O'Rourke Denis: Residential Tenancies Amendment Bill — In CommitteeText is incorporated into the Bound VolumeO'Rourke Denis: Residential Tenancies Amendment Bill — In Committee[Sitting date: 24 May 2016. Volume:714;Page:11125. Text is incorporated into the Bound Volume.]DENIS O’ROURKE (NZ First): The major problem with this piece of legislation is not what it does but that it does not do it well enough. The main problem that we in New Zealand First see with it—we will continue to support the bill but we are disappointed in it—is the issue about non-uniform insulation standards. This bill does mean that properties built after 1978 with insulation standards that were in force at that time will for ever be permanently exempted from modern insulation standards—for ever exempted from that—and that is completely unacceptable to us. We would expect that over time all properties should have to come up to those standards.I listened to what Minister Nick Smith said about that and the excuse that he gave as to why he would allow that situation to continue to occur in the future under this bill. I forget the exact figure but he said that more than 80 percent of the modern insulation standard would be achieved by the 1978 standard. First of all I do not accept that that is the case. I do not accept that that is anything more than just an estimate and the reality is that that will be very patchy. There will be some well under that percentage and some no doubt considerably better than it. I built my home shortly after that time. I remember investigating standards and looking at what other people were doing and I found that there was a huge array of different solutions to the insulation of homes so factually I do not accept what the Minister said.The other excuse that members on the other side of the Chamber have given for not requiring all properties to come up to modern 2008 standards is the cost. The claim was made that if that cost was imposed on people with properties built after 1978 then that would mean significant rent increases and that that would be a problem for renting properties but that is completely untrue. That is not the way markets work because once a regulation is in force the whole level playing field just goes up a little. One property is not performing any better or worse than the other if that happens and there are no grounds for one landlord increasing rents more than another. So market competition simply means that the market can bear a certain amount and that is the amount that will determine the rent not whether the properties are being improved in terms of their insulation standard. So for that reason I do not accept the National members’ arguments either.What does of course increase rents is house prices and rents are based on the recovery of the cost of capital of houses. That today is what is really driving rent increases and anybody with half an ounce of common sense knows that if we continue to get the magnitude of house price increases that we are currently getting then inevitably that is going to push rents up and up and up and little or no proportion of those rent increases will come from having any requirement for an improved insulation standard. That is the truth of the situation there. I think that the National Government’s arguments in terms of those exemptions—which is what they effectively are—for 1978 properties from having the current standards is simply unacceptable.In fact if the Government really was concerned about rent increases arising from having a requirement for properties built after 1978 to improve insulation standards to current standards then why would it not for example allow landlords to expense the whole of the cost of that upgrade in the year that the expense was actually incurred? If that was done then what we would see is landlords wanting to do this voluntarily whether it was required in the regulations or not. I know that that is the case because I have talked to representatives of the landlords’ organisation and they have said to methat for a certain specified number of particular improvements—like insulation like improved heating facilities in homes—if they were allowed to expense those costs fully in the year that they were incurred then those people would invest much more readily and much more willingly in the improvements to their homes.So if the Government really is concerned about those issues then that is the sort of thing that it would do about it but we are not seeing that. So I do not accept at all the arguments that the Minister and the speakers from the other side of the Chamber have put up against requiring over time all properties to meet what we are calling now the 2008 insulation standards. There should be no difference whenever the property was improved or whenever it was built. What I would say is that if a property was built after 1978 because the insulation standards were better than before 1978 I would think it would be reasonable to have a longer period of time for compliance for properties built after 1978—maybe 7 or 8 years or something like that—but it should not be for ever. There should be a period within which all landlords know that today’s standards—the 2008 standards—are the standards that ultimately they will be required to have.Furthermore as technologies improve we should improve those standards and landlords should continue to have to meet those standards within a reasonable period of time no matter what those standards are and no matter when a property was built. That has got to be the objective—uniform standards for all properties—so that we get this very essential requirement for insulation at the highest achievable standard that we can in New Zealand and of course that will not be enough by itself.I want to refer lastly to Supplementary Order Paper 172 because the part of that that I particularly want to see is that heating and ventilation must also be subject to minimum requirements for performance of a property in terms of heating and ventilation—not just a list that space heating for example should be required but what the standard actually is. There is not much point in having very good insulation standards without having similar standards for performance of heating systems and for performance of ventilation.That should not of course apply only to rental properties. We have to try to see that those standards get met throughout New Zealand’s housing stock as soon as possible because as others have said the cost savings and the avoidance of illness and the avoidance of a whole raft of social problems that arise from this lack of standards in New Zealand are fundamental problems we have to address in this country and we need to try to get ourselves much closer to the kinds of standards that you see in North America in particular and in parts of Europe. So we need to aspire to that much.That is why I think I am so disappointed in this piece of legislation because it really does not go far enough. The Minister has criticised other parties for wanting to go too far. He should look in the mirror and see that the real problem is not them; it is him for not wanting to go far enough.