Hague Kevin: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — Second ReadingText is incorporated into the Bound VolumeHague Kevin: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — Second Reading[Sitting date: 24 March 2015. Volume:704;Page:2523. Text is incorporated into the Bound Volume.]KEVIN HAGUE (Green): David Bennett in his contribution to this debate referred to this bill as a small bill and I think that was generous on his behalf. As officials pointed out to the Finance and Expenditure Committee this bill in fact achieves almost nothing. None the less the small amount that it does contribute possibly is worth supporting and we will vote for it in this second reading debate.The Prime Minister said last week that there was no housing crisis. It feels very much like it is a housing crisis to those people who are increasingly shut out of homeownership. New Zealand has the lowest rate of homeownership that we have experienced since 1951—the lowest rate since 1951. Why is that a problem? It is a problem because New Zealand made a choice. Countries generally made a policy choice between comprehensive superannuation programmes or alternatively policies that supported comprehensive homeownership. New Zealand chose the latter of those. Our policy settings were designed to encourage almost universal homeownership because we were not going to provide comprehensive superannuation. So when we have our rates of near universal homeownership from the past actually declining to their lowest rate since 1951 that is a crisis and it is a crisis because more and more New Zealanders are shut out.We have particularly declining rates of homeownership amongst Māori and Pasifika New Zealanders and indeed from the increasing group of poor New Zealanders who are likely to see that they will never have the opportunity to own a home in their lifetime. That is a problem not only for them but for all of us as increasing inequality has been shown to be. Inequality is a problem not only for those at the bottom at the heap but for the whole society. The whole society carries the costs of increasing inequality.The consequence of that decreasing rate of homeownership is to throw more and more people on the mercy of the appalling rental market in New Zealand which delivers extremely poor-quality housing in general. It delivers a very poor standard of rental security which still exposes New Zealanders to increasing rental costs right now at a 6.5 percent increase year on year. And as I say there are those major consequences down the track for the retirement savings and incomes for New Zealanders. So the problem is not just theirs; it is also ours.This is particularly a problem for young people which is where this bill comes in. When speaking in the House last week I pointed out that for New Zealanders aged 20 to 39—a group of New Zealanders we would expect to be moving into homeownership establishing families and setting the foundation for their productive years as adults and for their retirement savings and incomes—homeownership declined from 61.4 percent in the 1986 census to 26.8 percent in 2013. It more than halved.We have a plummeting rate of homeownership by younger New Zealanders—those aged 20 to 39. It is not only for the very young New Zealanders who may only just be moving into the age where we expect homeownership to be occurring; it is for that whole group. For New Zealanders aged 20 to 34 homeownership in the Auckland region declined in 2013 to 17.2 percent and it is not much better in other large cities. So young people I am sure will have been thrilled to hear the National Party in its election campaign just weeks before the general election last year talking in terms of providing a handout or a hand up for those young New Zealanders and talking about how it understood the plight that young New Zealanders faced in trying to afford their own homes. It seemed like we had a National Party that cared about the plight of young New Zealanders.However I suspect that not many of those young New Zealanders looked at the detail of the policy that National was offering them. Nick Smith referred to young New Zealanders in his contribution earlier in this debate when he said that they really welcomed what the Government was doing and had looked at the numbers but I do not imagine that Nick Smith pointed out what those numbers were to those young New Zealanders.The total contribution that this makes is $521 per person per year and even that contribution will be at the expense of the person’s own retirement savings. This contrasts with a median house price in Auckland just now of $621800 while the average median household income for New Zealanders aged between 20 and 34 is just $48600. That $521 per person per year will go almost nowhere in adding to the affordability of housing for that group of young New Zealanders.Steven Joyce in the House last week said he could not understand why it was relevant to compare median house prices with the median household incomes of young New Zealanders but I can assure Mr Joyce that those young people understand. The overlap between their incomes and house prices is becoming smaller and smaller. It is drifting further and further apart. Homeownership is becoming an unaffordable dream for more and more young people in this country and this bill does almost nothing to fix that problem.That group of young people is the same group who is also saddled with high rates of unemployment. It is saddled very often with high and unaffordable student debt. Those young people are facing a situation where their own health and welfare is being put at risk by that financial situation by the unaffordability of both buying houses and renting houses. But also this intergenerational inequity that the Government is feeding by its policies across the board not only affects those people now but will also affect them in the future when they come to retire and it will affect the situation that their children will inherit.There is a structural inequality that the Government is building into the New Zealand economy that will saddle this country with debt and with deep and deeper problems for generations to come. Against that picture what this bill does is essentially nothing. It is a demand-side stimulant at a time when what we need to do is deflate the speculative market in housing increase supply and reduce demand. What the Government needs to do instead is tackle the root causes of the problem. We would suggest a five-point plan: a capital gains tax; restriction on homeownership and landownership by non-resident foreign citizens; accelerated intensification of building housing particularly around Auckland’s public transport corridors; a regional development strategy to divert demand away to places that are supply rich in housing but currently job poor; and potentially different macro-prudential tools targeting the mark-to-market nature of valuation and its relationship to lending. That would be a package of measures that might actually start to address that problem.There is nothing offensive enough about this bill to require us to vote against it. But what is offensive and deeply disappointing is a Government whose housing programme is based on unfettered ideology and a Government that seems to be bereft of ideas when it comes to actually ensuring that everybody in New Zealand is well housed. Thank you.