Lees-Galloway Iain: Local Government Act 2002 Amendment Bill (No 3) — Second ReadingText is incorporated into the Bound VolumeLees-Galloway Iain: Local Government Act 2002 Amendment Bill (No 3) — Second Reading[Sitting date: 27 May 2014. Volume:699;Page:18316. Text is incorporated into the Bound Volume.]IAIN LEES-GALLOWAY (Labour—Palmerston North): The centrepiece of this legislation which the Government seems so excited about is its measures that it claims will improve housing affordability by restricting the application of the development contributions that developers make to city and district councils when they are developing sites whether they be for residential or commercial development. Although this may make a rather insignificant impact on the affordability of housing it is I suppose a minuscule step in the right direction. It is an addition to the Government’s other infinitesimally small step towards improving housing affordability that was in the Budget—that being its removal of anti-dumping tariffs which the Government guessed may reduce the cost of building a new home by $3500 an extraordinary amount in the context of what would normally be about a $500000 house.What we are seeing here from this Government is an extraordinarily inadequate response to the single-biggest issue out there in the public. On the day the Budget was announced the front page of theDominion Postran a survey of what were the most important issues to New Zealanders. Right there at the top at No. 1 was housing affordability. What this legislation claims to do is to address that No. 1 issue. Well it is a woeful attempt at addressing that issue. House prices are absolutely rampant and out of control and what does this Government do in response? It has a guessed $3500 reduction in the cost of building a new home which is highly unlikely to be passed on to the actual purchaser of that new home and these provisions to tinker with the development levies are anticipated to reduce the cost by $750—$750. So there we have got a combined total of around $4000 off the cost of building a new home—Sue Moroney: Maybe.IAIN LEES-GALLOWAY: —perhaps. There is absolutely no evidence that even that ridiculously small cost reduction will actually occur. And that is it—that is it. That is the National Government’s response to the housing affordability crisis—$4000. That is it—nothing else not a jot.Well we have got some better ideas on this side of the House. We have actually got a plan to deal with housing affordability. If Labour were in Government the first part of the plan would be to build some houses. What we actually need to see happening is some houses coming on to the market that are affordable that people trying to buy their first home can actually buy. Labour will build 100000 homes over 10 years. That is the first part of the plan.The second part of the plan is to introduce a capital gains tax because we need to take the heat out of the speculation in residential property. National backs the speculators; Labour backs the first-home buyers. We want to support people to get into their own homes. We do not want to sponsor the speculators; we want to support clever investment in New Zealand in the productive sector. We want investment in things that create jobs not in things that just push house prices up.Thirdly we need to cap the offshore speculation in residential property. Foreign capital can be very very useful when it creates jobs and when it supports innovation but foreign investment in our residential property does only one thing: it drives up thecost of houses for hard-working Kiwi folk who just want the opportunity to buy their first home and get ahead in life.That is the stark difference between the provisions in this legislation when added to the other paltry attempt in the Budget from the National Government and what the Labour Party plans to do. This side of the House has a plan for housing and that side of the House can offer nothing but tinkering around the edges. That is the sum total of the effort from that side of the House when it comes to housing affordability. There is absolutely no guarantee whatsoever if there are any savings from these tiny changes to the way development contributions are made—absolutely no guarantee at all—that those savings will be passed on to the home buyer particularly in Auckland. Of course it is from Auckland that a lot of this housing affordability issue is being driven. There is a large divergence there between the cost of building a home and the price at which they are actually sold.So I think it is courageous of this Government to seriously believe that its little effort in tinkering here will actually result in changes that would be experienced by the homebuyer by those families who are doing all the right things by people who are working hard in their jobs and saving their deposits. And of course saving for a deposit has got a whole lot harder under this Government as well because of its failure to address the housing affordability crisis in Auckland. That is impacting right across the country. So all those people who are doing all the right things and saving hard still do not have an opportunity to get into their first home and this bill simply will not do the job. It might be helpful for the National Party’s donors those property developers who make substantial donations to the National Party. They might get a little bit of help out of this but it will do absolutely nothing for those people struggling to get into their first home.