Twyford Phil: Supplementary Estimates — Imprest Supply DebateText is incorporated into the Bound VolumeTwyford Phil: Supplementary Estimates — Imprest Supply Debate[Sitting date: 24 June 2014. Volume:699;Page:18817. Text is incorporated into the Bound Volume.]PHIL TWYFORD (Labour—Te Atatū):I want to talk about housing in this estimates debate. Housing was the gaping hole in the Government’s Budget. In the face of great expectation from the public that the Government would use the Budget to do something constructive about its housing crisis very little was forthcoming. I want to start by drawing the House’s attention to a story that ran in the New Zealand Herald on Saturday about a poll that it had done of New Zealanders who own their own homes. This is interesting because for a long time in this country it has been the conventional political wisdom that house prices going up is a good thing. The idea has always been that when house prices go up it means people are getting richer. They are acquiring extra value from that. For that reason I think Governments for a long time have thought that it is fine to just let house prices go higher and higher.Well something really interesting has happened in the last few years. The New Zealand Herald poll showed that half of the homeowners whom the New Zealand Herald polled said they were either worried or very worried by rising house prices. That I think is remarkable because these are people who on the face of it are benefiting from the fact that their house values are rising but they told the New Zealand Herald poll that they were very worried about this.I think this explains why housing has become such an explosive issue in the last few years. What the people told the New Zealand Herald poll was that they were worried that their kids would never be able to own their home—that they were locked out of the dream of homeownership—and secondly they were worried that the housing crisis and ever-escalating house prices could lead to a housing bust that would threaten the economy and could lead to people losing their shirts as they did when the global financial crisis hit the United States.I think this is very very significant. It is clear to the people here. Half of the homeowners told the New Zealand Herald that they were worried or extremely worried that we have a housing crisis. The symptoms are there for everybody to see. Let us look at what those symptoms are. We have rapidly falling rates of homeownership. That was very clear from the census data that came out a few months ago. House prices in Auckland are skyrocketing. The median house price in Auckland is now over $700000. If you look at house price inflation over recent months—annualised—it amounts to house prices in Auckland going up by $72000 every year. Is it any wonder that people cannot save fast enough to keep up with house price inflation?A year ago the Reserve Bank was so panicked by the housing crisis that it introduced these loan-to-value ratio lending restrictions which mean that no matter where you are in the country even if you are in Balclutha Dunedin Wanganui Palmerston North or Gisborne—places where there is no housing crisis—you still have to find a 20 percent deposit. Depending on where you are that could be $60000 $70000 or $80000 before you can even get in the door and talk to the bank manager about a mortgage.In Canterbury because of this Government’s near-criminal negligence in failing to deliver a speedy residential rebuild after the earthquakes rents have gone up by more than 30 percent since the earthquakes. People are living in the most disgraceful conditions because this Government has taken a hands-off approach to the rebuild. Fewer than 1000 of the 12000 to 15000 houses that are needed in Canterbury right now have actually been built.We have seen the running down of Housing New Zealand. There are 700 fewer State houses now than there were a year ago. There are around 3000 vacant State houses around the country while people are shuffled off to the private rental market and living in often substandard conditions.The OECD says we have got a housing crisis. It pointed out that we have some of the most overpriced housing in the world. The IMF said the same thing. The Reserve Bank noted the other day that the housing crisis in Auckland poses one of the biggest threats to our economy but John Key and this National Government are in denial about this. They do not believe that there is a housing crisis. Well the first step to addressing the problem is actually acknowledging you have a problem but National has not even got to the first step.By contrast Labour has a positive agenda for change and if you look at our housing policy it has so many bold constructive elements to it. The next Labour-led Government will take serious measures to address the housing crisis. With KiwiBuild we will build 10000 affordable houses every year and sell them to first-home buyers. What is National’s solution? It is drawing lines on a map with its housing accords hoping that if it changes the zoning rules somehow the market is magically going to build these houses. We can see that that is not happening because in Auckland where the Government announced a housing accord more than a year ago Nick Smith has not built a single new house in the special housing areas that anyone is living in.Labour will tackle the speculative forces that are driving house prices higher and higher in Auckland. We will do something about the demand side. A capital gains tax that excludes the family home will dampen down the out-of-control frenzied speculative activity that the IMF report proved conclusively is responsible for driving up housing prices in Auckland. National on the other hand refuses to do anything about the demand side. It will not even collect the facts on the effect of offshore speculators outbidding New Zealand first-home buyers and driving up house prices in Auckland. Even though the Reserve Bank says it would be helpful if the Government collected the data National refuses to do it. Well Labour will change the law so that only New Zealand citizens and New Zealand residents can buy houses in this country. There is no benefit to New Zealand from having offshore speculators buying houses in New Zealand and farming them for capital gain.Labour has a policy which David Parker has put out there that will tackle monetary policy reform that will lower interest rates and that will benefit New Zealand homebuyers and homeowners as well as New Zealand businesses. Labour will tackle the structural imbalances in our economy—the lack of savings and the lack of exports which mean that we have not paid our way as a country for more than 40 years. We will tackle those. Those are the very causes of the risk premium which means that when foreign banks are lending to New Zealand banks they charge extra. That explains why New Zealanders are paying higher interest rates on their mortgages than homeowners in Australia the US and the UK.Labour will tackle the surge in net inward migration.David Bennett: Shame on Labour.PHIL TWYFORD: That is going to mean that in the next year David Bennett with a projected 42000 extra migrants coming to New Zealand Auckland alone will have to build an extra 14000 houses.David Bennett: So what’s the matter with that?PHIL TWYFORD: Well Mr Bennett do you know how many extra houses are being built in Auckland? It is about half that. We are on track to build only about half the number of houses that are needed to house the surge in inward migration that is happening under this Government. John Key refuses to even acknowledge that that is an issue. That is negligent. Labour will fine-tune the flow of skilled migration coming here so that New Zealand gets the benefit of skilled migrants without putting unsustainable pressures on our housing market.Labour will set minimum standards for rental properties to guarantee that every rental property in New Zealand is warm and dry. National refuses to do that. The most it can offer is this lame commitment by Nick Smith to carry out a pilot scheme of the warrant of fitness of State houses. It is not needed. State houses are already all insulated. What we need is action to set standards in the private rental sector to make sure that those 285000 children who are growing up below the poverty line and living in largely private rental properties at least have a warm dry home to grow up in. Labour will guarantee that they get that. Instead of running down State housing in the middle of a housing shortage as National is doing Labour will actually build State houses. We will increase them. That is the obvious thing to do; National refuses to do it.Labour will solve the housing crisis. We have done it before in the first Labour Government’s massive programme of State house building. In the 1950s and 1960s successive Governments intervened on the side of first-home buyers and gave us the highest rates of homeownership in the world. We have done it before and we will do it again.