Twyford PhilPHIL TWYFORD (Labour—Te Atatū): It is good to be taking a call in this Estimates debate. I want to speak about the issue that has been hanging over this Government like a dark cloud all through the preparation of this Budget the delivery of the Budget and in fact the aftermath of the Budget and that is the housing crisis. There are many items in the Budget and Ministers have been along to a select committee and have talked extensively and been grilled on their housing policies. I want to do a bit of an overview a bit of a summary of those different housing policies and evaluate them.Apart from the members opposite I think that everybody in this House and in fact everybody in the country accepts that we have a housing crisis. Let us just look at the most recent kinds of headlines in the last few days: 26 percent annual house price inflation on average nationwide"—26 percent. That is unbelievable. That actually puts New Zealand's house price inflation right up there with a handful of the international cities that have the fastest-growing house prices. Any day now the average house in Auckland is going to hit $1 million in value. One million dollars in value for average houses across the whole Auckland region—you would not have believed it a while back. We have got the lowest homeownership rates in 65 years and hardly a day goes by without some new revelation of the squalor and homelessness that people are suffering as they are squeezed out the bottom of the rental market.Most recently we saw revelations that the Government had been referring desperate people homeless people to some of the worst slum landlords in South Auckland who were charging them several hundred dollars a week to live in unconsented garages. Entire families were crammed into a single room of a shared house. That is the situation we are facing.What is the Government's response to this housing crisis that is now enveloping the country? Well most recently Nick Smith ratcheted up for the third time in 2 years the house price thresholds for the home-buyer assistance scheme HomeStart. It is the third time in 2 years the Minister has had to increase the thresholds because house prices are increasing so fast. In the last 12 months it turned out that only 9 percent of these HomeStart grants were made to people in Auckland and that just shows you that this kind of tinkering policy providing some subsidies for first-home buyers has been rendered obsolete by skyrocketing house prices in the Auckland housing market.The special housing areas which have really been the centrepiece of the Government's housing policy in Auckland have been around for nearly 3 years. They have resulted in we think about 1200 completed homes in 3 years. A shortfall of 42000 homes has built up since National has been in office—42000 homes. That is how much Auckland is short on dwellings and the Government's big policy the special housing areas has delivered only 1200 homes in 3 years—a spectacular failure.With regard to Nick Smith's policy to develop vacant Crown land which he announced two Budgets ago and updated with more money in the most recent Budget he has been scrambling around trying to find scraps of land: power substations—he even had cemeteries and he even had the old Government House on the list. He promised 500 hectares in the Budget before last he has found 20 hectares and I think he has announced only three development deals for that land—again promising big but delivering very very small.I want to just say by contrast that Labour's policy in this area is a commitment to build—to actually build—100000 affordable homes. That is what Labour is going to do—an average of 10000 new affordable homes for first-home buyers every year. It is going to create 5000 new jobs in the construction industry. It is going to ramp up the building and construction sector to the equivalent of the top of the cycle and maintain it there for a decade. It is a serious policy designed to change the market dynamics and to revive and sustain a flagging building and construction industry that is struggling to match the kind of red-hot demand that we see at the moment.Labour has announced that we are going to legislate for an affordable housing authority: a central government - mandated urban development organisation that will maintain the Government's urban land holdings and set up project-specific urban development authorities to deliver thousands and thousands of new affordable homes in the context of high-quality master-planned new developments. We have proposed a whole new approach to managing urban growth that recognises that restricting and stopping cities from growing up and growing out has only one effect and that is to drive land and dwelling prices up.Labour is proposing a whole new approach far more radical and far more courageous and thoughtful than the kind of business-as-usual approach that we have seen from the National Government with its national policy statement which came out just after the Budget. It is actually far more of a bold reform than the Auckland Council's unitary plan which is just a kind of business-as-usual approach with a bit more up-zoning and a bit more greenfields land. That is the kind of tinkering business-as-usual lacking in ambition approach that we have seen from the National Government.Let us talk about the influence of speculators in the housing market because that is something that is a big topic for debate when 46 percent of all property transactions in Auckland at the moment are going to speculators—46 percent. The staggering levels of house price inflation that we are now seeing in places like Wellington Tauranga Hamilton and others are being caused by Auckland property investors who are fleeing the Auckland market because of the Reserve Bank's loan-to-value ratio lending restrictions and driving up house prices elsewhere around the country. What is the Government's approach? Last year it introduced a 2-year brightline test saying that if you flick a house within 2 years of buying it or a rental property you are going to pay income tax. Treasury told the Government it would be ineffective. It said it would be lucky if it raises $5 million.What has Labour promised? We are going to push that out to 5 years so that if you sell a house or a rental property within 5 years of buying it you will pay income tax on the capital gain. That is a serious policy. We have signalled we are going to move on negative gearing. Last year property investors pocketed $650 million in tax breaks as a subsidy for speculation. Negative gearing is the practice of being able to write off your losses on a rental property. If you are getting less in rental revenue than you are paying in mortgage interest you can write off those losses against other taxable activity. Labour is going to put a stop to that.The biggest contrast is with the Government's dodgy manipulation of the foreign buyer data that Land Information New Zealand has been gathering for the last 9 months claiming speciously that the data shows only 3 percent of people in the market are foreign buyers. It is obvious—and the Government was ridiculed and laughed out of town by the commentators and by the media when it released this data a couple of weeks ago—that is it much more than that probably two or three times as much.Let us look at the rental sector finally. More than half of New Zealanders rent. We have seen that Nick Smith's policy to set insulation standards has a giant loophole in it allowing redundant insulation standards to continue in rental properties. We are seeing a systematic selling-off of State houses. In the middle of a housing crisis the Government has reduced the total number of State houses by a net 2500—in the middle of a housing crisis—while it has pulled $500 million in dividends out of Housing New Zealand while people are living in garages and campgrounds. It is unbelievable.Labour will set standards for healthy dry homes. We will make it illegal for landlords to rent out cold damp mouldy homes—and this Parliament will have a chance to vote for that when Andrew Little's bill comes back to the House. We are going to revitalise State housing in the 21st century. We are going to stop National's sell-off. We are going to bring Housing New Zealand back into the core Public Service with one job and that is to put a decent roof over the heads of people in this country who need it. We will build more State houses and increase the total number of State houses by at least 1000 a year until demand is met and we will more than double the current funding available for emergency housing. Paula Bennett made a great show of saying that she was going to spend $10 million a year to fund emergency housing for the homeless but she has had to come to this House and admit that it would not generate any new places. Labour will do the job properly."