Mooney JosephHousingJOSEPH MOONEY (Chairperson of the Social Services and Community Committee): Thank you very much Madam Chair. So I rise as the chair of the Social Services and Community Committee which reported back on the annual review of Kāinga Ora Homes and Communities Ministry of Housing and Urban Development and Tāmaki Redevelopment Company Limited.Now rather than reporting separately on each entity for the 2022/2023 annual reviews we have considered the social housing sector as a whole. And so we conducted a hearing on those three entities and we also heard from the Minister of Housing the Hon Chris Bishop for 34 minutes.I'm just going to go through some of the key points that we considered and reported back on to the House. So in terms of Kāinga Ora in December 2023 the Government commissioned an independent review of the financial situation of and procurement and asset management in Kāinga Ora. When the review was announced the Minister of Housing expressed concern over the current and projected growth of Kāinga Ora's debt and deficit levels. So as of June 2023 Kāinga Ora's total debt was $12.3 billion more than four times its debt level in 2018 which was $2.7 billion. That represents a debt-to-asset ratio of around 27 percent. So Kāinga Ora's financial planning takes a long-term view of its financial sustainability looking 60 years ahead and it forecasts that under current settings its debt will not be completely repaid over the 60-year period. They told us that by 2081 it projects that its total assets will be valued at around $260 billion and will have around $9 billion in debt. That would represent a debt-to-asset ratio of around 3.5 percent. Its debt is forecast to peak at $28.9 billion in 2033.Kāinga Ora told us that the three largest areas of expenditure were maintaining public housing the construction of new public housing supply and large-scale civil works including its large-scale projects such as Te Mātāwai Greys Ave in Auckland. It said that it is working to improve efficiency and save costs across all three areas.The Ministry of Housing and Urban Development told us that it's been working alongside the Treasury and Kāinga Ora to review Kāinga Ora's spending funding and financing systems. We noted that in 2022 the financing arrangements of Kāinga Ora changed so it could no longer borrow money directly from the private market to build and renovate public housing. Instead it must borrow through New Zealand Debt Management a business unit within the Treasury.In terms of increasing public housing both Kāinga Ora and the Tāmaki Redevelopment Company Limited advised that their goals are to increase public housing supply. And Kāinga Ora advised that in the 2022/2023 financial year they built 2893 new public and supported homes against a target of 3400 homes. So that resulted in a net increase of 2526 homes to its public housing portfolio in comparison to its target of 2200 homes. Kāinga Ora has said that in total it has built more than 11000 homes in the last six years.The Tāmaki Redevelopment Company reported that it has a target of building 10500 new affordable and private market homes in the following 20 years and in the 2023/2024 year constructed total of 128 new homes.Housing and Urban Development advise that it has a focus on place-based rather one-size-fits-all approach to addressing housing needs. Under this approach housing planning aims to recognise and respond to the needs of each specific community and it uses data such as the social housing register and median regional incomes to determine priority areas of highest need across the country. And the Minister noted that levels of housing affordability vary greatly across New Zealand.In terms of maintenance renewals and retrofits Kāinga Ora said that it's guided by its Asset Management Plan a system it first introduced in 2016 and in the 2022/2023 year renewed around 750 homes. Now the rising cost of construction and high inflation has contributed to an increase in maintenance costs. Housing and Urban Development also noted that it is focused on working with local councils to support growth in their regions and has said that it's absolutely critical that local councils play a role that is front and centre and that local councils can have a considerable influence over the housing sector.In terms of infrastructure and urban planning all three organisations emphasise that they face significant challenges related to infrastructure and urban planning and we heard that a lack of supporting infrastructure can create roadblocks to being able to efficiently plan and provide for housing growth.And finally Madam Chair in the time available it's important that the work is being done with Kāinga Ora with Community Housing providers which we also reported back on.