Twyford Phil: Budget Measures (Miscellaneous Fiscal Matters) Bill — First Reading Second Reading In CommitteeText is incorporated into the Bound VolumeTwyford Phil: Budget Measures (Miscellaneous Fiscal Matters) Bill — First Reading Second Reading In Committee[Sitting date: 15 May 2014. Volume:698;Page:18047. Text is incorporated into the Bound Volume.]PHIL TWYFORD (Labour—Te Atatū): I am glad you did not mistake me for Grant Robertson!The CHAIRPERSON (H V Ross Robertson): Certainly not!PHIL TWYFORD: I want to talk briefly about Part 3 of the Budget Measures (Miscellaneous Fiscal Matters) Bill which deals with the suspension of anti-dumping duties. This is the centrepiece of National’s housing policies in the Budget and a sadsad underwhelming policy it is. I want to talk about the whole question of housing costs because I think everyone would accept that we have a housing crisis. The evidence is plain to see. House prices in Auckland have increased by 40 percent since National came to office.Currently it costs someone on the average wage 49 percent of their income just to service an average mortgage. That is unsustainable and very very unaffordable. Under the numbers contained in this Budget the projections are that that will go to 63 percent so 63 percent of the average wage will go to service a mortgage. So things are not looking good first-home buyers are locked out of the market under this Government and Government agencies like Housing New Zealand are routinely referring people to live in camping grounds. We heard the Minister for Social Development Paula Bennett say the other day that people who live in camping grounds are not regarded as high priority for eligibility for a State house. That is how bad things have got.Why are houses so expensive? There are clearly a number of factors. The question of building materials and the high price of those materials is just one of those factors but I want to touch on the other factors in the course of these comments. Land particularly in Auckland is a major factor that is driving up the cost of new homes and residential developments. This Government thinks that the answer to the land supply shortage in Auckland and the high price of land is these special housing areas that it is splattering all over suburban Auckland at the moment. I want to say that Labour’s policy KiwiBuild will drive down the cost of land in new residential developments by the Government taking a much more hands-on role in the development process and foregoing the developer’s margin. A capital gains tax under Labour will also put the frighteners on the land-bankers and the speculators who are making a killing at the moment at the expense of first-home buyers.One of the other major factors is construction costs. About half the costs of a new build are the construction costs excluding materials. This Government has no answers to that. It has been wittering on about the construction industry’s productivity for the last 5 years. It has not done a thing about it. Under Labour the building of 10000 new homes a year for a decade at scale will open the door for off-site manufacturing and modern prefabrication that an industry working group recently estimated would slice $32000 off the cost of a new standard home—$32000. I hope the members opposite are listening to this because compared with the paltry $3500 that they have put on the table in this Budget $32000 amounts to a real and substantial saving. Add to that the possibilities which are unprecedented in New Zealand for bulk purchasing of building supplies. That would enable us to strike deals the likes of which have never been seen in New Zealand. By being able to bulk-purchase the components of 100000 homes we will be able to strike deals that are better than we have seen the likes of in New Zealand.Tony Sewell the head of the Ngāi Tahu Holdings Corporation has been very active in talking about the high cost of building materials in New Zealand and was recently pointing out that we are paying 25 to 30 percent more than Australian consumers for many of the new components of a new build. I think he is quite right. There is clearly something wrong with the industry and I think that most observers would agree that it is fundamentally a lack of competition. We essentially have a duopoly in the building materials industry. It is not the scale of the country; it is fundamentally a lack of competition.I invite the Minister in the chair Craig Foss to take a call and tell us what he and his colleague Nick Smith are going to do about this. What they have done is that they have chosen the low-hanging fruit from the Ministry of Business Innovation and Employment’s residential construction industry market study. By suspending or lifting tariffs and anti-dumping duties they have chosen the low-hanging fruit. They do notappear to have any political will to do anything about the core problem in relation to the high cost of construction materials and that is to address the lack of competition in the industry. So those are some of the factors.But we all know that if you are going to think about the cost of new housing it is not just about the cost of the component parts of a new house. The price of a new house is set by supply and demand. It is inexplicable to me that this National Government refuses to consider the demand side of the equation. It refuses to do anything about speculators who are bidding up prices in Auckland. Auckland is a speculator’s paradise. People are farming Kiwi houses for a capital gain. The collateral damage is to first-home buyers who cannot keep up with median house prices that are now in excess of $700000 in Auckland. But this Government refuses to consider what almost everybody else now thinks is a no-brainer and that is a capital gains tax. As we have said earlier in this debate offshore speculators are contributing to this problem. Cashed-up speculators—whether they are in New York London or Shanghai—are bidding on the end of a phone and driving prices beyond the reach of ordinary Kiwi first-home buyers.National refuses to do anything about the demand side of the equation and on the supply side all it has is this lame Auckland Housing Accord which on its own figures will deliver only 5500 new dwellings in the next 3 years in the special housing areas. Auckland needs 13000 houses every year for the next 3 years to catch up on the shortfall and keep up with growing demand. We know from the Budget figures yesterday that surging net migration is going to add 40000-odd new residents to Auckland which will make it almost impossible under the current policy settings for this Government to make a dent in the housing crisis.We know that if you walk into Home Depot in California you can buy treated four-by-two framing timber for a quarter of the price that we pay in New Zealand. It is 25 percent of the price in New Zealand if you walk into Home Depot in California. Why is that? Is it that the Americans are much more efficient at growing pinus radiata than we are? I do not think so. There is a problem in the building supplies industry. It is fundamentally a lack of competition but this Government has no will to address that problem.All that the Government has brought to Parliament in this Budget and offered the people of New Zealand in relation to the housing crisis is this pathetic measure to lift the tariffs and anti-dumping duties on nails varnish and wallboard. It may if we are lucky take $3500 off the cost of a new house but there is no reason to believe on the evidence that we have heard so far that this Government has even thought about how you would ensure that that saving is passed on to first-home buyers. It will undoubtedly be pocketed by builders and developers taking advantage of an overheated seller’s market. The $3500 that the Government has promised will be saved off the cost of a new build is less than 1 percent of the cost of an ordinary house—less than 1 percent. It is 2 to 3 weeks’ house price inflation in Auckland. It is pitiful it is pathetic and the people of New Zealand expected a lot more.