O'Rourke Denis: Budget DebateText is incorporated into the Bound VolumeO'Rourke Denis: Budget Debate[Sitting date: 30 May 2013. Volume:690;Page:10598. Text is incorporated into the Bound Volume.]DENIS O’ROURKE (NZ First): The objectives of the Housing Accords and Special Housing Areas Bill are a major Budget issue and housing as we all know is a major concern in many parts of New Zealand. The bill represents the Government’s solutions to fix the housing crisis in this country. It is of course about time that the Government acted. It has fiddled while the housing market in New Zealand burns hot especially in Auckland and Christchurch and several other places. Very few first home seekers can now afford to even dream of buying a home in this country. The great Kiwi expectation of a homeowning democracy lies in ashes. The Government is now belatedly trying to conjure up a phoenix from those ashes but it is far too little and it is far too late.The basic problem with the Government’s actions is that they are under-reactive to a huge problem suddenly realised. It is based on simple expediency rather than a balanced approach. It favours developers’ agendas and sidelines local democracy. It is ad hoc rather than strategic. It is careless about good planning and substitutes it with quick-fix band-aid solutions. It is superficial rather than well considered. It is short term and not an enduring long-term plan which New Zealand needs. No doubt profiteers are already buying up land that might be used for special housing areas.The Government has assumed that freeing up the land supply will work. But will that really mean lower home prices? Will it even mean that the rate of increase of home prices will be curbed? There is no apparent research upon which the Government has based that assumption that freeing up land for development will really assist with housing affordability and it is housing affordability that is the real issue. First homeowners will see no real assistance to them buying a first home in the Budget provisions that have been presented to us.But there is some good. New Zealand First supports the concept of special housing areas in regions or districts identified by the Minister of Housing on the basis of the criteria proposed but it would allow special housing areas only on the basis of a genuine accord with local government or where there is genuine disagreement and not contrived disagreement by the Minister acting alone. Because the Minister alone will have the power to create special housing areas if there is no accord it is necessary that such accords be genuinely negotiated and that councils not be bullied into them.The way the bill is drafted it will be an “agree or else” scenario for councils so an important question arises as to what constitutes disagreement because it is that fact of disagreement that empowers the Minister to act alone. The bill should therefore state clearly that both the Minister and the council concerned have concluded on reasonable grounds that an accord is not possible and the bill falls short on those issues. There should also be a provision for partial or limited accords so that the Minister cannot simply assume the power to act alone on the basis of perhaps a single point of disagreement when there is agreement on most matters. We would want to see at least some opportunity for local public consultation by the council before finalising an agreement even if consultation is more limited than might usually be expected.We would also expect that the special housing areas would be approved within the established Resource Management Act principles rather than within the compromised bill the Government is currently pushing on to us. We see no need for the panic measures of the kind promoted by the Government in the proposed legislation. Our main concern would be the loss of local democracy with too much power given to the Minister of Housing. Of course we in Christchurch are very very used to that in the current circumstances.In practice developers would be looking for quick ticky-tacky developments rather than quality housing. There is a risk that developers would continue to optimise profits with large houses on large sections not the modest housing that New Zealand needs and that first home owners can afford. We also do not see any reference or intention to try to integrate these special housing areas into transport health and other strategies when New Zealand needs a much more integrated policy framework for all of those things. In other words it is not a strategic approach; it is a quick-fix ad hoc approach.New Zealand First would also oppose the width of the proposals concerning plan changes. We think these are too likely to completely compromise district plans. They need to be consistent with plan objectives. Coming from Christchurch I would have to say that we should be learning lessons from that city. There were far too many developments there for housing in inappropriate areas—housing built in areas that we all knew were subject to liquefaction subject to ground damage subject to rockfall in an earthquake subject to sea level rise or subject to flooding. The developments should not have gone on in those places. So it is very important that these sorts of proposals for special housing areas should be consistent with the objectives in district plans otherwise we are going to risk repeating the mistakes that we have seen the effects of in the city of Christchurch.Overall we think that we need to balance speed—which is needed—with quality because that is just as important a consideration. Although the special housing areas are an appropriate measure—but only with the amendments I have suggested—I would ask how this measure alone would really help homeowners seeking their first homes. How would it help them to provide the deposit that is necessary? How would it help them even if they could find a deposit to finance a new home? The answer is that there is actually nothing in the Government’s proposals that goes anywhere near far enough toadequately address those sorts of issues. The expectation that making more land available within district or city plans will bring prices down enough is fraught. It addresses only availability and only in a limited way. It does not adequately address affordability at all. Supply alone will not result in solving the affordability issue.Much more is needed and New Zealand First has much more comprehensive policies for housing. Our first objective is to simply see that homeownership is within the reach of all New Zealanders. We would set up a special purpose agency for those purposes and we believe it should establish a land bank—land actually purchased by the Government to make it available for housing in the proposed special housing areas. We want to see long-term agreements for sale and purchase made available to first home seekers at an initial concessionary interest rate so that they can buy a section without having to come up with the full capital cost up front. They could then pay it off over 25 years and they would get title to the land so that they could then borrow from their bank to build a home on the section.The cost breakdown for a new home is about 36 percent for the average cost of a section 4 percent for consents and permits and the remaining 60 percent for the house itself and associated costs. So under the New Zealand First policy a first home seeker would be able to avoid over one-third of the total capital cost up front with the long-term agreement for sale and purchase of the land on the initial concessionary rate of 2 percent that we propose. We also think that there needs to be a comprehensive New Zealand housing strategy addressing a whole range of things such as the role of the Earthquake Commission; compulsory insurance; quality housing provisions such as earthquake-proofing leakproofing and insulation; and a whole range of other things. In the end New Zealand First will support the bill because there is some good in it but it does not go far enough. It is a move in the right direction—The ASSISTANT SPEAKER (Lindsay Tisch): Sorry to interrupt the honourable member. His time has expired.