Smith StuartSTUART SMITH (National—Kaikōura): This bill the Housing Corporation (Affordable Housing Development) Amendment Bill—I mean it is a laudable name. No one could really complain about the aims of the bill and the name of the bill and as the previous speaker James Shaw said it is a simple bill and he argues that its simplicity is its greatest strength.When you look into the bill it says it will ensure that homes that are built are affordable but there is no definition of what affordable means. Minor detail you might think but it has no practical sense other than a laudable aim. That simply will not work. It is a shame. The bill goes on further to say that the homes must not be used for speculation. Quite what speculation is—as my colleague Matt Doocey said before people's life circumstances can change so is it going to require people to hold a house for a set period of time during which they cannot sell it? When their circumstances change how does that work? I can see another Government department coming out to make all the measurements on that so perhaps there is some method in Labour's madness on that one; I am not sure. I am not having a real crack at the member because I think he has had a good go on this but he has not really gone into a lot of detail. That is really where the whole thing falls down. We have looked at the things that are causing the issues—talking about the cost of housing which is referenced a lot by people in here. It is not the cost of building the house that has caused houses to go up in price in Auckland—and they are significantly in Auckland; it is happening a little bit elsewhere but it is mostly in Auckland—it is a shortage of supply. I think Jono Naylor actually gave a pretty good explanation of the guiding principle of economics which is supply and demand. And I think that really we have got a shortage of supply which has driven up demand and that has driven up price along with that.But costs have gone up due to building costs as well and a lot of that and the shortage of land comes back to the Resource Management Act (RMA). The Productivity Commission estimated that the RMA had added $15000 to a house cost on average and extra costs added $30000 on average to an apartment and that over the last 10 years $30 billion had been added to the building costs for homes in New Zealand. Over that same period 40000 fewer homes have been built—40000 homes. If they were available in the market today or had been produced through that period we would not have the shortage that we do today. So you would think all those who are speaking in favour of this bill would be queueing up to help pass our RMA legislation; but anyone who thought that would be sadly mistaken because they are not and yet that is very clearly one of the key drivers of the shortage which has driven the prices up causing all of the issues really that this bill aims to solve.In the meantime another issue that is going on for us is the construction boom. It topped $19 billion last year in the construction industry and there has been a huge number of houses built—30000 homes in New Zealand 10000 of which were built in Auckland. Of course that is constraining the supply of workforce to build those houses—and there is also a commercial construction boom as well—but there has been a huge growth in jobs. There are 240000 people working in the construction industry and there are 10000 apprentices being trained so it is a huge opportunity to get more people into the workforce build better homes—we do need better homes and more homes. We have seen what has happened in Christchurch when supply really builds up momentum where the terraced houses in Christchurch that were built for the so-called affordable end of the market are having difficulty selling now because of the supply and demand. The suppliers of demand are immutable as is well known in the economic sector and that has certainly shown up with what is happening in Christchurch.To sum up I think this is a bill with great aims but it is fatally flawed because of its lack of definitions and it really skirts around the main issue which is supply and demand driven by poor RMA legislation. I urge other supporters of the bill to support the RMA legislation. Thank you.Mr DEPUTY SPEAKER: Kelvin Davis—5 minutes in reply.