Robertson Grant: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — Second ReadingText is incorporated into the Bound VolumeRobertson Grant: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — Second Reading[Sitting date: 24 March 2015. Volume:704;Page:2514. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): There is a certain appropriateness that the Minister the Hon Nick Smith who delivered that speech on behalf of the Minister responsible for the bill was the person speaking about it—the “Minister for Blather and Excuses on Housing” because that is what he is. He is like a man in a dinghy facing a tidal wave desperately paddling round in circles going absolutely nowhere as the housing crisis overwhelms him. Of all the things that we could be debating today about what to do about the housing crisis in New Zealand about how we could make sure that young New Zealanders can achieve their dream of owning a home about how we can make sure that there is something to stem the out-of-control housing prices in Auckland about how we can actually increase supply in housing and about how we could manage demand in housing—of all of the things that we could be doing today the Government brings to us this bill.And its officials gave it a ringing endorsement in the committee!Hon Clayton Cosgrove: What was it?GRANT ROBERTSON: They came to us and they said that they had looked at all of the information they had looked at all of the background and they were “tentatively positive” about it—Hon Clayton Cosgrove: Is that a direct quote?GRANT ROBERTSON: —tentatively positive. Not positive but tentatively positive. That is a direct quote Mr Cosgrove. That is exactly what the officials said. They said that they—Hon Dr Nick Smith: They were negative about your policy.GRANT ROBERTSON: Dr Smith says they were negative about our policy. At least Dr Smith our policy builds some houses. At least we are about trying to make sure that New Zealanders have some houses built.Hon Dr Nick Smith: That’s right we are—24000 in the last year. Double the rate.GRANT ROBERTSON: No do not talk to us about consents Dr Smith—actual houses. Things that people can live in. After 7 years of this Government it still has not got a decent housebuilding programme going. And what it came to the Finance and Expenditure Committee with and what it comes to the Parliament today with is a bill about which the best thing officials—its own officials—can say about it is that they are tentatively positive about it. In the end they basically said it would do no harm. That was as good as they got to—that it would not do any harm. Well that is good news is it not? The Government has introduced a piece of legislation that is not going to harm people. That is fantastic news from the Government.The officials were asked a number of quite simple questions about this. Will it improve homeownership? No was the answer to that question. They expect the impact on the proportion of owner-occupiers to be small as most recipients of a KiwiSaver HomeStart grant would have purchased their home eventually anyway. Although the grant will make a contribution to the ability to raise a deposit as Dr Smith has told us a quote from the officials is that “… the grant makes no difference to the cost of servicing a mortgage.” That is the reality: the overall price of housing particularly in the Auckland region is now so out of control that this is actually just tinkering around at the edges. So the officials told us no it will not make a big difference to homeownership.Will the changes benefit supply the officials were asked; answer no it will not benefit supply. Advice to the Government noted there was already substantial demand for homes at the lower end but it was simply not profitable enough from a developer’s point of view. At best officials told us they indicated that the subsidy may have an impact on—get this—a couple of hundred homes; a couple of hundred homes. There is a shortage in Auckland right now of 18000 homes. That is just to get ourselves up to where we need to be let alone the building of an additional 10000 on an annual basis. For this piece of legislation the best that the Government’s own officials could say was that it might mean a couple of hundred extra homes. It is the very definition of tinkering around at the edges of a significant and major problem for this Government.On this side of the House when we introduced the KiwiSaver scheme it was always designed with the idea that it could be used by people buying their first home to be able to use that money for a deposit on a house. We do not have a problem with that. In principle this idea is one that potentially could have some merit but in the end it simply does not address the core issues. What it really does not do—in a supply-constrained environment this really is the equivalent of trying to put out a fire by putting petrol on it. Yes we will open up the possibility of some people perhaps a few hundred to be able to take some benefit from this but the reality is—and different from when we first introduced the KiwiSaver scheme—we are now existing in a very supply-constrained environment and this is what the Government thinks is the most pressing and important thing that it can bring before the House.We had some interesting exchanges in the select committee with the officials who came to see us and we learnt a lot during that about sartorial issues for members of the officials who came in and saw us. It was quite clear from the officials who came from the Ministry of Business Innovation and Employment to brief us that this was simply something that the Government had proposed during the election campaign. It was a desperate bid when Labour’s KiwiBuild policy was out there and the Government had nowhere to go and it went for a policy that it thought would be popular. It was and is essentially a gimmick. It does not change very much at all and yet this is what the Government would have us believe is the answer to housing problems in New Zealand.It is quite clear when we are looking at average house prices in Auckland of around $750000 with increases in the prices month on month—we hear 3 percent one month we hear 5 percent another month—that we know all of those things are adding up to a pressure cooker housing market. So it is all very well to have a policy like KiwiSaver HomeStart but with the loan-to-value ratios and their impact and fundamentally the failure to build affordable housing this simply goes nowhere.It is interesting that on a day in this House when the first three questions on the Order Paper during question time were to the Government around its absolutely failed social housing experiment which nobody wants a bar of in the third sector this is the bill we are now debating. It is quite clear to us on this side of the House that the housing market is in failure the housing market is in crisis and it requires significant Government intervention to deal with that. The Government’s response is to sell the houses that it owns. That is the Government’s response to this. This is not the time to sell houses; this is the time to build houses. This is the time to use the power of the Government to build more houses to use the fact that the Government can borrow more cheaply than the average homeowner to use the fact that the Government is the controller of more land and to use the fact that the Government can do things on a scale that no other developer can to actually correct the failure that is in the market right now.We want to be very clear on this side of the House that this is a question about both supply and demand within the housing market. We heard Bill English say the other day that he did not want to do anything at all to meddle in the demand side of the equation. Well failing to meddle in either side of the equation is the problem for Bill English at the moment. The housing market is a broad thing. If we are not building enough affordable houses it puts pressure on the rental market. If there is pressure on the rental market that pushes up rents and that puts more people towards the need for social housing. The response of the Government is to sell off that social housing. The fact that it does not understand the connection between all of these things in the housing market represents an absolute and total failure of this Government to have a proper coordinated and connected housing policy. When we come to a piece of legislation that the Government’s own officials can bring themselves to only tentative positivity for for one that they say will not do any harm—Hon Clayton Cosgrove: Not a lot of good.GRANT ROBERTSON: —but not much good at all Mr Cosgrove—that is a failure of this Government.The Labour Party will support this piece of legislation because it does something. It allows the KiwiSaver HomeStart policy to be put into practice. We will support that. We think that is something that should happen but be under no illusion—this does not solve the problem. This will not build more houses. This will not see more New Zealanders able to fulfil that Kiwi dream any more than any tinkering that this Government would bring to the House would. What we need in housing is a large-scale building programme of affordable housing and we need to ensure that the rental market is kept under control. What we must not do is sell off the social housing that underpins the housing ecosystem in New Zealand. This tinkering legislation is emblematic of a Government that has no idea how to deal with the housing crisis and is failing New Zealanders.