Financial Review Debate — Vote Housing, Non-departmental appropriations

Kia ora, Mr Chairman. The first point I want to make about funding for affordable housing is how woefully inadequate the Social Housing Fund actually was, particularly when you consider the staggeringly high need, and, secondly, how little of that woefully inadequate amount was actually spent on housing.

I have got to highlight those figures here. Only $28 million was actually allocated and only $16 million was spent. How bad is that? The Government takes only 2 days to decide to spend $30 million on Rio Tinto, but in a whole bloody year cannot spend $28 million on housing for the poor. How is that for poor performance? The Government got only $28 million, but through bureaucratic inefficiency it managed to spend only $16 million, and has delivered only 165 houses. What a shambles.

But that is not the worst part. The worst part is that the Government’s policies are leading to huge numbers of low-income families being evicted from their homes, State houses being disposed of, and large tracts of State housing land being sold off to make way for high-end housing estates, because National believes that the private sector is the best place to provide for housing. E hoa, ēhara tērā i te pūru tūtae noa iho.

[Friend, that’s simply just not bull’s droppings.]

There is nowhere in the world where the private sector provides quality, long-term, affordable housing for the poor, and it certainly ain’t happening here, where thousands of families are forced to rent high-priced, damp, draughty, and cold flats, houses, and caravans on the open market, because the State no longer wants to bother.

Those living in State houses are being shunted out of them, as we speak—like the family who have lived in a home in Glen Innes for the past 33 years but are about to be evicted by Housing New Zealand this Friday, as part of the sale of State properties to the private sector and the redevelopment of the area. Housing New Zealand says it is evicting the family for alleged antisocial behaviour. Is it not funny how a family can live in a house for 33 years without any major problems but the minute that mum speaks out against policies that have led to the eviction of friends and neighbours whom her family has known for decades, all of a sudden her family are being evicted for antisocial behaviour? Betty has lived in Glen Innes all her life. She is a postal worker, a cleaner, a member of the Amalgamated Engineering, Printing and Manufacturing Union, and a regular volunteer at the Glen Innes Primary School.

Late last year Betty’s sister’s family were evicted from the home where their family had lived for 54 years. Betty herself has just come out of hospital, where she underwent a procedure for breast cancer. She is tired, she is unwell, and now, thanks to these Housing New Zealand policies, she is about to become homeless. Betty’s family want to stay in their home and fight the eviction, and the public are invited to support them by marching with her this Thursday at 6 p.m. on Taniwha Street in Glen Innes.

The housing crisis in low socio-economic areas like Glen Innes, Pōmare, and Maraenui has actually been worsened by Housing New Zealand policies that demonise poor families and devastate communities, leaving empty houses and unsafe neighbourhoods. If that was not enough, the Government is now reviewing all tenancies and shifting the allocation of State housing from Housing New Zealand to Work and Income New Zealand, bringing even greater insecurity and evermore bureaucratic harassment for low-income families. That is not a future that any Government should be seeking.

The Government should, instead, take a positive approach to the problem by engaging in a comprehensive programme of building 10,000 new State houses every year for at least the next 5 years, to help address the critical shortage of healthy homes for low-income families and because building homes does more than just provide houses for people. It creates thousands of jobs in design, architecture, carpentry, cabinetmaking, community infrastructure, and all the related jobs that come with a strong and vibrant housing sector. It helps to build healthy families and healthy communities, because when people are working everybody is happy.

I have no doubt that a Government-funded home-building programme would be well received by local bodies and by iwi, both of whom have a huge interest in seeing their communities engaged in meaningful work and who would happily come to the party on consent issues and availability of land for housing development. There is no question that we do have a housing crisis, but we also have the ability to deal with it quickly and positively. All it takes is the political will to do so. Kia ora.

I want to acknowledge Mr Hone Harawira and his comments, especially around Glen Innes. I want to talk about Glen Innes because I have lived in a home in the area for the last 18 years. I know the people well and the community well. I know the struggles and I know the issues that he talked about.

💬 Phil Twyford: You’re not very popular there now.

I am, Mr Twyford, actually. The fact is that we have worked quite hard there for quite a long time. Tāmaki Transformation, which came under the Labour Government, started to look at a whole-of-community perspective, and housing was one of those issues. Out of that issue we worked collectively with the Government agency, a whole community working together, to address these issues.

But here is one of the shameful things that the Labour Government needs to be held to account for. It had some of the worst housing stock in the whole of New Zealand. Fifty-eight percent of that area, the communities of Glen Innes, Panmure, and Point England, was State housing stock. It had some of the worst stock. In other words, under that Government’s watch there was a lack of maintenance and there was a lack of repair. In other words, there was a lack of concern—there was a lack of concern. For all the talk, let us talk about the action, and let us talk about the reality. Nothing was done over 9 years in those very communities. I can take you to the streets. Flanders Street—we can go up there—and Ropata Avenue. We can name the streets. I am not sure that Mr Twyford can name the streets, but we can name the streets where the homes and the houses that these families had to live in were really shameful. If you want to talk about Government responsibility, that was shameful.

So what did this Government decide to do? This is what it decided to do. It was time for change. Inside of that change, yes, there were difficulties and struggles because some of those families had been there for such a long time. But I can say this. A number of the community initiatives are there, even at the moment. There is an organisation called Ngā Iwi Katoa, which Monte Cecilia Housing Trust is involved in with David Zussman, and there is a collective of the community working together with the Tāmaki Redevelopment Company to try to address some of the critical concerns that are there. This is what we are doing as a Government to address them. There have been 6,960 new tenancies started and 200,000 people in our houses. But I want to talk about some other things. When they were asked and surveyed, right across the board, with regard to how they found the service and what it was doing, yes, there were some areas of need, but 76 percent of those surveyed were satisfied with their house maintenance and the customer services centre. That was not the figure under a Labour Government of 9 years. That was not the figure that was there.

Hone talked about the importance of having healthy housing and home insulation. One of the things we have had over this period of time is 2,000 whole-of-house upgrades. We have spent $190 million to improve the quality of our houses. You see, again, this is a Government of action, not just of talk. This is a Government that has made a difference to those homes. We have insulated 8,295 homes. In other words, we are making a difference to the care and concern of the families—even those families that are in Glen Innes. There have been 390,000 maintenance actions. We know, again, that the maintenance of, and repairs to, a number of those homes was quite critical to our families.

I also want to talk about social housing and the whole thing around the third-tier sector—the third sector of the housing market that is out there. I can say this. We know that Brian Donnelly, for instance, of the New Zealand Housing Foundation, the Salvation Army, the Monte Cecilia Housing Trust, and a number of these collectives have come together and said that this is the right intent, this is a good initiative, and they want to see the ability to come in to that sector to truly make a difference. Here is the difference that they can make. They can make a difference because they can meet the needs of those housing issues for their communities in particular. So there is $2.9 billion for housing, to add bedrooms to 3,000 homes, to build 500 new homes, and to complete home insulations and repairs inside our Housing New Zealand stock.

That is the difference that this Government is making. We are now starting to hear families that are saying: “Now not only do we have healthy homes but we can access things like health services and education.” There has been a concern about some of our families, even in Glen Innes. We had the petition for Pōmare and Maraenui as well. What we know is this. I want to commend the new Chief Executive of Housing New Zealand, Glen Sowry, who even in his first month went and visited the homes. He visited them with the case managers to see what was actually happening on the ground, and saw how it was making a difference. Here is the difference. Mr Chris Hipkins was in Maraenui about 2 or 3 weeks ago, and he celebrated the success of what was happening. They were making a difference, to address the issues—

I want to address the question of why this National Government has so completely failed to address the housing crisis. I think that is the interesting question. Everybody knows that there is a housing crisis. It is affecting first home buyers. It is affecting State house tenants. Government agencies are routinely referring people to live in campgrounds. There are 285,000 children growing up in cold, damp homes, and who are constantly sick because of the state of our housing stock. The country knows that there is a housing crisis. The National Party knows that there is a housing crisis. That is why Nick Smith runs around like a jack-in-the-box every 2 days. He would turn up to the opening of a door handle. He has got some half-baked scheme he announces every couple of days, like the one where he was flogging off broken-down old State houses in parts of the country where there is no housing crisis. He was flogging them off at knock-down rates to make it look as if he is doing something. We know that there is a housing crisis. The National Party knows it. But why has it not done anything about it? That is the interesting question, and that is what I want to address.

Let us take the issue of these loan-to-value ratio lending restrictions. They have had the effect of locking out a generation of young New Zealanders from the dream of homeownership. Over the last week I have visited a number of cities around the North Island, and some of those places are cities where first home buyers have been the worst affected in New Zealand by loan-to-value ratio lending restrictions. I am talking particularly about Napier, Wanganui, and Palmerston North. These are places where first home buyers have basically had the drawbridge pulled up. They have been told to go away—do not bother, do not come back; you are not going to be able to buy your own home.

I met a young family in Hamilton. They had moved from Auckland to avoid Auckland’s high property prices. They were a young couple with kids. They moved to Hamilton to avoid the skyrocketing house prices in Auckland. They told me that now, because of loan-to-value ratio restrictions that have been broadened by this Government and because of the 20 percent minimum deposits, they are 3 years away from being able to summon up a deposit. This is a family with professional, well-paid jobs, so imagine the stretched lower-middle and middle income people, who believe that they should be able to own their own home. They are utterly locked out.

Let us look at healthy homes. The Minister of Housing announced the other day a pilot scheme—he re-announced last year’s Budget commitment—involving 500 State houses to see whether the Government could make a warrant of fitness scheme work. The State houses are all already insulated. They have been retrofitted and insulated. They do not need a warrant of fitness pilot scheme. What they need is for the Minister to pick up the phone and tell the chief executive of Housing New Zealand that he wants those houses built to a certain standard so that they are warm and dry. So instead of doing the thing that is necessary—tackling cold, damp homes in the private rental sector—this Minister is doing more busywork with a trial warrant of fitness with his own State houses.

The third example of this Government’s total failure to address the housing crisis is its mismanagement and incompetent neglect of the State housing asset. We currently have 4,000 empty State houses in New Zealand—4,000. By coincidence, there are about 4,000 people languishing on the waiting lists, and that is after Phil Heatley narrowed the eligibility criteria so tightly that hardly anybody these days qualifies to get a State house. In the last 12 months the number of State houses in New Zealand has decreased by 700. Under this National Government there are fewer State houses than ever before.

Iain Lees-Galloway and I were in Palmerston North last week. We visited Highbury in Palmerston North. Palmerston North has about 90 vacant State houses. In Highbury they are boarded up, they are covered in graffiti, and they are a magnet for vandalism and crime. Such is the neglect of the State housing. It is the single most valuable publicly owned asset. We have $46 billion worth of State housing, and all over New Zealand, in every provincial city, you can see them rotting, boarded up, and covered in graffiti. This Government has brought downtown Detroit to Napier, to Palmerston North, to Hamilton, to Gisborne, to Wanganui—you name it.

It is probably worthwhile doing a timely comparison between the Labour Party’s record on housing when in Government and what has happened under the current Government. Nothing would be more apt than to remind New Zealanders of interest rates under the Labour Government from 1999 to 2008. People will recall that during those heady years of Helen Clark and that big-spending Government, interest rates for first-home buyers were around 8 percent, or 9 percent, or 10 percent per annum. That is right.

💬 Jacqui Dean: Up to 11 percent.

First-home buyers who are listening to this speech today will sit and wonder how they would ever cope if a Labour Government came in and started running mortgage interest rates at 8 percent or 9 percent. I stand corrected by the member for Waitaki, Jacqui Dean, who reminds me that, actually, interest rates hit 11 percent under the Helen Clark Government. I do apologise—under the previous Labour Government mortgage interest rates for first-home buyers were around 9 percent, 10 percent , and 11 percent. Under the National Government we have seen interest rates oscillate at around 5 percent and 6 percent. They may go as high as 7 percent, but not the dizzying target of the big-spending Labour Government of 11 percent, I am sure. So there you have mortgage interest rates—a housing issue for all who borrow to buy a home, which is usually everyone.

The second comparison would be those houses in Highbury and other parts of the country where the Labour Government allowed gangs and gang members to run rife, not just in State housing but in State housing neighbourhoods. It allowed scams to occur, such as subletting. It allowed people to undertake violent behaviour—picking up glass and the pickets from the picket fences and beating up their neighbours—and did not do a single thing about it in State housing neighbourhoods. Today we see the statistics where up to 400 State house tenants have been moved on in the last few years because of their violent, dysfunctional, and antisocial behaviour in State housing neighbourhoods. The Labour Party members have gone quiet on the other side of the Chamber because they know that they never dealt with those problems in State housing neighbourhoods, but the National Government has.

The third issue is the insulation of State houses. I would be very proud if I was Nick Smith for being the Minister of Housing who oversaw the insulation of every single State house in New Zealand that could be insulated. How is it that the Labour Party after 9 years of Government left not thousands but tens of thousands of State houses uninsulated? State houses were old, cold, and mouldy under the previous Labour Government for almost a decade. Why has the barracking stopped? Why are the Labour Party members no longer heckling me in the Chamber? They go quiet in shame. Congratulations to Nick Smith on insulating every single State house across New Zealand that could be insulated.

That brings me to the warrant of fitness. Nick Smith is introducing a Housing Warrant of Fitness trial for States houses across New Zealand. The Labour Government never did it. Do you know why? Because its State houses would never pass a warrant of fitness. The idea that the Labour Party would introduce some sort of warrant or housing standard for private sector landlords—because this is what the Labour Party waxes lyrical about: private sector landlords across New Zealand needing to up their game. The fact of the matter is that while in Government the Labour Party could not even insulate or provide State houses of good quality in its own stock, let alone in the private sector’s. It never introduced a warrant of fitness because it could not even meet that standard in State housing and it could not do it in the private sector area.

Fifthly, of course, the Labour Party when in Government, with its legislation and regulation, prevented land being supplied across New Zealand in the provinces and the metropolitan areas so that houses could be built. In fact, under that—

I was not going to take a call, but there has been some misinformation that I felt needed to be cleared up. I am an Associate Minister of Housing and the Minister for Social Development. Yes, there are some changes going on with how we work with those who need houses, how we work with the waiting list, how we get people into homes, and how we look at reviewable tenancies and at who is in our houses and who should be looking at alternative options so that we can free up some of those houses. I agree with all members of the House that we have some people living in situations that none of us would wish on anyone, quite frankly. To do this we need those who are most in need actually living in homes. So since 2011 we have advised people who are going into Housing New Zealand houses that those houses were not necessarily a house for life and that we could be looking at some of the need as we went forward.

There are big changes happening on 14 April. We have certainly made them public but I am not sure that they are getting the kind of attention that they perhaps should be. No longer will Housing New Zealand place people into homes. That will be the responsibility of Work and Income, and I think that is really important for the well-being of those people. Mr Harawira raised concerns about that and felt that it would be marginalising people. In fact, it is the complete opposite. The reality is that we know a lot about people who are on benefits. We know how many children they have, we know what their income is, we know what their needs will be longer term, and we know their history of benefit receipt or with Child, Youth and Family. By taking all of those things into consideration when we place someone in a home, we can also be looking at the wider social concerns.

So the reality is that if we set someone up in a home, their children are engaged in school. We have the right kind of support going in to them, whether it be via an NGO, a programme like Family Start or Parents as First Teachers, or one of those great programmes that works with them. We keep them there for a very long time so that they have that sense of community and are able to stay engaged in work and schools. However, there are some people who are paying market rent in a Housing New Zealand home. That means that their income is such that they could actually afford, supposedly, to be in a private rental. So then it gets really interesting to look at what the barriers are that are preventing them from going into a private rental. Quite often it can be bond payments, quite often it can be fear, and quite often it can be just knowing what they know. So we can actually put things in place that will assist people to overcome those barriers so that we are freeing up homes for those most in need.

One of the other really important things is, of course, that we are opening it up to social housing providers. So people like the Salvation Army, Vision West Community Trust in my own patch out in west Auckland, and other organisations that actually do engage in social housing will be able to access income-related rents, and that is massive for them. That means that they can offer the tenants in their homes income-related rents, which of course greatly reduces the cost for the individual or family and, equally, also makes it much easier for the organisation that is supporting them, because they are no longer reliant on just the accommodation supplement.

What you will see from 14 April is that we will have people on a waiting list that will be going out to social housing providers as well as to Housing New Zealand. They will be advising us on the homes that they have available. We will then be making the best call for that individual or family as to where they live and what best suits their needs. We then get far better wraparound support for them. We get to identify what all of the issues are. Although it is a massive change and there is always some risk in how Work and Income will handle that, with the increase in staff for specialised services, I know that we can make a really big difference. We will be making some announcements very soon on reviewable tenancies. They will be sensible, they will be common-sense, and they will working alongside someone over a period of time. So someone is not going to get notice of 1 month or even 2 months, or, for that matter, even 3 months. We will be working with them on what other opportunities there are and how we can place them into homes. So I really welcome this.

I have heard other members raise the issue of how many houses have been insulated. I cannot even start to go on about the special housing areas in Auckland and the difference they are making in homes being built and opening up other opportunities for New Zealanders. This is a complex and a hard area, but it is one that I know National is making a difference in, and Nick Smith deserves all recognition for the work that has gone on.

Report noted.

Ministry for the Environment