Heatley Phil: Affordable Housing: Enabling Territorial Authorities Bill — Second Reading In Committee Third Reading 
Heatley Phil: Affordable Housing: Enabling Territorial Authorities Bill — Second Reading In Committee Third Reading 
[Volume:649;Page:18468] 
PHIL HEATLEY (National—Whangarei) 
: 
 I will raise an interesting matter with the Committee of the whole House on Part 1—that is the interpretation or definitions of various terms used in the bill. The first one up is the most telling. It is the definition of “affordable housing” which means “housing that—(a) is for persons living in households that—(i) have low to moderate income; …”. 
I found it particularly interesting some months ago when I asked the Minister of Housing Maryan Street in the debating chamber during question time whether the definition in this bill of “affordable housing” with regard to people on a low to moderate income was the same definition she used in relation to the affordable housing being built in Hobsonville. Apparently the housing being built in Hobsonville by the Government is called affordable housing. In fact the Government is proposing that several hundred affordable houses be built in Hobsonville. The Minister told us at the Local Government and Environment Committee that those houses will be worth $350000 to $370000. People owning those houses will require an income of $75000 per annum to service their mortgage without paying back any capital cost. 
In other words the Minister of Housing’s definition of someone who is a low to middle income earner is someone who can afford a $370000 house and is on an income of over $70000 a year which is absolutely ludicrous. Low-income people do not earn $75000. In fact those on the average wage in New Zealand earn about $65000 so one could say that low to middle income earners might earn anything up to $65000 yet the Hobsonville houses which are to be provided by this Government will cost $370000 and people will need to be on an income of $75000 to be able to afford them. 
We have a Minister of Housing who is completely out of touch on two levels. The first level relates to what low to middle income earners earn—and we need only go to Statistics New Zealand to discover that it is $65000 a year not $75000 or above. The second level relates to what an affordable house is. 
I can tell the Minister of Housing if she is listening that $370000 for a first home is very very expensive indeed for a low to middle income earner in this country. That is a huge burden to undertake when it comes to a mortgage. So for the definition of “affordable housing” in this bill to state that it is for persons living in households that have low to moderate incomes is an absolute nonsense. The Minister of Housing thinks that those people should be able to afford a $370000 house that would require its owner to be on an income of $75000 a year in order to service the mortgage plus those people will want to eat and drive a car as well. Of course the Minister said at the time that there was actually no connection between the definitions. That might be all very well in legalese but in reality it does not help those who cannot buy their first home. 
That is why we keep bringing this Minister of Housing back to two very important points. The first point is to acknowledge that the most significant thing we can do for first-home buyers is to give them more money in the back pocket to service a mortgage because take-home pay pays the mortgage not gross pay. The next best thing we can do is to get interest rates under control. 
If one has a mortgage of $200000 which is not the average cost of a house but the average mortgage across the country then one is looking at paying $2000 a year to service the mortgage on that house which is about $40 a week. An interest rate of 1 percent interest on an average mortgage equates to $40 a week which is an awful lot of money in some households. 
The CHAIRPERSON (Hon Marian Hobbs) 
: Before I call the next member can I just give a word of warning to members. This is not a second or a third reading. We are talking about Part 1. The last member began to suggest solutions to provide affordable housing which are not in Part 1.