Heatley Phil: Affordable Housing: Enabling Territorial Authorities Bill — Second Reading In Committee Third Reading 
Heatley Phil: Affordable Housing: Enabling Territorial Authorities Bill — Second Reading In Committee Third Reading 
[Volume:649;Page:18493] 
PHIL HEATLEY (National—Whangarei) 
: 
 I was remiss in the Committee stage for not speaking about the commencement date of the Affordable Housing: Enabling Territorial Authorities Bill and I would like to raise that now in my third reading speech which of course I am quite entitled to do. Listeners will be interested to know that this legislation comes into force when it receives the Royal assent which is of course almost immediately. That commencement date is quite ironic in the sense that councils may or may not take up this legislation. In fact most councils across the country have opposed the bill as have builders developers and those who provide housing. 
This legislation has come 6 years too late. During the previous 6 years probably ending at Christmas last year property prices have skyrocketed in New Zealand. They have been growing much more quickly than household incomes. That is what housing affordability is all about. It is about the balance between household incomes and the buying power of that income—in other words household incomes versus the cost of housing. The cost of properties is divided into two aspects: one is the cost of the building and the other is the cost of the land. Property prices have skyrocketed over the last 5 years up until roughly Christmas last year. In terms of those two cost components building and land it is land that has increased in cost—more so than the cost of building. 
We have now reached the point where property prices have pretty much stabilised right across New Zealand and in fact they have dropped in some areas. So here comes Maryan Street and Labour. Property prices have finally stabilised if not dropping further and she suddenly has an answer; 5 or 6 years later we have had legislation brought into this House after property prices have stabilised. Am I saying that the stabilisation of property prices across New Zealand has solved the affordability problem? No I am not. What has happened is that property prices have now settled at a value well over and above what most first-home buyers can afford. They are still in trouble. The reality is that we had a period of growth that went for over half a decade and the Minister Maryan Street now rides over the hill on her white horse to save the day but she is 6 years too late. That is obscene. What has she saved the day with? She has saved the day with legislation that suggests that local councils across the country may or may not like to force builders and developers to set aside 5 or 10 percent of their land for cheap housing to set aside a whole bunch of cash from their housing development for first-home buyers or to build a whole bunch of cheap houses themselves. 
The Minister ignores the fact that that will drive up property prices for everybody else. As the correspondent who has been emailing me tonight has suggested what Labour members “do not want to acknowledge or at least they choose to ignore is that if you force developers to provide low-cost sections it will only force the price up of other sections” meaning that the house price of everyone else in the subdivision goes through the roof. It is quite true that if we force property developers builders or whomever to take a big hit on a few sections in a subdivision all it will do is force up the price of houses in the other parts of the subdivision because those builders will have to recover their costs. So a whole bunch of people end up paying more for their houses in order to possibly help a smaller bunch of other people. 
Of course that smaller bunch of other people may never be helped because as we heard at the Local Government and Environment Committee very few district councils across the country are interested in taking up the legislation. In fact I was quite amazed that the Minister acknowledged the five regions in New Zealand that have serious affordability problems: Christchurch Nelson Queenstown Auckland and Wellington. Interestingly Auckland City Council and the councils in South Auckland mainly and also North Shore City Council do not want a bar of the legislation. Wellington City Council came to the select committee and had very serious concerns about the legislation. Nelson City Council is not interested. We heard from Christchurch City Council that it may or may not use the legislation. Queenstown Lakes District Council is already implementing the principles of the bill without the legislation. So there we have it. Of the five areas that the Minister Maryan Street identified as having serious affordable housing problems none of the five are likely to use this legislation. That is the disgrace we are seeing here tonight. The 6 years have passed when the Government could have done something. It did not do anything and finally in the dying days of this Parliament it passes legislation through this House—forces it through this House—that will have no effect whatsoever upon the regions that may or may not take it on because they are not at all interested. 
My question to the Minister is why she does not do something for first-home buyers that will actually help them. Why does she not address the issues that matter? There are four or five of those issues. First of all what about tax relief? It is take-home pay and not gross pay that services a mortgage. So why does the Government not give people more money in their back pockets so they can afford to service a mortgage? Why does it not do that? That would help everybody; it would absolutely help everybody. Take-home pay matters. Why does the Government not deliver a tax cut for those first-home buyers so that they can service a mortgage? The deposit is not the problem; it is the weekly or fortnightly payments that trip up people. Members on the other side of the House do not seem to understand that but that is the case. 
Secondly why do the Minister and her Government not run this country in a better way economically and fiscally so that we can get interest rates under control? Interest rates more than any other factor affect a person’s ability to service a mortgage. The Minister will acknowledge that the average mortgage in this country is about $200000. That is not the average cost of a house but the average mortgage. A 1 percent interest rate drop equates to two grand a year which is 40 bucks a week. So a 1 percent interest rate drop can mean $40 a week to a first-home buyer. That is a significant amount of money I can tell members for many households today that are really struggling. A 2 percent interest rate drop would mean 80 bucks a week. That is very significant. The members on the other side of the House who have not made a contribution in this debate all night but simply sit there and mock do not even understand that take-home pay matters and that interest rates matter. 
What is more the Building Act and the Resource Management Act are two pieces of legislation driving up property prices right across the country. Why? It is because builders are finding that the cost of compliance under the Building Act and under the Resource Management Act has driven up property prices over the years. Why? It is because of the cost of the resource consent process. 
I raise a point of order Mr Speaker. I would just like your guidance. I have been speaking for about 8 minutes. [ 
Interruption 
] Can I make a point of order in silence? 
Mr DEPUTY SPEAKER 
: Yes we must— 
PHIL HEATLEY 
: The members on the other side of the Chamber have been heckling me the whole time. It has not stopped me at all; I have not responded to their heckling. They have not disturbed me one iota. Why do they bother Mr Speaker? Can you answer that? 
Mr DEPUTY SPEAKER 
: Phil Heatley. 
PHIL HEATLEY 
: Why does the Government not do something about the Resource Management Act and the Building Act? Why does it not give tax cuts so that people can afford to pay off their mortgage each fortnight? Why does it not get interest rates under control? Those things would really make a difference instead of bringing legislation into the House in the dying days of this Parliament that no local authority across the country will adopt.