Goldsmith Paul: Questions for Oral Answer — Questions to Ministers Personal Explanation—Comments Made at Environmental Defence Society Conference 
Text is incorporated into the Bound Volume 
Goldsmith Paul: Questions for Oral Answer — Questions to Ministers Personal Explanation—Comments Made at Environmental Defence Society Conference 
[Sitting date: 25 July 2012. Volume:682;Page:3886. Text is incorporated into the Bound Volume.] 
3. 
PAUL GOLDSMITH (National) 
 to the  
Minister of Finance 
: What reports has he received on housing affordability? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Housing affordability is important for fairness and for allocation of capital in the economy. The Productivity Commission released a report on housing affordability that found that housing in New Zealand has become increasingly unaffordable over the past decade. Real house prices almost doubled between 2001 and 2007. In particular it found that there is almost no building of houses that are affordable for New Zealanders in the lowest quartile of incomes. The commission found that this affects communities and puts pressures on the Government’s fiscal position because the Government has very large subsidies to the cost of housing. 
Paul Goldsmith 
: What are some of the factors behind housing affordability issues in New Zealand? 
Hon BILL ENGLISH 
: The Productivity Commission found that the price of housing has been driven up by a combination of rising demand and unresponsive supply. Housing prices boomed in the 2000s backed by large Government transfers strong population growth and favourable terms of trade but the supply of housing has been unable to keep up with demand. We agree with the Productivity Commission’s view that urban planning has played a critical role in constraining the supply of land and constraining the opportunity for higher-density development within cities. 
Paul Goldsmith 
: Why does the Government regard the issue of housing affordability as a priority? 
Hon BILL ENGLISH 
: If we left the situation as we inherited it from the previous Government housing would be too expensive for young lower-income and migrant New Zealanders who would find themselves locked out of the housing market and locked into poor and low-quality housing. This Government made it the first inquiry of the Productivity Commission when it was set up and intends to follow through by working with local government and with the planning and development industry to improve housing affordability. 
Denis O’Rourke 
: How confident is the Minister in the Social Housing Unit when the Productivity Commission report on affordable housing states: “Although the formal objectives of the SHU are clear its structure as a semi-autonomous body leaves room for unclear priorities mixed purposes and misaligned accountabilities.”? 
Hon BILL ENGLISH 
: We appreciate the advice of the Productivity Commission. The Social Housing Unit is a very early attempt to undo the substantial mess left in social housing by the previous Labour Government with around about $5 billion worth of houses in poor condition the wrong size and in the wrong place. They are not enabling the taxpayer to help those New Zealanders who are in serious housing need and need assistance. 
Denis O’Rourke 
: I raise a point of order Mr Speaker. The question was about how confident the Minister was about those issues. I do not think he answered that question. 
Mr SPEAKER 
: That type of question asks for an opinion and the Minister gave his opinion. He said that the views of the Productivity Commission were very valuable to the Government. Therefore obviously it takes the views quite seriously. When asking for an opinion like that there is no particular answer to that kind of question. 
Hon Annette King 
: Does he appreciate the advice of the chair of the Productivity Commission who said recently that the Government’s budget for social housing aimed at making housing affordable for low-income New Zealanders is well short of the mark and does not meet current need and that expanding the role of social housing is at the heart of addressing affordability? 
Hon BILL ENGLISH 
: I certainly do not agree with the last remark because actually the heart of housing affordability is enabling all New Zealanders not just that small minority who are in significant housing need. But in respect of the other remarks that the commissioner has made yes we broadly agree with them. I think even the member has made some useful comments herself in the last few weeks to the effect that if we want a proper allocation of capital in the economy if we want to be more effective in the way that we assist New Zealanders with housing we need to rethink the current models and that is what we are doing. 
Paul Goldsmith 
: What issues is the Government considering in preparing its response to the Productivity Commission’s report on housing affordability? 
Hon BILL ENGLISH 
: The Government is looking at all the issues raised by the Productivity Commission which include land supply resource and building consenting development contributions liability rules cost of building materials and industry structure. Actually to that we would add the fiscal costs to the Government which include all of the housing subsidies the implicit subsidy in the ownership of $15 billion worth of Housing New Zealand Corporation assets and the significant transfers through Working for Families and other schemes which are there partly to help New Zealand households meet the excessive cost of housing. 
Hon Annette King 
: If the Minister does agree with the chair of the Productivity Commission why did he cut the budget for social housing over the next 3 years? 
Hon BILL ENGLISH 
: Well I would contest the Minister’s view about the social housing budget being cut. Certainly— 
Hon Trevor Mallard 
: She’s not the Minister yet. 
Hon BILL ENGLISH 
: —the member’s views—she can put down a question to the Minister of Housing about the detail. But in the interests of getting more assistance for more New Zealanders more efficiently out of the Housing New Zealand Corporation we are changing the way the money is used which means less focus on some of the individual schemes the previous Government had in place and more focus on having more larger providers of social housing.