Lotu-Iiga Sam: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Lotu-Iiga Sam: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 12 February 2013. Volume:687;Page:7701. Text is incorporated into the Bound Volume.] 
8. 
Peseta SAM LOTU-IIGA (National—Maungakiekie) 
 to the  
Minister of Housing 
: What steps is the Government taking to improve housing affordability? 
Hon Dr NICK SMITH (Minister of Housing) 
: 
 A major driver of housing affordability is mortgage interest rates. Since we have been in Government they have dropped from 9 percent to 5 percent a 50-year low saving a family with a $300000 mortgage $230 a week. We are taking steps across all five areas of land infrastructure labour materials and compliance costs to tackle the doubling in house prices over the past decade. The latest steps announced at the weekend are proposed changes to development contributions that have gone up by 360 percent over the last decade. 
Peseta Sam Lotu-Iiga 
: Why has the Government made a particular priority the cost of land in sections as opposed to the alternative proposals of a massive State housing building programme? 
Hon Dr NICK SMITH 
: We are particularly focused on the price of land in sections because they have increased from $94000 a section a decade ago to over $190000. This compares with an average section price of NZ$100000 in the US. Reports on housing affordability from Treasury from the Productivity Commission from Motu Economic and Public Policy Research Trust and even from the Department of the Prime Minister and Cabinet under Helen Clark all recommended that changes focused on land supply and section costs. None of those independent reports recommended a massive State house building programme. 
Peseta Sam Lotu-Iiga 
: What was the rationale given in 2002 for widening the powers of councils to set development contributions and for removing any appeals to the amounts charged? 
Hon Dr NICK SMITH 
: The law change in 2002 did broaden the powers for development contributions and remove those appeal rights. The rationale that was given at the time by the previous Government was that the increased cost was of no concern because it would simply come out of developers’ margins. Experience in the decade since has shown that this was flawed thinking. The 360 percent increase in development contributions has been passed on in section prices and has adversely affected housing affordability. 
Hon Annette King 
: When he said on  
Morning Report 
 this morning that he had been in the job less than 2 weeks and it was going to take time to pull together new initiatives for affordable housing could he tell the House why the Government has waited almost 5 years and two Ministers later to come up with an announcement on some work on new initiatives for affordable housing? 
Hon Dr NICK SMITH 
: As I pointed out in my answer to the primary question the single greatest factor in housing affordability is interest rates. I am very proud of this Government’s record which has seen interest rates at the lowest level in 50 years. It is a step that is saving the average Kiwi family— 
Hon Annette King 
: I raise a point of order Mr Speaker. That was a very specific question. It is interesting to have the Minister ranting about something else but that is not what I asked and I would like an answer to the question I asked. 
Mr SPEAKER 
: It was a very political question but if the member wants to repeat her question we will give her the opportunity. 
Hon Annette King 
: If you could just wait. 
Mr SPEAKER 
: I will give you a minute to assemble your pieces of paper. 
Hon Annette King 
: If you could wait 5 years while I put it together. 
Mr SPEAKER 
: No we are not about to wait 5 years but I will give you 5 seconds. 
Hon Annette King 
: I asked: when he said on  
Morning Report 
 this morning that he had been in the job less than 2 weeks and he needed time to get together new initiatives on affordable housing why has the Government waited almost 5 years and two Ministers later before it came up with a programme of work on new initiatives? 
Mr SPEAKER 
: That is exactly how I recall the question. 
Hon Dr NICK SMITH 
: As I pointed out if you look at homeownership for instance over the last 50 years it has improved in the years when interest rates have been low and it has got worse in the years when interest has gone up. What that history also tells you is that interest rates have gone up under every Labour Government that this Government has done a good job of keeping those interest rates low and that there are further initiatives around Resource Management Act reform development levies and others that will be needed to enable more Kiwis to own their own homes.