5. Housing Market—ImmigrationRt Hon WINSTON PETERS (Leader—NZ First) to the Minister for Building and HousingHousing Market—ImmigrationRt Hon WINSTON PETERS (Leader—NZ First): This question is to the Minister of Finance—[Interruption] Mr SPEAKER: Order! I am on my feet. The House will give the member the opportunity to ask his question.Rt Hon WINSTON PETERS: Mr Speaker I apologise. I wrote that last set of economic facts out on the back of it. But that is why I—Mr SPEAKER: I am trying to give the member an opportunity—Rt Hon WINSTON PETERS: I thought some people over there needed a lesson in economics.Mr SPEAKER: —to ask his question. I suggest he take it.5. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister for Building and Housing: What policies does the Government have to comprehensively deal with the demand side of New Zealand's housing challenge"?Hon Dr NICK SMITH (Minister for Building and Housing): My responsibilities are primarily around growing housing supply but the Government has taken a number of measures on the demand side. Tax changes in Budget 2010 removed the right for building investors to deduct depreciation on buildings. This measure increased their tax liability by $700 million per year. Other tax changes include the brightline test introduced last year the requirement for IRD numbers on all property transactions $33 million extra for Inland Revenue Department (IRD) enforcement and the withholding tax on housing investments which took effect this week. Other demand measures include the loan-to-value ratio limits introduced by the Reserve Bank in October 2013 and the further limits on lending policies targeted at investment housing in 2015.Rt Hon Winston Peters: Where in the comprehensive plan is the most critical thing that economists and now others are calling for and that is a policy to seriously curb immigration demand which is inflating house prices and demand in Auckland now and elsewhere?Hon Dr NICK SMITH: My ministry has commissioned research quite specifically on the linkages between migration and house pricing.David Shearer: Only now.Hon Dr NICK SMITH: Actually it is some months ago and I would be happy to share the results of the research which actually make a very interesting read.David Seymour: Is the Minister at all concerned that his comprehensive plan might be so effective as to trigger an abrupt correction in house prices?Hon Dr NICK SMITH: It is certainly clear that New Zealand house building investment is at the highest level ever. It is 30 percent higher than the last peak and so on the supply side we are making great progress. On the demand side actually the thing that is making the greatest difference is the fact that Kiwis are not leaving and as a consequence we have record high population growth.David Seymour: I raise a point of order Mr Speaker. The question was a very simple one: was he concerned that the strategy might be overly effective? He made no attempt to address that whatsoever. He simply described some of the measures that were being undertaken.Hon Gerry Brownlee: He called for an opinion and he got it. Essentially the Minister was trying to make a simple question more intelligible for the population.Mr SPEAKER: Order! That part does not help. I think on this occasion the question has been addressed but clearly not to the satisfaction of the member.Rt Hon Winston Peters: What comprehensive plan can the Government possible have if it does not first include massively curbing immigration demand for housing in Auckland and elsewhere?Hon Dr NICK SMITH: The big change that has occurred around migration is that 35000 Kiwis are not going each year to Australia. Unless the member is proposing to block Kiwi citizens coming back to this country because this Government has been successful in making it such an attractive country then it actually will not make much difference.David Bennett: What research has the Government undertaken on the influence of migration on housing and what does it conclude?Hon Dr NICK SMITH: Research was specifically commissioned by the National Institute of Demographic and Economic Analysis at Waikato University. It noted in its report that in Auckland the bulk of the population was due to natural increase. To give the actual numbers Auckland's population increased by 87700 over the study period of which 87 percent was the difference between births and deaths and 13 percent was due to net migration. The report also noted that the most dramatic change was the shift in New Zealanders not leaving—i.e. New Zealand's natural population increase has historically been shielded by the net loss of 35000 Kiwis leaving. This has stopped this has meant a stronger natural increase and this means there is more demand for housing.Rt Hon Winston Peters: Why is the Minister refusing to call it what it is when Kim Campbell chief executive of the Employers and Manufacturers Association—Hon Michael Woodhouse: Xenophobic rant from that member.Rt Hon Winston Peters: —he a xenophobe is he; OK—Mr SPEAKER: Order! Just complete the question quickly.Rt Hon Winston Peters: —and Michael Reddell former Reserve Bank economist are urging him to join the dots linking the housing crisis to record immigration?Hon Dr NICK SMITH: This Government makes its policies on the basis of facts and evidence not prejudice. I would draw the member's attention to the research report from Waikato University that dispels the claims that the member is making.David Bennett: What was the conclusion of the study on migration and house prices?Hon Dr NICK SMITH: Can I directly quote the report's conclusion. "The literature and the available data on population change suggests that visa-controlled immigration into New Zealand and specifically into Auckland in the recent past has had a relatively small impact on house prices compared to demand factors such as the immigration changes of New Zealanders low interest rates investor demand and capital gains expectations. Consequently changes in immigration policy which can only impact on visa-controlled immigration are unlikely to have much impact on the housing market."Rt Hon Winston Peters: If the Government when in Opposition was accusing another party of fuelling the house prices and demand by mass immigration—I am talking circa 2004—Mr SPEAKER: Order! Just complete the question.Rt Hon Winston Peters: —why when the record level now is 125000 gross and 69000 net is he trying to defy gravity and say something else?Hon Dr NICK SMITH: It is absolutely true that net migration is having an impact on the housing market. What the member needs to understand is that what has changed is that 35000 New Zealanders are voting confidence with their feet saying that New Zealand is a great country to live in and coming here and adding to the housing pressures. I actually think that it is great thing that New Zealanders are choosing to build their futures in this beautiful country. Rt Hon Winston Peters: Given that under his watch the housing crisis in Auckland in particular and around the country now has dramatically worsened why does he not do the decent thing and resign for another time?Hon Dr NICK SMITH: I note that when that member was Deputy Prime Minister house prices doubled and that Government did absolutely zip—absolutely zero. What I am proud of is that housebuilding in New Zealand is at an all-time record high because ultimately supply is the answer.Rt Hon Winston Peters: I raise a point of order Mr Speaker. The statement just made by Nick Smith was about another era another time and it was not correct. I am saying that what he told the House about when I was Deputy Prime Minister is utterly false and he knows it.Mr SPEAKER: Order! The member himself referred to when the current Government was in Opposition in the previous supplementary question.Hon Gerry Brownlee: I raise a point of order Mr Speaker. I think the Rt Hon Winston Peters is quite right about that. He was foreign affairs Minister at the time never in the country and could not have been responsible.Mr SPEAKER: Order! Neither of those points of order were much help to keeping order in this House.Hon Dr NICK SMITH: I seek leave of the House to table the report dated 13 April 2016 by the National Institute of Demographic and Economic Analysis from the University of Waikato on the impact of immigration on house prices.Mr SPEAKER: Is the report available publicly on a website?Hon Dr NICK SMITH: No it is not.Mr SPEAKER: It is not. I will therefore put the leave to table that particular report from the University of Waikato. Is there any objection? There is objection."