Affordable Housing: Enabling Territorial Authorities Bill

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?

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 $350,000 to $370,000. People will require a household income of $70,000 to $75,000 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 $350,000 and it would require a household income of $75,000 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 $75,000 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 $70,000 a year. My understanding is that low-income households earn nothing like $70,000 or $75,000 a year, and low to middle-income earners cannot afford to buy $350,000 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 $350,000, 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.

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 $40,000 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.

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.

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 $120,000. By the time the cost of a section is added in, it will be somewhere between $180,000 and $200,000. 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 $25,000. Just to get a section with all the costs around resource management and other costs is about $50,000. That is before starting to build—just in compliance costs. That is a total of $75,000. 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 $75,000 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.

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!

—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.

I move, That the question be now put.

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?

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.

I move, That the question be now put.

Thank you, Mr Chair—

💬 Hon Clayton Cosgrove: Here’s Sir Les Patterson.

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 $7,000. Who told me that? Builder Dave Borman told me that in Masterton last week. It costs $7,000 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.

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—

I move, That the question be now put.

I move, That the report be adopted.