English Bill: Infrastructure Bill — In Committee 
English Bill: Infrastructure Bill — In Committee 
[Volume:665;Page:12654] 
Hon BILL ENGLISH (Minister for Infrastructure) 
: 
 It is a bit rich hearing Labour members go on about affordable housing. Under the previous Labour Government’s policies housing became less affordable than it has ever been. The reason that the Government is using Part 4 of the Infrastructure Bill to repeal the Affordable Housing: Enabling Territorial Authorities Act is that it was a nonsense. 
The previous Labour Government ran policies that drove housing to the most expensive levels ever relative to people’s incomes. It then thought that it would fix that problem by passing a law telling local authorities they have to have affordable housing. This was during the tail end of Labour’s time as the Government and it summed up the vague wishful and incompetent policy-making it applied to the housing area. 
The measure of the affordability of housing is the ratio between the average value of houses and the average wage. Under Labour’s watch it almost doubled in some cases and for the average person homeownership became unaffordable—not affordable but unaffordable. Labour needs to learn that saying that something should be affordable does not make it affordable. What would make it affordable? Sensible policies that stop driving up interest rates tax policies that stop driving up house prices unnecessarily and pushing people into excessive borrowing and resource management policies that prevent local government constraining the supply of land so much that it drives up the price of land considerably. 
The interesting thing is that Labour knew most of this. The Labour Government committed considerable resources to housing affordability. It is just that the result of a year-long working party across the whole of Government was a silly provision that said we would achieve affordable housing by passing a law that said that local government had to have affordable housing. There were simple issues with the legislation like what “affordable” is. Why have legislation where the key term “affordable” is not able to be defined or understood by anybody? For most normal people in the street an affordable house is the house they would have liked to buy but could not quite borrow enough money for and did not have quite a big enough deposit to get. So it was an unworkable provision. It was a triumph of incompetent wishful thinking over reality. It was a hope by the previous Government that it would be able to use aspirational legislation to fix what is fundamentally a microeconomic and policy problem. That is why we got rid of that provision. What has happened around housing affordability? It has started to improve. Surprise surprise with some more sensible policies that put a bit less pressure on interest rates it is starting to turn round. 
The other day I saw a table of international rankings of affordability. We have one of the most expensive housing markets in the world when compared with wages—one of the most expensive. That is the legacy that Labour left when it said it wanted there to be more affordable housing. It took us from the middle of the pack to being one of the most expensive housing markets in the world. I do not mean in the developed world or in the OECD; I mean in the whole world. 
The mountain that New Zealanders have to climb to homeownership is now steeper and higher than it ever was and that is why we got rid of that provision. It is time that we got rid of the muddled thinking about the affordability of housing that we took seriously the New Zealand dream to own one’s own home and that we implemented concrete policies to bring that about. That is what we are doing. 
Progress reported. 
Report adopted.