Smith NickHon Dr NICK SMITH (Minister for Building and Housing): I am delighted to take a call on the Estimates for this year in the area of building and housing and to talk about the Government's plans around dealing with the issue of supply dealing with the issues of the quality of New Zealand housing the issue of affordability and the issue of homeownership. I think it is very important that we have this debate in the context of some of the challenges that we have. The truth is that we have the lowest interest rates in 50 years. That is actually for the vast bulk of New Zealand. If you look at the independent indexes from Massey University if you look at the indexes from HYPERLINK http://www.interest.co.nz" interest.co.nz on the affordability of homeownership those record low interest rates actually mean that housing is a lot more affordable today in the vast bulk of New Zealand—Carmel Sepuloni: No one believes that. No one believes that.Hon Dr NICK SMITH: —than it was when we were elected to Government. The member interjects. Well go and have a look at the indexes that are produced by Massey University because that member is denying a fundamental fact. When we came to Government interest rates averaged 10.5 percent. Today interest rates average 4.8 percent. That is a very substantive drop in interest rates which is so crucial to those families who are out there actually meeting their mortgage repayments. The second thing that is true is this: New Zealand is doing well and we have net levels of immigration that are the highest ever for our country. If everything was as bad as members who have just spoken from the Opposition say why is it that a record number of New Zealanders are choosing to come home and build their future here? What we see in that report that I attempted to release in the House today—it is up on the website—is that—Grant Robertson: Ha! You told us it wasn't.Hon Dr NICK SMITH: No—I put it up on the website because I was denied leave in the House Mr Robertson. I would invite you to have a look at it because what is going on in New Zealand right now is that we are doing well. As a consequence more New Zealanders are choosing to come home and as a consequence that is putting more pressure on the housing market. The third part of the equation is that New Zealand has very high economic confidence. That is people feel good about the economy they are prepared to invest and that is providing very strong growth. Let us firstly deal with the issue of supply because we know from the experience in Christchurch that supply is the ultimate answer. If you take house-building right now in New Zealand—$18 billion of construction activity across New Zealand right now—it is at an all-time high. It is 30 percent above the highest peak that previously occurred more than a decade ago. So when members of the Opposition stand up and say "Oh there's no houses being built. There's nothing happening." I say: look at the record levels of house-building activity. Look at the record numbers of people who are billed in the industry. Look at the record number of people who are in apprenticeships. Those members know in their heart of hearts that there are more houses being built today than there has been in many decades and that is part of the answer. Grant Robertson: What percentage is affordable? What percentage is affordable?Hon Dr NICK SMITH: I remind Mr Grant Robertson who is chipping in about the issue of affordability that actually during the last Government house prices more than doubled. What did the last Labour Government do in response to that doubling of house prices during its watch—The CHAIRPERSON (Hon Trevor Mallard): Order! The member will resume his seat. I think he was actually in the House yesterday when there were rulings from both Chairs around focusing on the Estimates of expenditure and not having an excessive look backwards which may or may not be appropriate for a review. Hon Dr NICK SMITH: I want to come to the issue of quality of housing because actually there is not just record growth in the number of houses that are being built but we have actually been ensuring Kiwis have access to homes that are of quality. In this year's Estimates for the very first time—Carmel Sepuloni: They stuffed that one up too didn't they?Hon Dr NICK SMITH: Well let me again remind the member of the record and I just simply say: how many homes are we insulating as a Government? What provision is made in this year's Estimates to make sure we continue that progress? The truth is in the term of this Government more homes will be insulated and at a better quality than has ever been the case in our country. Last week we passed the smoke alarms legislation. Do you know in the very first of that legislation lives have been saved? Lives have been saved in Wanganui where a landlord specifically said they bought a smoke alarm as a consequence of the advertising that is provided for in these Estimates and young families and lives were saved—as a consequence of this Government's move on quality. There was a very similar incident in Westport just 2 days ago again where lives were saved as a consequence of this Government's initiatives around improving the quality of the housing. On 1 July this year with the funding that is provided here for the very first time my ministry has a compliance and enforcement unit to ensure the quality of New Zealand housing.Grant Robertson: What about heating? Hon Dr NICK SMITH: Well the member Grant Robertson interjects. I simply say to him: what did any previous Government do in this space? Zip—absolutely nothing. We are a Government that is providing for enforcement and compliance standards and that is something—Grant Robertson: Insulating cold houses—that's a great idea. Heating?Hon Dr NICK SMITH: Well the member does not even understand the rules. Actually the housing regulations right now Mr Robertson require heating.Grant Robertson: Do they? Are you enforcing that?Hon Dr NICK SMITH: They do. And here is the answer: up until 1 July the law did not allow it. It was a National Government that passed the law that allows the enforcement of the regulations to actually ensure that our standards get up to a minimum standard. These Estimates also provide for the HomeStart scheme. In my role as Minister for Building and Housing do you know what issue I get more letters on than anything else? It is around the number of New Zealanders off the back of the KiwiSaver scheme and the HomeStart grants who are getting the opportunity to buy their own home. That programme—a programme of $430 million of grants—is the most generous support that any Government has provided in a generation for people to be able to get into homeownership. In the first year over 12000 New Zealanders have taken up that opportunity. The numbers in these Estimates provide for even more in this year. It is a good scheme and do you know what the biggest risk is for those New Zealanders who are working hard and saving hard under KiwiSaver with the Homestart scheme? It is that Labour has promised to scrap that scheme and that would be a tragedy because it is actually one of those things that is making a real difference for Kiwi families who are wanting to own their own home. Also provided in these Estimates is funding for the Crown land programme—another $100 million—and this week the announcement was made about using 10 hectares of land that is currently with the Counties Manukau District Health Board and producing that into housing. It is very interesting to look at the amount of houses that are in the pipeline and actually being built because the truth is this—and the members opposite will not acknowledge it—this Government is building more houses than any Government in 25 years. That is the truth. Let me give you the numbers. We are using a billion bucks of Housing New Zealand investment. Do you know what the peak was under the last Labour Government? Not more than $500 million. So the amount of money that is being invested by Housing New Zealand in its own properties is more than double. We had the programmes at Hobsonville. Let me tell you about Hobsonville. The first sod was turned in 2002. It was the only sod that was turned in the term of the Labour Government. Already we have over 600 houses built on that site and houses are being built on that site at great guns. You go to a site like Waimahia a project that we have done in South Auckland where a new house is being completed every 3 days—every 3 days.Peeni Henare: Ha!Hon Dr NICK SMITH: The member chuckles. I challenge him. Will he visit Waimahia and acknowledge that houses are being built? Do you know what happened to that block of land during the term of the last Labour Government when house prices doubled? That land sat vacant absolutely unused for every year of that 9 years and that truly is a tragedy. Whether you look at the project for Tāmaki whether you look at the other huge investment that is going on in housing members have to acknowledge that whether it is the Government or whether it is the private sector there are record levels of building activity across New Zealand. The very last area is an area that I want to acknowledge is under pressure. We are building so many houses there is actually real pressure on quality. The Auckland councils and other councils are really struggling. So these Estimates provide for a big investment in building standards. We have got to make sure we are building more houses but we have to make sure that they are of quality. That is done in terms of investments in the building code and also in building standards."