Affordable Housing: Enabling Territorial Authorities Bill — Second Reading In Committee Third Reading 
Affordable Housing: Enabling Territorial Authorities Bill — Second Reading In Committee Third Reading 
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Affordable Housing: Enabling Territorial Authorities Bill 
Second Reading 
Hon PHIL GOFF (Minister of Defence) 
 on behalf of the  
Minister of Housing 
: I move  
That the Affordable Housing: Enabling Territorial Authorities Bill be now read a second time 
. In doing so I would like to thank the chair of the Local Government and Environment Committee Moana Mackey and members of the committee for their hard work on this bill. I would also like to thank all of those who made submissions on the bill. The committee considered 78 submissions on the original bill and the considerable thought and effort put in by the submitters and the committee have helped to improve the bill. The majority of the committee recommended that the bill be passed with some amendments. 
This bill provides new powers to enable territorial authorities to increase the supply of affordable housing in their area. The bill fits in with other work that the Government has undertaken to improve housing affordability in New Zealand. The way that territorial authorities use the powers in the bill will vary across the country depending on local affordable housing needs. International and New Zealand experience shows that the new tools will be effective in helping territorial authorities to achieve a range of goals such as housing essential workers on modest incomes. 
The bill is enabling rather than mandatory. Only those territorial authorities that want to need to develop an affordable housing policy. The bill requires a territorial authority to carry out a housing needs assessment so that it has a clear picture of housing needs in the area before using the powers provided in the bill. Based on that assessment a territorial authority can develop an affordable housing policy that sets out how it will respond to local housing needs. Territorial authorities must consult their community before adopting any housing policy. 
The bill will prevent the use of covenants on land or property titles where one of a covenant’s purposes is to stop the provision of social or affordable housing. Such covenants unfairly discriminate against some of our most vulnerable people. There was unanimous support for that clause by the select committee which recommended a slight change that will strengthen it. 
As the bill’s policy objective is to provide a workable tool for those territorial authorities that elect to develop affordable housing policies the select committee has endeavoured to ensure that the concerns of local government are reflected in the suggested amendments to the bill. For example the select committee has simplified the requirements of the bill by removing clauses that duplicate provisions of the Local Government Act and also by replacing six separate clauses with one simple clause regarding the process for developing and implementing affordable housing policies. The bill has also been amended to be more closely aligned with the Local Government Act. 
Those territorial authorities that would like further guidance on and assistance in using the powers that will be available under this legislation following its enactment can contact Housing New Zealand Corporation which will arrange for them to receive appropriate advice and information. 
This bill balances the need of the community for affordable housing with developers’ needs for consistent and predictable planning guidelines and with the property rights of individuals. The bill promotes housing choice by ensuring that a range of housing types tenures and costs to meet the needs of moderate-income households are being included in new developments. I commend the bill to the House. 
PHIL HEATLEY (National—Whangarei) 
: 
 The National Party has been under tremendous pressure to vote against this legislation. The pressure has come from builders district councils across the country developers across the country and community organisations involved in housing affordability issues and the provision of affordable housing to first-home buyers and even to those renting. This legislation on the face of it seemed like a good idea 6 or 7 months ago but when questions were asked about the detail it appeared that the legislation would drive property prices for first-home buyers even higher than they are today. It seemed the legislation would not help first-home buyers in the long run at all. 
National Party members were very very concerned particularly when local authorities mainly smaller local authorities across the country told us they are already struggling with their statutory responsibilities. The legislation that has been pouring out of central government in recent years has meant that local authorities have had to go to their ratepayers cap in hand year after year to ask for additional rates in order to deal with the growth in their own bureaucracies. Costs have been imposed on them because of the extra legislation coming out of this place. Local authorities have told us they do not want more legislation that will oblige them to spend ratepayers’ money. They have said that the resources they would need to undertake for example a housing needs assessment are too much in addition to what they already have to do. They have said also there is no proven gain for their local communities. 
This legislation puts another layer of expectation upon councils in their view. It is another expectation that communities will have of them and it is another responsibility that central government has imposed upon them and they do not need more compliance costs. That is what local authorities had to say at the Local Government and Environment Committee and certainly that is what they said to the media. In fact very few local authorities were happy about this legislation. 
Interestingly we know that the genesis of this legislation came from activities undertaken by the Queenstown Lakes District Council. It has an affordable housing programme whereby developers and builders when undertaking a development set aside some of that land and it goes into a land portfolio to be used for affordable housing initiatives. The reason they need that down there of course is that the cost of housing and renting is so high for people on average incomes or those we expect would normally be able to afford housing—people such as nurses policemen teachers and those in the hospitality industry which the Queenstown lakes district relies on so much. At the select committee we asked how without legislation the Queenstown Lakes District Council was able to set up a programme whereby developers set aside an amount of their land to go into such a pool. 
We asked how it was able to do that without legislation because it begs the question of why we need this legislation. Why do we need to legislate to ensure that councils go through these responsibilities and go cap in hand to the ratepayers to pay for these additional compliance costs when the Queenstown Lakes District Council is doing this activity already? The answer from that district council is that it would have preferred to have more clarity and that it was difficult at times to work through its processes but it did it without this legislation—and other councils could as well. 
The interesting thing is that Maryan Street the Minister in charge of the bill said that the bill would drive down costs for first-home buyers. But what this legislation does is force builders and developers to set aside a portion of their land and give it to trusts for affordable housing. So they might have to carve off 10 percent of their land and not sell it but essentially give it to an affordable housing trust. Instead of giving land they could write out a big cheque and put it into the trust and that could be used for affordable housing. 
That sounds great on the face of it and it certainly sounds great for that trust but the problem is that builders and developers then have to somehow make up that loss. They make up that loss by selling the sections they retain at a higher price because quite frankly they have mortgages to pay too. When builders and developers buy land they have to pay interest they have to pay rates and they have to pay for the development of that land and if we take away a portion of that land—particularly if it is as high a value as 10 percent—then clearly they have to get those gains from elsewhere. So on the 90 percent of land they retain they have to make greater profits in order to cover those costs. So the cost for the sections in the other 90 percent goes up and the cost of housing overall will go up. Again we have a problem there. That is why builders and developers oppose this legislation and we can understand why that is the case. So there we have it. Local authorities are objecting to this legislation builders and developers are objecting to it and many of those involved in community housing objected to it at the select committee. 
Members of the select committee were also very interested in another matter raised in this bill. It is certainly associated with housing but not necessarily with the issue of first-home buyers. It is the intention in the legislation to void covenants that restrict the provision of affordable public or institutional housing within a residential development. That was intended to address problems such as we see in Auckland and Housing New Zealand Corporation gave us examples of where developers have put covenants over their developments saying that social housing cannot be placed within that area. For example Housing New Zealand Corporation homes or houses provided by other social housing providers cannot be in those particular developments. 
We could understand why there was an intention in the legislation to do that. We note however that exceptionally large-scale or high-density social housing developments do need local community support in order to succeed. So if we have a development where there are say a hundred or a couple of hundred houses then surely we would want some sort of community consultation where half of them—say fifty or a hundred—are Housing New Zealand Corporation houses. It is not a minor thing. It is a minor thing where we have two three or 10 State houses in a subdivision and covenants surely should not be passed in those cases. But where there are hundreds of State houses in a particular development that is a very significant step indeed and we would want community buy-in and consultation in that case. So although we support the intention in the legislation to void covenants that restrict the provision of affordable housing or public or institutional housing we note that exceptionally large-scale or high-density social housing developments require community support and buy-in in order to succeed and we make that note here in our speeches tonight. 
This legislation does not address the real cost-drivers of housing supply. Meeting residential land needs making sure that enough land zoned is for residential housing beating back over-regulation—particularly where it comes from the Resource Management Act and the Building Act—and streamlining the planning and consent processes are key issues that need to be addressed. It must also be remembered that take-home pay pays the mortgage and the higher taxes that we have seen year on year under this Government do not help the value of take-home pay. People are getting less in their back pocket to service a mortgage. It is take-home pay that counts and only lower taxes will improve the situation and put more money in the back pockets of those who want to pay off their mortgages. Of course interest rates also need to be brought under control and there is no way that that will happen when we continue to see the low-quality spending that this Government has put into various services across the country. 
LESLEY SOPER (Labour) 
: 
 Well it does not surprise me at all that the previous speaker from the National Party Phil Heatley opposes so vehemently the Affordable Housing: Enabling Territorial Authorities Bill. It does not surprise me at all when one considers that any bill with the words “affordable housing” in its title would seem to be anathema to the National Party. It does not surprise me at all to see that the National Party would be opposing a bill that seeks to create more choice and opportunity for families by giving councils some flexibility to promote a wider variety of house sizes ownership models and costs in the new home market. Why does it not surprise me that National which brought in market rentals for State houses sold 13000 State houses and devastated the housing market should come into this House and oppose this very good affordable housing bill? 
It does not surprise me that those members are back to their old tricks of the 1990s once more. What those members do not like is the fact that this bill provides new powers to enable territorial authorities to increase the supply of affordable housing in their local areas and to do the sorts of good things that the Queenstown Lakes District Council has struggled to do. That is another very good thing that territorial authorities will be able to do under this bill and they will be able to take an easier path to do it. The fact is that this bill enables other territorial authorities—without the same problems and in consultation with their community—to require persons doing developments to facilitate the provision of affordable housing to low and moderate income households in a way that encourages that range of housing sizes tenures and costs. 
The bill fits with other work that the Government has undertaken to improve housing affordability in New Zealand and that is why the National Party finds it anathema. Those members do not like the idea that this Government has had successes in that area. When we consider the other initiatives that are under way— 
Sandra Goudie 
: Such as? Name one. 
LESLEY SOPER 
: —such things as the very good and popular shared-equity scheme the work done to start large-scale housing developments that help boost the numbers of affordable housing available and the improvement in the quality standards of houses among other things—we can see that that is why National members find it anathema. They just cannot bear the idea that this is a good Government that cares about affordable housing. The Government sees it as being fundamental to the health and well-being of families and communities that there is decent affordable housing. It actually regards it as a basic human right. And that is what those carping speakers on the other side just do not seem to be able to grasp—that this bill is actually popular and required. 
The fact is that this bill balances the needs of the community for affordable housing with developers’ needs for consistent and predictable planning guidelines and with the property rights of individuals—balance between developers and communities. The National Party cannot take it because that party seems to not want to admit that Labour can actually come up with good balanced legislation that once again delivers to ordinary people. That is what National members do not like—that this party has delivered and keeps on delivering in housing health education and in a range of social issues. That party has never delivered in any of those areas in any of its previous administrations and will have no chance to try to even think about delivering in the future because the people of New Zealand know that if they want good social provision whether it is in housing or in any other area the party they need to have leading the Government is the Labour Party. Thank you Mr Speaker. 
JOHN CARTER (National—Northland) 
: 
 I have to say that it shows how much the Government really believes in this legislation when it gets the Minister who has let the Defence Force run down to an absolute shambles and who allows prisoners out of prisons every day to come down to read a speech on it for about 2 minutes because he would not have a blind clue about this bill. The member Phil Goff would not have one iota of understanding. To make it even worse the Government puts up a lightweight member called Lesley Soper whom they brought into the House and who was then kicked out because she could not get high enough up on the list. The Government has brought her back and she will be kicked out again. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! 
JOHN CARTER 
: It is a day of sadness and shame in this country that we are addressing this sort of legislation in the depths of yesterday if we look at today’s date on the calendar on the wall. It is a shame because we have a member called Winston Peters who has purportedly stood for standards and who has been caught out having to try to explain again. He has also brought into disrepute not Helen Clark because she does not matter but the position of Prime Minister. The Prime Minister also now has to explain and that is a shame. Then the third thing we need to be concerned about is that we are here in urgency discussing this bill. 
I feel really sorry for the likes of Pita Paraone who is a very honourable person. I have great respect for that member. Unfortunately he is caught up in the trap of the Winston saga. 
Here we are tonight debating a third bill. We had the Biofuel Bill which the Government did not really support and then we have just gone through the Real Estate Agents Bill which was all about politics. And now here we are with a bill that is actually meaningless. The unfortunate thing about this legislation is that we are passing a bill that will have no impact other than to put more compliance costs into New Zealand and on to local government and it will not reduce by one diddly-squat the cost of housing to those who need it. 
Let me just explain why that is. The reason is that the Minister of Housing Maryan Street heard about what was happening in Queenstown. She thought that she would go down and look at what they are doing down in Queenstown because it actually works. What happened was that the council had got together with developers—those nasty people who actually make money—and said that it had a problem. The problem was that people who came to that town needed to be able to afford to live there and at that moment they could not. The council suggested that they all get together and give those people an opportunity to be able to afford a home. It suggested that where there was a subdivision and the developers were developing some housing the developers should set aside some funding that would allow those people to get a house that was cheaper than the average home that one might expect to buy in Queenstown. So that is what happened. 
The developers said that it was a good idea. They needed workers. They needed people to come down and help with the surveying they needed people to come down and help build houses. They needed people who are dentists they needed people who are doctors they needed people who are waitresses and they wanted to attract those people to that town. And of course they wanted the well-to-do people to retire there and they wanted to set a standard for them as well. They said that they should get together with the council and allow that to happen and that is exactly what happened. 
The Queenstown Lakes District Council and the developers—those horrible commercial people—all got together and said: “OK here is a good idea. We will make this happen.” Maryan Street heard about this so she whistled down there and said: “By gosh! What a good idea. Why do we not pick this up?”. So the Government forgot what the Queenstown Lakes District Council is doing and it brought in this silly bill that says to local authorities in New Zealand that they must provide affordable housing. 
But what does it mean? Well actually when one reads the bill it means nothing. It means absolutely nothing. All that it says to local authorities is that they shall try to do this. The fact is that every local authority in New Zealand opposes this bill with the exception of none because they know it will have no impact. I tell members opposite to go and talk to the mayor of the Queenstown Lakes District Council. 
Hon Steve Chadwick 
: He worked with the Government on this bill. 
JOHN CARTER 
: Of course he did; he worked to try to make this bill work. If the member will go and talk to him now he will tell her that it is a joke and that this bill will not work. I tell the member to go and ask him because I did. I asked him what he thought about this bill and whether it will work. He said that it was a joke and it will not work that it does not do anything that his council is not doing and that it is providing opportunities for people on lower incomes. 
Of course the sad fact is that the Government has got it wrong. What this Government will not understand is that part of the reason why we struggle in this country to provide affordable housing for low-income people is the compliance costs this Government has imposed on local government bodies which they have to pass on. Let me just talk about that for a minute. 
Lesley Soper 
: Have you read the bill by any chance? 
JOHN CARTER 
: The member can interject as much as she likes but the fact is that the way the Resource Management Act works under this Government—it has to be implemented by local authorities—means that every section subdivided in this country costs $50000 in compliance costs before one even gets started. Right now if one gets a building permit with the Department of Building and Housing which is administered by Shane Jones on top of the $50000 on average that one pays in compliance costs for a section one now has to pay another $25000 per home on average in compliance costs for building and it is nuts. So before one gets a section and house started one has to fork out $75000. 
The second point that has caused a problem and that this Government just will not believe in is not only does it cost $75000 but also people have an expectation that they will have a house valued above what they are able to afford. The fact is that in Northland right now we are starting to design and develop homes—just the house not the section; I will be very clear—working with the likes of Juken Nissho where we will have a modest three-bedroom home that is watertight and comfortable and has all the facilities for the cost of about $110000. We should be starting to provide that sort of thing on top of the cost of a section which is maybe $70000. So one might have a modest three-bedroom home for a first house costing somewhere between $180000 and $200000 and who would argue with doing that? It is a good start for a young couple who maybe have a child on the way or who are just starting out. They can get into a home as a way to step forward. That is what we should be aiming for. 
I really regret the fact that some of the other parties will support this bill because it will not achieve what they seriously want to achieve. I acknowledge that they want to achieve opportunities for young people. This bill will not do it. But the work National is doing in Northland and the work it will do around reducing compliance costs if it is fortunate enough to become the Government will certainly make sure that young people are given the opportunity to get into homes at an affordable level. It is those things that are important not making more rules and regulations and putting more cost on to local government and the ratepayers but allowing young people the opportunity to start at a price they can afford somewhere in the vicinity of $180000 to $200000 without their having to meet the $75000 of compliance costs this Government is imposing on them. 
I for one say that if I had the choice between supporting a Government that says I have to write out a cheque for $75000 before I even start or a party that is saying it will give me the opportunity to get into a first-time home modest though it may be which is a good start and is warm comfortable safe and secure for approximately $200000 without needing rules and regulations—[ 
Interruption 
] I just wish Lesley Soper would for once open her ears but she cannot because she is worried about the fact that she will not be here soon. I wish she would understand what I am saying which is that National is interested in getting young people into homes. I know that the likes of Pita Paraone also support that objective. This bill will not do it. But I do say there is an opportunity for us to make sure that we can and if we are given the opportunity then we will. 
PITA PARAONE (NZ First) 
: 
 Tena koe Mr Assistant Speaker. I stand on behalf of New Zealand First to say that we will support this bill. I start by saying that New Zealand First has always been of the mind that all New Zealanders should have access to affordable homes. Owning one’s home has always been part of the Kiwi dream and we would like that to remain so. Unfortunately the dream has become a nightmare for many people who have come to realise that access to affordable housing which earlier generations of New Zealanders enjoyed is no longer available to them. The fact that we here in New Zealand are at the end of the global economic food chain so to speak has seen the downturn in other economies impact on our own. The New Zealand Institute of Economic Research recently reported in its last quarterly prediction that gross domestic product was likely to decline for three consecutive quarters. It went on to say that inflation is still a problem and would therefore impact on a return to robust economic health. Having said that I believe it is still the Government’s responsibility irrespective of who might be occupying the Treasury benches to ensure that this country’s citizens are suitably housed and that incentives are provided to do this. 
We in New Zealand First believe that this bill will provide that incentive which I regard as being a beginning. House prices have left a large number of people on modest incomes unable to compete in the current housing market. The bill is intended to help provide additional supply-side tools for local government in order to complement the housing supply-and-demand measures that central government already provides. As the Minister who opened the debate this evening said costs vary amongst the territorial authorities around the country and therefore the cost of housing will also vary. 
I heard reference made to Queenstown and the belief that this bill will not solve the problem that Queenstown is possibly facing. However the responsibility does fall on that local authority to ensure that in order to maintain its position as one of the leading tourist centres in the country it must look after its service workers. If it wants to attract service workers to the region and wants them to stay there to be able to cater for the demands that tourism brings to the area then it will certainly have to have a plan that will provide affordable housing for those people. 
New Zealand First recognises that this bill is a stand-alone bill that dovetails with other legislation. The bill’s purpose is to enable territorial authorities in consultation with their communities to require developers to facilitate the provision of affordable housing. We have heard comments this evening that developers are opposing the notion of this bill. I say that given the economic climate at the moment I have heard of developers actually approaching the Government to see whether the Government will purchase sections from them to provide State housing. I think that that is the consequence of being at the end of the economic food chain which I alluded to earlier. 
I do not want to take too much time other than to say that this bill is just one of the many tools that will be available to provide affordable housing to our citizens and I reiterate our support for this bill. Kia ora. 
SUE BRADFORD (Green) 
: 
 The Green Party will be supporting the Affordable Housing: Enabling Territorial Authorities Bill through its second reading and remaining stages in the House today. I have to say however that ours is somewhat lukewarm support. Although we are keen to see local councils encouraged to support the development of affordable housing within their districts and to end the use of covenants designed to restrict the availability of affordable housing within developments we believe that this bill is a missed opportunity in terms of doing something a lot more meaningful. 
We have a housing crisis in this country right now. Just a couple of weeks ago I took part in a hui on housing in Northland at which representatives of numerous iwi and community organisations talked about the realities of increasing numbers of forced mortgagee sales sometimes because of ridiculously low actual arrears. They talked of private rentals being too high for people to afford even in traditionally low-cost areas like Kaitaia and Kaikohe and of people living under canvas and in sheds caravans and other insecure and inadequate forms of shelter because those were their only options. 
This morning the  
New Zealand Herald  
carried the story of Auckland City councillor Paul Goldsmith who is asking Parliament to widen police powers to allow them to forcibly move rough sleepers along. At the same time Diane Robertson from the Auckland City Mission talked about the problem in a rather more productive way saying that the real answer is to give people somewhere adequate and appropriate to live. Both responses highlight the problems of people sleeping out in Auckland City. It is not a new issue but it is one that does not look like going away any time soon unless there is a concerted response from the Government local government and the community sector to ensure that the housing needs of those most in need are met. 
Councillor Goldsmith’s “blame the victim” response is as old as time. It is reminiscent of Beijing’s recent clearance of its streets and slums for the Olympics or closer to home of the bid to remove the homeless from the streets parks and open spaces of Auckland when APEC came to town in 1999. 
The need for safe secure healthy and affordable housing starts at this extreme end with those who are literally homeless and out on the streets right now—and there are many more of them in Aotearoa in 2008 than some might imagine—and it goes through to those who are among the 9000 or 10000 households on the State house waiting lists to those who are living in substandard or inadequate housing but cannot get on the waiting lists at all and to those who are working as hard as they can but are failing to get together the money to buy a home. The inability of so many to afford or to access accommodation either rented or bought is a reality that this and the next Government must face. 
This bill takes a very small step towards at least enabling local territorial authorities to implement and enforce affordable housing policies in new developments where they have the will to do so. It was interesting to see that so many local government submitters had doubts about the bill although I have to say that a lot of these seemed to be driven more by fears of the costs of taking up affordable housing plans rather than by any analysis of the bill’s inadequacies in terms of meeting real housing needs. In the Auckland region for example five out of six councils opposed the bill with only the Waitakere City Council supporting it while taking the position that the bill should go further and make affordable housing compulsory for all districts. 
Other organisations found the bill inadequate too. For example the Salvation Army opposed the bill despite its unquestionable interest in and commitment to affordable housing. It submitted that it saw the bill as lacking in terms of containing any particularly meaningful response to the crisis it deals with daily through its social services arms. Like the Waitakere City Council the Salvation Army sought among other things a requirement that local authorities must give consideration to local housing affordability issues in their planning and policy development. 
The Green Party came very close to opposing the bill as well but in the end we decided that we would continue to support it partly because of some small improvements achieved at the Local Government and Environment Committee and partly because anything that supports and encourages councils to at least consider the development of affordable housing has to be better than nothing. We also see the clause on covenants with the improvement made at the select committee as being critical. Clause 35(1) now states: “A covenant over land is void if one of its purposes is to stop the provision of affordable housing or social housing on the land.” We are keen to ensure that this becomes law as soon as possible. 
However what we would really like to see soon is a major commitment from the Government to real solutions. The Greens like the Waitakere City Council and the Salvation Army would like to see all local councils adopt housing affordability policies along with a greater commitment to land banking and to the retention of any social housing that they already own. We would like the Housing New Zealand Corporation local councils and the community sector to work together to increase the social housing stock available in areas of need that is provided through all three sectors. 
The private market is not able to meet the housing needs of everyone in this country as is all too apparent at present. We believe that both central government and local government have a responsibility to take a lead on these issues. Central government funding should be available to assist local councils to carry out effective planning and to meet social housing needs but this funding should not be available unless they have developed an affordable housing plan in genuine consultation with their local community. I hope that the next time we are discussing an affordable housing bill in this Parliament it will be a lot more serious than the one in front of us today. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Ten years ago the Hikoi of Hope called on the Government and the community to urgently improve housing for low-income New Zealanders. The Government was advised that if we really want to be seen as a socially just nation we must recognise the link between housing and poverty and act appropriately on the issues in that sector. A decade later does this bill the Affordable Housing: Enabling Territorial Authorities Bill do it? 
Right on cue the social report was released last week and it provided the context with which to understand the importance of secure stable and safe housing. It is not a good-news story. It is a story of haves and have-nots—those who can afford to live well and those who cannot. There is of course the fact that some 15 percent of householders own an investment property and such properties include holiday homes rental properties timeshares and overseas properties. And then there are the others. 
Since the late 1980s the proportion of New Zealand householders spending more than 30 percent of their income on housing has literally hit the roof shooting up from 11 percent in 1988 to a massive 26 percent in 2007. For Maori households the decline in disposable income has become even more severe. The proportions of Maori spending over a third of their disposable income on housing had risen to 29 percent in 2007. 
Affordable housing is a cornerstone of any programme to reduce poverty. Affordable housing is essential to well-being. Without housing stability learning is hindered and opportunities for social and economic participation are seriously compromised. There is a lot at stake then in thinking about the range of mechanisms available to ensure that people on low to moderate incomes are able to access affordable housing. And so we were introduced in the range of submissions and effort put forward into defining exactly what we meant by affordable housing including the specific suggestions of “income-to-housing” cost ratios. 
This of course has long been the view that we know of with regard to the concept of poverty. New Zealand does not have an official poverty line. The arguments have been put forward by Statistics New Zealand—that it is too hard to set the level too hard to take account of geographical variation in living costs too hard to handle short-term periods of low income and too hard to adjust the measure over time. So with no poverty line how do we really know the extent of the poverty gripping our communities? 
The same will now apply to affordable housing. It is kept deliberately broad to enable territorial authorities to develop their own definitions to suit their own housing markets. It is this deliberate flexibility that we in the Maori Party have some qualms about. A little flexibility can be a dangerous thing. The context of this bill in enabling territorial authorities to address problems of housing affordability in their districts is one that essentially rests on the quality of relationships with mana whenua—whanau hapu and iwi. Of course we know that when iwi are perceived as investors the relationships with territorial authorities are suddenly conducted with great haste and respect for all parties involved. 
We were interested that the report of the Local Government and Environment Committee considered the possibility of amendments to the Resource Management Act for affordable housing. The Maori Party supports amendment of the Resource Management Act 1991 and the Local Government Act 2002 to strengthen the recognition and decision-making authority of local hapu and iwi in their region. We believe that that legislation needs amending to provide for appropriate representation of and engagement with mana whenua in decision making in their rohe. Such amendments would provide a more tangible way of spelling out the nature of the relationships sought with tangata whenua. The critical issue that concerns us is how mana whenua are involved in the design and discussions around affordable housing in their districts. 
But other relationships are at risk in this bill such as relationships with the so-called gated communities—relationships between gated communities and those who seek to live in social housing. Sarah Walker has produced an interesting paper that describes the effects of gated communities and their regulation in New Zealand. In that paper she describes the fortified pa of tangata whenua as the earliest example of gated communities. Fortified pa provided a stronghold and a sense of security in the knowledge that there was somewhere safe to run to to return to in times of trouble. It also meant that in the luxury of being separated out from potentially hostile “others” the community was a safe haven where people could be free to be Maori to protect each other to store their food and supplies and to enjoy their cultural activities. 
It is a fascinating context from which to consider the risks of simply importing another different group within the midst of gated communities. Pepper-potting State houses in the midst of say a retirement village is bound to create conflict and uneasy tension unless due attention is paid to relationships. The impact of high-density social housing developments must be comprehensively and carefully negotiated with our local communities if we are to achieve buy-in. 
I want to return to the very basis of the need for social housing. If we continue to accept that market forces will determine price in the supply-and-demand world then the poor will never ever be able to be safely and appropriately housed. The god of the market at whose altar we kneel will determine the sort of life we lead. But we must ask: is this right? Should this be so? High housing costs eat into the limited capacity of low-income households to meet basic needs such as food clothing transport medical care and education. 
We must ensure that the housing market is more efficient and fair. Direct assistance for low-income tenants enables a basic quality-of-living standard to be met. We know that community and social service agencies are seeing the real impact of increased accommodation costs on poverty. So we welcome the initiatives in retrofitting the Housing Innovation Fund and the developments the Minister has shared about renovating State houses and moving them on to land. I was pleased to learn about the efforts made in the Matahi Valley for the people of Tuhoe and the efforts made to ensure that a kuia in Nuhaka was able to enjoy better health and housing at the wonderful age of 92. 
But we must look past isolated examples to really understand the grim reality for so many New Zealanders that makes servicing a mortgage simply out of the realms of possibility. The pressures on people are already too immense to create further stress on households by adding ever-increasing mortgage repayments on to their already stretched budgets. 
We will support this bill though we are greatly concerned that low and moderate income earners should be entitled to benefit from affordable housing—but may not as very few tangata whenua have an income or two incomes of up to $80000. We are also very concerned to explore every possibility for innovation in expanding options for affordable housing. This is more than a matter of bricks and mortar; it is about quality relationships quality locations and quality decisions. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I stand on behalf of United Future to oppose sadly the second reading of the Affordable Housing: Enabling Territorial Authorities Bill. United Future supported this bill going to the Local Government and Environment Committee and we had very high hopes that the Government was making a real effort to address a genuine problem. United Future has gone on record historically as saying it wishes that this 2008 election was being fought around the issue of affordable housing—that both National and Labour would be trying to outdo each other in putting forward to voters some really workable options to increase homeownership for middle and low income New Zealanders. So we are very disappointed to have reached a point where we can no longer support this bill. 
I have to say that I am a little surprised that the Maori Party is supporting the bill. That party has gone on record on numerous occasions in this House in support of people’s property rights. This bill has the ability to seriously breach the rights of property owners and put demands on them in a way that I think is inconsistent with the stands that party has taken on previous issues. 
This bill provides but does not demand that territorial authorities should they wish can develop some affordable housing policy at a local level. It is really clear from the feedback from local government that some territorial authorities are already doing this. They are the ones that have been looking for a little bit of legislative support to continue what they are doing and we acknowledge that. But a whole lot of territorial authorities are currently quite uninterested and they are particularly uninterested in some of the options that are put before us in this bill. 
If a territorial authority chooses to consult as it is required to do first of all and to set up a scheme to offer affordable housing options it is then able to put some quite strong demands on property developers forcing them to make available some of their land for affordable housing. Territorial authorities have always had the option of providing incentives through lower compliance costs and a number of other mechanisms to incentivise those options but what they would get out of this bill if they so choose is the ability to actually impose that type of provision on to a property owner and a property developer. We think that is a very sad option. 
I questioned the Minister and she kindly gave me a briefing because I wanted to try to get my head around how this could play itself out at a local level. I asked the Minister whether the bill in the way it has been written could for instance stop a local council showing preferential treatment to one developer over another making no demands on one property developer—making no requirement that it set aside land for affordable housing—but choosing to put requirements on another developer within its territorial authority. She admitted that yes it was quite possible under this legislation for preferential treatment to be given to developers within a territorial authority. So already we start to see some real flaws that could happen off the back of this bill should it pass in its current form. 
Another concern mentioned in the commentary on the bill as it has been reported back from the select committee is around the adequacy statement because the regulatory impact assessment unit does not consider that this proposal meets the consultation requirements for regulatory impact analysis. Really if there is any strength to this proposal it is that the territorial authority in setting up an affordable housing scheme is required to do some consultation with its constituents. That is a good requirement but some concern is expressed by the regulatory impact assessment unit that it does not believe the provisions as stated in the bill currently are sufficient to mean that the consultation process is done in a way that is helpful. 
I was interested to find out from the Minister why she had chosen to set up a separate bill rather than to amend the Resource Management Act and/or the Local Government Act 2002. Certainly the commentary on the bill gives some reasons around that. Apparently the Local Government Act 2002 could not be used in its present form to require developers to contribute towards affordable housing and territorial authorities obviously wanted the flexibility and the choice as to whether they opted into these provisions in the legislation. So it will depend on where people live in New Zealand and on the priority set by their local authority as to whether this legislation will even have application and provide affordable housing options for them. A huge amount of choice is given to territorial authorities. However once they decide to take advantage of the provisions of this bill then I think a lot of problems could kick in particularly for property developers in a way that United Future feels breach the very principles that we as a party have based ourselves on. 
United Future is committed—along with other parties in this House—in seeing what can be done to improve affordable housing options in New Zealand. Right now in New Zealand we face a housing crisis. It is increasingly difficult for first home owners to get their proverbial foot on that first rung and much more can be done. Most of us bought our first house with Government assistance. Short-term loans were given to kick-start our deposit. The family benefit could be capitalised. Historically there have been a whole lot of helpful mechanisms. 
United Future for instance would like to explore the option of capitalising Working for Families payments. A whole lot of things could have been considered by this Government and we are very disappointed that it has limited itself to hitting property developers rather than putting forward a bill that could have included a whole lot of other really excellent options that we would have been able to support. We are sorry to have to pull our support at this time. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am absolutely delighted to speak on behalf of National in opposing the Affordable Housing: Enabling Territorial Authorities Bill. This is another piece of very very poor legislation. It follows on from a litany of poor legislation put through the House by this Government. It asked the first question: “What’s the problem we’re trying to fix?” and yes there is a problem around affordable housing. But did it do any rigorous analysis about what the cause of that problem was? Of course it did not because those members opposite are too jolly lazy as a Government to take even one look at the real causes relating to affordable housing. 
SANDRA GOUDIE 
: Let us consider one of the first problems faced which is the resource consent process under the Resource Management Act. Did Government members even take a look at that process? Did they put any effort at all into looking at what it means for anybody wanting to build a subdivision and provide housing for our people? No they did not. Did they even look at the Building Act? Well yes they did and what did they do? They made it worse because when they identify a problem they have absolutely no idea about the rigorous analysis needed to understand the causes of it. That happens time and time again in every piece of legislation. This Government has passed a litany of legislation that is a burden on the people of New Zealand and this is another example. 
What a burden this legislation will be on the people of New Zealand. If Government members think this bill will do one single thing towards achieving affordable housing they are seriously mistaken. We heard the previous speaker say that local authorities will need to have an affordable housing scheme. That is another step in the direction of a bloated bureaucracy; everything this Government does that has an effect on local authorities does nothing but add cost and bureaucracy to them. The local authorities have to find the wherewithal to fund the staff to do the investigation and analysis needed to put in place all of the rubbish—this absolute garbage—put upon them by the current Government. It all comes at a price that local councils have to pay. 
But hold on who funds the local councils? Well it is the ratepayers who have to pay that price and they are sick of it. Time and time again they are burdened with costs imposed by this Government and this bill is another classic example. 
Let us consider affordable housing schemes. For a start local authorities have to draft a scheme. Do they get any funding from the Government for that? No. Once they have drafted a scheme—and spent hundreds of thousands of dollars on staff to do that—they have to go out for public consultation. Hello there is a few more hundred thousand dollars gone. As we heard from previous speakers all sorts of community groups want to put their finger in the pie because they all think they know how best to do things. They all want to put in their 10c worth. They drag the process out just like they do when people put in resource consent applications. Everybody wants a finger in the pie. 
Why do members think that the cost of housing is so great? If they had listened to John Carter they would have heard the answer: it costs at least $50000 for a start. I know of a guy who requested resource consent for eight motel units. Before he even started he was being asked for $150000. That was before he even put a peg in the ground. Why would he bother? This bill will absolutely cripple any initiative that people take or any enthusiasm they have to enter into business or to create businesses in this country so they can improve their wealth their take-home wages and as one of the previous speakers said their ability to afford to pay for housing. There are costs and costs one after another. 
One council has become the first in the country to say that it will take 50 percent of the development contribution on the first building inspection. That is before the developer has even used any of the facilities being charged for. Then the developer will need to pay the rest of that development contribution before he or she can get a certificate of title at the time of the last building inspection. Give me a break! If this Government cannot understand the basic costs of building a house then that is an absolute indictment on its representation of the people of this country. 
If anybody is failing the people of New Zealand it is the members of this Government who do not properly understand the problem and are not addressing the compliance costs. They are doing nothing to reduce the cost to people wanting to build houses. They are doing nothing to reduce the costs to ratepayers. It is no wonder that housing is becoming unaffordable even if one does own a home because rates are going up at the rate of knots just to meet all the costs being imposed by this Government. 
This Government keeps saying that it cares but it puts through more bills because it wants to control things. It does not understand that people in the private sector can work together with public sector entities such as local government and make arrangements that suit them without needing to get tied up in knots by legislation that just adds more costs. Does the Government not understand the simple idea of contracts and agreements? No it does not. It cannot stand not being able to put its finger in the pie and interfere in the process. It cannot leave it alone. Queenstown did it and what did Government members do? They wanted to capture it and make it theirs so they ring-fenced it put a whole lot of words around it and turned it into an utter shambles. That is what this bill is—an utter shambles. It is a disgrace. It just reinforces my already strongly held view that this Government is completely fiscally irresponsible. There is absolutely no way I would want any one of those people managing my household budget. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Could I have a bit of order please the noise is getting too high. 
SANDRA GOUDIE 
: Oh gosh let them go. For goodness’ sake let them go and send them out. 
There is absolutely no way I would let any member of this Government manage my household budget. When we look at the way they are managing the taxpayers’ budget we are absolutely horrified. The number of bureaucrats has grown by 10000 in the last 9 years—do we want our money spent on more bureaucrats? This bill provides for more bureaucrats at the local government level just to deal with the sorts of rules and requirements that the Government is imposing through this legislation. 
Let us look at some of the submissions to the Local Government and Environment Committee. Business New Zealand said that any basic understanding of the economic principle—[ 
Interruption 
] The Government hates business. It is the businesses of New Zealand that give our people jobs so that they have the income to pay for their survival—to buy food pay rent or buy houses. But Government members cannot stand that; they cannot stand the idea that somebody might make a bit of profit while providing income for others. That is a total anathema to them. We can tell by the immediate reaction we heard when I said “Business New Zealand”—shock horror! Well hello newsflash! We actually need businesses in this country so that people have employment. Do Government members not understand that equation? They just do not understand that we have to have business to provide employment. The two go hand in hand. If one does not have a job one cannot afford to own a home. It is simple but it is obviously lost on the current Government. 
So what did Business New Zealand say in its submission? It said: “Any basic understanding of the economic principle of supply and demand would acknowledge that artificially lowering prices leads to reduced supply and or increased costs for other householders as developers seek to cover their costs and make a normal profit. This is borne out by overseas studies…”. Once again I say that this Government has let down the people of New Zealand. If we think that homes are unaffordable now this bill will only make matters worse. This bill is an absolute indictment on the ability of this Government to do anything rational or that actually supports the people of New Zealand. 
A party vote was called for on the question  
That the Affordable Housing: Enabling Territorial Authorities Bill be read a second time. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Bill read a second time. 
In Committee 
Part 1 Meeting housing needs  
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. 
JOHN CARTER (National—Northland) 
: 
 Thank you for the timely warning Madam Chair. 
The CHAIRPERSON (Hon Marian Hobbs) 
: Good. Before I hear about your mother! 
JOHN CARTER 
: The gate is open but the stock is quiet! I want to specifically address Barbara Stewart Keith Locke and Te Ururoa Flavell—and any of the Labour members who may care to listen—and to talk about clause 6. I do so from the point of view of saying that although the intention of this bill is to provide more affordable housing to low-income people if we look specifically at clause 6 we see that it fails. It fails because all that clause 6 does—and the other clauses—is say that local government bodies will find out whether there is affordable housing in their districts provide a needs assessment etc. What that means is that local government bodies will end up having to employ people to go through the steps of producing the reports required. They will probably come out with a report that says there is not enough affordable housing in their districts. 
That is the nub and the problem of this legislation. The sad fact is that this bill merely provides for local government bodies to write reports. It actually requires local government bodies to go out and make assessments. What it does not do—and what I thought was the intent of the bill—is ensure that we end up with more affordable housing. Nowhere in this bill as members will see if they read it carefully does it say that the end result of the local authorities’ endeavours of their assessments will be that we have more affordable housing. 
I say to the representatives of those three parties here tonight that National members oppose this bill because it is back to front in addressing housing need. The sad and unfortunate fact in this country at the moment is that the expectation of the starting step for house ownership is too high. We would have done better to work with the building industry and with local authorities together to ensure that there are lower-level homes—still of good quality still secure still safe and still watertight—at a lesser cost that people on lower incomes can afford. That is the dilemma we face in this country today. For most people the price of a first home is out of their reach. Yet we have the ability in this country to provide lower-cost homes. I am not saying they are cheap homes; I am not suggesting that for a minute. What I am suggesting is lower-cost homes. 
When the likes of Trevor Mallard and I were starting off in this country as young men we had expectations of stepping into a home that was of a smaller size but still adequate for us to start our families. Unfortunately today all of us have an expectation of being able to step into a more expansive home. Quite honestly we need to change that attitude. We need to accept that a first home can be a small 3-bedroomed home that does not necessarily have all the bells and whistles but is adequate. It can house our children— 
Hon Trevor Mallard 
: Some of them have two bedrooms. 
JOHN CARTER 
: Maybe it has only two bedrooms. The point is that the home does not have to be a great big expansive palace. It can be a first-step house. It can be something we can turn into a home. It might have only two bedrooms one for mum and dad and one for the first child maybe. 
Hon Trevor Mallard 
: I can remember when kids shared bedrooms. 
JOHN CARTER 
: Of course; we all did that. The point I am making is that our expectations are now above the level that we should reasonably expect. 
I say to the members of the smaller parties here and indeed to the Government members that we should have said we will work with local government and we will work with industry and the whole focus will be on ensuring that we have an adequate supply of lower-priced homes of good standard that allow families in New Zealand to get a start. That is where this bill fails. In fact it actually adds to the cost. I say to the Government and I say to this Parliament tonight that what disappoints me about the smaller parties which I know genuinely want affordable housing—as do we—is that their supporting this bill in the manner in which it has been put forward will make it harder for young people to reach that first step. That is most unfortunate and I say that genuinely. This is one of the times in this House when we really need to reflect on what we are doing. We are not achieving what we set out to do as a Parliament. This body has a responsibility to the people of this country and tonight I say that unfortunately rather than achieve what we set out to achieve which is a laudable goal we will push it further out. I say to Parliament that it is sad and unfortunate that we are doing that this evening. Thank you. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I fully concur with my most eminent colleague John Carter. He is absolutely right. He has said the very things that needed to be said about the fact that this Government should have taken a step back and should have done the work necessary so that we would not find ourselves in this very unfortunate position in respect of considering the Affordable Housing: Enabling Territorial Authorities Bill. The first definition in clause 4 covers affordable housing which “means housing that—(a) is for persons living in households that—(i) have low to moderate income; and (ii) have no low or moderate legal or beneficial interests in property; and (b) is priced so that the persons are able to meet—(i) their housing costs; and (ii) their other essential basic living costs; and (c) is within the regulatory criteria for determining what affordable housing is if regulations setting criteria exist”. 
I am blowed if I know what that means and I am sure it is a lot of gobbledegook for most people. But when we look at moderate incomes I am concerned. The average income of the majority of people in my electorate is around $26000 a year. That is the average income for the Coromandel electorate. How could anybody afford to own his or her own home on that level of income? We talk about most people now earning around $60000 a year but coming from the Coromandel I find that very very hard to believe. 
Business is incredibly important in the Coromandel because we need those businesses to provide jobs for the local people and housing is certainly an issue. We have a very limited land resource and we need to use it to the very best of our ability. 
I would like just to pick up on some of the points made by John Carter when talking about affordable housing. He referred to providing housing that can be affordable. If local government and central government are to work together then they need to look at the cost of building a house. They need to look at the cost of purchasing the land in the first instance the cost of building the house and all of the constraints that start to come into play the moment someone takes a step into the council to begin the process. Firstly there is the resource consent cost and secondly there is the building consent cost. The bill has a definition of affordable housing; paragraph (c) of that definition states: “is within the regulatory criteria for determining what affordable housing is”. This Government has not done that. Obviously the expectation is that local authorities will do that and it will place an incredible burden of cost on them because it is not an easy undertaking to start pulling all of that analysis together to determine what affordable housing is. 
In the first instance councils are required to implement legislation passed by the Government like the Resource Management Act and the Building Act. They have to do that regardless of how poorly the legislation has been drafted and how it has not been changed to accommodate some movement in the cost of housing. Councils have to work with that. They do not seem to be able to control the costs incurred by people who want to build houses through that process. That is absolutely where it needs to start. When I talked before about a $150000 development contribution it was $150000 after the costs of about $40000 or $50000 just for the resource consent and the building consent alone. We are looking at some councils charging up to $1000 for building a carport. 
It is going out of control and is becoming a nonsense. The sooner some rationality is put into the process around how resource consents and building consents are dealt with the sooner we might be able to have more affordable housing for people in New Zealand. I wish that some sort of sense could be made within the regulatory criteria as defined in the bill. The purposes clause talks about enabling territorial authorities “in consultation with its community to require persons doing developments …”. But it is done in consultation with its community. People who know anything about what it is like when someone starts to consult the community will know this is just another one of those exercises that adds hundreds of thousands of dollars on to the cost of starting an affordable housing scheme. 
JOHN HAYES (National—Wairarapa) 
: 
 I would like to begin by speaking to clause 3A which states: “This Act binds the Crown.” I feel quite sorry for the Minister in the chair the Hon Trevor Mallard because this legislation is abysmal. It is on a par with the emissions trading scheme legislation. What I am getting at is that the Act binds the Crown but this whole bill is concerned with territorial authorities. When the Minister speaks at some point I will be very interested in his explanation as to why this Act binds the Crown because clearly it does not. I feel very sorry for the Minister because this legislation is terrible. I do hope the Minister is reading Paul Quinn’s column in the  
Hutt News 
 which I see he is engrossed in. 
Hon Trevor Mallard 
: Who? 
JOHN HAYES 
: Paul Quinn. He is the fellow who is standing against the Minister. 
Hon Trevor Mallard 
: Is he? 
JOHN HAYES 
: Yes. 
Clause 4 states: “In this Act unless the context requires another meaning”—brilliant—“affordable housing means housing that—(a) is for persons living in households that—(i) have low to moderate income;”. This would apply to most people in my electorate in the Wairarapa who typically earn $12 to $20 an hour. But what is a moderate income in that context? Next subparagraph (ii) states: “have no low or moderate legal or beneficial interests in property;”. That does not stop someone with property held in a trust from being able to make him or herself eligible for affordable housing. Paragraph (b) of the definition goes on: “is priced so that the persons are able to meet—(i) their housing costs;”. Well that is really wonderful legislation. Why do we need a rule for that? Then paragraph (c) states: “is within the regulatory criteria for determining what affordable housing is if regulations setting criteria exist”. This is appalling drafting; it is appalling legislation. 
Let us turn to clause 5 “Purposes”. It states: “The purposes of this Act are to—(a) enable a territorial authority in consultation with its community to require persons doing developments to facilitate the provision of affordable housing—”. Why do we need legislation to do this? The bill goes on to state in clause 5(a)(i) that it is “for the purpose of meeting a need for it that the authority has identified by doing a housing needs assessment:” That is wonderful! Why do we need central government to waste its time to waste the time of the Local Government and Environment Committee and to waste the time of officials by asking them to come up with legislation that states a territorial authority can do a housing needs assessment. We do not need this legislation to do this; this is wasting the taxpayers’ funds. 
Then the bill states in clause 5(a)(ii) that facilitation of housing must be “in a manner that takes account of the desirability of the community having a variety of housing sizes tenures and costs:” For heaven’s sake! This is the real world; we do not need legislation that says that. Then clause 5(b) states that the purpose of the Act is to “void covenants that have as one of their purposes stopping the provision of affordable housing or social housing.” For goodness’ sake! Who drafted this stuff? This is meaningless arrant nonsense. 
This is exactly the theatre that this Government has created around the emissions trading scheme. It is the theatre of appearing to be doing something for a community. But I say that this legislation will do nothing to deliver an affordable house to anybody in this country. It is unnecessary legislation. Clause 6(1) states: “Territorial authorities that want to find out whether there is enough affordable housing in their districts may do housing needs assessments.” What brilliant law! Who was the wizard who thought of this legislation? It is absolute and utter rubbish and the Government is charging taxpayers to produce this sort of nonsense. 
JACQUI DEAN (National—Otago) 
: 
 I am very pleased to rise to speak on Part 1 of the Affordable Housing: Enabling Territorial Authorities Bill. I start my contribution this evening by saying I am a little puzzled at Madam Chair’s directing my colleague John Carter—I believe—not to move beyond the scope of Part 1 into providing solutions. I think I have correctly picked up her direction. 
The CHAIRPERSON (Hon Marian Hobbs) 
: This debate is consideration in Committee. That can be done in the second or the third reading but not in this debate. 
JACQUI DEAN 
: Thank you Madam Chair. I understood and I thought and I do believe that this bill is about providing solutions to affordable housing and it is in that context that I make my comments. 
I want to make my contribution very local and to put the Committee in the hands of a small local authority such as the Waimate District Council the Mackenzie District Council the Waitaki District Council the Timaru District Council or the Ashburton District Council all councils in my region that may or may not—because this is an enabling bill—decide to take a housing needs assessment on behalf of their community. How will that housing needs assessment be generated? It might be generated from a member of the community or a group within the community that feels very strongly about this matter—and there are members of the community who feel very strongly that there is a need to provide community housing within a certain town or district. 
That is fine. A letter is written to the mayor and councillors requesting that a housing needs assessment take place. What does that mean for the Waimate District Council which has got say one engineer one community services officer and one other officer? There will be a rating officer. Who is going to undertake this work? We can argue—probably quite rightly—that because every council in New Zealand is required to undertake a long-term community council plan then a housing needs assessment can be undertaken alongside with or attached to an annual plan or a long-term community council plan. That is a case that can be argued. But when a council has one engineer one community services officer and one rating officer who also have to deal with the day-to-day business of the Mackenzie District Council or the Waimate District Council and who also have to deal with accreditation under the Building Act which is still exercising many small local authorities not just in my corner of the world but throughout New Zealand who will undertake that study? Who in a small rural local authority has the expertise to undertake a housing needs assessment? 
If we turn to the provisions contained within Part 1 we see that under clause 8 “Method of assessment” subclause (3)(d) provides for a method that gives “a description of the current balance between supply and demand in the housing market generally and if relevant in different sectors:” If say the Waimate District Council is going to do that does it do it just for the Waimate township or does it also do it for the little villages that are spread around the Waimate District? Where does it end? 
I think Part 1’s requirements of small local authorities of which there are many around New Zealand will impose an added amount of work which they may be willing to undertake—this is an enabling bill and if the community wants a council to do an assessment then the council may well be willing to do it—but there is the question of their capability to do it. If they have to bring in consultants to undertake the work who will pay the consultants? The concern I have is not about the willingness of a local authority to do a housing needs assessment; it is about the capability of a local authority to undertake an assessment and the cost that it will impose on the whole of the community. 
Madam Chair I am concerned at your direction to my colleague not to stray into the realm of finding solutions when debating Part 1 because I think Part 1 is very much about the mechanism of finding solutions. I am very concerned that we have two directions here. On the one hand we are not to try to find solutions yet we are debating Part 1 which provides the mechanism for finding solutions through a housing needs assessment. 
I am concerned that a new industry of housing needs assessors will build up in New Zealand. I am concerned that there will be a number of consultancy firms—they are probably writing their job descriptions even now and scoping out the type of work they will be doing. These housing needs assessors—I am sure they will find much flasher descriptions of their jobs than that—will offer themselves to local government to undertake housing needs assessments. 
The concern I have on behalf of the Waimate District Council and the MacKenzie District Council is that although the aim of this bill is to provide affordable housing to people the method does not actually follow through on it. This bill does not in any way achieve what it sets out to achieve. What it does is provide an opportunity for housing needs assessors to find a whole new vehicle for earning some jolly good fees from the ratepayer base of small local authorities. 
The CHAIRPERSON (Hon Marian Hobbs) 
: Before I call Tim Groser I just want to make something very clear to the previous speaker Jacqui Dean who I think misunderstood what I was saying. I was saying that I wanted her to focus on the wording of the bill on the intention in this bill and not to focus on alternatives that are not part of this bill. Speaker’s ruling 104/1 states: “Consideration by the committee of the whole House is the nuts and bolts stage in which a bill is considered [part by part] and detail by detail …”. It is not the wide things. That speaker did actually deal with that. But that was my warning before people take off into the wide blue yonder of housing affordability in general. 
TIM GROSER (National) 
: 
 Had I heard that explanation I possibly would not have risen to take a brief call. I have to be honest: in coming down to the Chamber it was not my intention to take a call on Part 1 of the Affordable Housing: Enabling Territorial Authorities Bill but merely to enrich my parliamentary experience by listening to my National Party colleagues go through this bill with their customary forensic skills and tear the logic and ambiguities of Part 1 apart. 
As members may have noticed I was sitting next to my parliamentary colleague Mr Keith Locke from the Green Party—a man whom I have known for 40 years. We were discussing the strategic outlook for Hezbollah in the Lebanon which is probably not quite part of Part 1. But I was forced to rise to my feet by the very observation that you have just made Madam Chair. I wrote it down as: “Part 1 does not require us to focus on solutions to affordable housing.” I thought that this was very intriguing given that the immediate description of the title of Part 1 is “Meeting housing needs”. I thought that we can afford to say this— 
The CHAIRPERSON (Hon Marian Hobbs) 
: Could the speaker resume his seat. The directions I give are not debatable. I have given a direction; it is not up for debate now. Please focus on Part 1 of the bill. Thank you. 
TIM GROSER 
: Thank you; most certainly. The problem is trying to work out what exactly Part 1 is trying to fix. When I started to read this bill in the House just about 10 minutes ago I found the most childish drafting I think I have seen in my brief time in Parliament. Let me give members an example. Clause 6 states: “Territorial authorities that want to find out whether there is enough affordable housing in their districts …”. This sounds like a third-form essay on the issue. 
Then when we come across other clauses we find bold declaratory statements. For example let me take clause 13 “Criteria for allocation” which states: “An affordable housing policy must state the criteria …”. This sounds bold and decisive but when we look at the operational clauses dealing with the criteria which are contained in clause 10 we then find out that the criteria are a purely illustrative list of criteria that have no particular force whatsoever. It states: “(1) An affordable housing policy must state the criteria …”. It then lists a series of criteria such as “(a) the proposed location of the development:” and “(b) the kind of development proposed …”. But it is quite clear from later parts of Part 1 that this does not exclude the possibility that a local authority may decide on other criteria which makes a nonsense of omitting paragraphs (c) (d) and (e) from clause 10(2). 
The whole bill is a complete artifice. It has no intrinsic content whatsoever. One has to ask oneself why Part 1 is in this bill and what its actual real purpose is. It seems to me—and no doubt we will come to this in a more complete examination of the bill when we start to look at it in total—that this is essentially a political fig leaf. This bill does not actually do anything. It is permissive of a policy that local authorities may in any event already do. It does not add anything to the sum of human knowledge in our country whatsoever. It is simply a political fig leaf for this Government to cover up 9 years of inaction on affordable housing. 
SU’A WILLIAM SIO (Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Maryan Street to clause 27 be agreed to: 
to insert in subclause (7) “must” after “the territorial authority”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Amendment agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Part 1 as amended agreed to. 
Part 2 Amendments to other enactments 
PHIL HEATLEY (National—Whangarei) 
: 
 Madam Chairperson I am intrigued that as the Chairperson of the Committee of the whole House you required members not to talk about solutions for affordable housing— 
The CHAIRPERSON (Hon Marian Hobbs) 
: Please do not trifle with my ruling or discuss it. 
PHIL HEATLEY 
: I am hoping that in the debate on Part 2 we can canvass solutions regarding affordable housing given that that is to all intents and purposes what the Affordable Housing: Enabling Territorial Authorities Bill is hoping to achieve. I will move through clauses 40 41 and 42 and will address those particular issues with that backdrop—without actually mentioning any solutions. 
I will first convey my concern to the Committee that although clause 40 does not deal with affordable solutions to housing it does make a couple of amendments to the Building Act. In fact it makes three amendments. I have to say that three is too few. I do not know any builder who does not want amendments to the Building Act. Builders across the country will be delighted to see three amendments here. They have another 333 that they would like to introduce and I am a bit disappointed that the Minister of Housing in improving the lot of first-home buyers has not introduced more amendments to the Building Act. It is the Building Act along with the Resource Management Act and a bunch of other Acts that the Government has forced through this Parliament—while ignoring necessary changes—that has driven up house prices for first-home buyers. Clause 40 was a great opportunity to make amendments to the Building Act which is making life very difficult for builders right across the country. 
A builder who has done the hours and has been in the trade for 20 to 25 years cannot move a window 1 foot to the right—30 centimetres for those of us born after the change to the metric system—without trotting off to the local district council with a bunch of plans under his or her arm to explain why it has to be done even though the window does not change the structural strength of the wall. A builder has to down tools go to the council with a bunch of plans submit them wait 5 days for a decision— 
The CHAIRPERSON (Hon Marian Hobbs) 
: Please could you take a seat. I will read to you Speakers’ ruling 44/1 on the question of relevancy: “Because a matter is incidentally mentioned”—namely the name of the bill that is being amended—“in the course of a debate … does not justify discussion on the …” Building Act. 
PHIL HEATLEY 
: I raise a point of order Madam Chairperson. Clause 40 involves amendments to the Building Act and I am speaking about amendments to the Building Act. 
The CHAIRPERSON (Hon Marian Hobbs) 
: You are not speaking about the appropriate amendments to the Building Act—the ones in this bill. 
PHIL HEATLEY 
: Who judges what is appropriate? 
The CHAIRPERSON (Hon Marian Hobbs) 
: It is whether it is written in this bill. 
PHIL HEATLEY 
: I appreciate that members are not allowed to talk about affordable housing solutions in the debate on the Affordable Housing: Enabling Territorial Authorities Bill nor about Building Act amendments when the clause is about Building Act amendments. I will move on to clause 41 dealing with amendments to the Housing Corporation Act. 
I shall remind members of the Committee of clause 35 in Part 1 to which clause 41 “Amendments to the Housing Corporation Act 1974” in Part 2 directly relates. Clause 35 refers to covenants being made void. They are covenants across developments that would otherwise restrict social housing from being provided. For instance a builder with a development of 100 houses might put a covenant across the property to say that no Housing New Zealand Corporation houses may be built there and none of the houses may be sold to Housing New Zealand Corporation. Certainly National as we said earlier supported the intent of the legislation to make such covenants void but we did mention that there is no doubt that when Housing New Zealand Corporation purchases 100 houses in a subdivision of 200 houses that is of huge interest to the local community and it ought to be consulted on and considered. So although National supports the idea of voiding such covenants we do make that point. A case in point is the Hobsonville subdivision where 400 to 800 State houses are being built. The local community is very upset about that. There has been no consultation at all and it has caused a lot of angst in the local community. 
I now move to clause 42 which does not address issues to do with the Building Act and does not address issues to do with affordable housing solutions. It is well worth canvassing because it deals with amendments to the Local Government Act 2002. This clause does not deal with development levies. Development levies are charges to builders and developers that in some cases are spread across property developments throughout the country driving up the cost of properties and driving up the cost to first-home buyers of building houses because in the end they pay the development levy through the added cost on to their homes. That is not what this clause is about. This clause is not about the Local Government Act driving up the costs of first-home buyers. This clause is about an amendment to section 102(5) of the Local Government Act by adding the following paragraph which is a fascinating paragraph indeed: “(c) an affordable housing policy under the Affordable Housing: Enabling Territorial Authorities Act 2007.” It has no mention of development levies or anything like that; there is just that mention of that amendment. 
JACQUI DEAN (National—Otago) 
: 
 Earlier in this debate I made a note to myself on the Order Paper—as members do—in response to one of your rulings Madam Chairperson. The note said that I thought this Affordable Housing: Enabling Territorial Authorities Bill was about providing solutions. I thought Part 2 was about making amendments to other enactments that enhance and underpin the aim of this bill which is to make housing more affordable for people. 
Phil Heatley 
: Don’t talk about that. 
JACQUI DEAN 
: You see I made a note to myself earlier on in this debate during the debate on Part 1. As I think about things I like to note them down in case I get an opportunity to speak again. My note was that I thought this bill was about providing solutions. But apparently we are not supposed to talk about that so I will move on to Part 2 “Amendments to other enactments” and to the amendments to the Building Act 2004. 
I started my contribution to the Committee stage by keeping it local so I will go local again and I will go back to the Waimate District Council and its grappling with the Building Act. I had a letter from the chief executive of the Waimate District Council Tony Alden outlining the compliance costs that his small rural local authority has to meet in terms of audits long-term council community plans and most specifically compliance with the Building Act 2004. The Waimate District Council if it decides—because this is an enabling bill and is about providing solutions—to undertake a housing needs assessment will have to apply the consequential amendments to the Local Government Act 2002 and the Building Act 2004 but that will be at a cost and at a time when councils like Waimate’s are grappling with accreditation and coping with the poaching of their planners and engineers by larger authorities. The Government has created a trade in planners because of the Building Act. There is not only a shortage of planners but a trade in planners. Small rural local authorities are the very ones that are least able to cope with the requirements of this so-called enabling bill which has the so-called purpose of providing solutions. National can see only problems and costs with this bill. 
The amendments to the Building Act will not just happen by themselves. The Waimate District Council if it decides to undertake a housing needs assessment will require a great deal of work from its one planner—if it has a planner. I do not whether it does at the moment because sometimes in small authorities those positions remain vacant for a time and they have to bring in consultants. That is life! The Government’s changes in the Building Act have created a market for planners and engineers and the small local authorities are the ones that miss out. So my Waimate District Council will struggle with these amendments to Building Act 2004 should the council decide to have an assessment—because this is an enabling bill with the aim of providing solutions which apparently we are not to talk about but they are there none the less apparently. It will struggle with these amendments to the Housing Corporation Act 1974 and these amendments to Local Government Act 2002. This bill will come at a cost to the ratepayer. 
JOHN CARTER (National—Northland) 
: 
 Allow me to beaver away to see whether I can stay within the rules that you have set Madam Chair. 
The CHAIRPERSON (Hon Marian Hobbs) 
: The rules have been set by the House. 
JOHN CARTER 
: Of course they have Madam Chair and I will do my very best to comply with them. 
I want to talk to clause 42 “Amendment to Local Government Act 2002” and draw to the Committee’s attention that subclause (2) amends schedule 10 by inserting new clause 7A which states: “Affordable housing policy—A long-term council community plan must contain a summary of the local authority’s affordable housing policy if …”. I want to talk about that word “if”. 
Sandra Goudie 
: “Eff”? 
JOHN CARTER 
: Call it what you like. However it is pronounced that is the word I want to focus on. That word is the nub of this whole bill. We are here tonight talking about something that may never happen. This bill and particularly this subclause says to local government: “If you want to then go ahead and do it if you think it’s important and if you think it’s necessary. If you don’t want to do it then it does not matter.” Councils do not have to focus on it or talk about it or put it into their long-term council community plan—only if they want to make the comment. That word “if” is the nub of this whole debate. 
John Hayes 
: “Eff”? 
JOHN CARTER 
: The Committee should be talking about this word “if”—or “eff” or however one wants to say it. To me that one little word makes that clause meaningless. Local government up and down this country is saying to this Parliament and said so in its submissions: “Not interested thank you very much. We aren’t interested because we can’t do what this bill asks us to do.” When the bill says “if you want to” we have had a response from local government right across this nation saying “Nope.”— 
Hon Member 
: “Eff”? 
JOHN CARTER 
: —with rare exceptions; there were one or two. No we are not saying “eff off” but the fact is local government has rejected it. We have to ask ourselves why if we put a bill out before local government and they come back to the select committee and say “No we don’t want to be involved and if you give us the option of not being involved then we’re not going to.” this Parliament would ignore that advice from local government. There does not seem to be any sense in it. 
The problem that local government authorities have up and down this country is that they are met with increasing costs. We are going through another ratepayers’ revolt and one of the issues that local government authorities raised with us is that if this bill gets imposed on them and if they have to follow it and undertake to do the work then that will add more costs to their ratepayers. They were asking collectively why they should have to be responsible for social housing. They said they think it is a Government responsibility generally. Certainly that was the view of the smaller local authorities. They say that if they have the option then they do not want to have to be responsible thank you very much. They say they will not put this sort of thing in their long-term council community plans. 
I say that is the tragedy of what we are debating tonight. Some people will be listening to the debate on their crystal sets thinking that this Parliament is going to address the issue of affordable housing and their expectations will be raised. Unfortunately they will turn to their local authority and ask whether it is going to do that. The local authority will say: “Nope the Government said ‘if’ we want to and we are not going to. We are not interested. You’re not going to get it.” What a shame! 
JOHN HAYES (National—Wairarapa) 
: 
 I wish to continue the theme in the speech made by my colleague John Carter but first of all I turn to clause 40 “Amendments to Building Act 2004” and pick up on the theme in the speech made by my colleague Phil Heatley our housing spokesman. I support his comments that it is really unfortunate that this legislation does not provide for greater amendments to the Building Act. 
Clause 40(2) amends section 49(2)(b) of the Building Act by adding the word “and”. Subclause (3) amends section 49(2) by adding paragraph (c): “if section 28 of the Affordable Housing: Enabling Territorial Authorities Act 2007 applies”—if it applies—“notification under section 28(6) of that Act.” 
I think that a number of other amendments could have been made to the Building Act to help us secure more affordable housing. We could for example have amended the Act to reduce the cost of building permit charges applied by territorial authorities. You see what seems to be happening amongst my five district councils in the Wairarapa electorate is that they are being asked to cover their backsides with such a lot of— 
Hon Member 
: Bumf. 
JOHN HAYES 
: —bumf that they are having to make huge charges and are requiring vast amounts of information that are not necessary for the task of building things. So I feel that this legislation could amend the Building Act in order to reduce the cost of permits by requiring less information. 
Secondly I feel that the legislation could amend the Building Act to reduce the cost of resource consents. In the last year for example the South Wairarapa District Council in my electorate found fit to charge a constituent in Greytown where I live $900 for a resource consent to build a hen house that would take five hens—$900 for a hen house to accommodate five hens. I think members would agree with me that these sorts of charges unnecessarily add to housing construction costs. 
The next area where we could ask for an amendment relates to clause 40. The amendment would require that there be less responsibility on the part of councils to collect 20-page and 30-page sets of plans for very simple dwellings. If we are to build affordable housing we need such an amendment. The planning framework at present requires far too much on the part of builders. I am told that the cost of applying for a building permit in my electorate from any of the five councils begins at $7000 per house. 
I move on to clause 40A “Amendments to Goods and Services Tax Act 1985” and I pass on the thoughts of many of my constituents that this Act could be amended in such a way as to remove the cost of GST from the purchase of first homes. I am doing that on behalf of my constituents not on behalf of the National Party or myself. The idea has been suggested to me by constituents and it could be addressed by an amendment to clause 40A if the Government were serious about reducing the cost of housing. 
If we look at clause 41 “Amendments to Housing Corporation Act 1974” we see that again we are not being asked to make any significant amendments at this point in the legislation except for subclause (3) which amends section 3B of the Act by adding new paragraph (c) which states: “to arrange for territorial authorities applying the Affordable Housing: Enabling Territorial Authorities Act 2007 to receive appropriate advice and information of a policy or other nature about housing and services related to housing.” 
This legislation is totally unnecessary. That clause delivers absolutely nothing to the people of my electorate. It will make no difference whatsoever to the cost of their housing except that it will add to construction costs. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I would like to follow on from my most eminent colleague John Carter who spoke about clause 42 “Amendments to Local Government Act 2002” and particularly about new clause 7A “Affordable housing policy” which is to be inserted in schedule 10 of that Act by clause 42. This is Mr Carter’s famous “if clause” and it states: “A long-term council community plan must contain a summary of the local authority’s affordable housing policy if it has adopted one under the Affordable Housing: Enabling Territorial Authorities Act 2007.” 
What I understand that to mean is that there is no way that a council could actually consult on an affordable housing scheme in conjunction with a long-term council community plan. It would have to run a separate process in time to catch the process of a long-term council community plan if it wants to include a summary of the affordable housing scheme within the long-term council community plan. So in actual fact it will have to either wait for another 3 years before it can do its long-term council community plan or run it in a pretty condensed time frame through a consultative process with its community to try to get it in the next round of a long-term council community plan. 
So in spite of the comment made earlier by a speaker I do not see that there is any way that an affordable housing scheme could go through a consultative process in tandem with a long-term council community plan. That just adds another cost because the council would not have that advantage. If it wants a summary then it will have to do all that work beforehand and it will not be able to run it concurrently. So there we have that separate cost of consultation and of course the hundreds of thousands of dollars that go with that. Councils have already said that there are 60-plus pieces of legislation that already add about 6 percent to the rates bill as it is. 
Further in speaking to Part 2 I am looking at the commentary on the bill with regard to the amendments to the Goods and Services Tax Act 1985. As my learned colleague John Hayes mentioned there was a recommendation for the inclusion of new clause 40A which would make consequential changes to that Act. There are two main effects of the recommended amendments. The commentary states: “Under new clause 40A(2) when a person undertaking a development made an affordable housing contribution payable to the territorial authority the authority would be deemed to supply goods and services to the developer. Under 40A(3) when a contribution from a person doing a development was in the form of land both sides of the arrangement would be charged at a rate of zero percent.” The commentary goes on to state: “These amendments should”—not “will” but “should”; ever hopeful—“reduce compliance costs for all parties.” 
Well it quite patently will not. It will not do anything in terms of reducing compliance costs. If we look at what compliance costs are we see that they are the costs of applying for a resource consent and the process that one has to go through to do that and hopefully the consent process is not challenged. That is a compliance cost. Then the cost of building consents for actually putting any housing on the subdivision if that is what one is doing is a compliance cost. So I do not see that having a GST rate of zero percent will do very much at all because a person is already incurring all those other costs and they are not being changed in any way shape or form. 
I refer to the comments made earlier by my learned colleague Phil Heatley who talked about development contributions which are another compliance cost that will not be addressed by this bill. 
Phil Heatley 
: They listen to me! 
SANDRA GOUDIE 
: Oh we absolutely do listen. You know the tragedy of it is that those members on the Government benches are not listening because they do not understand this stuff. They cannot get their heads around the simple cost of doing business because all they can see is the profit line and they hate that. Businesses making a profit is an anathema to them. So we are looking at amendments that “should” reduce compliance costs and at the word “if” which John Carter was fixated about in clause 42 “Amendments to Local Government Act 2002”. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak to Part 2 of the Affordable Housing: Enabling Territorial Authorities Bill and to address specifically the amendments being made to the Local Government Act 2002 in clause 42. This clause amends the Local Government Act and I will tell those people who are listening out there to this debate what it does. Clause 7A “Affordable housing policy” which is to be inserted in schedule 10 of that Act by clause 42 states: “A long-term council community plan must [now] contain a summary of the local authority’s affordable housing policy if it has adopted one under the Affordable Housing: Enabling Territorial Authorities Act 2007.” 
Government is about providing leadership and about providing the tools to achieve certain goals in that leadership. Clearly the leadership that we are trying to achieve here is to provide and increase the supply of affordable housing. I am guessing that the aim of inserting clause 7A is to help achieve that goal. I have some questions for the Minister in that regard. I ask the Minister in the chair the Hon Maryan Street how many councils indicated to us in their submissions that they will be looking to include a piece on affordable housing policy in their long-term council community plan. 
Jacqui Dean 
: How many? None. 
CHRIS TREMAIN 
: None. So here we are introducing legislation with the aim of increasing the supply of affordable housing by introducing a clause into Part 2 of this legislation and changing the amendments to the Local Government Act and taking up Parliament’s time to do something that will not achieve the goal that we set out to do. So I ask the Minister a second question. Did we do any analysis of the cost to local councils of doing an affordable housing policy? 
Phil Heatley 
: No but Local Government New Zealand did. 
CHRIS TREMAIN 
: Did it? And what was the cost there? 
Phil Heatley 
: It blew out in the case of most council’s plans. 
CHRIS TREMAIN 
: OK. I have another question for the Minister in relation to this long-term council community plan policy. If a council already has affordable housing within its boundaries—as the Napier City Council does—but does not intend to expand its affordable housing will it now have to include a piece in its long-term council community plan about how it manages that affordable housing? That is an interesting question. And I ask the Minister this: in doing this legislation in the analysis—in the projections that have been done for the cost of implementing this legislation—how many affordable houses are proposed by local governments around New Zealand? Were there indications from those who submitted that they would be going down the track? Maybe there were 150 in Auckland or 60 in Taranaki? I have another question for the Minister in regard to the long-term council community plan and the analysis that was done. How many families will benefit from this? 
The point I make—and I will finish on this—is that Government is about leadership. Yes there is a problem in this country about affordable housing and we have gone through this legislation with the aim of doing something to improve the lot of people by providing affordable housing. But the clear fact is that there are very few if any local governments that will actually do anything about the amendment that we are proposing to the Local Government Act 2002. They will do nothing. This is a complete waste of time. Thank you. 
Hon RUTH DYSON (Minister for Social Development and Employment) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 67 
New Zealand Labour 49; New Zealand First 7; Green Party 5; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Part 2 agreed to. 
Clauses 1 and 2 
PHIL HEATLEY (National—Whangarei) 
: 
 Thank you Madam Chair. You have treated me with an even hand I very much appreciate that. I am delighted to take the opportunity to speak about solutions to unaffordable housing having been restricted in doing so—for a very good reason—to this point. 
I have been very surprised that the Minister in the chair Maryan Street has not made a single contribution this evening and I query that. She came to Parliament and has been upheld as a politician with a purpose and I certainly respect that but she has brought two pieces of legislation to this House. In the first one she wanted landlords to pay the cost of damage caused by tenants’ guests even though landlords have no control over whether tenants invite guests into the property and if they do over who the guests are when they come and what they do. She also wanted landlords to pay for accidental damage caused by tenants even though there is no way of proving whether the tenants did the damage accidentally or deliberately or of establishing what happened. This Minister brought that legislation to the House but it did not get the support of this very wise Parliament. Now she brings this Affordable Housing: Enabling Territorial Authorities Bill into the debating chamber and we have not heard a squeak out of her. I want to know why that is the case. Is she ashamed of the legislation? Has she read the legislation? Does she understand what this legislation does not do? 
I put it to the Committee this evening that this bill rather than giving the opportunity for first-home buyers to get affordable housing when they are under financial pressure or cannot get a deposit together to do so is about ifs buts and maybes. It essentially says that councils may—they do not have to but they could do so if they want to—provide affordable housing in their districts. If they do decide that they want to provide it they have to do an affordable housing study. That involves councils possibly going to various community groups depending on what they want to do or whom they may like talk to and putting together an affordable housing plan. Then if they decide that yes it is worth going forward or that maybe it is not worth going forward or that perhaps it may be worth taking a bit of a punt they may or may not require developers to set aside 10 percent of their land and put it in a land bank for affordable housing. 
But councils may decide they do not want to do that. They may decide get developers instead—perhaps—to write out a cheque in lieu of the land and put the cheque into a trust for affordable housing. Or—perhaps—councils may change their minds and decide that rather than doing that an alternative could be to get the developer or builder to build affordable houses in lieu of providing land or cash and put them into a trust for first-home buyers. Of course that ignores the fact that builders or developers if they set aside land or pay cash in lieu or—perhaps—build affordable houses themselves will take a financial hit and will therefore have to regain the profit or income they have lost because of those additional costs. That will mean putting up the prices of all the other houses in the development. Ninety percent of the buyers will pay more for their houses so that the costs are lower for those who may or may not get the opportunity to buy an affordable home if a council does or does not decide to have an affordable housing policy. 
That is the kind of policy that may be enacted tonight and if this legislation is enacted councils may or may not choose to use its provisions. If they do developers may or may not set aside land or provide cash in lieu or build houses themselves. Builders may or may not choose to do that if a council decides that it will or will not have an affordable housing policy. 
The interesting thing in all this sort of “perhaps-ness” is that councils have this wonderful opportunity—and there are two of them in this country that may or may not forge forward and take up the provisions of this legislation. 
Hon Member 
: Who are they? 
PHIL HEATLEY 
: I do not remember their names but I do remember that there are over 72 district councils across this country and two of them have said clearly to the Local Government and Environment Committee and have written to me and said clearly that they will definitely maybe take up this offer and are delighted to have this opportunity. That is good news for first-home buyers! 
National on the other hand says we definitely will give people tax relief so they will have more money in their back pocket because we understand that take-home pay is what pays a mortgage. National has said we will get interest rates under control because we know that even a 1 percent interest rate cut on an average mortgage is worth about $40 extra a week let alone a 2 percent interest rate drop which would mean about an extra $80 could go towards a mortgage so there is no housing pressure. On the one hand we have something that is in the ether and could happen. Some councils might take up the provisions of this legislation; if they do it is good luck to them and if they change their minds well that would be like a lot of things promoted in it. On the one hand there is whole lot of uncertainty and on the other hand the National Party leader is saying take-home pay matters and interest rates matter and those are the things we would address first. 
First-home buyers those who are looking for a home are under pressure. We know that property prices across the country have stabilised recently and have in fact dropped in many parts of the country. But they are still at a point well above what most young people can afford. That is also true for elderly people who would like to own their own home in their retirement. What is the Minister going to do about that? I do not know. She may speak tonight. She may not speak tonight. She may change her mind after the debate has closed and discover that it is all too late. I do not know what the Minister thinks and I wish she would take a call this evening. At least John Key says National will address the things that matter—the things that will affect all New Zealanders whether they want to buy a house or have bought a house and whether they are young or elderly. John Key will address the issues that matter and those are ensuring that take-home pay can service a mortgage and getting interest rates under control. 
Of course there is a bunch of other policies that we will be supporting but we cannot support this legislation. We actually do not know what use it will be. We do know that it could force up the property price of every other house on a subdivision if a council does take up the provisions of this legislation. We do know that councils right across the country have opposed this legislation because they feel that it will add more costs to their own bureaucracy and therefore to their ratepayer base. We do know that many many community housing organisations across the country are opposed to this legislation as well for a variety of reasons. But we do not know whether if this legislation does pass tonight any council will take up its provisions and any first-home buyer will get any benefit from that. 
In my earlier speech I did point out one thing which is that the genesis of this legislation actually came from the Queenstown Lakes District Council which does this voluntarily. Developers and builders there voluntarily set aside some land or cash or cheap buildings so that they can house nurses teachers police and hospitality workers for example who would otherwise find it very difficult to afford housing in Queenstown. Affordable housing is provided on a voluntary basis down there and that works very very well but the Labour Government feels it needs to legislate. Why does it need to legislate if Queenstown Lakes District Council is doing it already? That is a question that the Minister could answer. Why legislate when a council is doing this already on a voluntary basis in order to address a particular problem in a particular community in our country? Why legislate and why does the legislation give councils so many choices that it means affordable housing may or may not happen? Why legislate on something that is already able to happen under the current law? At the moment we have a situation where as I said Queenstown Lakes District Council can provide affordable housing already. 
I had an interesting email during the course of the debate which I would like to read to the Minister. This is from a builder somewhere in New Zealand. He was quite fascinated by the speeches that have been coming forth from this Chamber this evening. I hasten to add that the only party whose members are making any speeches is the National Party. However this is what this great New Zealander said: “Labour members do not want to acknowledge or choose to ignore that if you force developers and builders to provide low-cost sites it will only force the price of other sites higher thus reducing the affordability for other buyers. If you force builders to provide low-cost sections it will only force the price of other sections up thus reducing the affordability for other buyers.” Well I could not put the situation more succinctly than that. That is the problem. Essentially if district councils take up the opportunities available under this legislation—they may choose not to but if they decide to go forward after perhaps doing some consultation with the local community—in fact that may end up driving up house prices in a district rather than giving opportunities to first-home buyers in that district. 
This bill is one of a number of initiatives that appear to have turned to custard when this Government talks about affordable housing. Members will recall the discussions about Hobsonville. This bill came out at the same time as an announcement that about 450 sections in Hobsonville would be available for first-home buyers. Those sections and houses will cost $350000 to $370000. People will require a household income of $70000 to $75000 in order to be able to purchase one. I remember asking the Minister Maryan Street in the debating chamber one day whether she thought that low to middle-income earners would be able to afford one of her so-called cheap homes in Hobsonville if the home costs $350000 and it would require a household income of $75000 to service the mortgage buy food fill up one’s petrol tank and buy a block of cheese. She said of course low-income and middle-income earners would be moving into the houses at Hobsonville. I argued that low to middle-income earners do not earn $75000 per annum and that is where the debate was left. 
Perhaps the Minister could take a call and address that particular issue because I am still intrigued as to whether she considers that a low-income earner does earn over $70000 a year. My understanding is that low-income households earn nothing like $70000 or $75000 a year and low to middle-income earners cannot afford to buy $350000 houses even if the Minister puts a sign on the house saying it is a good cheap deal. Even if the Minister does put a sign on a house saying it costs $350000 it is cheap and it is a good deal I tell the Minister that most New Zealanders will not accept that. They do not believe that. That is far out of reach for them. 
So the Minister has a lot to answer for with regard to this legislation. She can tell us first of all why so many councils opposed it and why so few are supportive of it. She can tell us why it is voluntary. How is the Queenstown Lakes District Council able to provide affordable housing already? Why do we need legislation if that is in fact the case—or is she saying that council is breaking the law? And what is the answer to those builders out there who say as this gentleman—or woman—so aptly put it: “If you force builders to provide low-cost sections it will only force the price of other sections up thus reducing the affordability for other buyers.”? What is the answer to that builder? I would have thought that what that builder says is in fact the case. Perhaps the Minister in the chair Maryan Street can answer those questions. 
Hon MARYAN STREET (Minister of Housing) 
: 
 I rise to take a short call simply because of the inanity that we have been hearing from members on the other side of the Chamber which clearly shows that an understanding of the really significant issues around affordable housing seems to elude the Opposition members. John Carter said earlier that the significant word in this bill was “if”. He is absolutely right. The Affordable Housing: Enabling Territorial Authorities Bill is voluntary; it is voluntary for territorial local authorities. If it is not to be voluntary then I would ask Mr Carter what the alternatives are. If it is not to be voluntary then would the National prefer that it be compulsory? That is one of the options. The National Party says it would not like to make the legislation compulsory and certainly we do not wish to make it compulsory because we know the territorial authorities do not want that. 
What other choices are available? If National does not want this legislation to be mandatory and does not want it to be voluntary the third choice is to do nothing. And that is what I hear coming from the Opposition in every discussion about affordable housing. I hear it say we should do nothing about affordable housing. I hear the Opposition say we should do nothing about the people who by now ought to be in a position to be able to afford their first house except that in the last 5 years the price of houses in the market has escalated by some 80 percent—80 percent. So a number of measures are required in order to make sure first-home buyers once again have a chance to get into the housing market. One of the options that has been put up is this bill. It is a voluntary bill; it does not mean that territorial authorities have to go into anything. 
But I can give members a very good example back—[ 
Interruption 
] It is clear those members are not interested in answers. Mr Heatley asked a moment ago about whether this bill was relevant to the Queenstown Lakes District Council which was in fact in the process of putting out affordable houses anyway. Well I just draw that member’s attention to some current affairs that I would have thought one of his colleagues the member for that area could tell him about. However she has not done so. The fact is that the Queenstown Lakes District Council is currently being taken to court by a developer for trying to do this kind of thing without having the legislative backing to be able to do it. Now let us hear some of the responses on that. Let us hear some of the ignorant comments that have come out from the Opposition be tempered with a little fact. This bill is needed because local authorities are actually being taken to court by developers for trying to provide affordable housing within residential developments. 
In the brief time I have left available to me I will give members a couple of other examples. I understand that Tasman District Council has recently voted against putting together an affordable housing plan which it had voluntarily decided to put up to its council members. It has chosen to vote against that. Right next door I understand the Nelson City Council has put aside $40000 because it wishes to put a plan together. It is allocating some funding in order to put an affordable housing plan together. I would suggest that the Nelson City Council is likely to benefit from having an affordable housing plan to the detriment of Tasman District Council right next door which may choose not to have such a plan. 
If councils have that opportunity and that choice then where is the Opposition’s problem? I will tell the Committee what the problem is: we need more affordable housing in this country. And one of the things needed in order for that to happen is this bill. Tax cuts will not do it. The tax cuts proposed by the National Party will be eaten up by Maurice Williamson’s tolls on roading every week. 
DAVID BENNETT (National—Hamilton East) 
: 
 When we hear that weak Minister in the chair the Hon Maryan Street talking about doing nothing we can look at this legislation and see that the Labour Government has taken 9 years to put forward legislation on affordable housing. It has taken 9 years at a time when New Zealanders have had a housing market they have not been able to be in. They have not had the opportunity to buy the Kiwi dream to set up a family home for their children and to partake in the capital gains that they would get as members of the home-owning community and this Minister puts forward this legislation in the last week of a dying Government. Well that is simply not good enough. If the Minister wanted to help those people and if she wanted to provide affordable housing then she should have done it a long time ago. If she had done it a long time ago the Government would have worked out what actually makes the difference in affordable housing. 
The Government does not understand the difference between income and equity. The Government of the day believes that if it gives equity advances it will assist people into housing. Well the reality is that the biggest thing dictating whether people can get a loan and therefore whether they can get a house is the income ability of the individual or the family. The ability to service a debt is the key ingredient in getting a loan. People can go and borrow 100 percent from a bank if they want to but the Government of the day believes it is about the equity people put into the purchase of a house not their income-earning ability and their ability to repay the loan and pay the interest on their debt. 
That is the difference between National and Labour. The National Party understands business. We understand that if one has income in the hand then as a member of the community with that income one can go out and buy a house. If a person is just given capital commitments then to a large extent it will not make any difference to his or her ability to purchase a home in the current environment. 
When we look at the current environment we see that the Labour Government has done one thing to make housing affordable in New Zealand—it has destroyed this economy. It has absolutely and criminally destroyed this economy to make sure that we are in recession at a time when we should be growing. With that recession the housing market has declined and it is making houses affordable through its economic mismanagement of the New Zealand economy. That is the reality of what is going on out there. 
But the great thing about that from Labour’s point of view is that the Government is also taxing those hard-working New Zealanders who need some income in their hands to take advantage of the lower market. And what is the Government doing? The Government taxes individuals and families meaning that they cannot go out there and purchase properties because all their money is going towards paying for the Government’s promises at election time—promises brought in to try to win election after election. 
Government members do not care about affordable housing. They do not care about New Zealanders getting in there and buying their first home. They do not care about families having an asset that they can all treasure and build upon. All they care about is promises that they can go out to an election campaign with—false promises based on equity and not the income ability of an individual or family. 
That is the point of difference between the parties and that is why New Zealanders are struggling to get into homeownership. The answer to that problem is to have a strong economy and only National will deliver that. If we have a strong economy then we can deliver strong and successful wage increases and that gives individuals and families the ability to go out and purchase properties. Without a strong economy individuals and families do not have that ability to purchase. They stagnate just like their country is stagnating under this Government and the people of New Zealand find that they cannot access homeownership. 
Affordable homeownership is more about how one runs an economy than about how one actually dictates the rules of the game. It is about how one gives New Zealanders who want to purchase their own home a chance to go out and do it themselves. That is the real nub of making housing affordable in this country as it is in any other country. The Government will not though the whim of a piece of paper make housing affordable. That is why this legislation is all a lot of ifs maybes buts whatevers and whoevers and nobody is taking it on board because the reality is that the market the councils and the individuals know that they need income streams to have affordable housing. 
JOHN CARTER (National—Northland) 
: 
 I recently heard somebody say that this Labour Government had done a lot for health. I thought that was an interesting observation so I asked the person to explain. The reply was: “It has. It has made lots of people sick.” Well I thought the person had probably got it right. 
I heard the Minister in the chair the Hon Maryan Street just say that she wants to do something for people so that they can have more affordable housing. Well the sad thing is that this bill will actually distance people from that objective. That is what is disappointing about this legislation tonight. 
Earlier during the debate on Part 1 we heard a very good dissertation on clause 6 about the fact that what we are doing and what we should be doing is working with industry to see whether we can provide good but small and less costly homes—affordable homes that are not so pretentious but are still secure dry safe warm and healthy though maybe of a smaller size. The Minister in the chair at the time suggested that starter homes be two-bedroom homes. There is nothing wrong with that. In our generation a number of us started that way. 
There are companies around that are prepared to provide those sorts of homes. In fact a company up north is starting off with a house that will have three bedrooms but will not be large. It will have all the facilities and will be warm and dry and it will probably be put on the market for about $120000. By the time the cost of a section is added in it will be somewhere between $180000 and $200000. That is within reach of a lot of people. We heard a very good dissertation on that. 
Then in the debate on Part 2 we heard a very good dissertation on clause 42 and the issue around the word “if”. I know that we had that dissertation because I made it. Both dissertations were very good I have to say. 
But the disappointing thing is that this whole issue is likely to move us further away from the objective rather than achieve the goal the Minister wishes to achieve which is to make housing more affordable. If we could have argued here tonight that this bill in itself would somehow or other allow young families or those who are starting families to get into their first home and if this bill gave them that step then we could support it. We could actually say that yes there is merit in it. 
Remember it is not something that local government has to do; it is an option and so far I think only two have suggested they might take an interest in it. One is led by Bob Harvey the Mayor of Waitakere City who is inclined to support Labour Government legislation. Only two local authorities might get involved—and there are only two that might. That means that nothing will be achieved other than that some people will have their expectations heightened because they will think the Government has put through a bill that will make housing more affordable. 
If this legislation is implemented it will actually put on more cost on; it will not take cost away. We would happily have worked with the Minister and the Minister for Building and Construction to take away compliance costs. We heard tonight that it is estimated that the cost of getting a permit to build a home is now on average about $25000. Just to get a section with all the costs around resource management and other costs is about $50000. That is before starting to build—just in compliance costs. That is a total of $75000. We would happily have worked with the Minister to see how we could reduce that. We would have worked constructively with her and her colleagues to achieve that because $75000 is a lot of money for a lot of young people—for most people actually. 
We would quite happily have worked away with her and local government would have come to the party to see how it could help reduce costs. Already there are ways in which that can be done but unfortunately this bill does not address any of that. All it says is that if local government wants to it can consider affordable housing and if it wants to it can include it in its long-term council community plan. If it wants to it can do an assessment and if it wants to it can talk with developers. Well actually local government has the opportunity to do that already. This bill will not achieve any of that. 
TIM GROSER (National) 
: 
 In some respects I have some sympathy for the position the Minister is in. She has just been appointed to this position recently after God knows how many disastrous predecessors. She has inherited a problem the roots of which are deep and substantial and she has been told to come up with legislative sleight of hand masquerading as a substantive solution. Frankly the time left for a substantive solution to the things actually driving this problem has long since disappeared. What we have left is a political fig leaf and it will not cover the reality of the problem the Government will confront when finally it is forced to confront the electorate and face the decision of the New Zealand people as to who is to govern them for the next 3 years. 
We have with this bill an empty vessel almost wholly without content. Let us look at the language. It is childlike in its simplicity. We have bold declaratory language leading absolutely nowhere. Clause 6(1) is my favourite—“Territorial authorities that want to find out whether there is enough affordable housing”. I have never heard anything more childlike in its simplicity than that clause. Clause 8(1) states: “A territorial authority that decides to assess the need for affordable housing … must choose the method”. Well what on earth would it do? I have never seen anything so amateurish so childlike and so thin. But of course I understand the problem because the roots of a solution would have had to be taken years ago by this Government and this Minister who is in the unfortunate position of receiving a suicide pass on an issue of fundamental importance to the New Zealand people has come up with a completely empty vessel. 
Let us examine what the real problem is and put some numbers around it. In 1999 a median-priced house in our country cost just over six times the median wage. By 2006 this cost had catapulted to 10 times the median wage and it is higher today. In 1999 it took 42 percent of the average pay to service a mortgage on the median house price. Today it takes around 81 percent and that is after people have saved 20 percent for the deposit which of course by definition is a larger sum of money. It is no wonder that New Zealand is now one of the least affordable places in the world to find a house. 
If members of this Government think that this political fig leaf this legislative sleight of hand that they are forcing through in the dying days of this Parliament [ 
Interruption 
]—under urgency I say to Mr Cosgrove—will fool anyone then I say to them that the only people it will fool I am afraid are themselves. They will find this out the hard way on the hustings in a matter of weeks. The day of reckoning is right before them in all their electorates— 
Hon Clayton Cosgrove 
: Bring it on! 
TIM GROSER 
: —including Mr Cosgrove’s. 
The Minister said that this bill is voluntary and she asked what the alternative is. I will tell the Minister what the alternative is. The alternative has nothing to do with this approach. The alternative has to do with coming to grips with high interest rates. What has driven high interest rates? It is an inflation rate that has been divided up into two sectors for the last 5 years—the traded sector and the non-traded sector. 
The one thing the Government had control of if it had wanted to attack the roots of this problem was non-traded sector inflation which has been nearly above 4 percent for 5 years. But that would have meant tackling the gorilla in the room—the role of the Government—and tackling the need to do something to reverse the disastrous slide in productivity that is behind this problem. Having seen the Government do nothing on that front for 5 years we now see entering from stage left a massive inflationary injection from the traded sector which—up until now—with the higher exchange rate we had and with constant price depreciation from the manufacturing plants of China helped to contain inflation. But it has now gone berserk in the opposite direction. We now have imported inflation adding to the additional problem that this Government never tried to resolve and never tried to get on top of. These are the real solutions to the problem not this phoney legislation. 
DARIEN FENTON (Labour) 
: 
 I move  
That the question be now put 
. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to be able to take a call. I was appalled by the Minister’s previous speech to the Committee on this bill. It alarmed me in the sense that if councils can do this already—address the problems of housing affordability—then they should be left to it. We do not actually need legislation to say to councils that if they want to do this they can. That is just an absolute nonsense. 
The Minister then said in terms of the affordable housing scheme that if a council has a scheme then all the developers can be blackmailed by that scheme to participate. When we start looking further into this bill we see that it gets worse and worse. If developers thought things were bad now—and when I say “developers” I mean people who want to do the business of providing housing for our many many communities in their own way and that is a worthy endeavour—they can see that we are now putting in place yet another hurdle for them. 
I direct members to clause 34. You know if developers are scared they will be even more scared by all this. In the event of a dispute it will be the Environment Court that decides. Clause 34(1A) states: “This section applies to a person described in subsection (2) if the person considers that there is a conflict”. Subclause (2) is headed: “The persons are—” and the list includes the Minister for the Environment and the Minister of Housing. 
Well we know what it is like when a Minister suddenly gets pulled into a consent process dispute. We need only look at the Whangamata marina to see what a mess the Minister of Conservation made of that and here we have the potential for that same event to happen again with the Ministers not being able to help themselves and making matters worse by poking their noses in. The mere fact that the Environment Court will decide the outcome in the event of a conflict means that the affordable housing scheme just gets worse and worse. If a council has one and if people want to build houses for their communities they should look out because that will really bite them where it hurts. 
I refer members to the commentary on the bill. We talked about ifs—that is the fact that adopting a scheme is optional. The fact that the Minister says “if” makes it voluntary. If it is voluntary and councils can do it now if they want to why do we need legislation? It is absolutely dumb and the Minister just does not get it. The public gets it. Both Phil and I have received emails and texts from people saying: “We hear what you’re saying. Good on you. Go for it. How dumb can they be?” and we totally concur with those sentiments. We are getting those sorts of emails and texts now. 
When I was reading out some of the parts of the commentary on the bill earlier on we talked about the provisions with regard to GST. The Minister said that the bill “should” reduce compliance costs. Well hello—talk about hopeful and wishful thinking! It “should” or maybe it will but we do not think so. Quite frankly this bill will do nothing but increase compliance costs. When we look at the consultative processes that local authorities will have to go through just to provide an affordable housing scheme we see that the costs are absolutely huge. Local authorities have to do a full cost-benefit analysis apart from all the other things they have to do that are set out in the different parts of the bill. It will be another huge cost on local authorities to get that expertise in order to pull all that information together. 
Hon Clayton Cosgrove 
: Have you written this speech on your cast Sandra? 
SANDRA GOUDIE 
: Perhaps that Minister might like to take the opportunity to read the bill and maybe to develop a bit of an understanding of it because the Minister of Housing has absolutely no idea of the definition of a compliance cost. If she did she would know that all this bill will do is add compliance costs. 
This bill does not address the cost of a resource consent the cost of a building consent or the cost of development contribution fees and it does not address the fact that most of that has to be paid up front. The people who are contacting us are talking about their own experiences. Ordinary mums and dads as someone said might want to build a hen house a carport a garden shed or even a deck. It just gets worse and worse and here we have a Minister who is totally ignorant about what compliance costs actually mean. This is something that Minister Cosgrove might like to focus his mind on. He might like to take a bit of notice of the actual bill. 
SU’A WILLIAM SIO (Labour) 
: 
 I move  
That the question be now put 
. 
JOHN HAYES (National—Wairarapa) 
: 
 Thank you Mr Chair— 
Hon Clayton Cosgrove 
: Here’s Sir Les Patterson. 
JOHN HAYES 
: It is Les Patterson if the member likes but I tell Mr Cosgrove that this bill is theatre. It has no substance whatever. It is theatre. It is absolute arrant childish nonsense. The Minister in the chair the Hon Maryan Street should be ashamed of herself and her officials should be ashamed of themselves for bringing this rubbish to the Committee and expecting us to be sitting here debating it. It will change nothing in this country. It will not deliver one affordable house to one person in New Zealand and the Minister has wasted the cost of building an affordable house with all the costs of putting this rubbish together. 
This bill is in the Minister’s words voluntary. Well it is not as voluntary as she thinks it is and let me explain why. If one develops a piece of land from nothing the first thing one has to do is to go to the council and apply for a resource consent. Then that has to be advertised and huge costs are associated with doing that. Then once one gets through the consultation process and secures the resource consent to subdivide one has to bring in surveyors architects and electricians to provide underground services and lighting. Then one has to provide sewerage curbing and channelling and macadam. All those things amount to a very high cost. On top of that the existing law requires one to pay a contribution to roading and a contribution to the amenities. Now clause 23 in this bill is proposing that developers can have additional costs imposed upon them and the Government is to price all the constructions it is wanting to bring in to reduce the cost of housing. 
All the Government is doing is putting up the price because if it imposes a cost on a developer he will pass it on. So if as this bill provides local authorities can start imposing additional costs upon developers on the basis that they may have to make so many houses in a particular development affordable houses then all that is doing is creating a cost to be passed on. 
The way to make house affordable in this country is first of all to get rid of the Resource Management Act and its Draconian elements. The Resource Management Act is OK to a point but it needs significant changes. 
The second thing that needs to happen is that the Government needs to encourage councils to back off on the requirement for building plans because just to apply for a building consent requires a minimum payment of $7000. Who told me that? Builder Dave Borman told me that in Masterton last week. It costs $7000 to get the proposal to the council. Then the council will get engaged in the process. It will want engineering reports and they cost money and it will also start to engage in a whole lot of other rules and regulations that come from the long-term council community plan. 
Clause 24 “Who may object to what” [ 
Interruption 
]—the member may object to that—states: “(2) A person to whom notice is given under section 22(2)(a) ie a person doing a development—(a) may object to the decision on any ground; and (b) may object to a provision in the territorial authority’s affordable housing policy on any ground.” All the Government is doing is setting up in this legislation more confrontation between people in the community who want reasonably priced houses and the local authorities that the Government is dumping more rules on through this legislation. I can tell members that because I have five district councils in my electorate and they do not want more nonsensical legislation imposed upon them. All the Government is doing is cluttering an already overburdened system that is not working. 
Hon Lianne Dalziel 
: It is not mandatory. 
JOHN HAYES 
: What does the member mean by saying that it is not mandatory? It is voluntary. That means it is worth nothing—absolutely nothing. This legislation means nothing to anybody because one cannot possibly enforce it. What one has to do in this country is enable people to work. Let me explain to members why that works. When I was a bit younger than Mr Cosgrove I had a work ethic. I went out and earned money and I saved a deposit to buy a house. Now we have a system called family support— 
TIM BARNETT (Senior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 4; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 4; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 66 
New Zealand Labour 49; New Zealand First 7; Green Party 4; Maori Party 4; Progressive 1; Independent: Field. 
Noes 52 
New Zealand National 47; United Future 2; ACT New Zealand 2; Independent: Copeland. 
Clause 2 agreed to. 
House resumed. 
Bill reported with amendment. 
The CHAIRPERSON (Hon Clem Simich) 
: I move  
That the report be adopted. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 4; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 50 
New Zealand National 47; ACT New Zealand 2; Independent: Copeland. 
Report adopted. 
Third Reading 
Hon MARYAN STREET (Minister of Housing) 
: 
 I move  
That the Affordable Housing: Enabling Territorial Authorities Bill be now read a third time 
. The purpose of the bill is to enable territorial authorities in consultation with their communities to develop and adopt affordable housing policy that requires developers to provide an affordable housing contribution for low to moderate income households. The passing of the bill will give territorial authorities new powers and a clear mandate to increase the supply of affordable housing in their areas. 
The supply of affordable housing is currently vexing a number of territorial authorities around the country. Those authorities see the need to improve economic development and economic prospects within their jurisdictions in order to enhance the lives of the families and communities living in those areas yet they see forces over the last 5 years in particular as having worked against housing affordability for a number of reasons. There are five places in New Zealand that are extremely expensive to buy houses in. The bill will give territorial authorities in Auckland Wellington Christchurch Queenstown and Nelson in particular—but also anywhere else where the pressure of unaffordable housing is being felt—the ability to require a contribution of affordable houses money or land from developers in order to satisfy some of the need for affordable houses to accommodate the workers and families who are required to boost and support the kind of economic development to which those territorial authorities aspire. 
The use of the new powers in this bill will vary across the country depending on the need so it was important to not make the bill compulsory. One might have inferred from John Carter’s contribution earlier that the National Party was keen to make the bill compulsory or alternatively to do nothing—that is the only other inference that one could have drawn from John Carter’s contribution. The bill is an enabling provision not a mandatory one. 
The other important aspect of the bill is that the policy for affordable housing must be developed in consultation with the community. Nobody wants to see enclaves of disadvantage proliferating throughout the country— 
Hon Clayton Cosgrove 
: The Tories do. 
Hon MARYAN STREET 
: Yes perhaps. It may be that they are the only ones who wish to push poor people farther and farther out beyond the reach of community services and transport nodes. That is not the vision of this Labour-led Government for our communities or our country. This Labour-led Government has a vision of mixed communities with a range of tenures from State house rentals through to homeownership at very high rates in order to achieve harmonious cohesive communities that are prosperous and safe for everybody. 
The bill includes a range of incentives that territorial authorities can offer to developers to facilitate the provision of affordable houses. The bill also consequentially amends four pieces of legislation. The select committee process has simplified the bill and I have worked closely with Local Government New Zealand to ensure that the bill is more closely aligned with the processes that local government bodies are familiar with in the Local Government Act 2002. 
I thank all of those who made submissions on the bill. I also thank the Local Government and Environment Committee and acknowledge the work it has done to bring the bill to this stage. Thank you Mr Deputy Speaker. 
PHIL HEATLEY (National—Whangarei) 
: 
 I was remiss in the Committee stage for not speaking about the commencement date of the Affordable Housing: Enabling Territorial Authorities Bill and I would like to raise that now in my third reading speech which of course I am quite entitled to do. Listeners will be interested to know that this legislation comes into force when it receives the Royal assent which is of course almost immediately. That commencement date is quite ironic in the sense that councils may or may not take up this legislation. In fact most councils across the country have opposed the bill as have builders developers and those who provide housing. 
This legislation has come 6 years too late. During the previous 6 years probably ending at Christmas last year property prices have skyrocketed in New Zealand. They have been growing much more quickly than household incomes. That is what housing affordability is all about. It is about the balance between household incomes and the buying power of that income—in other words household incomes versus the cost of housing. The cost of properties is divided into two aspects: one is the cost of the building and the other is the cost of the land. Property prices have skyrocketed over the last 5 years up until roughly Christmas last year. In terms of those two cost components building and land it is land that has increased in cost—more so than the cost of building. 
We have now reached the point where property prices have pretty much stabilised right across New Zealand and in fact they have dropped in some areas. So here comes Maryan Street and Labour. Property prices have finally stabilised if not dropping further and she suddenly has an answer; 5 or 6 years later we have had legislation brought into this House after property prices have stabilised. Am I saying that the stabilisation of property prices across New Zealand has solved the affordability problem? No I am not. What has happened is that property prices have now settled at a value well over and above what most first-home buyers can afford. They are still in trouble. The reality is that we had a period of growth that went for over half a decade and the Minister Maryan Street now rides over the hill on her white horse to save the day but she is 6 years too late. That is obscene. What has she saved the day with? She has saved the day with legislation that suggests that local councils across the country may or may not like to force builders and developers to set aside 5 or 10 percent of their land for cheap housing to set aside a whole bunch of cash from their housing development for first-home buyers or to build a whole bunch of cheap houses themselves. 
The Minister ignores the fact that that will drive up property prices for everybody else. As the correspondent who has been emailing me tonight has suggested what Labour members “do not want to acknowledge or at least they choose to ignore is that if you force developers to provide low-cost sections it will only force the price up of other sections” meaning that the house price of everyone else in the subdivision goes through the roof. It is quite true that if we force property developers builders or whomever to take a big hit on a few sections in a subdivision all it will do is force up the price of houses in the other parts of the subdivision because those builders will have to recover their costs. So a whole bunch of people end up paying more for their houses in order to possibly help a smaller bunch of other people. 
Of course that smaller bunch of other people may never be helped because as we heard at the Local Government and Environment Committee very few district councils across the country are interested in taking up the legislation. In fact I was quite amazed that the Minister acknowledged the five regions in New Zealand that have serious affordability problems: Christchurch Nelson Queenstown Auckland and Wellington. Interestingly Auckland City Council and the councils in South Auckland mainly and also North Shore City Council do not want a bar of the legislation. Wellington City Council came to the select committee and had very serious concerns about the legislation. Nelson City Council is not interested. We heard from Christchurch City Council that it may or may not use the legislation. Queenstown Lakes District Council is already implementing the principles of the bill without the legislation. So there we have it. Of the five areas that the Minister Maryan Street identified as having serious affordable housing problems none of the five are likely to use this legislation. That is the disgrace we are seeing here tonight. The 6 years have passed when the Government could have done something. It did not do anything and finally in the dying days of this Parliament it passes legislation through this House—forces it through this House—that will have no effect whatsoever upon the regions that may or may not take it on because they are not at all interested. 
My question to the Minister is why she does not do something for first-home buyers that will actually help them. Why does she not address the issues that matter? There are four or five of those issues. First of all what about tax relief? It is take-home pay and not gross pay that services a mortgage. So why does the Government not give people more money in their back pockets so they can afford to service a mortgage? Why does it not do that? That would help everybody; it would absolutely help everybody. Take-home pay matters. Why does the Government not deliver a tax cut for those first-home buyers so that they can service a mortgage? The deposit is not the problem; it is the weekly or fortnightly payments that trip up people. Members on the other side of the House do not seem to understand that but that is the case. 
Secondly why do the Minister and her Government not run this country in a better way economically and fiscally so that we can get interest rates under control? Interest rates more than any other factor affect a person’s ability to service a mortgage. The Minister will acknowledge that the average mortgage in this country is about $200000. That is not the average cost of a house but the average mortgage. A 1 percent interest rate drop equates to two grand a year which is 40 bucks a week. So a 1 percent interest rate drop can mean $40 a week to a first-home buyer. That is a significant amount of money I can tell members for many households today that are really struggling. A 2 percent interest rate drop would mean 80 bucks a week. That is very significant. The members on the other side of the House who have not made a contribution in this debate all night but simply sit there and mock do not even understand that take-home pay matters and that interest rates matter. 
What is more the Building Act and the Resource Management Act are two pieces of legislation driving up property prices right across the country. Why? It is because builders are finding that the cost of compliance under the Building Act and under the Resource Management Act has driven up property prices over the years. Why? It is because of the cost of the resource consent process. 
I raise a point of order Mr Speaker. I would just like your guidance. I have been speaking for about 8 minutes. [ 
Interruption 
] Can I make a point of order in silence? 
Mr DEPUTY SPEAKER 
: Yes we must— 
PHIL HEATLEY 
: The members on the other side of the Chamber have been heckling me the whole time. It has not stopped me at all; I have not responded to their heckling. They have not disturbed me one iota. Why do they bother Mr Speaker? Can you answer that? 
Mr DEPUTY SPEAKER 
: Phil Heatley. 
PHIL HEATLEY 
: Why does the Government not do something about the Resource Management Act and the Building Act? Why does it not give tax cuts so that people can afford to pay off their mortgage each fortnight? Why does it not get interest rates under control? Those things would really make a difference instead of bringing legislation into the House in the dying days of this Parliament that no local authority across the country will adopt. 
SU’A WILLIAM SIO (Labour) 
: 
 It is 25 minutes to 12 o’clock so I will keep this rather short. The working public of New Zealand who are listening to this debate could be forgiven if they feel somewhat confused after listening to the National Party contribution on this significant Affordable Housing: Enabling Territorial Authorities Bill. 
The public will have heard speakers from the National Party attempt to portray empathy for the local citizens of New Zealand but the truth is that those members do not care. They do not care about people who are struggling with private rentals. They do not care about families who want to get into their first home. The truth of the matter for those who are listening is that National just does not care about ordinary New Zealanders. We can look at 1990 when National was the Government. National Party members were the ones who sold off the State houses of New Zealand. They were the ones who sold them off to their friends. They were the ones who refused to maintain the stock that we now have to rebuild—that is what the Labour Government is doing. 
I acknowledge the Hon Maryan Street because she is a Minister of Housing who is showing leadership in difficult times. She is a Minister who is showing innovation by coming forward with the Affordable Housing: Enabling Territorial Authorities Bill. Labour believes that access to decent affordable housing is fundamental to the health and well-being of families and communities. It is a basic human right of New Zealanders that the National Party does not seem to consider to be important. 
The bill provides new powers to enable territorial authorities to increase the supply of affordable housing in their local area. It does not try to impose anything on local authorities; it is an enabling bill about working in partnership with local government throughout this country. “Partnership” is a word that the National Party ought to be familiar with; it ought to learn from this Government. This is a Government that is prepared to work in partnership with like-minded parties in this House. 
I join the Hon Maryan Street in commending this bill to members of this House. 
JOHN CARTER (National—Northland) 
: 
 There is only one comment we can make about Mr Sio’s speech; one word sums it up and that is “nothing”. It was a zero contribution. What a shame. The sad and unfortunate thing is that— 
Hon Clayton Cosgrove 
: Did you think of that yourself? 
JOHN CARTER 
: I tell the member across the House that he certainly would not have done so. He has not the capacity to think of anything. All he thinks of is nothing because that is what is between his ears. 
The unfortunate thing about that contribution and those we have heard so far from the Government side of the House is that this is a serious issue. It is an issue that the Minister of Housing Maryan Street did hope she might achieve something on. She hoped that through this legislation she might make housing a little more affordable for some people. Sadly and unfortunately that will not be the result. The sad fact is that had the Government worked with the industry worked with building firms it could have come up with something that would have been very positive for people on low incomes. It could have come up with good sturdy houses of a smaller size—with three bedrooms but sturdy warm healthy and safe. All those things could have happened. In fact a firm up north right now is looking to put such a house on the market. It is a small three-bedroom home but nevertheless it is a good start-off home. 
Most people in my generation started off in a smaller-sized house then moved up. We have gone away from that in this country because our expectations have grown beyond our ability and we need to get back to the fact that it is actually acceptable for people to start off in smaller-sized homes—something not quite so pretentious that nevertheless allows people to bring their children up safely and healthily. A firm will be putting a house on the market for about $120000—just for the house. That firm is to be commended. The shame of it is that this Government did not think to start working with the firm and to ask it how it could help make that happen. 
Shane Ardern 
: They’ve added $30000 to the price of it. 
JOHN CARTER 
: Well the shame of it is that if the Government had been prepared to look at the whole issue of the compliance costs the National Party certainly would have supported it. Local government now issues building permits. The extra compliance costs for an average-sized home are about $25000 per home. That is a hell of a lot before one even starts building. We also know that compliance costs are imposed on sections because of councils’ obligations under the Resource Management Act. Lianne Dalziel asked earlier who passed that Act: it was passed by the National Government with the support of the Labour Party back in 1991. 
Hon Lianne Dalziel 
: So what is your problem? 
JOHN CARTER 
: She may have forgotten but it was actually a unanimous decision—just so that she understands we are all complicit in the cost of it. She sits there and asks who passed the Resource Management Act: we all did. The sad thing is that this Labour Government actually has had a chance to redress and reform a whole lot of it and the Government has forsaken that opportunity. Well that will be addressed if we are fortunate enough to become the Government after the next election. But the problem in the meantime is that it actually costs on average about $50000 a section now for someone to start subdividing. 
John Hayes 
: At least. 
JOHN CARTER 
: Well yes on average. That is an estimate—it is hard to guess exactly. But it is about $50000 plus $25000 for building so one actually starts off $75000 behind. If we had addressed that issue in this bill maybe we would have made some more progress plus worked with— 
Hon Lianne Dalziel 
: Why didn’t you fix it? You had 9 long years. 
JOHN CARTER 
: Well we have both had 9 long years—and they have been long years. The sad thing is that this Government has done nothing to address it at all. 
Hon Lianne Dalziel 
: You’re making it up. 
JOHN CARTER 
: Well the member over there shoots her mouth off and that is the problem we have. Those members talk a lot and will not listen. She has actually done nothing at all other than chap her gums. If she just listened for a minute she would see that I am actually trying to be constructive but that is not something she is known for. 
The fact is that had we addressed those issues we would have actually seen something positive. Indeed I believe that if we had addressed some of those issues we would have the support of local authorities across the country as well. It is they who tell us of the problems they have. When one talks to local government—and I am sure the members here have and do—one sees that it is bound by rules and regulations that cause it problems in servicing its constituents and ratepayers. That is part of the problem that we should have been addressing in this legislation about affordable housing. Sadly and unfortunately it has not been addressed. I know that members in this House have tried to get round the whole issue of building regulations. Unfortunately it has just got out of control. I was told just recently by a roofer that if he had to follow every rule and regulation set down by the Department of Building and Housing every roof he put on every house would leak. That sort of stuff is nuts and it is that sort of stuff— 
Hon Clayton Cosgrove 
: Rubbish! 
JOHN CARTER 
: Well I can get the guy to come and talk with the member. The fact is that if that roofer built according to the law the roofs would leak. The silly thing is that we have people writing rules and regulations who do not know about building. The fact is that sort of stuff is increasing the cost. 
On top of that the unfortunate thing about this bill is that it adds to the continued cost that this Government is imposing on local government. This is just another cost. If the local government bodies pick up this challenge put down by the Government—and most if not all of them will not—then it will just be another cost. If members look at clause 42 they will see that it says that local government bodies have to “contain a summary of the local authority’s affordable housing policy”. Well that means that if they develop an affordable housing policy they have to get consultants in to develop it. 
Hon Lianne Dalziel 
: Read the bill. 
JOHN CARTER 
: I am. I am reading it right here. Just for members I say that it says “A long-term council community plan”—I will read it slowly for the member because I know she finds it hard to absorb—“must contain a summary of the local authority’s affordable housing policy if it has adopted one…”. 
Hon Lianne Dalziel 
: “If”! 
JOHN CARTER 
: That is right. I talked about “if”. 
Hon Lianne Dalziel 
: What does “if” mean? 
JOHN CARTER 
: Well did I not make a speech about “if”? Did I not say that that is why it is so silly? It actually means that local authorities do not have to do anything. So why do we have this bill before us at all? The member just argued against herself. The bill says “if” local authorities do it—well most of them will not do it. Most of them will not do it because they know that it will not achieve anything but if they do it it will cost the ratepayers money. If they do it it will cost the homeowner more. The chances are they will not do it; I am sure they will not. 
The only thing that is iffy is that member’s future actually; her ability to continue making these stupid rules is limited thank goodness. But the fact is we have legislation here and the member herself has just asked why we should put this provision in if no one is going to do anything with it. The sad fact is that that is what the bill will end up with—nothing. I started with nothing and this bill will unfortunately end up with nothing. 
PITA PARAONE (NZ First) 
: 
 Tena koe Mr Deputy Speaker. It has been a long day. I do not know whether it was my good fortune but as a consequence of the Order Paper I had to be here at 9 o’clock this morning. Those of our fellow citizens who are working out there and making sure that our country is still alive who are travelling back from work having completed their night shift or are travelling to work to start a night shift may be interested to know that the House is now hearing the third reading of the Affordable Housing: Enabling Territorial Authorities Bill. I stand on behalf of New Zealand First to say that we continue to support this bill. 
This country needs more affordable homes for its citizens. The bill provides for that. It is very interesting to hear critics of the bill accuse the Government of doing nothing yet here we have a bill that was introduced into the House to help the issue of affordable housing for its citizens and they still criticise the Government for it. The bill provides a vehicle for territorial local authorities which is voluntary. Those who have spoken against the bill have questioned this voluntary aspect. That then raises the question as to what the alternative is. Making it compulsory or doing nothing? 
Then we heard that those who have spoken against the bill would solve this problem with tax cuts and by controlling interest rates. Well I tell those home seekers—in fact I caution them—to please please not get sick; to be prepared to home school their children; and to talk to their neighbours and plan how they intend to protect themselves from criminals. Those are just some of the services that will be affected. But the public can rest in the knowledge that with the tax cuts they will be able to pay the tolls to travel on the roads. 
I apologise for my cynicism but here we have a bill that is intended to address a serious issue and rather than giving support to it much of the debate has been to deride it. However I appreciated comments about how developers would pass on those costs to others. When I heard those comments I pondered on the houses built in the 1950s 1960s and even 1970s and on the fact that the three-bedroom homes of that era were very much smaller than the three-bedroom homes of this day and age. I wonder whether it could be a practical solution for designers or architects to revert to the 1950s 1960s and 1970s design of homes so that we would then be able to build more on the land that is available. Now that might sound pretty simplistic but I ask members to think about it if that is the concern that people have. Quite clearly this bill is all about allowing territorial local authorities to exercise their option to take it up but it does— 
Chris Tremain 
: They can do it already. 
PITA PARAONE 
: But I say to the member that some do not and as a consequence nothing is done. Again here is another vehicle. I do not want to prolong this debate. I am quite clear on behalf of New Zealand First that we support this bill. We commend it to the House. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I will raise some pretty scary issues here. The Affordable Housing: Enabling Territorial Authorities Bill gives councils the option as to whether they want to have an affordable housing scheme. That is great I say to members. It is optional but the scary part is that if councils decide to take up that option and go down the path of having an affordable housing scheme the bill states in clause 28 that binding commitments may be required. We must remember that an affordable housing scheme will have a standing accorded to it alongside the Resource Management Act so that it goes through an Environment Court process and is then included as a part of—and has the equivalence of—a district plan. That means it will be very difficult to change that policy once it is in place. 
I also add that the Governor-General has the power to make regulation to enforce or require some commitments through those affordable housing scheme policies. Some considerable commitments will be required of developers here so I do not see how that can be supportive of affordable housing because those additional costs on developers will have to be met in some way or another. Let us look at the binding commitments that may be required when a council develops an affordable housing scheme. The council can make some binding commitments on the developer at the time of granting the resource consent and the building consent. Those are two different occasions when the council can make the developer meet commitments in terms of affordable housing and that has to come by way of land money or the building of houses on property. Whichever way that cake is cut it is going to be a cost on the developer. How is that to be met? It will certainly not be the council that will meet that cost; it will be the developer and that cost will be passed on. It will be interesting to see how that pans out in the future. 
I go to the commentary which states in regard to GST: “These amendments should reduce compliance costs for all parties.” Well hello I have never seen such a glaringly incorrect statement. That is an absolute joke. It shows complete ignorance and a lack of understanding of what compliance costs are and how they are passed on. It shows that this Government—and in particular this Minister—has no understanding of the fact that businesses provide jobs and wages to people to be able to afford to buy homes. In the Coromandel our average wage is one of the lowest in New Zealand at around $26000 a year. How on earth will lower socio-economic groups be able to afford even an average home—even the home that John Carter talked about? It is an absolute joke. It is absolute nonsense that not only will binding commitments be possibly required of developers but also it gets really scary when we consider what has happened through the Resource Management Act process and how it has developed under councils. This measure is just adding to that process and frankly anybody building subdivisions should be very very afraid of what it will mean if a council adopts it. Not only will this put compliance costs on to developers but also it will put added costs on to ratepayers. 
Once again we have to look at the bill to see what the criteria are around developing an affordable housing scheme. The bill has gone to great lengths to outline all the things that are necessary for a council to do to meet the criteria for having a scheme. The commentary states in relation to clause 10 that the criteria must include the proposed location of the development the kind of development the potential of the development the desirability of the community having a variety of housing tenures or whatever and also a cost-benefit analysis is required—the whole works. The bill is really really prescriptive about all of the work a council has to do to come up with an affordable housing scheme. Councils will have to develop or purchase that expertise. That means—[ 
Interruption 
] 
John Hayes 
: Let her speak! 
SANDRA GOUDIE 
: No just ignore them. The Minister of Housing is totally ignorant about compliance costs. If we ask Government members to define what compliance costs are they cannot come up with an answer. Maybe the Minister might like to take a call and share with us what she understands compliance costs to be. If we ask anybody applying for resource consent or building consent what sort of charges they are experiencing at the coalface they will say those costs are prohibitive in terms of undertaking their activities. I challenge the Minister to tell us what she thinks compliance costs are and what compliance costs she thinks will be reduced as a consequence of her bill—that is if any local authorities take up the opportunity to have an affordable housing scheme. 
I think this bill is an absolute nonsense. In her own commentary the Minister said that it should reduce compliance costs. Well hello it is not going to; it will have the opposite effect. I wish this Government would get with the programme and really understand what the fiscal implications are. It has no fiscal understanding of the impacts of any of the legislation it puts in place. I see that the Minister of Finance is here. Maybe he should take a call and tell us what he thinks compliance costs really are and maybe he should enlighten his Ministers as to what they are. This bill will deal to developers. It will do nothing but shut down subdivisions and shut down housing. There will be even fewer opportunities for people to buy their own home. 
JOHN HAYES (National—Wairarapa) 
: 
 If we want to build affordable houses then I am afraid I have to disagree with the Minister. Even if one is living in Queenstown Wellington Nelson or Auckland and one is earning a substantial income house prices are very substantial. One could be living in Eketahuna earning $12 an hour and not be able to— 
Debate interrupted.