Twyford Phil: Budget Measures (Miscellaneous Fiscal Matters) Bill — First Reading Second Reading In CommitteeText is incorporated into the Bound VolumeTwyford Phil: Budget Measures (Miscellaneous Fiscal Matters) Bill — First Reading Second Reading In Committee[Sitting date: 15 May 2014. Volume:698;Page:18029. Text is incorporated into the Bound Volume.]PHIL TWYFORD (Labour—Te Atatū): On Budget morning an opinion poll in one of the daily newspapers said that 76 percent of New Zealanders wanted to see theBudget prioritising tackling the housing crisis and doing something for first-home buyers. Oh how New Zealanders have been let down and disappointed by this Budget. How badly the National Government has got it wrong after talking up the housing crisis for months and leaking suggestions that it was going to do something about the supply of housing in Auckland. Well it has left New Zealanders feeling badly let down.How bad is this housing crisis? Well bear this in mind: the median house price in Auckland has now gone over $700000. We have seen a 40 percent increase in house prices in Auckland since National took office in 2008. Foreign speculators are driving up the price of houses in Auckland outbidding Kiwi first-home buyers from the end of the telephone. We have got people living in garages and sleepouts around the country. And because this Government has utterly failed to get a grip on the housing crisis the Reserve Bank has imposed lending restrictions and loan-to-value ratios requiring 20 percent minimum deposits which have shut first-home buyers and low-income Kiwi families out of the housing market handing the advantage to speculators both foreign and domestic.The best this Government could do was to announce the temporary suspension of anti-dumping duties and tariffs on some building materials. That is the best it could do and that is a very inadequate response to the housing crisis. There is nothing in the Budget—nothing—for first-home buyers. There is nothing to put a stop to foreign speculators bidding up the price of houses in Auckland. There is nothing to guarantee that the 285000 children growing up in this country below the poverty line who live in rental properties will have a warm dry home. The best that National is willing to offer the country is to lift the anti-dumping duties and tariffs on some building materials. It has estimated on the back of a cigarette packet that this might save $3500 off the cost of a new home but we have heard nothing from the Ministers or from members in the House today about why they think that saving would be passed on to first-home buyers. What is to say that in an overheated housing market the builders and the developers will not just pocket that $3500? That is even if we give any credibility to the estimate that it would save $3500.What else alongside this measure did the Government announce in the Budget? It announced $30 million for social housing organisations. That is $30 million over 3 years—$10 million a year—for social housing organisations. The supposed centrepiece of Nick Smith’s housing policy is to resource the community housing sector to provide more affordable housing. Alongside lifting the anti-dumping duties and the tariffs on varnish and nails and wall board the Government has put $10 million a year into social housing organisations. I calculate that on the basis of a house costing $350000 it will take Nick Smith 455 years to meet his target of transferring 13000 houses to the community housing sector—455 years. The NGOs having heard Nick Smith announcing with great fanfare in last year’s Budget the expansion of the community housing sector—just like this year’s great announcement of lifting the anti-dumping duties on Gib board—have been left waiting for the last 12 months to hear what kind of resource the Government would put into this initiative. But all they got was a measly $10 million a year—utterly pathetic.The other initiative alongside the lifting of tariffs and anti-dumping duties is $80 million to the Ministry of Social Development for the purposes of implementing the eligibility assessment for people to get into State housing. So the Government’s single biggest announcement alongside the lifting of anti-dumping duties and tariffs is $80 million to pay the bureaucrats in the Ministry of Social Development to do the job that Housing New Zealand has been doing within its baseline funding. This is unbelievable stuff.But look there is more—there is more. There is $7 million in the Budget to pay the Ministry of Social Development to kick pensioners and disabled people out of State housing. Alongside lifting anti-dumping duties and tariffs which has been talked up as this Government’s huge contribution to solving the crisis in affordable housing this is all it has got. After Nick Smith has been the Minister of Housing for a year and a half this is all the Government has got—to pay the Ministry of Social Development $7 million to kick people out of State housing. Paula Bennett announced it in a press release entitled “Helping more families into rental housing”. Actually it is $7 million to kick people out of their State houses—unbelievable.I want to say that the public have been left open mouthed and astonished that the Government would talk up the housing crisis for the last few months dropping generous hints that it was going to do something for first-home buyers. This temporary suspension of tariffs and anti-dumping duties is estimated by someone in Treasury to save $3500 off the cost of a new house. Even if that is true it is still a tiny pathetic amount. It is less than 1 percent of the median cost of a house—less than 1 percent. Get this—it is 2 to 3 weeks of house price inflation in Auckland. It is 2 to 3 weeks of house price inflation. That is all it is going to save.The Productivity Commission which Nick Smith loves to quote in this House as his bible the font of all wisdom heard a lot of submissions on the question of building costs. Its report indicated that building supply costs in Australia are 76 percent of those for a standard home in New Zealand. So New Zealand is paying a lot more. In fact based on that data and adjusted for inflation and for the exchange rate New Zealand is paying more than $20000 more for the building materials for a standard home than consumers in Australia are paying. And the best this Government can do after an extensive working group exercise to look at building costs—Ministry of Business Innovation and Employment officials did a market study on residential constructions we had extensive public consultation and a whole range of options were foreshadowed—is come up with the temporary suspension of anti-dumping duties and tariffs on varnish nails and Gib board. It is unbelievable.I just want to say in the context of this being the Government’s showpiece announcement on affordable housing that it is worth noting that the Budget’s own figures tell us that under the current policy settings of this National Government the housing crisis is going to get much much worse. The Budget figures themselves the interest rate track and the projections on wage growth tell us that in 5 years’ time by 2018-19 it will take 63 percent of the average full-time wage to service an 80 percent mortgage on a standard home—63 percent of the average full-time wage. It is currently bad enough. It is currently 49 percent and everybody but the National caucus and Nick Smith would agree that that constitutes a housing crisis. In 5 years under this Government’s policies it is going to go from 49 percent to 63 percent. And if you live in Auckland that figure is 86 percent. So under this Government’s policies hard-working Kiwi families paying off a mortgage in Auckland in 2018-19 will have to spend 86 percent of an average full-time wage just to service a mortgage. That is if they can afford to get into their own home.What is the upshot of this? The Government with this Budget has basically run up the white flag. It has admitted defeat. It is telling New Zealanders that the dream of Kiwi homeownership is over. It is finished. The Government has given up and it has surrendered.