Goff Phil: Budget DebateText is incorporated into the Bound VolumeGoff Phil: Budget Debate[Sitting date: 20 May 2014. Volume:699;Page:18120. Text is incorporated into the Bound Volume.]Hon PHIL GOFF (Labour—Mt Roskill): I have heard some of the National speakers pretend that this Budget is a “Labour-lite” Budget. There is nothing “Labour-lite” about this Budget. This is a conjuror’s Budget. You know Mark Mitchell was right; it is quite a good thing that under-13-year-olds can go to the doctor without charges. What he did not tell us was that while the great conjuror was saying “Look! Look here! Under-13-year-olds—free general practitioner visits!” at the same time he was ripping out the guts of the health system by cutting health spending in real terms by 2 to 3 percent. That is what Treasury says. That is what Bill English was challenged on onQ+A on Sunday and he had no answers. It is fine that we get our kiddies to the doctor; it is not fine that we rip the guts out of health spending by increasing spending at less than the rate of the increase in population and the increase in inflation.The same thing is happening in education. A good Budget is a Budget that helps the wealth of the country through the people of the country. It is people-centred. This Budget cuts real spending on health cuts real spending on education and reduces the police budget in real terms by $40 million according to the Police Association. So much for the law and order party that wants to have a safer community. There is a $40 million cut in real terms in the policing budget.Those are all failures—those are all failures—but the biggest failure in this Budget is that this Budget does not recognise does not act on and does not put in place measures to deal with the housing crisis. There is John Key who says “What housing crisis?”. Well there is an example of a Government that has become arrogant and out of touch.From the lofty heights of St Stephens Avenue the lord looks down over his empire and says “What crisis? What peasants? What is the problem with housing?”.I will tell Mr Key what the problem with housing is. The problem with housing is that this year we will have the lowest rate of homeownership in New Zealand in half a century—half a century. I grew up and you grew up Mr Assistant Speaker Tisch in a New Zealand where the Kiwi dream of owning your own home was something we assumed we could aspire to. My parents were a working-class family. They bought their own home. They capitalised on my family benefit to do so and good luck to them. I had my own home in my early 20s. I paid $12500 for a very nice cottage in Papatoetoe. My children go out into the market today and to buy a house in my working-class electorate of Mt Roskill—what is it Mr Mitchell? It is $700000—$700000—and the increase in house prices since 2008 has been 40 percent.Hon Ruth Dyson: What?Hon PHIL GOFF: A 40 percent increase in house prices since 2008. I ask any member on those benches opposite to tell a young Kiwi couple desperate to own their own home how they can do that. Forty-six percent of all New Zealanders had no wage rise in the last year—46 percent. Nearly half of all New Zealanders got no wage rise. Every one of those New Zealanders had their rent go up. They sat in my electorate and watched the price of houses in the last month alone the month of April go up by $6000. Can you imagine the despair of a young couple who are desperate to get a home of their own when they face that? No wonder the OECD has just produced a report in utter contradiction to what the Prime Minister says saying that we are the country with the most expensive houses in the world and the least affordable houses. Do you know what this Prime Minister does after 6 years in office? He says that it is the Labour Government’s fault—6 years in office Mr Key. After 6 years we are sick of the excuses. We want to see some action. But we are not seeing action; we are seeing only excuses.Well when we look at this Budget what does Treasury say? Treasury says about housing that at the moment to buy an average-priced home in New Zealand with an 80 percent mortgage you will be paying 43 percent of the average full-time wage—43 percent. It sounds quite high does it not? But do you know what Treasury says?Jami-Lee Ross: It would have been less if prices didn’t go up so much under Labour.Hon PHIL GOFF: It says that in 5 years’ time that figure will be 63 percent. ForJami-Lee Ross’ information in Auckland it will be 86 percent of the average full-time wage. That is fine if you are a born-to-rule person who has money and help from your parents. Every parent wants to help their kid get into their own home but what about all those families out there who cannot rely on that help? How can they ever aspire to homeownership?The other day I was knocking on doors down on the street that I was brought up on in Mount Roskill. It is called Warren Avenue. I went down a long driveway. There were the old houses there and there were infill houses behind them. I knocked on every door. Do you know what I found? I found that every single family living in both the old homes and the new homes were tenants. They were renting their properties. When I talked to them they felt that they were doomed to becoming tenants in their own land because there was no hope at all of homeownership. And this Government did what in the Budget to help those families? Let us hear it from the Government members.Denis O’Rourke: Nothing.Hon PHIL GOFF: Nothing—well actually it did do something. The price of nails from China and the price ofGib board from Thailand will apparently come down because now those countries can dump those products in the market at a cost less than itcosts to produce them. That is what the Government did. Is that going to be worth anything? No because most first-home buyers are buying existing homes.The Government says there will be $3500 in cost savings. Where did it pluck that figure from Mr Young? Where did the Government pluck that figure from? I will tell you this: there is no sound foundation for believing that that will be the saving. There is no proper estimate of that. There is no guarantee that one cent of that will be handed on from the builder to the consumer. It will do nothing to help those families desperate to buy their own homes. If the Government was right about that figure of $3500 and every dollar was passed on to the consumer that would be less than half the cost that house prices went up by in the month of April alone. This Government is a shocker. It has done nothing to help people realise that fundamental human desire to be homeowners.I want to talk in the time that I have got left about the answers that Labour has because I think that the Labour policy is offering hope. The first thing that you need to do is to recognise as anyone can recognise when they go along to a housing auction that the price of houses in New Zealand is being driven up by speculators and property investors. The answer to that is a capital gains tax on property investment. I have heard person after person—and Jacqui Dean is about to mouth it again—say it will not work. Well I say to Jacqui Dean to look at what the Chief Economist from Westpac Dominick Stephens said this morning in theNew Zealand Herald. What did he say? He said that a 15 percent capital gains tax would reduce the value of speculation by 23 percent. He said we should do it. The chief economist of the ANZ said we should do it. The Governor of the Reserve Bank says that we should do it. The chief executive officer of the Treasury said that we should do it. Take the speculation out of the housing market. Why will National not do that? Because there are vested interests in every one of them there. Look at the pecuniary interests register and you will see why the National MPs do not want to stop speculation do not want to make housing easier for the first-home buying family. They want to make life better for themselves and that is despicable.Then there is an element of that speculation that is foreign speculation. Nick Smith says there are 22000 owners—disingenuous. There are 22000 owners probably with 10 houses each. But the Inland Revenue Department says 11 percent of ownership is by foreign investors. I want to ask the next National speaker to explain to this House and to young New Zealanders what good it does New Zealand to have foreign speculators pushing up the price of our residential housing. Where is the benefit to New Zealand? There is no benefit to New Zealand; there is only a downside.I want to come to MichaelWoodhouse’s point. I happen to be pro-immigration but I believe that immigration has to be managed in a way that it does not soar and put unnecessary costs on the housing market. That is why it needs to be controlled.