Heatley Phil: Debate on Prime Minister’s Statement 
Heatley Phil: Debate on Prime Minister’s Statement 
[Volume:670;Page:16542] 
Hon PHIL HEATLEY (Minister of Fisheries and Aquaculture) 
: 
 I endorse the comments from my Hamilton colleague David Bennett. He outlined the reasons why those tax-and-spend and tax-and-consume days are over. He understands that New Zealanders now understand that we can no longer have a Government that sprays cash around every 3 years and then spends its last year explaining why things have not improved. We are not going to enter this election in a competition with Labour members about how we can lolly scramble out there more than they can. I tell those members to listen: we surrender. Labour members can throw cash around this country better than we can. All of them in Father Christmas uniforms look much more convincing than we do. Goff running around looking like Father Christmas with his 30 or 29—or are there 17 MPs left I do not know—elves left on that side of the House spraying around lollies and cash looks much more convincing than John Key doing it because people expect from John Key Bill English and this Government a lot more thriftiness a much more conservative approach and a much more frugal and sensible approach than they expect from Phil Goff. So we surrender—we surrender. We are not going to spray cash we are not going to throw out presents and we are not going to tempt the public with sweets; we give in. We are quite simply saying that the days of tax-and-spend consumption and increasing borrowing are over. I think the member from Hamilton put that quite succinctly. 
I would like to explain something else to Labour colleagues and those who are listening. I have been extremely concerned as to why Labour members are asking questions about housing and perhaps their questions are why the Prime Minister decided to address housing in his speech today. They are asking why rents are going up. I remember that when they were in Government they were asking why the prices of houses were going up so I will back up to quite basic straightforward economics. Nothing has changed. The more houses there are on the market the lower the price of the houses. 
Hon Member 
: Say it again? 
Hon PHIL HEATLEY 
: The more houses there are on the market the lower the prices of the houses. That is because when there are plenty of houses to choose from and there are just a few buyers house vendors and people building houses have to drop their prices. So that is the first concept for Labour. The second concept is that the fewer houses there are and the more buyers then house prices will go up more. The fewer houses there are on the market the more buyers there are then house prices go up. Why is that? That is because there are very few houses and lots of buyers and therefore people are competing for the houses so the house prices go up. I want to explain that to the Labour members. 
Labour members might ask why when they were in Government for 9 years house prices went through the roof. Moving back to what I previously said that is because over the term of the previous Labour Government we were not building enough houses. Builders found it hard to build houses. Why? First it was because consents—building consents and resource consents—took so long to go through the system because of the bureaucracy. Second it was because land was not released. The previous Labour Government had the view that there was no land in New Zealand around any town or city that would be useful for housing. Even if land was covered in gorse or tea-tree or had no other use whatsoever Labour was very scared to open up new land to housing. The third reason was that interest rates during the period of the previous Labour Government particularly during those middle years were around 8 9 and 10 percent so people were not prepared to borrow money to buy or build a house. House prices went up because fewer houses were being built and more and more people wanted them. Why were fewer houses being built? It was because the consenting process was difficult no land was made available to build the houses on and interest rates were high. 
Now Labour members ask why rents are going up particularly in Auckland. It is quite simple. I will go back to those initial principles. More people want to rent houses than there are houses available to rent. So what happens is that 10 houses are available to rent but 100 people want them so the rents go up. Why are there fewer houses to rent? It is because fewer houses have been built. So we need to build more houses; whether one is buying or renting the fact is that in New Zealand we need to build more houses. The first way we will be able to do that is simply to maintain interest rates at a level where people want to borrow to either build or buy. Maintaining interest rates at 6 or 7 percent which we have now would be a good thing for New Zealand. John Key and Bill English have laid out their economic plans to make sure that we keep interest rates low and at a reasonable level—at the moment about 6 6.5 7 percent—in order for people to be prepared to build and to buy. The second thing we can do—as we are talking about Auckland—is start talking about what areas of land we can open up for new housing. Do not be afraid of this. There are areas around Auckland where we could have some new housing. In Auckland we could also demolish some housing that is old cold and mouldy and make housing denser—in other words not have so many quarter acre sections and perhaps put two houses on those quarter acre sections. The third thing we can do is look at the Resource Management Act and the Building Act and look at the way we allow the consenting process to drag on for 2 or 3 or 4 years. 
National has made its views pretty clear to people. We want to make sure that house prices remain stable and no longer spiral out of control into the future. We want to make sure that rental prices are kept under control and the only way we will do that is to build more houses. In fact colleagues might be interested to know that over the last decade including the period of the recession builders have not been building enough houses across New Zealand to keep up with either immigration or population growth. Even before the recession each year we needed about 22000 to 23000 houses but builders across the country were building only 15000 or 16000 houses. So we have a housing shortage. Keeping interest rates under control managing the economy making sure that we are streamlining consenting processes freeing up new land for housing developments and allowing densification in towns and cities is the only way we will get more houses. 
Why does Labour insist on maintaining the red tape of resource consenting the red tape of the Building Act insist there is no land in New Zealand for residential housing and maintain policies that spray cash around in an election year and can only ever have the result of sending interest rates sky high to 8 or 9 or 10 percent where they were roughly when Labour left office. I do not know why Labour is coming out with these solutions. All I say is that we surrender. We will not run around with bags of cash trying to bribe the public this election. Labour is better at that then we are. We are not going down that road. Labour can compete alone. This election will not be a contact sport if Labour is going to spray cash because National will not engage in that at all. 
It is fair to say in talking about housing that the Housing New Zealand Corporation which owns about 65000 houses across New Zealand—almost one in 20 houses—is making sure that it is better using the land. It is subdividing quarter acre sections now and building two houses on those sections instead of one. It is keeping an eye on interest rates and making sure resource consent processes are timelier too. So National is doing its bit. John Key and the National Government will continue to do its bit in housing and we will not compete with the Labour when it comes to spraying cash around.