Mark RonHon RON MARK (Minister of Defence): Thank you Madam Speaker. It's really interesting listening to the debates and I guess that as this legislation makes its way through select committee I fully anticipate that there'll be strong representation from those on both sides of the floor in this debate. There will be the property investors. I do have and New Zealand First always has had some sympathy for the plight of senior citizens who have taken it upon themselves to buy one home as the renter is going to be their superannuation fund and is going to be the provider for them in their later years. Some of them are doing that because they've seen the interest rates on their deposits in banks where they have had that decline markedly over the last 10 years in particular. They see the real estate market as being a more attractive investment proposition to provide for them in their retirement and are quite obviously taking the advantage of a capital gain. The previous speaker Lawrence Yule is quite correct. From everything that I've heard there is a little bit of mild panic at the thought and suggestion that a capital gains tax might be implemented amongst those people and those elderly investors in particular. There is a somewhat different view of those who have rental property portfolios more on a corporate level because they tend to bring with them a corporate approach to the management of those tenancies. What we do know is that the market has changed markedly since the Residential Tenancies Act was first implemented back in 1986 or something around that time. The Residential Tenancies Act created back in 1986 was one thing. We are now at 2020 and the market has shifted. There have been a number of things that have contributed to the changes we've seen and the effects of them. One of them has been quite clearly the exiting of the market by Government. There used to be a time in this country when the Government was the predominant renter when the Government provided State housing for New Zealanders at a time when the majority of New Zealanders owned their homes. That has changed quite substantively now and given the market forces—and I do remember the speeches from people the neo-liberals who believed that the market would determine the future and that it would all balance out and it would all come right and that Government needed to get out of owning houses and that the Government should not be in the business of owning and renting properties and what have we seen? Well we've seen homelessness increase. We've seen people living in cars and these are not people who are unemployed. We have seen families where mum and dad have both had jobs—and in fact one of them has had two jobs—who are living in vans. Everything has changed and if people can't accept what they see with their own eyes or what they are dealing with as members of Parliament in their own electorate offices then I can only suggest they're asleep or they don't do any work in their electorate offices because those of us who do go to our electorate offices and who do do this work see this problem every day. I can say this. In the Wairarapa and here is a classic example we used to have hundreds and hundreds of State houses—580-odd actually. But a Government of the day decided to sell the whole batch to a private trust enterprise who promised—who promised—that they would meet the community housing needs of the Wairarapa and what have we seen? They promised that they would maintain a housing stock to meet the community needs. They promised. And what did they get? Well I'll tell you what they got. This is a real hell of a deal coming from a party who prides itself as being the great stewards of the economy the great managers of the State's assets. They sold these 540-odd houses for $19000 each—$19000. This was the deal from heaven. In the very least the capital gain that was achieved overnight was about a 400 percent return. In fact some would suggest that when those houses were revalued the day after the deal was done it was something like about an 800 percent return on investment. And that trust called Trust House in Masterton—[Interruption] Well I'm not going to go down that path Dr Webb but I would say this: there were some very strong connections between people who wanted this trust to get all of the houses and I'll leave it at that. So they bought all of these houses for less than $20000 each and promised to pick up the social obligation. Now what do we have in the Wairarapa? We have a housing problem. We have a problem where one there are no community houses; two there are not enough houses to meet the growing population; and three people are unemployed—that's why they can't get houses—and Trust House has decided that it'd rather invest its money in pubs and bars that can house pokie machines which ironically take money off the same group of people who rely on community housing. But that's for Trust House to explain themselves and I have been on the record as criticising that entity for not living up to its obligations. But therein lies the lesson. If the Government absolves itself of its responsibility to provide housing for the people and if the Government of the day puts that responsibility in the hands of a private enterprise and the Government has no way of ensuring or guaranteeing that that private enterprise or that trust will actually do the work it promises to do and undertake and accept the responsibilities that it promised on the back of a sweetheart deal then the Government is either foolish or the Government is—Marama Davidson: Immoral. Hon RON MARK: —stupid—I don't know. Or immoral—I don't know. The net result is that we have a housing problem and we have a totally different market where tenants can be taken advantage of. We have a totally different market where you end up with bidding wars and it is the prospective tenant who's got the big chequebook who gets the house and other people end up homeless. It's interesting and I'm watching Alastair Scott who's not going to be standing again this time. He understands very very clearly what's happened in the Wairarapa and I recognise him for that because he's been supportive of some of my criticisms and I know that. But look we're in a different situation now. We have to look at the rules. I think we will be mindful of the comments that are made and submissions that are made as to how this might impact on the total housing pool. We will be mindful of the difficulties people face getting into housing. Those are the very reasons that this legislation has come before us. There is a select committee process and I will be encouraging the New Zealand First representatives and the Government representatives to listen closely. But the inescapable fact is we have a problem and it's not going to go away by us continuing to do what we've always done since 1986. Things are drastically different and if I believe there's a problem in Masterton and Carterton and Greytown and Martinborough and Featherston then I guess I'd have to concede that our problems pale into insignificance with the problems that face people in Auckland and Christchurch and Wellington. This bill seeks to give some strength to landlords. It does seek to make some adjustments—so things that we never ever imagined back in 1986 like broadband or the desire of people to connect up the rooms of their houses to broadband so the kids could come home and do their homework on their laptops and on their tablets. These things were never imagined back in 1986 but these are realities now and to say that a tenant can't install broadband or can't have wireless connection to their house is a little bit silly but of course there are some definitions and some criteria in this bill that specifically identify what is minor work and what is not. Of course no one is going to be sanctioning a tenant knocking out a wall and putting in a new door or a new window but there are some minor things like fixing your shelves to the walls so that they don't fall over in an earthquake—something Wellington's a bit prone to—that we believe are sensible and worth considering. That is why New Zealand First is supporting the first reading of this bill.