Infrastructure Bill — In Committee 
Infrastructure Bill — In Committee 
[Volume:665;Page:12650] 
Infrastructure Bill 
In Committee 
Debate resumed from 21 July. 
Part 3 Amendments relating to New Zealand Railways Corporation ( 
continued 
)  
CAROL BEAUMONT (Labour) 
: 
 I am speaking to Part 3 of the Infrastructure Bill which amends the New Zealand Railways Corporation Act 1981. This amendment was relatively uncontroversial at the Transport and Industrial Relations Committee. In fact we did not have much by way of submission on it. 
Essentially Part 3 seeks to amend the Act by removing some of the statutory restrictions that negatively affect the running of New Zealand Railways Corporation business. Those changes include normalising the appointment and dismissal of directors changing the number of directors who can call a meeting to a simple majority establishing the power to appoint a deputy chairperson and streamlining arrangements for changes to Railways Corporation capital. Part 3 also removes the requirement to annually provide the Minister with a programme of capital works removes the limit on how much the Railways Corporation can expend in one year and permits it to effect insurance cover for or give an indemnity to a director or employee. Those amendments are consistent with the equivalent provisions in the Crown Entities Act 2004. 
For this side of the House anything that streamlines the operation of the Railways Corporation and ensures that it is modern and well managed is important. As members will know Labour strongly supports rail; we bought back rail and we want to see more use be made of rail. Rail has many advantages for our country. It is environmentally sustainable in comparison with roading it is safer and it has provided really important service to primary producers. 
What is happening with the Railways Corporation is interesting. We are all aware that a former Prime Minister Jim Bolger—a good man—was not reappointed to his role as chair. What was that about? He obviously—I give him due respect for this—believes in railways. He believes in the role of KiwiRail. Removing him has removed any impediment to the sale of KiwiRail in the second term of this National Government—if it gets one. We are worried about the sale of a whole lot of assets if the National Government is returned at the next election. I know that this will be a really important issue in the next election campaign. Across on this side of the House we will do everything we can to expose what is a clear agenda to start privatising in the Government’s second term if the Government gets one. KiwiRail is right up there on the blocks. That is why we believe Jim Bolger was not reappointed. He believes that there is a future for KiwiRail as a publicly owned organisation. 
Why would the Government want to remove the requirement to annually provide the Minister with a programme of capital works? What possible motivation could there be for that? Well from our perspective the Government is hiding the real state of the asset and is preparing KiwiRail for sale. Labour is very apprehensive about the future of KiwiRail. 
It is terribly worrying to us that this Government seems completely fixated on highways. We heard it again today in the House when Steven Joyce talked about highways. He was saying once again that there had to be so much investment in highways—we were talking about the Auckland scenario—because something like 85 percent of transport movements are in fact by road. Well nobody would dispute that figure but what gets me is that every time he is asked these questions he trots that figure out as if it is a given as if it is something we cannot control. [ 
Interruption 
] As if it is something we cannot change—exactly. We can do something about it but the only way we can do something about it is by investing in public transport investing in rail and ensuring that it is a viable option for both the movement of freight and the movement of people. 
We all know that the relative share of funding between public transport and roading has changed under this Government. It has changed from what was planned by the previous Government. That is another significant difference between the parties: on this side of the House we believe in investing in public transport and investing in robust infrastructure. Thank you. 
The question was put that the amendments set out on Supplementary Order Paper 151 in the name of the Hon Bill English to Part 3 be agreed to. 
Amendments agreed to. 
Part 3 as amended agreed to. 
Part 4 Amendments relating to affordable housing 
MOANA MACKEY (Labour) 
: 
 I am happy to stand and speak on Part 4 of the Infrastructure Bill. Although Labour will be supporting the Infrastructure Bill we will not be supporting Part 4. In fact I would like to point out the anomaly of even having Part 4 in this legislation. 
Part 4 repeals the legislation relating to affordable housing. The question that needs to be answered is why this repeal was hidden away in the Infrastructure Bill. A number of people out there probably would have submitted on this particular part of the bill if they had known to look in the Infrastructure Bill for the repeal of the legislation on affordable housing. It has become very clear that the Government did not want to make it obvious that once again it was backing down on an affordable housing issue so it hid it away in Part 4 of the Infrastructure Bill. 
There are a couple of amendments in my name on this part which I will speak to soon. I will first address the issue of restrictive covenants. When the Affordable Housing: Enabling Territorial Authorities Act was passed under the previous Labour Government one part of that legislation removed restrictive covenants where they were being used in order to stop social or affordable housing. When we went through that process the issue was raised with us that if we say one cannot have a restrictive covenant that stops social or affordable housing as its primary purpose then all someone would have to do is to say that the restrictive covenant is for another reason and the secondary purpose is that it stops social or affordable housing. The Local Government and Environment Committee back then decided to close this ginormous loophole. We did so by saying it was unlawful to have a restrictive covenant that had any purpose of prohibiting social or affordable housing. 
For reasons that I completely do not understand the Minister for Infrastructure has decided that he will go back to saying that only if it is the principal purpose will it be prohibited. We asked for and received some advice from the officials at the Transport and Industrial Relations Committee on the repeal of this legislation and why the decisions were made. They said: “Independent legal advice … indicates that there is a risk that the phrase ‘one of its purposes’ is too wide and likely to catch covenants that are entered into for legitimate purposes. For example covenants to preserve rural character open space … sunlight or views”. Opponents could argue that “an undeclared purpose of a covenant is to exclude social housing even though the wording of the covenant was quite different and”—apparently—“reasonable.” 
The point was that people who believed that a restrictive covenant was being used to stop social or affordable housing would still have to prove it. It was still a very very high hurdle to clear. But the Government changing it back to say that a covenant over land is void only if its principal purpose is to stop the provision of social housing on the land opens that loophole right up again. When we heard the original submissions on the Affordable Housing: Enabling Territorial Authorities Act we heard one from the Human Rights Commission. It told us of a case in Nelson where a developer had said that the purpose of the restrictive covenant was related to amenity values—the houses had to look a certain way—when the reality was that the developer did not want to provide disabled access to those houses. That stopped people from the disability sector putting in community housing in that area. The developer said that the principal purpose was related to amenity values; the reality was that it was to stop housing with disabled access going in. Now this Government says that that is OK and it can happen. That is completely unreasonable and completely ridiculous particularly given that we went through a full select committee process on this legislation under the previous Government. 
In this current Parliament we went through a very quick select committee process on the Infrastructure Bill. Naturally most of the submissions were on infrastructure and not on the repeal of affordable housing or the issue of restrictive covenants. That brings me to my next point which is that the Government has also decided to take out affordable housing from the legislation. It is saying that although it thinks there should still be some kind of limit on restrictive covenants against social housing it thinks it is OK that there are restrictive covenants against affordable housing. I am interested to hear from the Minister in the chair Nathan Guy as to why he thinks that restrictive covenants against affordable housing are OK. I certainly hope that he will take a call on that matter. 
I have an amendment in my name that restores section 277A to the way that it was under the previous Government. The legislation went through a full select committee process where the issue of restrictive covenants was first and foremost in the submitters’ minds. We asked for extra advice on that. It was not buried in legislation so that people did not know it was there. It seems to me that this amendment is an ad hoc decision made by the Government. I wonder who has got in the Government’s ear and said that now it is really hard for them to block out social housing and affordable housing so it would be nice if the Government got rid of those restrictions. 
It was pointed out to us by submitters who came to the select committee—submitters we contacted who had submitted last time—that they were very very concerned about the opening up of this particular section in the law. The Minister of Housing has made a big deal about this. He got up and said that he was great because he was keeping the provisions on restrictive covenants. Actually I say to the Minister he is not. He is opening them wide up to abuse as was reiterated by a number of submitters at the select committee. 
I now move on to my second amendment which is to remove Part 4 entirely. The reason for this is that I am happy to admit that Labour probably could have done better with the Affordable Housing: Enabling Territorial Authorities Act. If the Government were serious we would be happy to support its referral back to the select committee to go through a process where we could address any of the issues that the Government had with it. We have not heard about why the Government wants to get rid of it. 
This is kind of like the shared-equity affordable housing scheme which the Government told the Housing New Zealand Corporation to stop promoting after the election. There was a 2-year pilot on an affordable housing programme and for 20 out of the 24 months that pilot was running under the National Government which did not tell anyone it existed. What an absolute waste of money! If the Government was not going to continue with it it should have got rid of it. Why did it go through the pretence and the expense of running a programme that no one knew about? I suspect that affordable housing programmes are much more effective when people know they exist. That might be a stretch but I am pretty sure that if people know a scheme exists it will get a lot more uptake than if no one knows it exists. 
We have the same kind of situation with this legislation. National decided it did not like it from the start because it is not committed to affordable housing. It is not committed to addressing issues around affordable housing. National decided from the start that it did not like it. It has no interest in trying to improve it; it would like to get rid of it altogether. This is not a Government that takes affordable housing seriously. The Government thinks that the invisible hand of the free market will deliver homes to everyone and if we give tax cuts to the richest people eventually they will trickle down to those at the bottom and with their $3 a week tax cut they will be able to purchase a house. Of course the National Party’s No. 1 policy on affordable housing at the last election was tax cuts. Well I do not know how someone on the minimum wage will get into affordable housing on a $3 a week tax cut. 
I want to read something on Part 4 from the same paper that the select committee received from the Housing New Zealand Corporation. It concerns Government policy to address housing affordability. A number of submitters who came along were very critical again of the fact that the repeal of this legislation was buried in the Infrastructure Bill. The fact was that since the legislation had been passed affordable housing pressures had become worse not better. Probably more submitters would have liked to come along to have their say on affordable housing at that time but of course they did not know about it. When people look for an affordable housing bill they would not think to look at the Infrastructure Bill which deals with a code for utility operators and access to transport corridors. 
The paper that the select committee received said that the Government was getting rid of this legislation because the Government was doing so much on affordable housing. It had the Gateway Housing initiative and details of the initiative were expected to be announced in October 2009. It is now July 2010 and the mythical Gateway Housing programme has yet to appear. It received no funding in this year’s Budget so it gets a cross. Then—this is fantastic—one of the Government’s affordable housing initiatives is the sale of State houses. How is a programme that sells houses at market prices to people who cannot afford to buy them an affordable housing initiative? 
The other initiative is the Welcome Home Loan scheme which was a Labour Government scheme. So the only tick National gets for the affordable housing initiatives of this Government is the Labour Government’s Welcome Home Loan scheme. We have the Gateway Housing initiative which does not exist and the sale of State houses to tenants which is not an affordable housing initiative as we have seen because the uptake has been about 20 people. Despite the Minister of Housing saying that he thought it would be hundreds rather than thousands it has turned out to be tens rather than hundreds or thousands. The hopes and the dreams of a large number of people were raised even though the Minister knew that they would never be able to get into those homes because that programme is not an affordable housing initiative. 
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.