4. Question No. 4—HousingCHRIS BISHOP (National) to the Minister of HousingQuestion No. 4—Housing4. CHRIS BISHOP (National) to the Minister of Housing: Has she been advised that Current financial modelling (without efficiency savings) shows Kāinga Ora is unable to repay the full $28.9 billion of forecast debt within the next 60 years" and what steps if any has she taken to assure herself that Kāinga Ora is complying with section 51 of the Crown Entities Act 2004 in relation to its long-term financial viability?Hon CARMEL SEPULONI (Minister for Social Development and Employment) on behalf of the Minister of Housing: In answer to the first part of the question yes. However I note that the paper this quote is drawing from is based on assumptions about current policy settings and market conditions over a 60-year time frame. A lot can change over 60 years and I note that at least some of the financial challenges Kāinga Ora faces are driven by the lack of investment by the previous Government in properly building and maintaining our public housing stock. On behalf of the Minister in answer to the second part I have received advice on Kāinga Ora's long-term financial sustainability and sought further advice from both the Ministry of Housing and Urban Development and Kāinga Ora on the issues raised. It is prudent to review funding settings particularly when market conditions such as increasing build costs are changing. The Government will confirm any changes in funding settings if they are agreed typically as part of the Budget process.Chris Bishop: Did she call in the board of Kāinga Ora following the 17 June 2022 briefing from the Ministry of Housing and Urban Development that warned that the four-year view of Kāinga Ora is "concerning" and what actions if any did Kāinga Ora undertake to do as a result?Hon CARMEL SEPULONI: As I referred to in my opening comments and answer to the primary question the indication is that things can change and that Kāinga Ora has said that the policy setting and market conditions over a 60-year time frame can change. So that remains the advice.Chris Bishop: Point of order Mr Speaker. It was a very specific question: did she call in the board of Kāinga Ora following the 17 June 2022 briefing and what actions did Kāinga Ora take?DEPUTY SPEAKER: Take it as asked again and the Minister can respond to it.Hon CARMEL SEPULONI: As I said the second part of the question was what I referred to in my answer—that the advice is that we note the paper this quote is drawn from is based on assumptions about current policy settings and market conditions and a lot can change over 60 years.DEPUTY SPEAKER: I'll give the member another question because I think the main part was the first part. If you want to ask that.Chris Bishop: Did she call in the board of Kāinga Ora following the 17 June 2022 briefing from the Ministry of Housing and Urban Development?Hon CARMEL SEPULONI: On behalf of the Minister the Minister meets regularly with the Kāinga Ora board. I don't have the dates for when the meetings may have occurred.Chris Bishop: Has the Government sought advice on whether Kāinga Ora is compliant with the Crown Entities Act particularly that it "prudently manages its assets and liabilities and endeavours to ensure it acts as a successful going concern" and if so from whom was that advice sought?Hon CARMEL SEPULONI: Kāinga Ora is compliant.Chris Bishop: Is she confident that Kāinga Ora will meet its current delivery commitments?Hon CARMEL SEPULONI: On behalf of the Minister yes.Chris Bishop: Is she concerned that on its current track Kāinga Ora will not be able to cover its depreciation costs and will have to issue debt on the same asset again to pay for its replacement or renewal and how is this consistent with the obligation for Kāinga Ora to be financially sustainable?Hon CARMEL SEPULONI: On behalf of the Minister what I'm concerned about is the fact that the public housing stock was so run down by the previous Government and the existing stock was not cared for and that is why there are some concerns that are raised in the report that the member speaks about with regards to finances moving forward.DEPUTY SPEAKER: No that wasn't addressed at all. The first part of the question again I think is the main part—so if you want to ask that again.Chris Bishop: Is she concerned that on its current track Kāinga Ora will not be able to cover its depreciation costs and will have to issue debt on the same asset again to pay for its replacement or renewal?Hon CARMEL SEPULONI: At this stage on behalf of the Minister we have no concerns.Chris Bishop: What is her definition of "financially sustainable"?Hon CARMEL SEPULONI: Ensuring that we have the money available to us to be able to continue to invest in future public housing and ensure that we're able to provide the houses that are needed for the general population unlike what was left to us when we took over Government when our housing stock had been run down.Chris Bishop: Is she concerned that on current projections by 2025 Kāinga Ora will reporting negative net operating cash-flows so that Kāinga Ora will be issuing more debt to pay the interest costs on its existing debt?Hon CARMEL SEPULONI: As said earlier the assumptions are questionable."