Twyford Phil: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeTwyford Phil: Oral Questions — Questions to Ministers[Sitting date: 28 October 2014. Volume:701;Page:254. Text is incorporated into the Bound Volume.]5.PHIL TWYFORD (Labour—Te Atatū)to the Minister responsible for HNZC: How does he anticipate Housing New Zealand will operate within a contestable market for social housing?Hon BILL ENGLISH (Minister responsible for HNZC):I expect that it will participate successfully but development of a contestable market is still some way off. The Ministry of Social Development currently holds around 62000 income-related rent subsidies. From now on a tenant can take that subsidy with them to a provider who best meets their housing health and employment needs or offers better wraparound services where those are required or a better path back to housing independence. Housing New Zealand will find in a contestable market that it will be required to develop similar kinds of services. I expect that for quite a long time it will remain by far the largest provider of social housing.Phil Twyford: Is he aware that social housing NGOs say that they do not have the resources to buy State houses and how will he make up the difference between the likely sale prices and the funds that he has signalled will be spent on his Government’s pet projects and his other political promises?Hon BILL ENGLISH: Well I am sure there are some community housing providers who feel like they would not have the resource to buy the houses but then they will not be obliged to. As long as they are registered as a community housing provider they can work with others who own the houses and they can participate in this market without the need for large lumps of capital. I would expect that they will be providers who are most motivated for instance by wraparound services for the most complex clients who could actually get a better deal there than they currently get or for new clients who are not in Housing New Zealand houses but have serious housing needs to be met. With respect to the funding issues the member raised I am not exactly sure what he means so I cannot answer the question.Jami-Lee Ross: What reports has he received on the operation of contestable social housing markets overseas and what does this say about Housing New Zealand’s role?Hon BILL ENGLISH: New Zealand is a bit unusual in the way that we have run our traditional State housing. The Housing Shareholders’ Advisory Group report in 2010 pointed to a number of similar countries that run social housing markets. For instance in the Netherlands there are 400 housing associations. In Canada the Crown specialises in financial support rather than the provision of houses and has a much more diverse range of housing providers. In the UK and Australia there are now large alternative providers to Governments that are doing a very good job of operating as mixed entities. Here in New Zealand we expect that Housing New Zealand will continue to play a major role alongside community providers but it will no longer be the only provider.Phil Twyford: Was he offended when his Cabinet colleague Paula Bennett launched an attack this morning on his failed housing policies when she said that sending people to live in caravans cars and garages as his department has been doing for the last 6 years was not suitable?Hon BILL ENGLISH: No I was not offended. In fact I had a discussion with Ms Bennett along these lines: if you wanted to house an extra 1000 people under the traditional model it would cost you $500 million to build the houses and it would take 5 years. Under the new model if you want to house an extra 1000 people it will cost $12 million a year in income-related rents because they are $12000 a year each in Auckland and if the houses are available across the whole market you could do it within a matter of months. Surely that is a better system for dealing with people living in caravans and garages.Phil Twyford: Was he concerned when Treasury warned the Government that it is not possible to provide social housing at a profit and when it advised exploring “how we can unlock the potential of Housing New Zealand’s asset base” was he concerned that that advice suggested that the only way to develop an artificial marketplace in social housing was to flog off State houses and knock down prices to make it look viable?Hon BILL ENGLISH: I am not sure whether the member understood the advice. Certainly I do not recall the advice being put in exactly that way. The Government subsidises social housing very extensively. We spend $1.2 billion on accommodation supplements and $700 million a year on income-related rents and we simply want to do a better job of it because despite spending $2 billion a year in subsidies there are thousands of people in serious housing need whose needs are not being met and thousands of people in State houses who should be on the path to independence but are in long-term dependency. We care about the people more than the houses and that is the difference between us and a Labour Party that cares more about State houses than people with serious housing needs.Phil Twyford: Is it not nonsense to talk about a market in social housing when it is impossible to even enter the market without a massive taxpayer subsidy and virtually giving away public assets and why did the Government deliberately conceal from the public at the election its plans to destroy a Kiwi institution that has been housing struggling families and giving young New Zealanders like the Prime Minister a decent start in life?Hon BILL ENGLISH: The irony of that comment is that when we passed the social housing reform legislation—the Labour Party used to be progressive because its members voted for that in 2013 which is when all this was laid out and debated. So it was hardly a secret. But clearly in the interests of Labour’s leadership contest those members are reverting to their 1960s notions of State housing.