Estimates Debate — Social Development and Housing Sector (continued)

The Chamber is in Committee for consideration of the Appropriation (2015/16 Estimates) Bill. Members, when we were last progressing the estimates debate we were debating the votes for the social development and housing sector—volume B.5 and volume 10—Vote Building and Housing and Vote Social Development. Poto Williams had the call and she has 1 minute remaining.

Just to round off my last call, I want to say that the estimates debate is all about transparency, it is all about openness, and it is all about accountability. In the case of moving over $15 million from the Christchurch Housing Accord for affordable housing without telling the people of Christchurch, or even its own partner, the Christchurch City Council, this fails to meet any test of accountability.

I would ask the Minister for Building and Housing to come to the Chamber and tell us why he chose to do that without suitable notification to not even the people of Christchurch or the Christchurch City Council. This fails to meet any test of accountability, of transparency, or of openness, and I suggest that the Minister be held to account for that.

Last night Philippa Howden-Chapman and Graeme Beattie spoke at the Speaker’s Science Forum about their respective research on housing and health. Their point was to talk with MPs about the evidence on which we as a community of MPs could build both cost-effective and health-effective policy in housing. This is an issue that was dealt with by the Social Services Committee in looking at the estimates and there has been some Budget provision for some part of some policy around home insulation, but it is weak and will not prove to be as effective as it could be because this Government simply will not prioritise this level of evidence-based policy detail. We have seen today in the 2015 report on household incomes more evidence about the state of housing for families, which should be driving urgency in this policy.

In general, the information presented last night was not particularly new to MPs. New Zealand homes are poorly built—

The CHAIRPERSON (Hon Trevor Mallard): Order!

Mr Chair?

The CHAIRPERSON (Hon Trevor Mallard): No—sorry. The people behind you should know better. Thank you—keep going.

Thank you, Mr Chair. New Zealand homes are poorly built for our climate and for the use of families. They are damp and they are cold, and this means, of course, that families spend an excessive amount on their power bills and too many, especially the elderly and children, get sick from the effects of this poor housing. According to the evidence, Warm Up New Zealand, the home insulation programme of the Greens and Labour, and then the Greens and National, has a cost-benefit ratio for grown-ups of nearly 4:1 and, for children, a cost-benefit ratio of 6:1, showing that there is enormous economic value in investing and warming up with good insulation and good heating in New Zealand homes for grown-ups and for kids. And yet we are still in the situation, the evidence shows, where 1,600 New Zealanders die each winter. We have 1,600 winter-related deaths—avoidable, housing-related deaths—every year. We have 1,600 people dead because of poor housing—that is what the evidence that was presented last night showed—and a very large proportion of them are of children.

We all know what the solutions are, and the evidence showed us that again last night. First, improve the building standards on insulation, heating, and ventilation to remove condensation and improve heat retention. Secondly, require rental properties to have and meet a set of warrant of fitness criteria to improve the safety of those homes. The study last night showed that there was a nearly 40 percent reduction in injuries based on home modifications and, subsequently, there was a significant decrease in the cost of ACC, which is a major cost to all of us. Thirdly, provide home insulation and heating subsidies to increase take-up across all households—not a select few but across all households. The evidence of that shows that hospitalisations fell by 27 percent in the first 12 months, and by 61 percent for the most intensive insulation and heating interventions. These are three straightforward, well-known, well-costed, well-thought-out policies that are well-understood, and the evidence shows that they would be very, very effective.

The household income report that came out today shows that the number of low-income families with excessive housing costs remain at a historic high—50 percent of people getting the accommodation supplement are paying more than 50 percent of their income in housing. Of those families in households that reported major problems with dampness and mould, 70 percent were on the lowest incomes, so the lowest-income families are the most likely to suffer from the poor quality of New Zealand homes. And, of course, the evidence from this report today shows that housing is increasingly expensive, degraded, and unsafe for New Zealand families.

At the dinner last night one MP noted that “Surely, if MPs in the House knew that 1,600 people die a year from poor housing - related illnesses, we would be up in arms and do everything that we could to fix it.”, but the fact is that we do know this. We have known this for years, and, no, there is not an urgent drive to fix New Zealand’s housing quality. There is no urgent drive to increase the home insulation and heating subsidies, or to make sure that there is a warrant of fitness for rental properties.

Thank you for the opportunity to contribute to this estimates debate. I want to add to the debate an element of the measures that the Government is currently taking to support students. I am going to do so at a time when we are hearing quite a lot of debate about what students do with the money that the Government sends their way for support of their tertiary education. So I would like to talk a little bit about my responsibilities within the social development portfolio for student loans.

We have made changes to the student support. It has allowed us to free up money that we can invest in improving the quality of the tertiary education we provide. Back in 2011 we passed legislation to make sure benefit and student allowances increase every year along with inflation. That lines up very nicely with the same changes that we made to give some certainty for increases to other welfare payments as well. Interestingly, that was not an action taken by the previous Labour Government, along with its partner-in-arms at the time, the Green Party.

Each year the rates and thresholds for a range of Work and Income assistance and StudyLink assistance will rise to keep up with increasing living costs, and back on 1 April this year we saw the annual general adjustment go up by 0.51 percent, which of course was indexed at the time. So we are supporting students. We are retaining the student loan repayment threshold at $19,084 until April 2017, and increasing the student allowance rates for families with children by $25 a week, which will kick in on 1 April next year. We are retaining the student allowance parental income threshold at $55,027.96.

There is another thing that we are doing for students. Let us face it, a lot of what we hear about students is that they are time poor—they are very busy studying. They are very busy in many cases with some part-time work to support their study. This year more than 130,000 students have benefited from the improvements that we have made to student loan and allowance application processes. These make it easier in the following ways. They allow for a pre-filled online application process, which saves about 30 minutes for every student getting on there. The one other thing that does is it saves money for the taxpayer, because the taxpayer is not spending more time with these students, getting the answers from these students in order to fill in the necessary forms to apply for things. So, in fact, we are in that same way getting better bang for the buck for our taxpayers as well. There is also a digital repository called Connect, which allows students and parents to scan the necessary documents, the evidence that they need to apply to StudyLink.

You know, there are some amazing statistics that demonstrate how well this is going. Unanswered calls have been slashed from 800,000 unanswered calls back in 2013 to fewer than 8,000 this year. That means, again, a saving for the taxpayer because there is a 22.5 percent drop in foot traffic at the StudyLink offices. So this is yet another example of this Government being careful with the money that the taxpayers are entrusting to us. It has been said in the Chamber this afternoon—and I am going to say it again because we cannot say it often enough—that the way for families to help themselves if they are dependent on a welfare benefit is, wherever possible, for the Government to assist them into work. That is how their children, their lives, their health, and their welfare, indeed, are bettered. Therefore, this Government is going to many lengths—extreme lengths in some cases—to assist families to benefit from having work and having an income coming into their household.

We have heard sanctions debated here today, and it is reprehensible to hear members of this Committee misrepresent the obligations we place on people and the way that sanctions are applied. We know at the heart of this that if sanctions are applied, that means quite a drop in income. That is never done without good cause, and if there are reasons for that person to have failed an appointment, then all they have to do is say so. But we also know that having an excuse repeatedly, time after time after time again, might indicate an inability to really show commitment towards going to appointments, to undertaking training, and therefore no commitment to bettering their own lives.

Earlier in this estimates debate we talked about the Prime Minister’s cynical comment that Auckland homeowners are happy about becoming wealthier because of skyrocketing house prices. It is so clear from those comments that that is the reason why this Government has done nothing substantive or serious about the Auckland housing crisis. All we get are public relations - driven half measures. We talked about the spectacular failure of Nick Smith over the last few years to do anything about increasing the supply of housing in Auckland, to the extent that the housing shortage is getting worse to the tune of 5,000 houses every year and the Productivity Commission is projecting a shortfall of 60,000 by 2020.

But there is so much more to talk about in the housing area. After the Government has denied for years that the rampant property speculation in Auckland has anything to do with the fact that house prices are going up on average by $500 a day, we saw just before the recent Budget what this Government so often does: deny, deny, deny there is a problem, and when the focus groups start to show up a bit of public concern, it wheels out a grudging half measure. And that is exactly what the Budget announcement on the so-called 2-year test and the brightline test, to try to catch a few speculators, is.

That policy is basically like hunting speculators with a very small butterfly net, and John Shewan, one of the Government’s most respected tax advisers, came out within days of that announcement to say it will not do anything to rein in house prices in Auckland, and it certainly will not catch very many property speculators. Meanwhile, this Government is completely at sea on the question of a foreign buyers’ register. We have had four different statements—from the Prime Minister, from Nick Smith, from Louise Upston, and from Steven Joyce—all saying different things. In fact, I think that Louise Upston was the most candid. She said that it is not a foreign buyers’ register, it will not be public, and it will not tell us the information that is needed for this debate. Well, I say good on the Minister for at least being candid with the public, because I cannot say the same for her colleagues.

This Government is completely in denial about the effect of property speculators, including offshore money, in the Auckland housing market. It is totally in denial about it, in spite of the fact—amazingly, for the Government—that the polls say that in the order of 70 percent of New Zealanders want to see a register of foreign buyers. It is good enough for David Cameron, who is saying that a fully accessible and searchable register of foreign property buyers is a priority for his Government in the United Kingdom. It is good enough for David Cameron, and it is good enough for the centre-right Federal Government in Australia, which has the same policy. But this Government will not go near it. All it has done is promise a very weak, very diluted attempt to gather a little bit of data on foreign buyers. It is completely in denial.

The Australian policy, which also happens to be the New Zealand Labour Party policy, is a ban on foreign buyers buying existing houses. Foreign buyers are currently responsible for channelling billions of dollars of investment from China into new builds. Apartments in Sydney and Melbourne are being put up like there is no tomorrow, and they are almost all funded by offshore money. That policy of a ban on foreign buyers is a sensible policy that is working. Steven Joyce has been going around saying that it is not working and that it has been a failure. He has been flatly contradicted by experts in Australia who have said that, actually, the Federal Government in Australia is completely committed to the policy and is toughening it up. In the state of Victoria they are jailing foreign buyers who rort the rules. Meanwhile, this Government denies it is even a problem.

Let us talk about another aspect of housing policy. I want to say what an excellent speech it was by Metiria Turei about warm, dry homes. All I want to add, really, is that the Government’s announcement in this area was yet another grudging half measure. The public want to see mandatory standards for rental accommodation to make sure they are warm and dry. They want to see insulation standards. They want to see heating standards. But what does Nick Smith do? He allows landlords, who have avoided taking advantage of the generous taxpayer subsidy for the last few years, a 4-year grace period and very weak standards.

Earlier in this estimates debate the Labour member Poto Williams made a comment and a statement, and asked a question: “How do people in Canterbury feel about that?”. Well, I can tell you how they feel about that. This National Government won the party vote in every electorate in Christchurch and every electorate in Canterbury. The reason was that they believed in us and they trusted us. The first chance we have had to repay them for that trust and that belief is this Budget 2015, the Budget that is working for New Zealand. Budget 2015 is working for Canterbury. Budget 2015 is working for my electorate of Waimakariri.

The member Phil Twyford spoke about Housing New Zealand. Well, she needs to get out of her office and go and talk to Housing New Zealand. I went to Housing New Zealand to listen to its update on rebuilding and repairing 5,000 houses and 700 homes. There was no Opposition member of Parliament at that event. They had not even bothered to turn up. I have listened to the appropriations around social housing and I have met with those at Housing New Zealand. It is great to hear that in “Waimak” we will end up with more Housing New Zealand houses post-earthquake than we had pre-earthquake.

In this debate on Vote Building and Housing and Vote Social Development we heard from Darroch Ball. Unfortunately for him and New Zealand First, he could not talk about social housing. The reason was that New Zealand First voted down the social housing reforms and those social housing appropriations that will give an extra 3,500 New Zealanders access to social housing. Those social housing appropriations and social housing reform will give extra wraparound services to vulnerable Kiwis, giving them support around mental health, giving them support about alcohol and drugs, and giving them support in education, training, and employment. That is why he could not talk about the social housing appropriation. Also New Zealand First could not talk about the appropriation for children in hardship, because it voted down that as well—a package that will give Working for Families an extra $12 a week through that appropriation. It is an appropriation that will give beneficiary families up to $25 a week. New Zealand First members voted that down. They are not putting New Zealand first; they are putting themselves first. Can I congratulate this Government on its appropriations and targeted investment, because what we know through allocative efficiency is that if we put money in, we can get better results out.

I would like to take some time to talk about our youth services. What we know around that social investment approach is that if we put $1 in, we will get $2.53 out through reduced future liability. That is what this Budget is about. We know that Vote Social Development 2015 is one of the biggest expenditures in this vote at about 25 percent, at about $25 billion. It is right that this Government is taking a social investment approach. We know that with the Youth Service we are putting $1 in and getting $2.53 out. This is a group of vulnerable New Zealanders: 38 percent of them are victims of domestic violence, 76 percent of them have been victims of emotional neglect, and 5 percent of them have been homeless and victims of sexual abuse. So it is right with this appropriation that we are investing in services that are making a difference in New Zealanders’ lives. That is what this Government is doing. We are listening to New Zealanders. We are working hard for them. We are the party for the working people. If we look at youth services, we know through research that 86.5 percent of participants are engaged in education, training, and employment. When we are talking about Vote Social Development 2015 the reason we can invest $25 billion is that we have a got a strong economy, we have got strong economic management—

This House does know the seriousness of the problem with housing quality and affordability in this country. This House also knows that 1,600 people die every winter in this country because of poor-quality housing. MPs in this House have heard me ask questions of Bill English about one of those 1,600, Emma-Lita Bourne, a baby who died last year from housing-related illnesses. So it is impossible to say that we do not know, and we do not know what to do. We do know, and we do know what to do. Although the politicians, particularly the Government Ministers, are ignoring the evidence and even the faces of the people who are affected by poor-quality housing, the ministerial officials do seem to be taking it into account.

I want to identify two areas where the officials have been listening to the evidence and putting to the Ministers solutions to help these kids and help these families. Here is one solution they proposed before the Budget: an integrated healthy homes service for families of children with housing-related health risks—this is from the Government’s own ministerial papers; this is from Treasury to the Prime Minister—like Emma-Lita had. It was a $2 million a year fund—not very much money—for 3,000 children who have already been admitted to hospital for respiratory and infectious diseases. These children, the officials say, can be identified as being at risk of serious health problems like rheumatic fever. It was a $2 million fund for 3,000 identifiable sick kids, and what does the Government do? It said: “No, it is not in the Budget.” No, it’s not a solution that it is prepared to consider. Then we have people like Anne Tolley saying that children’s health and well-being is the Government’s priority. Well, where is the plan to deal with the threat to children’s health from poor housing? Where are the Children’s Teams that are heading out to these families’ homes to insulate, ventilate, and put in place good heating? Why are these 3,000 identifiable babies not worth this Government’s attention and a measly $2 million a year? When did these kids’ lives suddenly become optional?

Here is another example: assistance with winter energy costs. It is in the Treasury paper to the Prime Minister, Bill English, and other Ministers. It is assistance with winter energy costs called the “winter warm-up payment” of $300 a year, going to the parents of children with a child aged under 1. It would be a great start for a low-income family with a little baby to get a winter warm-up payment to help them to pay for their winter power bill. It is about $4 million a year—a bit bigger than the other one. What did the Government say to that option? “No—big ‘X’. No, we are not going to provide low-income families with little babies just a little bit of extra money to help them get through this winter.” The Government could have done it—the officials said that it was possible to do it this year—but it decided not to do it. There is no justification for the Government saying that it cannot do anything about these 1,600 deaths, about the babies who are getting sick and being hospitalised, or the babies who never come home—no excuse at all. It has the money, it has the policy, and it has the officials who support it. It could roll it out under existing services, and it chooses not to. We can never accept a Government that is prepared to put the lives of babies at risk like this for nothing.

There is not even any ideological reason for it to say no to this. What is wrong with the Ministers that we have in place? They cannot look at genuine proposals or ways to help the most vulnerable families and the sickest babies, to make sure that we have fewer babies getting sick, fewer babies going to hospital, and maybe more babies at least coming home. The families that these options were directed towards are seeing their babies going into hospital and they are not coming out. Where is the Government in making sure that these families have what they need? The Government will make a claim about the $25 in increased benefits, but everyone knows that the families will be lucky if they get to see $20 of that. It does not come in until next year, and it is a farce.

It is nice to be here. I want to respond to some of the comments by the previous Labour speaker, Phil Twyford. He was correct in identifying that there is a trade-off in the Budget; in fact, trade-offs are inherent in Budgets. When that money is spent on housing, one of the key parameters that determines how much benefit can be provided to the citizens of New Zealand at the expense of taxpayers is the underlying cost of housing. Housing is the block in the cost structure for the Government’s provision of social housing.

We have to accept—and I think it was lost on the previous speaker, Metiria Turei—that there is an element of scarcity in this. The question is: how do we expand the overall amount of resource available for New Zealanders to consume? That is why there is no point in simply deciding that a foreign buyers’ register and knowing who owns the homes in some nominal sense is going to increase the overall amount of economic resource available in New Zealand to be consumed.

💬 Denis O’Rourke: It’ll help. It’ll help.

It is fundamentally flawed to believe that that could help, as the member is trying to say.

In truth, and the really dirty reality of that register, is that what it seeks to do is identify the ethnicity and the nationality of the person who owns the beneficial interest in a piece of property. That is the reality of what the New Zealand First members’ register—their dirty little secret—attempts to do. They don’t like it up ’em, but that is the truth, and it was a disgraceful political move to make.

They then say, in a related sense, that the limit in the availability of housing that we are going to spend on in this Budget is due to so-called speculation. Well, the fact is we know that the level of speculation is inversely proportional to the elasticity of supply of housing. It all comes back—

💬 Phil Twyford: So do something about it, then.

—we will come to that, Mr Twyford—to the amount of resource available to be spent.

💬 Phil Twyford: You’re supporting a Government that’s done nothing.

But as Mr Twyford truly knows—he truly knows, with all his feigned outrage and anger—that the real issue is the regulatory environment and the supply of buildable land. And he goes on and on with publicity stunts. He goes on and on, trying to blame this person, that person, and the other, and saying that a tax will help, even though it has not helped in any other jurisdiction, and nobody has ever built a house in order to pay more tax. What he is unable to bring himself to do is to reach across the aisle and be constructive.

You see, people on this side of the Chamber know that the Resource Management Act is one of the greatest constraints on the supply of housing and therefore puts pressure on this Budget. People on this side of the Chamber would like to reform it and increase that elasticity of supply to address the concerns raised by Mr Twyford.

💬 Phil Twyford: You’ve had 7 years and you’ve done nothing.

If he objects to 7 years, what about the previous 9? He could fix this problem. If he had any magnanimity and if he had any maturity, he could reach across the aisle and say: “Here is a set of Resource Management Act reforms the Labour Party will support.” But have we seen anything like that in this Chamber ever?

💬 Hon Members: Yes, we have.

No, we have not. The problem is that the ones that he would like to support—and he knows it—would be completely impotent and ineffectual because they are asinine.

💬 Phil Twyford: Read my press release, David.

Here we have it: policy making from the Labour Party comes down to a press release. The fact of the matter is that the kind of Resource Management Act reform that would increase the elasticity of supply of housing, that would solve the problems with registers being called for and with speculation, and that would actually increase the amount of economic resource available to be allocated in this Budget would mean changing the fundamental principles of the Act.

It would mean changing the principle sections, sections 5, 6, and 7. That is what it means. It means taking a Resource Management Act that has 156 mentions of inappropriate subdivision and reducing that number. But will the Labour Party reach across the aisle and support substantial Resource Management Act reform? I think if it was prepared to do that, we could actually solve a big problem for all New Zealanders.

💬 Phil Twyford: David, you’re an idiot. Don’t embarrass yourself.

I raise a point of order, Mr Chairperson. The member just said that you are an idiot, bringing the Chair into the debate. I think that is quite inappropriate.

I did not hear him, but the member’s time has now expired.

I welcome the challenge from David Seymour to the Labour Party to reach across the Chamber to try to find concord on the Resource Management Act, because he is too late; we have already done it. Labour has repeatedly told National and the other parties in Government that we would be more than happy to work with them on the Resource Management Act, but the National Government keeps saying: “No. It’s our way or the highway. No, Labour, we’re not prepared to work with you.” So thank you, David Seymour, for reiterating the challenge to the Labour Party, because we are more than welcoming of it. I want to hear the same challenge made to the National Government, to encourage it to reach across the Chamber and work in a cross-party manner with parties of the Opposition, so that we can actually deal with some of the real issues in the Resource Management Act—some of which do, indeed, relate to housing. We would welcome that challenge. We would love to have that, so good on David Seymour for laying down the challenge. At least he does something useful when he actually shows up in the Chamber.

I want to talk about what is really happening on the ground with housing for people, because there is a lot of rhetoric being spouted in here. The Government is trying to tell us the various plans and initiatives that it has got, but I want to talk about the real experience of people in my electorate of Palmerston North. The real experience in Palmerston North is that where there used to be State houses, there is now acres and acres of empty land, and some of that land has remained empty for years. Finally, after 7 years in some cases, the Government does have a plan for that land. The plan is to sell it off. That would be fine if the plan was to use the money from the sale of those houses to build more houses in Palmerston North, but that is not the plan at all. The Government has been quite clear about this: it is reducing the number of State houses. It is reducing the provision of social housing in Palmerston North, just as it is doing in regions right across the country. So that is a fact. That is what is actually happening if we cut through the rhetoric—if we cut through all the noise. We just have to look around us in our own communities, especially those of us who live in the regions, to see that, actually, National’s plan is to reduce the provision of State and social housing.

National members argue that there is actually no need for social housing. Well, if they genuinely believe that there is no need for it, I have a recommendation for them: go along to your local Salvation Army, go along to your local Women’s Refuge, go along and talk to any number of the organisations that represent people with disabilities and ask them whether there is a need for social housing—because the answer will be resoundingly: “Oh, yes. Yes, we are desperately short of housing for people who are the most vulnerable—the people who are in need.” What is happening as a result of this is that Work and Income is now telling people to go and see the Salvation Army because they cannot get on to the waiting list for a State house—the Salvation Army that has had to get rid of its women’s hostel in Palmerston North because of a lack of funding because it lost contracts with the Government and whose men’s hostel is now under extreme pressure and has been taking people whom it is probably not fit to take, which, because the Salvation Army does not get the appropriate funding from the Government to house those people adequately, has been raising the ire of the people who live around that men’s hostel.

Women’s Refuge has had to close one of its facilities because it has lost funding from the Government, and it is now having people referred to it by Work and Income. Any woman with children who goes to Work and Income and tries to get on the Housing New Zealand list and is denied is told to go to Women’s Refuge whether or not they actually qualify for the services that Women’s Refuge provides. Women’s Refuge is there to provide support for women who are trying to escape domestic violence. So now Women’s Refuge is having to waste its own resources screening women in order to determine whether or not they actually fit its criteria. Work and Income cannot do its job properly and actually ensure that those people who are in need are able to get supportive accommodation. That is the real thing. Whatever the Government tells us—whatever spin and lines it has for us—those are the facts. That is what is really happening in our regions.

I realise that the time is about to expire on this debate, but I just want to get in a few quick points before this debate does conclude. This is the end of the Committee of the whole House stage on the appropriations. We are focusing on the social aspects of them today. I still want to reiterate, at the end of this, that this Budget that provided these appropriations, provided these estimates of what is going to be spent over the next little while, will be transformational for New Zealand. It will be transformational for those people who are the most vulnerable in New Zealand. For the first time in so many years—so many years—families who are on benefits and who have children living in their homes are going to see a rise in their benefits. It is this Government that is bringing this into place.

It is this Government that is helping to support our teen parents. We saw some legislation go through just the other day to extend the age for the young people who are at a high risk of staying on benefits for long periods of time and also for teen parents. What we know is that these people who find themselves in a position where they are on a benefit, either as a teen parent or with other high-risk factors around them, will spend on average up to 13 years on benefits. This Government is absolutely aspirational for those people. It aspires to see them achieve so much more.

The time for this debate has expired.

When the Business Committee discussed the new format for this debate, an agreed allocation of calls within the time frame for the debate was established. I am aware that as the debate has progressed, that time frame has slipped. I therefore seek the leave of the Committee for the number of calls allocated to each party to be completed before the debate is ended.

I am prepared to put the leave, but I just want to express some doubt about whether it is something that we will get a proper ruling on, as I have a feeling the leave is unlikely to be granted. But I am not sure about the ability of the Committee to overrule an agreement that has already been entered into in the House. The question is that leave is sought for the allocation of calls that were agreed to by the Business Committee, albeit within this limited time, to be completed. Is there any objection? There is objection.