Young Jonathan: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Young Jonathan: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 06 November 2012. Volume:685;Page:6263. Text is incorporated into the Bound Volume.] 
3. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Finance 
: What policy steps is the Government taking to make houses more affordable in the medium term? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government has agreed with almost all of the Productivity Commission’s recommendations on housing affordability. We agree on improving land availability and the provision of infrastructure. We also agree with it on reducing costs around the regulation and construction and reducing delays which would all contribute to making new housing more affordable. I would also point out that stable and low interest rates and rising wages are also helping to ease affordability problems. Floating mortgage rates around 5.5 percent are around half of what they were in 2008 so a family with a $200000 mortgage is saving about $200 a week. 
Jonathan Young 
: What other problems associated with housing affordability are these policies trying to address? 
Hon BILL ENGLISH 
: About a third of New Zealand’s households spend more than 30 percent of their disposable income on housing costs. As these costs rise demands on taxpayers to assist with housing costs increase. I have seen projections that income-related rentals for the Housing New Zealand Corporation’s tenants currently costing $590 million a year will reach nearly $800 million a year by 2015-16. The accommodation supplement on which we currently spend $1.2 billion a year will rise by 9 percent over the next 4 years or an extra $100 million. So the less affordable housing is for households the more taxpayers are required to pick up the difference. 
Jonathan Young 
: What effect does borrowing for housing by New Zealand households have on the wider economy? 
Hon BILL ENGLISH 
: If New Zealanders are borrowing unnecessarily for purchasing housing it makes the economy vulnerable. Through the last cycle from about the year 2002 onwards housing prices rose rapidly New Zealanders borrowed large amounts of money at high interest rates and that left our household sector as one of the most indebted in the developed world. The Government is setting out to deal with the underlying problems that can lead to excessive borrowing by improving the flexibility of the supply of housing with the expectation that this will have some moderating influence on house prices and therefore on debt levels for households. 
Jonathan Young 
: What reports has he seen on the Government’s housing affordability package? 
Hon BILL ENGLISH 
: There has certainly been a wide range of interest in the issue. The Salvation Army with which we have been working for 3 to 4 years now on housing issues described the Government’s package as a welcome next step. Auckland Mayor Len Brown essentially agrees with the Government’s direction though he does say housing affordability is a complex issue that requires Government and councils to work together. To that list I would add banks the building industry and developers. The Families Commission has said the package is an important step in the right direction.