Twyford Phil: Budget DebateText is incorporated into the Bound VolumeTwyford Phil: Budget Debate[Sitting date: 27 May 2015. Volume:705;Page:4041. Text is incorporated into the Bound Volume.]PHIL TWYFORD (Labour—Te Atatū): It is always good to follow Poison Ivy. Expectations were very high in the Budget that the Government would finally—finally after years of being in denial years of Nick Smith’s photo opportunities and political stunts—do something about the housing crisis. First-home buyers were watching with horror as the average Auckland house price cracked over $800000 in the month before the Budget. House prices in Auckland went up on average by $100000 in the last 12 months. Renters watched as their rents in Auckland went up by 10 percent over the year because landlords were seeking a return on the investment that they had made in skyrocketing house prices. There is a housing crisis and people desperately want action.The Reserve Bank Deputy Governor Grant Spencer publicly embarrassed the Government by coming to this Parliament and saying that the Government needed to do more that they were not doing enough and that they needed to something about speculators. So the stage was set for this National Government to finally do something meaningful about the housing crisis. What we heard about was a speculators’ tax. John Key announced at the National Party conference that he was going to change the rules for taxproperty speculators and he announced a so-called—and not very bright—brightline test that would taxspeculatorswho buy a house and flick it on within 2 years.At first glance it was remarkable that the Government which has been denying for the last 2 years that speculators are a problem in Auckland at last announced some policy that was supposedly targeting speculators.But it did not take very long for the commentators the analysts and the general public to realise that this was a Clayton’s tax response to rampant property speculationin Auckland. The so-called 2-year test is simply an invitation to speculatorsto buy a property hold it for 2 years and flick it on. Treasury analysis from 2010 indicates that the tax will be lucky if it nets as many as 1000 speculatorsevery year when there are 80000 property sales every year. It will be lucky if it nets $18 million a year when there are hundreds of millions—in fact billions—of dollars in turnover every year from property speculation.John Shewan probably the most influential of the Government’s tax advisers commented that this measure will not curb skyrocketing house prices and that it certainly will not do anything to deter property speculators. This knowledge seemed to finally catch up with Bill English the finance Minister on Q+A last weekend when he was asked whether he thought this tax measure would have any effect. He said: “I don’t know. I have no idea if it will have any effect.”What a damning statement because what that means is that the National Party used Budget tax policy as a political stunt to announce policy where they have no idea whether it will have any impact at all and on an issue that is probably the most pressing public policy of the day and that is the urgent need to rein in the Auckland housing crisis which is making an entire generation of young New Zealanders Generation Rent. Young people in Auckland—good hard-working New Zealanders—have no prospect of ever owning their own home in Auckland unless mum and dad are wealthy enough to write them a very big cheque.The second announcement on housing policy that we heard as part of the Budget was Nick Smith last week announcing that he had found 500 hectares of vacant Government-owned land zoned residential that he was going to make available to property developers to put houses on. On the face of it it was a perfectly sound idea—in fact so sound that the former Labour Government 7 years ago did exactly the same thing. It did an inventory of available Government land and what did the National Party of the day do? It derided it it ridiculed it it thought it was the funniest thing it had ever heard and as soon as National got into office it shut down that work and did nothing at all.Nick Smith in his mad poll-driven panic to try to come up with something to announce on housing before the Budget got his officials to go back to the shelf and dust off the work that Labour did 7 years ago. In the meantime the National Government had done nothing zilch nada about the idea of developing vacant Government land in Auckland.On the surface what seems to have been a perfectly simple idea has been completely stuffed up by Nick Smith the Minister for Building and Housing. He rushed out the announcement so fast that he did not give his officials the time to even go and look at the parcels of land that were on his list—the list ofparcels of land that added up to the 500 hectares that he announced. He is the harum-scarum Minister for Building and Housing. If you want a good idea stuffed up give it to Nick Smith because that is what he did. He rushed it out. The officials did not have time to go and look at the sites of land. They did not even have time to pick up the phone and talk to the Government agencies that own this land to ask them what they were doing with it and what they intended do with it.The 500 hectares of landthat Nick Smith announced last week includes electricity substations the Māngere Lawn Cemetery the SAS training base in Papakura and the Ōtāhuhu fire station just to name a few examples. Nick Smith in the House today denied that any of those things were on his land but I guarantee this: those public facilities were on lists that his officials prepared that led to him announcing 500 hectares of vacant Government land.Nick Smith has been extremely evasive and economical with the truth. On Monday he denied categorically to the news media that the Hepburn Road electricity substation was on the list. Yesterday he was in this House in question time promoting it as a site.Hon Annette King: And he tabled some lists.PHIL TWYFORD: And he tabled the land title for the substation. I want to quote Nathaniel O’Connor who was interviewed a year and half ago concerning the Hepburn Road substation where Nick Smith wants to build houses. When that substation blew up and caused a fire a year and half ago Nathaniel O’Connor whose house is located 150 metres from the substation was reported as saying: “Our lights flickered then there was a really loud arcing sound and a second after that there was a huge explosion. You could feel it inside your chest.” Well I think that probably Nick Smith could feel a tightening in his chest as we have discussed this over the last couple of days in the House. Bill English told the media in very reassuring terms: “I presume the substation is not always exploding.” So Bill English is very relaxed about it.Nick Smith thinks that building houses on an electricity substation is the answer to Auckland’s housing crisis. If that is true we are in a lot more trouble that we thought previously. Things are a lot worse than we imagined. We have three housing Ministers in this Government—three housing Ministers: Nick Smith Bill English and Paula Bennett. I think that John Key should appoint three more because since he announced those three housing Ministers Auckland housing prices have gone up by $60000.What have we got? We have got a weak half-hearted tax change to try to catch speculators. We have got a bizarre Nick Smith special—overcooked under-prepared and he has not done his homework. Both of these announcements were rushed out. They are half-baked and were scrambled together at the last minute in a panic. Their only objective is to make it look as if the Government is doing something—anything—about the housing crisis in Auckland.But what we know is that these measures will have minimal impact. They will not make any difference to the generation of young New Zealanders who are locked out of the housing market. They are first-home buyers who simply want the dream that their parents and grandparents had in this country and that is to own a home of their own. It will not help the kids in my electorate in west Auckland who are living in uninsulated garages because mum and dad cannot afford to pay the rent and cannot find a house anywhere.These measures will not be effective. What we need is a comprehensive crackdown on speculators. We need thousands of new affordable homes to be sold to first-home buyers. This Government is a crushing crushing disappointment.