Budget Measures (Miscellaneous Fiscal Matters) Bill

I am glad you did not mistake me for Grant Robertson!

The CHAIRPERSON (H V Ross Robertson): Certainly not!

I want to talk briefly about Part 3 of the Budget Measures (Miscellaneous Fiscal Matters) Bill, which deals with the suspension of anti-dumping duties. This is the centrepiece of National’s housing policies in the Budget, and a sad, sad, underwhelming policy it is. I want to talk about the whole question of housing costs, because I think everyone would accept that we have a housing crisis. The evidence is plain to see. House prices in Auckland have increased by 40 percent since National came to office.

Currently, it costs someone on the average wage 49 percent of their income just to service an average mortgage. That is unsustainable and very, very unaffordable. Under the numbers contained in this Budget, the projections are that that will go to 63 percent, so 63 percent of the average wage will go to service a mortgage. So things are not looking good, first-home buyers are locked out of the market under this Government, and Government agencies like Housing New Zealand are routinely referring people to live in camping grounds. We heard the Minister for Social Development, Paula Bennett, say the other day that people who live in camping grounds are not regarded as high priority for eligibility for a State house. That is how bad things have got.

Why are houses so expensive? There are clearly a number of factors. The question of building materials and the high price of those materials is just one of those factors, but I want to touch on the other factors in the course of these comments. Land, particularly in Auckland, is a major factor that is driving up the cost of new homes and residential developments. This Government thinks that the answer to the land supply shortage in Auckland and the high price of land is these special housing areas that it is splattering all over suburban Auckland at the moment. I want to say that Labour’s policy, KiwiBuild, will drive down the cost of land in new residential developments by the Government taking a much more hands-on role in the development process and foregoing the developer’s margin. A capital gains tax under Labour will also put the frighteners on the land-bankers and the speculators who are making a killing at the moment at the expense of first-home buyers.

One of the other major factors is construction costs. About half the costs of a new build are the construction costs, excluding materials. This Government has no answers to that. It has been wittering on about the construction industry’s productivity for the last 5 years. It has not done a thing about it. Under Labour, the building of 10,000 new homes a year for a decade, at scale, will open the door for off-site manufacturing and modern prefabrication that an industry working group recently estimated would slice $32,000 off the cost of a new standard home—$32,000. I hope the members opposite are listening to this, because compared with the paltry $3,500 that they have put on the table in this Budget, $32,000 amounts to a real and substantial saving. Add to that the possibilities, which are unprecedented in New Zealand, for bulk purchasing of building supplies. That would enable us to strike deals the likes of which have never been seen in New Zealand. By being able to bulk-purchase the components of 100,000 homes, we will be able to strike deals that are better than we have seen the likes of in New Zealand.

Tony Sewell, the head of the Ngāi Tahu Holdings Corporation, has been very active in talking about the high cost of building materials in New Zealand, and was recently pointing out that we are paying 25 to 30 percent more than Australian consumers for many of the new components of a new build. I think he is quite right. There is clearly something wrong with the industry, and I think that most observers would agree that it is fundamentally a lack of competition. We essentially have a duopoly in the building materials industry. It is not the scale of the country; it is fundamentally a lack of competition.

I invite the Minister in the chair, Craig Foss, to take a call and tell us what he and his colleague Nick Smith are going to do about this. What they have done is that they have chosen the low-hanging fruit from the Ministry of Business, Innovation and Employment’s residential construction industry market study. By suspending or lifting tariffs and anti-dumping duties, they have chosen the low-hanging fruit. They do not appear to have any political will to do anything about the core problem in relation to the high cost of construction materials, and that is to address the lack of competition in the industry. So those are some of the factors.

But we all know that if you are going to think about the cost of new housing, it is not just about the cost of the component parts of a new house. The price of a new house is set by supply and demand. It is inexplicable to me that this National Government refuses to consider the demand side of the equation. It refuses to do anything about speculators who are bidding up prices in Auckland. Auckland is a speculator’s paradise. People are farming Kiwi houses for a capital gain. The collateral damage is to first-home buyers, who cannot keep up with median house prices that are now in excess of $700,000 in Auckland. But this Government refuses to consider what almost everybody else now thinks is a no-brainer, and that is a capital gains tax. As we have said earlier in this debate, offshore speculators are contributing to this problem. Cashed-up speculators—whether they are in New York, London, or Shanghai—are bidding on the end of a phone and driving prices beyond the reach of ordinary Kiwi first-home buyers.

National refuses to do anything about the demand side of the equation, and on the supply side all it has is this lame Auckland Housing Accord, which, on its own figures, will deliver only 5,500 new dwellings in the next 3 years in the special housing areas. Auckland needs 13,000 houses every year for the next 3 years to catch up on the shortfall and keep up with growing demand. We know from the Budget figures yesterday that surging net migration is going to add 40,000-odd new residents to Auckland, which will make it almost impossible under the current policy settings for this Government to make a dent in the housing crisis.

We know that if you walk into Home Depot in California, you can buy treated four-by-two framing timber for a quarter of the price that we pay in New Zealand. It is 25 percent of the price in New Zealand if you walk into Home Depot in California. Why is that? Is it that the Americans are much more efficient at growing pinus radiata than we are? I do not think so. There is a problem in the building supplies industry. It is fundamentally a lack of competition, but this Government has no will to address that problem.

All that the Government has brought to Parliament in this Budget and offered the people of New Zealand in relation to the housing crisis is this pathetic measure to lift the tariffs and anti-dumping duties on nails, varnish, and wallboard. It may, if we are lucky, take $3,500 off the cost of a new house, but there is no reason to believe, on the evidence that we have heard so far, that this Government has even thought about how you would ensure that that saving is passed on to first-home buyers. It will undoubtedly be pocketed by builders and developers, taking advantage of an overheated seller’s market. The $3,500 that the Government has promised will be saved off the cost of a new build is less than 1 percent of the cost of an ordinary house—less than 1 percent. It is 2 to 3 weeks’ house price inflation in Auckland. It is pitiful, it is pathetic, and the people of New Zealand expected a lot more.

I want to speak to Part 2 of this Budget Measures (Miscellaneous Fiscal Matters) Bill, which amends the Climate Change Response Act. I have a number of questions for the Minister in the chair, the Minister of Commerce, which I hope he will respond to. This is an incredibly damaging piece of legislation for the post-1989 forestry sector. My first question would be: why does the Minister hate forestry so much? Why does this Government hate forestry? Time and time again we have seen Government policies undermining the very sector that is doing all the heavy lifting in terms of climate change response. I would like to know from the Minister in the chair why this applies only to post-1989 foresters.

This is not actually about foresters not being able to reregister once they have deregistered and double-dip, because we could have stopped that if that were the case. We could have just said that within any single mandatory emissions reporting period you cannot reregister; you can only register once. That would have fixed it. We could also have limited these international units across the board—treated everyone the same—to try to narrow that differential in price between the New Zealand Unit and the Kyoto units. That would have fixed it. If we had a proper price on carbon and that differential was not there, then we would not have this issue at all. I want to know why the Minister is applying this only to post-1989 forestry. And the Minister should really be listening, because we are talking serious money, jobs, and investment for a very important sector.

The National Party likes to say that it is all about business—well, here we go, passing a piece of legislation that is unfair, retrospective, and inequitable, and the Minister is not even doing me the courtesy of listening to or acknowledging any of these concerns. Maybe we should just put the officials in the chair, because I do not actually think Minister Foss understands the emissions trading scheme or this bill at all, but I would not want to do that because I would not want to have to put them in the horrible position of having to defend what is being done here. All I can say is that help is on the way. Come 20 September you will have a Labour Government that will take climate change seriously and that will support, not undermine and attack, the forestry sector.

💬 Jami-Lee Ross: The arrogance.

Jami-Lee Ross, here we go—climate change denier No. 1. Oh no, sorry—that is Gerry Brownlee. Jami-Lee Ross is climate change denier No. 2. Simon O’Connor is climate change denier No. 3. He called it pseudo-science in his contribution—pseudo-science. The science of climate change is pseudo-science! Well, I can say to New Zealanders and to our long-suffering officials who do wonderful work on behalf of this anti-environment Government that come 20 September you will have a Government that takes climate change and environmental matters seriously, so hang on in there—hang on in there.

I want to know from the Minister in the chair why this does not apply to the heavy industrial emitters who are engaging in arbitrage. Minister? Hello? No, no answer.

💬 Hon Phil Goff: The lights are on but no one’s at home.

That is right—the lights are on but no one is home. Why does this not apply to your mates in the heavy industry sector like Rio Tinto? Why are they allowed to engage in arbitrage but the post-1989 foresters are not, Minister? Nope, no one is there. The wheel is spinning but the hamster is long gone. Why does it not apply to your mates in the heavy-polluting industry sector? There is no answer to that.

The other question I have for the Minister is if this is such a dreadful, awful thing, why was the Ministry for Primary Industries, as late as the beginning of this year, promoting it in its Sustainable Forestry Bulletin? Why was the ministry providing hints on things to consider when removing and reregistering post-1989 forests in the emissions trading scheme? I think it is fair to say that from this you could probably assume that the ministry thought the Government was OK with it, so this has probably come as quite a nasty surprise to it, which is why this bill should have gone to a select committee.

My next question for the Minister is if this is about reducing the fiscal risk to the Crown—and we all accept that that is a good thing to do—why, when the fiscal risk to the Crown of arbitrage being carried out by the post-1989 forestry sector is estimated to be between $11 million and $66 million, are we not applying the same restriction to the industrial sector engaging in arbitrage? If we use the same methodology, the fiscal risk to the Crown from that sector is $107 million. Why is $11 million of fiscal risk not OK, but $107 million of fiscal risk is just fine?

This is the most appalling thing. This is a serious piece of legislation. It was presented to us as being something minor and technical. On further investigation, it absolutely was not. The Minister in the chair is refusing to even acknowledge these concerns. I would welcome him to stop sitting there like a dried arrangement, get up on his pins, and answer some of the questions that have not been answered. This bill has not been consulted on. No one in the forestry sector knew this was coming. The Government has not consulted with anyone. There was no select committee process. So these are very, very simple questions, and I hope that the Minister is going to respond to them.

The next question I would put to the Minister is that if this is about reputational risk to the emissions trading scheme, then should he not be more concerned about the fact that in his Government’s plan for addressing climate change the difference between the results for that and doing nothing at all is a 0.4 percent reduction in greenhouse gas emissions? So the difference between the Government’s great climate change strategy on the one hand and absolutely nothing at all on the other hand is 0.4 percent. So, basically, we are doing nothing. If the Minister is concerned about reputational risk, then I suspect he need only look in the mirror to see who is responsible for reputational risk to the emissions trading scheme and to New Zealand for our complete lack of action in this area.

I have an amendment in my name, and we will be voting against this part of the bill unless my amendment is agreed to. That amendment would restrict international units across the board for everyone. That is actually what the post-1989 forestry industry has been calling for, for years. So this is not about the industry saying it wants these cheap units and it thinks they should be able to stay in our scheme. For years industry has been saying: “Please restrict them. We want to see them restricted. We want the New Zealand Unit to be the prime unit used in New Zealand, but apply that to everyone.” So for the Government to turn round and say it is going to restrict them but only to that industry, so it will be the only sector in the emissions trading scheme that cannot get access to these units, is highly inequitable. It is also retrospective.

This is, I think, one of the worst things about this particular change to the Climate Change Response Act. There are people out there right now who are holding Kyoto units that when this bill passes they will not be able to use. They purchased those units in good faith. They purchased those units because legally they were entitled to surrender them to meet their obligations. They purchased those units in accordance with the law, in accordance with Government policy—the Government had been promoting this activity—and they are now left hanging. If they have not started the deregistration process with the Ministry for Primary Industries by today, then they are stuck with those European allowance units. If they have not got New Zealand Units—if they have sold their New Zealand Units because they did not think that they were going to need them—then that makes it even worse.

I have another question for the Minister, which he will obviously choose to ignore because he does not understand it or appreciate how damaging this actually is. Why did he not allow the European allowance units that have already landed in the country from today to still be allowed to be used? Why is he retrospectively hurting people who have purchased these units in good faith and in accordance with the law but who have not started the deregistration process? Does he care? Do you care, Minister, that people are actually seriously out of pocket because of something that you refuse to even stand up and take a call on, while you sit there and pretend that you are not listening to me and pretend to be reading the papers in front of you? It is just embarrassing. Seriously, a quarter of a million dollars for this—that is what we pay this guy, for no answers, for a complete lack of understanding, and for no sympathy at all, no remorse for the business people who are out of pocket or the foresters who are going to be hurt by this change. So the amendment in my name will equitably apply that restriction across the board to everyone. That is the way we should be dealing with it.

But the primary question that I want to ask this Minister is: why is he giving his mates a free pass and whacking forestry? Minister, you should be thanking forestry. It is the only reason we came through the first commitment period of Kyoto in the black—the only reason. This Government has no plan to deal with climate change at all. Forestry saved us. You should be thanking the industry, not taking yet another whack at it. So I ask again: why are your mates getting a free pass and forestry is being disadvantaged? Minister? It is cronyism, plain and simple. It is what we have seen right through the Budget. It is what we have seen right through the 5 years of this National Government—cronyism. It is unfair, it is inequitable, it is damaging, and it is embarrassing.

For the Minister to say that this is about our reputation—give me a break. This damages our reputation. This is a massive breach of faith with people who made investment and business decisions based on what they understood the law to be, based on what the ministry was actually promoting.

Thank you, Mr Chair. I am grateful that you allowed me to take the next call, because it follows immediately on from what the previous speaker, Moana Mackey, was saying, which was about the iniquity of discriminating against a particular subsector of New Zealand’s economy, the post-1989 foresters, and, in the broader context, the sheer inadequacy of this Government’s climate policy. I think, to pick up on her point, we could call this Government the 0.4 percent Government. What does that mean? It means that, as I said in the second reading, this Government’s policies will result in our emissions projections, which, if they were emulated by every other country in the world, would result in something like a 5 to 6 degrees Celsius increase.

During the second reading I asked a number of questions. Because of the truncated democratic process, it was necessary to speak on behalf of the New Zealand people, who will not have an opportunity to have input into the passage of the Budget Measures (Miscellaneous Fiscal Matters) Bill. We simply wish to ask questions. There were five questions that I asked the Hon Amy Adams, who was in the Chamber at the time. I know she took careful consideration of those five questions. She will presumably have passed those on, with the suggested answers on behalf of the Government, to Minister Foss, who will be able to get up, having answered Moana Mackey’s questions, and answer the five questions that I lodged, as well.

Just in case his colleague Minister Adams omitted to convey them to him, the first one was whether they think climate change is just another economic problem, or is it a qualitatively new, unprecedented threat to human society? The United Nations says that to stay within the 2-degree temperature rise and 450 parts per million volume of carbon atmospheric concentration—which Cabinet has signed off on—developed countries have to stay below 1990 levels, within a 25 to 40 percent range of reductions, by 2020. The second question was why does the Government then respond that not every developed country has to stay within that range when that range is very clearly calculated to account for every different national circumstance of those countries? Question No. 3 was did he think that New Zealand was doing a fair share when global projections are on course for a 2.6 to 4 degree temperature increase, whereas New Zealand’s projections, as I said earlier, are on course, if emulated elsewhere, to 5 to 6 degrees?

The fourth question—and Minister Foss can answer this one effortlessly because he knows about these issues—is what is the global least cost of carbon in mid-May 2014, is it sufficient to begin the challenging task of bringing down global emissions, and is it the right criterion to bring to bear on New Zealand’s climate policy when we are trying to bring our own national emissions down? The fifth question, which both Moana Mackey and I have touched on, is why discriminate among subsectors when you profess equity in your climate policy inter-sectorally in New Zealand? Those five questions are now lodged with Minister Adams and Minister Foss, and we will look forward to those answers so that the democratic passage of this bill can be honoured as we go through the course of the next 60 minutes.

I am also encouraged by my colleague Moana Mackey’s creativity in terms of responding to Part 2 of the bill with an amendment. I have just put forward an amendment in the last few minutes as well. It comes from the bill titled Climate Change Response (National Emissions Reduction) Amendment Bill, which is in the ballot and has been in the ballot for 2 years. The reason “National Emissions Reduction” is in the title of the bill is that it is necessary to highlight the fact that the Climate Change Response Act does not specify emissions reductions as the primary goal—certainly not in the title. The title is about trading, not about emissions reduction, so the important thing was to have an amendment to the Climate Change Response Act that has in its title “National Emissions Reduction” to emphasise the point that we are not in the business of trading carbon; we are in the business of reducing it. That is the critical thing. That is the distinguishing thing between this Government and the Opposition.

So within that bill there were a number of purposes stated—there were about six—and they were, very briefly: introduce a carbon floor price and terminate the price cap; phase out the one-for-two surrender obligation; terminate the issuance of free allocations to participants; restrict international units that can be traded and surrendered in New Zealand; introduce agriculture into the scheme; and put an obligation on the Minister to prohibit the entry of any international carbon credit. The further measure in the bill was an obligation on the Minister to prohibit the entry of any international carbon credits that may in his or her judgment depress the price in New Zealand below the carbon floor price.

Updating that to put it into an amendment in response to the particular nature of this piece of legislation before us, Part 2 of this bill, my proposed amendment is headed as addressing the Budget Measures (Miscellaneous Fiscal Matters) Bill. The proposed amendment would be a new clause 8A, which would alter the Climate Change Response Act to insert new section 222I, which would have the Minister regulate trading and international carbon credits. It would simply say: “The Minister must, by notice in the Gazette, prohibit the entry into New Zealand of any international carbon credits that he or she considers may depress the price of carbon credits below the level required to commence a reduction in gross emissions.” That is designed explicitly to ensure that the status of New Zealand Units in the domestic currency and their relationship to any international foreign carbon credits is such that if the latter are going to depress the price of the former down below whatever level—in the judgment of the Minister and the Government—is required to begin the process of curbing our emissions growth and introducing omissions reductions, then those units are not allowed in. They are prohibited.

That is a response to the necessary but minor component of Part 2, which is to halt arbitrage on the part of post-1989 foresters. This goes considerably further. Halting arbitrage on the post-1989 foresters will halt arbitrage on the subsector. It will not in itself bring down New Zealand’s emissions level. It will not curb the growth in New Zealand’s emissions. This amendment will meet the challenge of bringing down New Zealand’s emissions, and I commend the amendment to the Committee.

I am going to speak just a little bit on the area of the building supplies part of the Budget Measures (Miscellaneous Fiscal Matters) Bill, in relation to the regulatory impact statement that was prepared in relation to residential construction materials. It is very interesting when you analyse this—the impact that it will potentially have on New Zealand manufacturers. It says in the regulatory impact statement: “One of the preferred options—to temporarily suspend the anti-dumping regime in relation to key construction materials—was not explicitly consulted on. It emerged as an option through the latest round of consultation, which highlighted the potential for unforeseen effects on other sectors (beyond residential construction). The new option minimises this risk. MBIE”—the department of everything—“is comfortable that the consultation provided sufficient information to assess the risks, costs, and benefits of the additional option, notwithstanding that it was not explicitly consulted on. Consultation on the final suite of proposed options has not occurred due to Budget sensitivity.”

So here we have a Government policy that has had minimal consultation and that has a potential effect on other sectors beyond the residential construction industry. It has not been widely consulted on, but the Government is hanging its hat on it, saying that it is going to save $3,500 per house.

If you look further into the regulatory impact statement, it then says: “Cost of residential construction—As indicated above, our preferred options package would reduce the cost of a newly built 202m2 house by around $900.” I am seeing the figure $900, not $3,500, Minister. Could the Minister please explain, or is $3,500 another figure that has popped out of the air? It says here “by around $900”. Then it says: “21,300 new dwellings were consented throughout New Zealand in 2013. If a similar number of consents are issued in 2014 and each saved $900, the total savings would be $19,170,000.” Well, that is interesting because today Fletcher Building has already had $75 million knocked off its capitalisation. So the Government is doing a good job here. It is saving $19 million over the industry, but it has managed to knock $75 million off Fletcher’s in one day.

Further in the regulatory impact statement it says: “Dumping can be remedied by the imposition of anti-dumping duties at the border to ‘level the playing field’. Since 1990, anti-dumping duties have not been applicable to imports from Australia.”, which is fair enough. Under CER you would not expect so. “Anti-dumping duties are currently applied to three construction materials: reinforced steel bar from Thailand; plasterboard from Thailand; and nails from China.”

It is interesting that the regulatory impact statement refers to those three particular materials. It also refers to Winstone Wallboards bringing a case in 2011 in terms of plasterboard coming out of Thailand: “The investigation found that Thai plasterboard was being dumped, that this was likely to continue, and this would likely cause a recurrence of material injury to Winstone.” Secondly, duties on wire nails from China were put in place. Again, it was found that three New Zealand companies, particularly, were potentially being affected by this, particularly the largest one, Wireplus, which had the largest market share. It says that Wireplus “had suffered material injury caused by dumped imports [of nails] from China.” So there are another three companies in New Zealand that are obviously now going to be feeling the heat of cheap, questionable-quality materials from China.

The third one was reinforcing steel bars and coils from Thailand. That was New Zealand’s Pacific Steel Group. Again, in the case of Pacific Steel there was dumped steel coming out of Thailand, which caused “material injury” to Pacific Steel. Pacific Steel, as many of us know, is the biggest recycler of New Zealand metals in New Zealand. It takes a large amount of the recycled steel and cans and all sorts of aluminium—all sorts of stuff—in New Zealand that you put out in your recycling bins. A huge amount of that ends up at Pacific Steel, it is melted down, and put back into steel. Some of it does end up going into reinforcing and that sort of thing, to go back into our construction industry. But this Government is quite happy to basically set Pacific Steel adrift in a leaky boat and say to it and the likes of—[Bell rung] Mr Chair—

The CHAIRPERSON (H V Ross Robertson): The honourable member Andrew Williams.

Thank you very much, Mr Chair. Mr Goff, you can have your call in a minute.

It is interesting. These companies are iconic companies, like Pacific Steel in New Zealand, like Winstone Wallboards, and like the other companies making plasterboard. It is interesting that this Government, which is so close with the Chinese—well, it is, because it has got Ministers going up to China every second week, having lovely private dinners and having all sorts of things in China. It is so close with China and obviously with some of these other places that it is very happy to sell our New Zealand companies, our iconic New Zealand companies, down the river, leave them out in the cold for the next 3 years, and watch cheap, nasty nails coming in from China and perhaps wallboard coming in from Thailand, which might look good on the wall for the first 6 to 12 months, but a year later, when it is all cracking, and with no warranties and guarantees—

💬 Paul Goldsmith: Oh!

—what is it going to be like then, Mr Goldsmith? And when the shoddy steel reinforcing goes into the concrete floors and in 5 to 10 years we see it all rusting and bowing, and concrete floors cracking in New Zealand—a bit like the leaky homes that the National Government gave us—what are we going to say then? “Oh well, we saved $900 per house and we saved $19.7 million, but, boy, we’ve got a bit of a problem in our construction industry because we’ve got a lot of shonky, unwarranted products in the market that also possibly put a lot of our good hard workers in some of these industries in New Zealand down the road because the sales of their products went downhill.”

Well, I am sorry but New Zealand First does not support that. We do not think it stacks up. New Zealand First stands for putting New Zealanders first, and we will continue to put New Zealanders first. We will certainly not abandon the manufacturers in New Zealand.

We are meeting here as the House of Representatives at 3.36 on a Friday afternoon under urgency. A member of the public might assume we had matters before us of great consequence, requiring our urgent attention—legislation that perhaps reflects the vision and the big ideas of a Government determined to tackle the major challenges of our time. But what are we doing? We are looking at a bill that is called the Budget Measures (Miscellaneous Fiscal Matters) Bill. And what are the big issues that require us to be here under urgency on a Friday afternoon? Well, the first one is the repeal of cheque duties—the repeal of cheque duties.

💬 Grant Robertson: Transformational.

You know, that is going to be so transformational that it is estimated it will save New Zealanders, on average, 35c a year. The big challenge in this is how to pay them the 5c, because we do not have them any more. And then we have two other areas that are major challenges facing this country—one is climate change and the other is the housing crisis, which dominates much of the discussion, particularly in Auckland and in Christchurch. But neither of the other two measures, the other two parts of this bill, does anything that has any meaningful consequence in tackling those crises.

I want to focus on Part 3 of the bill, which deals with housing. You know, I am a free trader. That is my record as a Cabinet Minister, as a Minister of Trade. I do not mind the removal of tariffs. This bill does not actually do the removal of tariffs; that is apparently done in some other measure. It will not have much effect. We do not have tariffs against Australia. We do not have them against China. They are our two biggest trading partners. We do not even have them against the ASEAN members, including Thailand. But we do have something called anti-dumping levies.

Anti-dumping levies are not against free trade. What they are against is allowing a country to subsidise its exports below the cost it would sell those products at in its own country, maybe even below the cost of manufacturing them, and send them to another country. The reason we have anti-dumping levies is to stop other countries unfairly dumping their materials in our country in a way that is not about competition and is about not having a level playing field. I wonder where the Government’s principles are in removing anti-dumping levies, because surely as a country that believes in free trade we also believe in fair trade that should set a level playing field. This bill undermines the concept of a level playing field, and I do not think that is an appropriate measure.

The big claim made on this is that it will save $3,500 in the cost of building a new home. Where are the figures to substantiate that, Minister Foss? There are no figures to substantiate that. You have plucked that figure from the air. How do you even know whether a building company is going to pass on to the consumer any savings that might be made? There is no guarantee of that.

What is so bad about this legislation is that it pretends to find a solution to a serious problem when that solution does nothing at all to help the average New Zealander, the first-home buyer, or the lower-income household to achieve that dream of owning their own home. If it were $3,500 being saved, that would be half the amount of house price rises in my city and your city of Auckland last month. That is what the saving would be—half the $6,000 inflation in house prices, Minister, that occurred in Auckland last month. Is it any wonder that our first-home buyers have given up hope of being able to save to get into their first home? Does this bill help those people? Not at all. Most first-home buyers, as you know, actually buy existing homes, not new homes, so it would not have any impact anyway. If the saving was what the Government claims, it would be less than the cost the people would be paying on conveyancing and a fraction of the amount they would be paying to the real estate agent in commission.

You see, the problem in my electorate is that median house prices since this National Government has been in office have gone up by 40 percent to $700,000. Paul Goldsmith came from my electorate. He knows that it is a working-class electorate—a working-class electorate where the median house price is now $700,000. My kids could not afford to buy in that area even though they are tradesmen on good incomes. That is a problem. Does this bill solve that problem? Not at all.

What does this bill do about the problem of speculation on house prices? Every young first-home buyer who is out there in the market trying to buy a home on the savings they can make by working hard is faced with competition from speculators. Some of them are New Zealand speculators, who can claim the costs of the mortgage off their profits. That is tax deductible. It is not for the home buyer; not for the first home - buying couple who desperately want to own a home of their own. Then there are the speculators from overseas. I want those people on the other side of the Chamber, who say that it is all about racism, to explain to this Committee why it is that first-home buyers in New Zealand should be competing with people who are not New Zealand citizens, are not New Zealand residents, and do not intend to ever come and live here but want to make a profit in a country that has no capital gains tax.

John Hayes was with me and others when we were in China. China is one of the countries that are interested in buying. It is not the only one, and it does not matter whether they are Chinese or Americans or British or whatever. What we discovered in China was this phenomenon where speculators were buying up apartments, relying on an income from the capital gain, and not even tenanting their apartments. There were hundreds of thousands of empty apartments because the attitude there is to buy the apartment, not worry about renting it out, wait to farm the capital gain, and leave the house empty.

How does that solve our housing crisis? Why is it that we do not do things to stop the foreign speculator on the other end of the telephone outbidding the young couple desperate to own their own home? Why is there nothing about that in this Budget? I would not mind being here on a Friday afternoon if we were doing something worthwhile to help those hundreds of thousands of young New Zealanders who will never realise the Kiwi dream of being home owners and are bound to remain tenants in their own country because this Government will not act.

Then we have got a Treasury warning in this Budget document that says we are getting so much immigration at the moment—38,000, well above what was predicted. They are all coming to Auckland, and that also will push up the price of houses. I am not anti-immigration at all. I have an electorate full of people who are migrants. Many of the people who are migrants in my electorate are also desperate to buy their own homes, but what they do not want is a level of migration coming through that is well in excess of our ability to supply the houses. Where are the measures in this legislation that will help those New Zealanders—my Indian constituents, my Chinese constituents, my Pasifika constituents, and my European constituents—to get homeownership? There is nothing there.

What else does Treasury tell us? It tells us that at the moment, a person will spend 49 percent of the average full-time wage on an 80 percent mortgage on the average home. It is 49 percent at the moment. It sounds pretty grim, does it not? But what does Treasury say also? In 5 years’ time they will be paying 63 percent of their wage, and if they are in Auckland, it will be 86 percent of their wage. No wonder more than half of all Aucklanders are caught in a trap of paying high rents and never being able to get their own homes.

What does this Government do? It says it will remove anti-dumping on plasterboard and nails. What a Government of vision this is! What a Government that understands the needs of the people! Why do these Government members not understand it? Half of them have their own investment properties. They do not understand what it is like for the people trying to buy. They are not even interested in the people trying to buy. Well, I am standing up here, speaking out for those young New Zealanders to whom I want to give a chance to do the same thing that I did when I was in my early 20s—buy my own home, work on my own home, live in my own home, and have that chance for the future.

I want to principally talk to Part 3 of the Budget Measures (Miscellaneous Fiscal Matters) Bill. Again, I am speaking up for the owners of small and medium sized businesses who will be impacted. Some will go out of business because of this bill. These are the ones who are not the big companies like Winstone Aggregates or Fletcher Building or others, which the paperwork around the bill suggests will be able to adjust. Yes, they will adjust, because they have got the sheer bulk and size. In fact, instead of being manufacturers, they will end up being the importers that will knock out some of the small businesses that I am particularly concerned about.

We have had a discussion around the forestry sector, but we need to be doing value adding for our forestry sector too. The logs that I see out my window on the wharf of Wellington heading off could be being processed and value added in New Zealand. This bill in part puts even more pressure on those who would do that value adding. It actually puts more pressure on them, to the point that they will go out of existence. New Zealanders will lose jobs because of this bill. They will not be losing jobs just at businesses like Winstone Aggregates; they will be losing jobs out of unique businesses doing very skilled work—cabinet makers, door makers, window frame makers.

There is another aspect too, and that is around insulation. Being here with a primary production focus, I am interested in fibre as well. More and more we are seeing a move towards wool and natural fibres rather than fibreglass batts. This bill does nothing to support the natural products that our sheep producers can be part of producing. It pushes back against that initiative too. Wool is a healthier, better product, but it will be priced out of existence for most New Zealanders. For $3,500 for a new home, I do not think that the bill is worth it. It is not worth it.

What the Government could be doing is supporting those New Zealand businesses to innovate and to tool up to be able to compete in the areas that they want to. There are businesses in Christchurch—and I spoke to one, as I said earlier—that have actually tooled up to help with this need that the Government has at last recognised in Christchurch. New Zealand businesses can come to the party and they can be helped to come to the party.

But what has this Government done? It has just opened up the borders and said: “Come on in, it doesn’t matter.” There is no recognition of a border here. There is no recognition of fairness. If something comes in from one of these other countries, will we be looking to see the wage structure and the conditions of the workers where it was produced? Will we be looking to see the environmental impacts where it was being manufactured? No, we will not. We will just be looking at that bare-bone price and saying “That’s great. We’ve got competition and we’ve got cheap commodity products coming into this country.” We will be worse off for this, because of the nature of this bill.

I do recognise the need to look at big businesses when they are rorting the system and ripping off New Zealanders big time, but there are other ways of doing it than this, which actually costs us throughout. The Greens support aspects of the initiatives in here for sure, but we do not support anything that is going to go against a fair trade and reasonable conditions for our businesses and our workers. So, on this part of the bill, or the third bill when it is divided, we will be opposing it. Thank you.

Just before I report this bill, there is a correction to the voting on the question that Part 1 stand part. It was recorded as 87 for and 7 abstentions. It should have been 107 for and 7 abstentions. So the record is therefore corrected.

Bill reported without amendment.

Report adopted.