. This bill also makes provision for the new rental Housing Warrant of Fitness scheme. To be eligible to receive an income-related rent subsidy social housing providers will need to meet certain standards.I would also note that this Government is providing for the biggest programme of new investment ever in the history of Housing New Zealand. Housing New Zealand isbudgeting to spend $2.9 billion over the next 3 years. The most ever spent in a previous year was less than half of that. This money will be spent on completing the insulating of all State houses; it will be going into Project 324&5 which is adding additional bedrooms on to three-bedroom houses which we have too many of putting extra bedrooms on 2000 of those homes; on the huge rebuild job that we have in Christchurch; on earthquake-strengthening State houses in other parts of the country that are not up to standards; and on major new redevelopments. These investments are about improving the quality of our State homes and ensuring they are the right size and in the right place.This Government’s housing policy does represent a significant change. We are far more focused on getting good outcomes rather than just simply counting the number of State houses. We are creating a more diverse and more innovative social housing sector. We make sure our support is going to the families that are in greatest need. We are focusing on the quality not just the quantity with the development of the rental housing warrant of fitness. I urge the House to support the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill. It is a better approach it will help more families it is well researched and it is widely supported. It is the sort of reform that all New Zealanders wanting a brighter future for their country should support. I commend the bill to the House.PHIL TWYFORD (Labour—Te Atatū): I will give this Government credit. It is true that it lacks an economic plan. It is true that it has left New Zealanders feeling disgusted by the sale of our gambling legislation to an Australian casino. It is true that it is on the long steady decline to electoral oblivion in 2014. But at least—at least—it has woken up to the fact that there is a house affordability crisis and I will give it credit for that. It has actually worked it out. Steven Joyce has looked at the polls. He knows there is a housing affordability crisis. He knows that Aucklanders particularly are deeply concerned about it. He knows that unless the Government is seen to be doing something unless it is perceived to be actually taking some action then it is in deep trouble. I will give Nick Smith this: he has at least since he took over from Phil Heatley as the Minister of Housing conveyed the impression of activity. But the problem is that the very direction the very nature of the policy that he is pursuing for social housing and for housing affordability more generally is undermining the values that New Zealanders have held dear for many many years about the role of the State in guaranteeing a social safety net for New Zealanders who need the assistance of the Government for a certain time in the provision of decent housing.Chris Hipkins: Nick Smith was part of the Government that did away with income-related rentals.PHIL TWYFORD: He was—he was in the Cabinet of the Government that was responsible for selling off 13000 State houses in the 1990s and left it for subsequent Governments particularly the fifth Labour Government to clean up that mess. I say to the House that Labour will be in Government before long and we will be cleaning up the mess that this Minister is leaving.The effect of the reforms in this bill will be to weaken the role of the State. This bill offloads the responsibility of central government in providing income-related social housing for people who need it. The crowning glory of National’s housing policy is to evict 3000 State tenants. That is going to be Nick Smith’s political epitaph. That is his greatest achievement as the Minister of Housing—to see 3000 Housing New Zealand tenants booted out of State housing. I ask Mr Smith—I ask him—is this an aspirational target to boot out 3000 State house tenants? Is that aspirational or are you Minister absolutely confident that you can kick out 3000 State house tenants? Is it simply an aspirational target like the 39000 houses that Mr Smith says that he is going to build inAuckland? He says he is going to build 39000 houses simply by opening the gate to new greenfield land on the fringes of the city and streamlining a bit of Resource Management Act consenting. By doing those things Mr Smith tells us—tells the nation—that he is going to build 39000 affordable houses. Well we will see Mr Smith. We will see if you do that. Only National would come to this House with an aspirational target in the area of social housing to boot out 3000 State tenants while we are in the middle of the worst affordable housing crisis in living memory. This is this Minister’s idea of some kind of progressive reform: to kick out 3000 State house tenants in the middle of a housing affordability crisis. That says it all.Let us talk about some of the detail of what the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill does. One of the first things that it does is that it allows the community housing providers to get access to the income-related rent subsidy. What is that? That is the difference between local market rents and what State house tenants are paying under the current policy. The context for this—it is very important to understand the context for this—is that Nick Smith wants to offload 12000 State houses to the charity sector. That is his idea of strengthening social housing provision in New Zealand. He wants to flick off the worst the most run down and the least fit for purpose State houses to a charity sector that is fragile undercapitalised under-resourced and ill-equipped to manage that kind of asset. It is exactly what the National Government did to rural and country hospitals in the 1990s. It did not want the State to have responsibility for providing health services for rural and provincial communities and isolated communities so what did it do? It offloaded them to the community and said: “Here. We don’t want to provide this essential service anymore. You go away and run it.” Did it hand over the revenue the funding streams and the capital to allow those community trusts to properly manage maintain and upgrade that vital infrastructure? No. It was a recipe for decline. It was a sordid act of back-door privatisation and simply National’s habitual response which is to offload and devolve the very functions that New Zealanders expect the State to take responsibility for. It is cynically disposing of a big chunk of the Housing New Zealand estate the least fit for purpose houses to NGOs. It is not handing over the capital that would be needed to properly maintain and ultimately upgrade those assets. It is a recipe for decline.Labour supports the social housing sector. We want to see a Government social housing programme that works in partnership with community housing providers but that is not what this is about. This is not an act of genuine partnership between the Government and social housing providers. It is shuffling pieces on the chessboard by moving a big chunk of the social housing estate out of Government control and into the community sector. Not a single extra Kiwi family in need will be housed by this move. It will not make a blind bit of difference to the number of people who are currently languishing on waiting lists desperate to get a decent roof over their heads.The second thing that this bill does is that it passes over to the Ministry of Social Development the responsibility for assessing the need and assessing the eligibility of State house tenants. The justification for this is that the purpose—the agenda of this set of reforms—is to try to establish a kind of quasi-market for social housing in New Zealand in which Housing New Zealand will be set up to compete with community housing providers. If you are going to have that kind of set-up then what you have got to do is have a neutral party that assesses the need and eligibility and that is why Nick Smith wants the Ministry of Social Development to take it over. My concern is that this is just the latest move by the National Government to de-power—to strip away—the functions of Housing New Zealand.It is already a weakened organisation. It is already dysfunctional. Phil Heatley’s “Smarter Faster Fairer” fiasco restructuring of Housing New Zealand has seen tenancy officers taken off the front line. Housing New Zealand tenants have been forced to engage with the organisation through an 0800 number. It has weakened the organisation. It has driven up tenant churn and turnover. It has driven up fraud it has driven up non-payment of rent and it has been an absolute disaster. The organisation is in no state to do the kinds of things that Nick Smith is asking it to do and he wants to weaken it even more by taking away what is a central function of a social housing provider and that is the assessment of eligibility. Housing New Zealand is going to be left simply as a tenancy manager for the rump of the old social housing estate. Minister you may as well just get Barfoot and Thompson to basically manage the tenancies. Why not? Just go the whole hog. You clearly do not believe that the State has a role in providing social housing for vulnerable people. No you do not Minister and your party does not. Everything that you have done as a party in the last 20 years says that you do not believe in the importance of the role of the State in delivering income-related social housing. Given the logic of these reforms you may as well just hand the whole lot over to Barfoot and Thompson. This National Party has an ideological belief that the State cannot do good in this area. Every opportunity it gets it wants to devolve contract out fragment and fritter away Housing New Zealand’s role as a social housing provider of income-related rental housing. Labour would like to see Housing New Zealand revitalised and rebuilt working in partnership with the social housing sector.The final point I want to make is applying reviewable tenancies to 3000 people who will be booted out under Mr Smith’s aspirational target—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. His time has expired.Peseta SAM LOTU-IIGA (National—Maungakiekie): It is a pleasure to rise and speak on the first reading of the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill. I want to again thank the Minister next to me the Hon Dr Nick Smith for his vision hard work and determination and for bringing these solutions to this House tonight.Budget 2013 as we heard from the Hon Bill English makes bold changes to the way that we will deliver social housing assistance to those most in need. We are ensuring that housing is in the right sizes in the right places and in the right conditions for those who need it most. This bill will help address the issues that Labour quite frankly did not have the intestinal fortitude or the appetite to fix. It will increase the pool of resources available to our service providers and get much needed support to those in need.You see Labour broke the housing sector by its inept leadership under the direction of former Ministers Maharey Chris Carter and Maryan Street. This infamous triumvirate of slum landlords provided cold damp and mouldy homes to those most in need. New Zealanders are grateful that this Government will have insulated every Housing New Zealand home by the end of this year. You see that triumvirate oversaw a sector where the average price of housing in Auckland between 1999 and 2008 grew by 91 percent.Hon Dr Nick Smith: How much?Peseta SAM LOTU-IIGA: Ninety-one percent—two and a half times the rate that those prices are going up under this National Government. Those members oversaw interest rates at an all-time high of 8 percent a rate of inflation of over 4 percent and a waiting list that grew longer and longer and longer. That is absolutely disgraceful and itis a direct example of the type of hands-on leadership those opposite continue to preach in this House.It was hands on with the economy and they increased house prices inflation and interest rates; hands on with electricity and they wiped $500 million out of the pockets of hard-working New Zealanders; and it was hands on with ACC—and Mr Smith would know this—and the social insurance scheme almost became insolvent. You cannot trust and the people in New Zealand cannot trust Labour to get its hands on anything. If you compare that with the John Key - led National Government you will see that it has delivered the lowest interest rates for over 50 years the lowest inflation rate since 1999—Iain Lees-Galloway: No growth.Peseta SAM LOTU-IIGA: —under 1 percent and Mr Lees-Galloway knows that—and continued economic growth during the most turbulent financial times globally. That may not matter to Maryan Street and it certainly sounds like it does not matter to Miss Dalziel but it matters to the average Kiwi paying a mortgage and supporting their family. This bill is part of our reforms to deliver assistance to those most in need and those who need social housing.As the Minister has already stated this bill extends income-related rents to community housing providers. It transfers the needs-assessment process to the Ministry of Social Development. It provides reviewable tenancy for all Housing New Zealand tenants. You see we on this side of the House are about growing the involvement of those who are best placed to help our most vulnerable. Government is not the only answer. If we are to be lambasted for using the skills assets and expertise of our social housing providers like the Salvation Army CORT Housing and others—Hon Lianne Dalziel: Transit camps.Peseta SAM LOTU-IIGA: —then so be it.Hon Lianne Dalziel: Transit camps that’s what you’re offering. What about communities? We need communities strong communities.Peseta SAM LOTU-IIGA: The Greens call this privatisation; we call it helping those families that most need help. Community housing providers—and Miss Dalziel knows this—can often do a better job of meeting the need because they provide wraparound services for their clients. The Minister has already referred to the fact that they provide churches NGOs and community providers. Often they integrate their housing with support for people with disabilities mental health issues addictions around drug and alcohol as well as family dysfunction. There is no reason why a family in need should receive less support just because the bricks and mortar of their house are owned by a community provider rather than the Government. So what is important is that those most in need get that support that they require.We are looking to bring in renewable tenancies for all Housing New Zealand tenants and I also want to commend the former Minister the Hon Phil Heatley because he began that work under his tenure. This will allow people to transition and give them support to move into alternative housing when their situations improve—Hon Lianne Dalziel: Transit camps. No communities.Peseta SAM LOTU-IIGA: —and they are able to become independent. Miss Dalziel Miss Street and their former colleagues oversaw tenancies where people with incomes of over $80000 were living in State houses while thousands languished and suffered on waiting lists. In Maungakiekie I have often seen three-bedroom homes occupied by single tenants who refuse to move to more appropriate accommodation and make way for families who are actually in need. This bill is about improving access tosocial housing for those who actually need it. State housing will always be there for those who need it and for the duration of that need. That is most important.As the Minister has already said we are making a record investment of $2.9 billion into Housing New Zealand over the next 3 years. We are tackling the issues that matter to New Zealanders. We were elected on a platform to deliver better smarter and more innovative public services. With this bill we are delivering on that promise. I commend this bill to the House.Hon ANNETTE KING (Labour—Rongotai): Well we have just heard a speech that was full of fake sound and fury straight from the research notes. Peseta Sam Lotu-Iiga read them—page 1 page 2 and page 3. I have to say how disappointed I am in a member who has been here 4½ years and still has to read out the research notes. He could not even make a speech straight from his heart. He had to read his fake outrage off a note.I have to tell you that this is the Nick Smith quinella—the second bill we have had on housing this evening. I have to tell you it is a real gamble because what we know about Nick Smith is he never does his homework he makes up fake figures and he goes around telling people one thing and then the evidence comes out under something else. So I say to people look out for the bodgie figures and look out for the bodgie evidence as to why we need the change in this bill the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill. He is “Mr Old Flip-Flop” because he was part of a Government that got rid of income-related rents. It hated income-related rents. It did not like State house tenants getting a fair deal under a National Government. Suddenly he embraces income-related rents and would like many more to have it in the other parts of the housing sector.There are three main parts to this bill as I see it: powers for Housing New Zealand to be able to review State house tenancies to ensure appropriate tenants are matched to appropriate housing; secondly to enable Housing New Zealand functions to be transferred to another Government agency at a later date; and thirdly to provide a framework for the provision of social housing by multi-providers in the social market. So I said “Let’s go straight to the regulatory impact statements and see what they have got to say about it.” because what I learnt with Nick Smith is that the regulatory impact statement on his Better Local Government legislation was the most shocking one I have ever seen. It tore apart his local government reforms. It said that there had been no work done on it and no evidence and that was backed up over and over again. Well what did I find Dr Smith? Your regulatory impact statements are not on the website. You say in the bill here: “Look up the website. You’ll find them.” So I went to the Clerk’s Office and the staff had to find the statements. They had to run them off and put some on the Table. Why did they not have the regulatory impact statements available?Well I had a wee look at them. There are two of them. One is from the Ministry of Business Innovation and Employment. What does it say? It says there is limitation to the analysis provided—there is limitation. Once again Nick Smith has a limitation to the evidence provided. The ministry said it is the early days of reform and most of the decisions being sought from Cabinet at this time—they have not all been finished you see. The Ministry said it also has not done the consultation. It has consulted with Government departments and has had “targeted informal engagement” with the community housing sector but “given the Budget sensitivity of the options outlined in this paper non-government stakeholders have not been consulted on the options.” They have not been consulted and it is dated 22 March. They have not been consulted and what is written on it? “Budget Sensitive.” So they were not consulted.What does the second one say? It is from Housing New Zealand and I find this very interesting because it goes through and it just happens to set out some of the risks and—Hon Dr Nick Smith: You can do better than this Annette.Hon ANNETTE KING: Oh no you do not want to hear about the regulatory impact statements because these are the independent statements about your lousy work. That is why he does not want to hear about them.And what does this one say? Housing New Zealand talks about what will happen in terms of the information-gathering powers. What are the costs? Well the costs will be increased accommodation supplement payments to tenants moving from State to private housing. That is one of the costs. Secondly there will be increased administration costs; and thirdly cost to the clients complying with information requirements. And then there will be costs to those other than tenants who are asked to provide information. None of that was put forward by Dr Smith today—not one of the costs or problems outlined. The Government hid the regulatory impact statements so the House here which has to debate it tonight could not get it.Well I will tell you what this bill is. This bill is the “Get Rid of Housing New Zealand Bill”. This is the first step in getting rid of Housing New Zealand. You see the National Party has always hated State housing. Right back to the 1930s when a Labour Government brought them in the National Party has—Peseta Sam Lotu-Iiga: Were you alive back then?Hon ANNETTE KING: Oh and that member probably lived in one but now of course he would like to get rid of them. You see National has never wanted to have State housing. So this is the beginning of getting rid of Housing New Zealand. It wants to flog it off. Why is the Government not honest? As Phil Twyford said why not go the whole hog and flog off Housing New Zealand to any old agency out there the private sector which could just carry on providing houses for it. You could probably get Beerfoot and Thompson or whatever it is called—Phil Twyford: Barfoot and Thompson.Hon ANNETTE KING: It could probably do it. Why not be honest Minister? This is step one in getting rid of Housing New Zealand. The Government wants to get rid of Housing New Zealand and it started it some time ago. Mind you the poor old hapless previous Minister could not get any traction on anything. He was so set in his ways and so unable to move that all he could do was talk about it. Nick Smith—I have to give him credit—does know how to make things happen. Even if they are terrible things he does know how to make things happen.So what did the Government do? The first thing it did was it closed the Housing New Zealand offices. Nobody can go to a Housing New Zealand office now unless they can get through on the 0880 number and get an appointment. You know the funniest thing happened recently. The Prime Minister and the Minister for Social Development were going through a town in New Zealand and they saw a Housing New Zealand office. They rocked up to the door and they thought: “Let’s pop in. Let’s pop in and say hello. You know we’re the Prime Minister and the Minister for Social Development—very important people. We’ll just pop into Housing New Zealand’s office.” What happened? They got to the door and the door was locked. They could not get through the door. They tapped on the door and nobody opened it.You see that is what has happened to Housing New Zealand offices. The Government closed the doors. It did not want—Hon Dr Nick Smith: Rubbish.Hon ANNETTE KING: Oh “Rubbish.” says the Minister. How long has he been the Minister? Oh maybe he gets in the door. He has to give them a ring on the 0800 number and make an appointment and then he gets in the door. The Government closed the office and it turned the service into an 0800 number. Well what a problem it had with that—thousands of calls that were never picked up and thousands of people who did not get any service at all. It was an absolute mess and this was Better Public Services. Those were the first steps. Now we have this bill and in this bill are the next steps in getting rid of Housing New Zealand. I think this is a very sad day. We will oppose this bill because the Government wants to get rid of Housing New Zealand. Why not be more honest?And why are we rushing this bill through at all? Part of it does not even come into effect until 14 April 2014—next year. That is when the Government wants to ensure that it can transfer the functions to another Government department. We now know that it is the Ministry of Social Development. I actually think it is quite a sensible idea to have the Ministry of Social Development giving advice because we used to have a housing advisory service that was available to anybody who needed advice. That was closed down as part of the downgrading of Housing New Zealand. So it is going to transfer it to the ministry. It does not happen until 14 April—if it happens by then—so what is the rush in terms of this bill? And the ministry is going to be able to provide information and Housing New Zealand will be just another provider of social housing—just another provider. That is right Minister is it not? It will be just another provider.I support the community housing sector as well but I have a question for this Minister: can those who have got income-related rent transferred to the community sector living in one of its homes when they are assessed as no longer having income-related rent be removed from the community house of a community housing provider? I cannot find out whether that is the fact. If it is the fact what right does the Government have to control who lives in the homes of the Salvation Army the Housing Foundation or Habitat for Humanity? What right does it have to interfere in that? That is something that needs to be answered. In conclusion the Minister talked about quality not quantity. This Government has never been able to provide either. We will get that only under a Labour Government.HOLLY WALKER (Green): As we have heard from both sides of the House so far this bill the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill represents a major overhaul of social housing in New Zealand and its significance should not be underestimated. It does signal overtly what has been clear for some time which is that the Government wants out of social housing. It wants Housing New Zealand to operate only as a landlord effectively and not as a social agency. Housing New Zealand’s 69000 properties are the second-largest single asset on the Government books. The Government clearly wants to treat them as such as a commercial asset not as an essential social service. That much is clear from the Cabinet agreements from 29 October last year which are revealed in the regulatory impact—The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am sorry to interrupt the member. There cannot be interjections when people are standing.HOLLY WALKER: Thank you. That much is clear from the regulatory impact statement’s Cabinet agreements which read like a neo-liberal manifesto. This Government’s vision for social housing has “a shifted emphasis from a model whereby the Government provides social housing primarily through ownership to one where it purchases services and enables greater consumer choice and diversity through a contestable funding pool; a larger percentage of social housing delivered by non-government providers; a less dominant role for [Housing New Zealand] one where non-government social housing providers enter the market and/or existing providers expand their operations and [Housing New Zealand] makes more efficient use of capital.” That is the vision.How does the bill give effect to this wonderful new neo-liberal corporate version of social housing? Well it provides for renewable tenancies for all Housing New Zealand tenants it shifts housing needs - assessments from Housing New Zealand to the Ministry of Social Development it extends the income-related rent subsidy to community housing providers and it provides a framework for a very limited warrant of fitness for some rental properties. There is a very small amount of good news in this bill and that is the extension of the income-related rent subsidy to the community housing sector.But there are some incredibly damaging measures in this bill as well and the worst of those is the extension of renewable tenancies to all Housing New Zealand tenants. In July 2011 renewable tenancies were introduced for new Housing New Zealand tenants. That has been in place for not even 2 years. We have barely seen any tenancies renewed under the pilot scheme of renewable tenancies which is now being extended to all tenants. So with barely any reviews undertaken the Government is going to roll them out to everyone even though it has not had the opportunity to actually test them to see how they work in practice to analyse the data and to review what the outcomes are for the tenants who have been moved out of Housing New Zealand homes because it has not had time to implement the pilot policy yet. The Government is already rolling it out to everybody in Housing New Zealand properties. It does not make any sense. Renewable tenancies are very dangerous because many of the social harms associated with poor-quality unaffordable housing are associated with the high degree of churn experienced by tenants in the private rental market. That is things like children changing schools frequently. It is things like social dislocation and isolation experienced by families who move frequently and who are unable to put down roots in their community. It is things like the inability to be part of their community and participate fully because they are constantly moving around. That is very common in the private rental market and that is what we are going to see now in the social housing market because of the extension of renewable tenancies to all tenants in Housing New Zealand and social housing properties.At the moment if Housing New Zealand tenants are able to get into a Housing New Zealand home they get a blessed relief from this dislocation of the private rental market because finally after years of that dislocation and severe housing stress and often homelessness they actually have a place to call home where they can put down roots where they can become part of the community and where their children can go to the same school for a number of years and they can begin to rebuild their lives. That is one of the beauties of the Housing New Zealand and State housing system. And perversely enough for the outcomes of this bill the ability for tenants to participate fully in their education and their community and to develop social connections dramatically improves the chances that they will be able to recover and move into private housing or purchase their own house under their own steam. So Housing New Zealand’s existing policy actually makes it more likely that those tenants are going to be able to recover and move on. Extending renewable tenancies will affect many people before they are ready to do that and it is likely to contribute to a higher level of churn in the social housing market as well as in the private housing market.The other concern we have about extending renewable tenancies is that it is going to affect a high number of elderly and disabled tenants who have been in their Housing New Zealand homes for a long time and for whom being moved on will be incredibly disruptive and harmful. The Minister has told us that he is budgeting to evict 1000 tenants or households in the first year of this policy being in place and 2000 in the second—so that is 3000 evictions as we heard before in the middle of a housing affordability crisis. In the Green Party we say that he should build 3000 new houses to accommodate this demand and he should give those tenants—because he will talk about tenants in Housing New Zealand homes who are already paying market rents and therefore do not need to be there—the opportunity to purchase equity in their Housing New Zealand houses. If they are able to pay market rents then that money that they can afford to pay should go towards purchasing equity in these houses so that not only do they have the opportunity to get on to the homeownership ladder but also we increase the supply of affordable housing by continuing to build new Housing New Zealand properties to replace them.The second concerning element of the bill is the shift from Housing New Zealand to the Ministry of Social Development of the responsibilities of needs-assessment for tenants. Again it signals that Housing New Zealand and the Minister want out of service provision in the housing sector. Arguably I think in some ways this could be seen as an improvement because Housing New Zealand has been so terrible at doing these needs-assessments since the introduction of the 0800 number. There is indeed some rationale to have eligibility assessed by the same agency that assesses eligibility for the accommodation supplement so there is some potential with this idea. The problem is that what we know about Work and Income New Zealand and the Ministry of Social Development and their attitude towards dealing with clients is that they have a strong incentive not to tell people about their full eligibility and entitlements for support. They have a strong incentive to move people off welfare and not to put them on to the support that they could be eligible for. And we have got no confidence that they would be any better at applying that process to housing needs - assessment and making sure that people were accessing their full entitlement to the accommodation supplement or making sure that they were getting into an income - related rent subsidy house. So we are not convinced that the Ministry of Social Development is actually capable of doing that in a way that potentially might have some benefit.There is also a risk in moving this needs-assessment away from Housing New Zealand that the agency making decisions about what houses to build and where—Housing New Zealand—will no longer be informed in making those decisions by the knowledge that it gleans by being the one that does the assessment of those needs. So there is a separation there.Extending the income-related rent subsidy to community housing providers is as I said one part of the bill that we do support in the Green Party because we agree that the community housing sector generally delivers high-quality housing that is specifically suited to the needs of its tenants. We could support that but that on its own is not enough for us to support this legislation. We would note that as well as extending the income-related rent subsidy there is a very real need for the Government to fund some capacity-building in the community housing sector—that if it wants the community housing sector to pick up the slack where it does not want Housing New Zealand to provide service any more it has to build capacity in the sector to allow that to happen.Finally I note the rental warrant of fitness. If there is one reform that we urgently need in the housing sector it is a warrant of fitness for rental housing. But what we havegot is a damp squib. We have got a very limited warrant of fitness which applies to only Housing New Zealand houses initially and later perhaps to the community housing organisations. Focusing this on Housing New Zealand is a waste of time and it is a red herring because I have received through an Official Information Act request Housing New Zealand maintenance guidelines and I have got a book this thick of the guidelines that Housing New Zealand already has for the quality of its houses. The problem is not that it does not have robust standards at Housing New Zealand; it is that it does not implement or maintain its properties up to those standards and it does not respond on time when tenants make complaints. A warrant of fitness will not make a blind bit of difference to that. Most children growing up in poverty in poor quality homes do not live in Housing New Zealand properties; they live in private rental houses and this bill does nothing for them. The Greens will be thoroughly opposing this bill for all of those reasons.MELISSA LEE (National): It is a pleasure to rise in support of the first reading of this Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill.I have to say I am appalled by that last speaker Holly Walker. I did not realise that people moving off a benefit was such a bad thing in this country. I did not realise that people becoming independent of Government support was such a bad thing that that member opposes support from the Government for people to become better and to live much more independent lives away from Government support. I did not even realise that Miss Annette King thinks that we are closing down Housing New Zealand. Why should we be spending $3 billion on Housing New Zealand if we wanted to close it down?This is about the Opposition becoming very frightened that we are getting into the territory that it claims is its domain: helping the people who are poor in this country. But what did the Labour Government do in the 9 years that it had the Treasury benches? I would like to ask that question. Obviously nothing. It was the slum landlord that had people living in cold homes that we had to warm up. We are warming up houses up and down the country and we are very proud of that record.This bill ensures that the housing we provide is the right size in the right place in the right condition for those who need it the most. Our social housing package is a key part of our promise to deliver a better public service. We want to provide the right environment to grow the community housing sector.There are many community housing providers—organisations such as churches NGOs charities that provide support for vulnerable people—and they do a great job. There is no reason why a family in need should receive less support just because the bricks and mortar of their house is owned by a community provider rather than the Government. So we are actually saying that we are providing the same support. We should remember that the important thing is to provide the support that people require not bicker about who owns the bricks and mortar in this instance.Often community housing providers can provide better support to people in need as they are already providing integrated support for those people in a holistic manner whether they are providing counselling whether they are providing support for people who are trying to come off drugs or alcohol or maybe they are in a situation where there is domestic violence. They provide holistic support and this support that the Government will be providing will be even better for the job that they already do. That is why this bill provides for income-related rent subsidies to be extended to the community housing providers. This will mean that community housing providers canhouse more people without the worry of where they are going to find the funds. They will be funded on the same basis as Housing New Zealand.The other aspect of the bill is the assessment of people’s housing needs being shifted from Housing New Zealand to the Ministry of Social Development. Currently people are assessed by Housing New Zealand for housing support and assessed by the Ministry of Social Development for social and income support. The shift in responsibility to the Ministry of Social Development will mean that the process will be fairer and will facilitate a more holistic view of people’s needs alongside other social and income support. The shift will also mean that people’s housing needs - assessments will be made independently of housing providers. It will be done by people who best understand their need for income and social support.As I said earlier the Government is making a record investment of $2.9 billion in Housing New Zealand over 3 years. That is definitely not a signal that we are giving up on Housing New Zealand. We are supporting it to provide a better service for New Zealanders.Also Opposition members have previously talked about the reviewable tenancies and why they disagreed with it. Many members in this House have actually come across situations where people are living in Housing New Zealand homes where their families have grown up and moved on but because they were already given the house—often very big houses to house bigger families—they refused to move out of these homes. There are many other families who actually need the bigger homes and they cannot move in. What we are saying is that reviewable tenancies which we make these people sign is not a case of evicting people out of their homes. The Minister never said anything about evictions. This is about providing the right housing for the needs of the people—the housing for the right need for the right people. We are not evicting people but are providing a better housing service for people in this country. This is a great bill. I commend it to the House and look forward to the submissions in the select committee consideration.DENIS O’ROURKE (NZ First): The Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill is just another knee-jerk reaction by the Government to the intensifying New Zealand housing crisis. The Government’s priorities are saving money and reducing the size of State services rather than ensuring that the needs of people especially those at the lower end of the socio-economic spectrum are adequately met. It will be a darker future for them.The bill offered here is another one of the Government’s moves being made in isolation to what is really needed: a comprehensive New Zealand housing strategy in which social housing must have a vital part not a reduced one. The social housing sector in New Zealand is grossly neglected. In comparison with the United Kingdom and Europe our sector is primitive and fails to meet the needs and expectations for social housing in this century. New South Wales is another example of a place where a much more innovative and up-to-date approach is being tried and found.This bill goes in the opposite direction. The expectation that somehow the laying-off of social housing to community housing organisations will solve our housing needs is unrealistic and risky. Housing New Zealand as it is is also unable to meet these needs adequately. There are too few rental houses especially in Auckland but also in Christchurch where the earthquakes have caused rents to rocket. There are too few houses to meet the need and there are poor-quality rental units. There is not adequate support either for State house tenants who need the assistance of other social agencies. We have in some parts of the country effectively State house ghettoes with attendant crime problems in some places but we have contrasting areas with no such issues in others.This inconsistency and the fact that there are too many State houses in some places and not enough in other places shows that we have had no strategic approach to social housing needs in New Zealand for far too long. We now need new housing models such as those being established in New South Wales and more innovation and options for people in the rental market—Hon Dr Nick Smith: That’s what the bill does.DENIS O’ROURKE: —this bill does not do that properly at all—and we need more experimentation. A good example actually is the competition for a new housing model in central Christchurch currently. It came up with some well-considered mixed housing ideas which I hope will all be tried. This bill does none of this.New Zealand First’s policy is to make rental housing affordable and accessible to people on the lowest incomes and to offer a range of options to meet all social needs. The Government’s social housing policy reduces the scope of the operation of Housing New Zealand and it will transfer large sums of money to community housing organisations. This raises many unanswered questions—most of all how will the need for a robust regime of accountability be met? The bill before us does not adequately address these issues. And what about the application processes? Last year the Salvation Army was turned down for not meeting the financial criteria but part of the $3 million Māori fund was allocated to Whangarei Accessible Housing Trust which was running at a loss. Figure that out.What about the competency of third sector housing providers applying for social housing? Grants are given of large sums of money and these organisations will own the housing funded by the Government. How do we know it will be well spent? There will be no State asset in return. What happens if a recipient organisation fails? Where do the assets go? How transparent and accountable are the processes for allocating funds to community providers? What safeguards and risk management have been put in place for the funds allocated to non-profit community providers? Will well-meaning community providers have enough competence in the housing market when private investors have lost many millions of dollars in the building and property market themselves? Will these organisations have the competencies to maintain and manage assets properly?New Zealand First believes that it is unwise to confuse social objectives with property investment objectives in non-governmental organisations. The outcome will be risky uncertain and unlikely to be acceptable in practice. The State would do better to provide social housing directly and not rely so much on the NGO sector. There is a place for those organisations such as those organisations that provide refuges for women—and there is a need for that facility—and there are others too. But these are a discrete and relatively small area of need.The social housing need in New Zealand is now huge and is growing. More and more Kiwis are unable to afford a home. Many will never be able to buy one. Their need is for options for long-term rental housing which in this country only the State can reliably provide. The income-related rent subsidies that this bill will provide to community organisations also has too many pitfalls especially—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair.Sitting suspended from 10 p.m. to 9 a.m. (Friday)