Social Housing Reform (Transaction Mandate) Bill

This is a very important bill, and Labour will be doing its best to give it comprehensive treatment this afternoon in the Committee stage, as we scrutinise it part by part and clause by clause. This bill is an enabling bill for the State house sell-off, which was announced with great fanfare by finance Minister Bill English after the last election. It was then showcased in the Prime Minister’s state of the nation address last year. It has been an issue of great controversy around New Zealand for the last couple of years.

For the benefit of folks who are just tuning in to this debate and have missed the earlier stages, let me just say that Labour is staunchly opposed to this bill. It is our belief that every child in this country deserves a warm, dry, and secure roof over their head, no matter how struggling mum and dad might be. The State housing system, imperfect as it is, has been the expression of that New Zealand value for decades—in fact, for most of the 20th century. What this bill does is enable the Ministers—in this case it would be Minister English and Minister Bennett. It gives them unfettered and extraordinary powers to sell off billions of dollars of publicly owned land and housing that has been built up and paid off by generations of New Zealanders, both taxpayers and State house tenants, with the express purpose of putting a roof over the heads of our most vulnerable citizens. We will put the view time and again in the course of this debate that we are utterly opposed to the dismantling and privatisation of that system of housing and social support.

There are two particular reasons that we are against this bill. The first, as we have set out in our minority view and which I have just been summarising, is the view that this is an enabling bill for a policy that we on this side of the Chamber find abhorrent. The second, which we will come back to repeatedly during this debate, is that the unfettered powers that this bill gives—which were described by the Government’s own officials as “unprecedented”—we believe pose a serious risk to this country’s reputation for probity and integrity. That is of special concern given that under this National Government, New Zealand is sliding down the ranks of Transparency International’s international corruption index.

The Government set out on this path to persuade New Zealanders that, somehow, the policies that this bill enables are basically about modernising and fixing up a broken-down, tired old system of State housing. The Government has said a number of things, which you will hear in the course of this debate. It has said: “Oh, the houses are all in the wrong place, and they’re the wrong size.” Well, it still has not explained to us how flogging off billions of dollars’ worth of State housing under this bill to private interests will ensure that those houses are in the right place or of the right size. How is that going to work?

The Government spent months telling New Zealanders that the powers that this bill gives to do whatever deal the Ministers see fit—to sell houses for whatever consideration Bill English and Paula Bennett see fit—will lead to the provision of State housing and social housing in a more efficient, kind, and compassionate way. The Government said that giving these houses to local community housing organisations would mean those people would be more in touch with the needs of State house tenants than would some Housing New Zealand bureaucrat in a far-flung office. Well, now we find the Government is talking to financiers, public-private partnership investors from the UK, property speculators, merchant bankers, and Australian companies. And now we find that Bill English’s great vision for the transformation of State housing in this country is that he wants the development of retirement village companies to take over the provision of State housing.

So, finally, after 2 years of changing their story, about every month, about who would get these houses—first it was going to be the Salvation Army, then it said: “No, we don’t like this policy. We don’t think it’s going to improve the lives of tenants.” Presbyterian Support followed, and said the same thing. The Government said: “Oh, the iwi will buy these houses.” Well, the iwi said: “We don’t want them unless we can have them for nothing. We don’t want the Government to basically hand down houses that it hasn’t properly maintained.” So it has been one spin line, one justification, and one rationale after another, and the latest is Bill English saying that retirement village companies are the people whom he thinks should pick up the State houses and run them at a profit.

And that goes to the nub of this bill and this policy, because this bill is about giving Ministers English and Bennett extraordinary powers to do whatever deal they like, to sell billions of dollars of land and housing to private interests. But State housing was set up because the market will never, on its own, deliver a decent quantity of affordable and decent quality housing to our poorest citizens. That is why it was invented. But this Government—and it is its own words—wants to create some kind of artificial market in State housing, with a whole lot of private landlords competing for subsidies.

So when Bill English said he wants retirement village - type companies to take over the provision of State housing, he is anticipating opening the public purse and dishing out vast quantities of public subsidies from the taxpayer directly into the pockets of these retirement village companies. It is absurd to think that a business model that allows the Rymans and the Summersets to make a killing off the wealthiest decile of New Zealand society, for people to live in retirement villages, would work for the 5 percent of New Zealand’s poorest and most vulnerable citizens without vast, ongoing quantities of public subsidies. That is the business model that Bill English has in mind.

He has just made a decision that the Government should no longer be in the business of owning and operating State houses to house our most vulnerable citizens. It is totally ideological, and it is consistent with National’s congenital discomfort with and contempt for the poorest New Zealanders. The National Government just does not want to be in the business of doing that. It wants private interests to do it. It is quite happy to flog off billions of dollars of publicly owned assets to the private sector and then to basically feed them hefty public subsidies on an ongoing basis.

How will that be a more cost-effective way of providing State housing, because exactly the same service, presumably, will be provided, or, one would hope, one that would be at least as good? Retirement village companies in this country make a 25 percent return on their assets. They are highly successful property development companies. How is the Government going to fund that 25 percent return on their assets if they take over the social housing estate under this bill? I will tell you how. The only way those companies will make the return on their investment that they expect is by the National Government dishing out hefty public subsidies.

So we are going to talk in Part 1 about a number of points, but I want to direct you, in particular, to clause 4, which inserts a whole new section 2A into the Housing Act 1955—the Housing Act that is there partly as a guide and as a legislative framework, as a set of accountabilities, for the provision of decent public housing for the poorest and most vulnerable citizens. Right into the heart of that law is being thrust, by this National Government, the tools for the very demise of State housing.

I do want to pick up where my colleague Phil Twyford left off, looking at what is clause 4 of this bill, inserting the new section 2A. I think that the title of that new section gives away the game completely. It is “Minister may exclusively administer land declared subject to this section”. So what has previously been under the control of the Housing New Zealand board, previously the Housing Corporation before that—the decisions about the way in which Housing New Zealand will control the land and the houses that it uses—is gone, by the stroke of a pen, into the hands of two Ministers.

The party opposite, which would tell us that it is the great party of democracy, the great party of small government—I think that is probably what Todd Muller and Matt Doocey thought they signed up to with the National Party. Those members do not like big Government, do not like the control of big government—they are signing up for it right here. They have got a charter here where two Ministers take control of what happens with Housing New Zealand, take on the legacy that goes back to the first Labour Government, and tear it apart and say that it does not matter anymore that the State should have that role.

It is the idea of a social contract that New Zealanders have bought into for generations, which is that if you cannot afford to house you and your family yourself, the State will be there to step in. That is because it is fundamental—it is fundamental to the well-being of New Zealanders, to the well-being of New Zealand children, that they grow up in a warm, dry, safe home and that they have that as the basis of going on to be able to achieve their goals and dreams in their life. That has been there for generations, and along comes the National Government, which says: “We’re not so sure about that. We want to open it up for private provision.”

As Phil Twyford has already mentioned, the policy that is enabled here in Part 1 of this bill has been dressed up by the National Government as being about making sure that we improve the quality of provision of social housing in New Zealand. Labour is very proud of having worked with the community sector to build up social housing, but that is about building up social housing. That is about increasing the stock of social housing; it is not about transferring something built up by generations of taxpayers and flicking it off to private investors.

Members on the opposite side of the Chamber did not seem to like it when Phil Twyford suggested this. Well, I suggest that they take a look at what the Minister of Finance, Bill English, said only this week. I quote here from the news story: “Fully private, share market-listed companies could provide social housing in return for guaranteed subsidies within five years, Bill English has told fund managers.” So this policy, which started out being about the community sector and getting people who were more appropriate than the Government to provide social housing, has morphed over a year or so into flicking it off to private developers.

The whole point of the State housing system in New Zealand has been because of the market failure in the private sector, because the private sector is not interested in providing that base level of housing that is required to give opportunity to all New Zealanders. So in Part 1 of this bill that whole ethos, that whole fabric that has been knitted together in New Zealand, is torn apart by section 2A. Section 2A(1) states: “The Minister may, after notifying the Corporation and by notice in the Gazette, declare any State housing land or class of State housing land (including any dwellings, other buildings, and chattels on that land) to be land that is subject to this section …”. It is anything—anything at all in the hands of two Ministers.

I defy any member opposite to get up and justify why Ministers are being put above the law, because that is what is happening here. The law is being changed to make sure Ministers can do as they wish here. Why have a Housing New Zealand board? Just get rid of it. Just leave it to the Ministers. Why even have the pretence any longer that there is any form of process here?

Members of all the Opposition parties in their minority report state very, very clearly that the mandate that has been given here is unwise and they talk about the unfettered powers to negotiate the transfer of such valuable assets out of the public realm into the private. It is unfettered because that section I have just read out to you, section 2A(1), gives carte blanche to the Minister.

Section 2A(2) states: “The effect of a declaration is that the Minister, to the exclusion of the Corporation, has and may perform and exercise the functions, powers, and duties of the Corporation under this Act …”. Just think about that for a minute. That is a specific section in a bill that says to Ministers: “You can exclude the Housing New Zealand Corporation. You can exclude any pretence that you have to abide by the law and you can go forth and negotiate.” Well, we know how great this Government is as a negotiator.

💬 Chris Hipkins: Steven Joyce will do it.

Fantastic work—yes, get Steven Joyce involved. He can learn the lessons of Skycity, of Rio Tinto, Warner Bros—all the great negotiations that this Government over there has done. Government members have hoisted themselves with their own petard here because every private developer now knows that the Government is so desperate to get this policy enacted but has failed to get the community sector to buy in that it is now beholden to someone to come along and rescue its privatisation agenda. Well, that is a travesty.

This is part of New Zealand’s history. It is part of the social contract because New Zealanders have for generations said “We want there to be this kind of housing stock.”, and this Government has come along and given carte blanche to Ministers under Part 1 of this. The only thing I will say is that under new section 2A—what was subclause (5)—it states: “The Corporation is not responsible or liable for the Minister’s performance or exercise of functions, powers, or duties …” Well, they will be pleased about that, will they not, because they will not have to put up with yet another negotiation stuff-up by the National Government.

But let us be absolutely clear. I have not seen a clause like the new section 2A in the time I have been in Parliament—a section that so obviously goes out of its way to undermine the accountability and transparency arrangements that we would expect from our Public Service. Is it little wonder that we are plummeting down the Transparency International ratings under this Government? We had Transparency International specifically mention the Skycity deal and the Saudi sheep deal when it was talking about why New Zealand went down. Well, I would add this, too.

I would add what is in Part 1 of this bill because it is an unbelievable power grab by this Government—the Government and the party that would tell us that it is all about democracy and it is all about small government. What it is about is centralising power. This is actually one of the great centralising Governments of all time. Those members are the people who said “We are going to make sure that we get services to the front line in public services.” and they ended up slashing public services in the provinces. It is the same thing here. It is a power grab, but, much more than that, what Part 1 of this bill does is undermine the legacy of State housing in New Zealand.

State housing in New Zealand is something that has given numerous New Zealanders the start in life that they would want. The Prime Minister has been very proud—and so he should be—to stand up and say: “I came from a situation where social housing helped me.” Good on him. Why is that not on offer to everybody else? Why is the opportunity to fulfil their hopes and dreams—just as the Prime Minister was able to do—being taken away because of an ideological obsession of Bill English and Paula Bennett that the State should not be involved in housing? The fact of the matter is that for all its imperfections, State housing in New Zealand has delivered opportunity to generations of New Zealanders, but this Government wants to come along, as it does so often, and pull the ladder up behind it and say that other people do not get that.

Mark my words, this is only the beginning of this agenda as Bill English wants to see it, because the social housing sector, the community social housing sector, is desperate to help out. But it does not want to be just lumped with the Government’s stock; it wants to work with the Government to get the kind of State housing stock, social housing stock, that New Zealanders need. But instead, because the community sector has said no, the Government has gone off and said: “All right, we’ll sell it off to the highest bidder. We’ll get the private sector involved.”

We know the imperatives are different there. We see that in the private rental market. The people and every member in this Committee know that those in their constituencies who are in social housing are there because the private market has failed them and they cannot be part of that. By having this turned over—by giving this power to the Ministers to implement their ideological agenda—New Zealanders are being failed by this Government.

I call Marama Fox—Marama Davidson.

Marama Davidson, standing on behalf of the Green Party, to take a short call on the Social Housing Reform (Transaction Mandate) Bill in the Committee stage of this debate. The Green Party kaupapa of social responsibility and just distribution and appropriate decision-making is why, with every fibre of my body, I oppose this part of the bill and, indeed, the whole bill. Part 1 of this bill, essentially, gives unprecedented power to two people—to two people in New Zealand—and we are supposed to believe and trust that those two Ministers will have every good wish towards the well-being of some of our lowest-income New Zealanders and some of our New Zealanders who have struggled, mostly, to try to find homes for themselves and their families. Part 1 is important to me to oppose because of this transfer—this extraordinary transfer—of power. Again, I support what the previous members have stated in terms of the reason why we should not trust this transfer of power. Certainly, the Skycity deal is one such example where that deal was put through behind closed doors.

I mentioned in my maiden speech the struggles that not just I have faced but also my friends, whānau, and community have faced to find good, safe housing. I would like to say to my networks that Part 1 of this bill—Part 1 of this whole bill—is a good thing for those of us who are really struggling to find housing, but I cannot go with Part 1 of this bill, which transfers that power, to say: “This is in your best interests.” I cannot do that, and so I do take a short call to point out that we oppose that.

I think about the drivers of this bill. Is it to uphold the legacy that the previous members have referred to, which we all know about, which was about providing good, safe homes for New Zealanders? No, it is not, so I oppose Part 1 of this bill on that notion.

I particularly want to mention and pay tribute to the voices of the people of the Glen Innes community in reference to Part 1 of this bill. Their voices were not listened to, were not heard, and only very minimally, if at all, were given a place in this House in any of the debates.

I refer, again, to why the Green Party is strongly opposing this bill. This is not a bill that upholds social responsibility. It is upholding profit-seeking intentions of property developers and the ideology where the Government wishes to flick off its responsibility for the provision of housing. The Green Party opposes this bill because we also stand for appropriate decision-making, and this bill also oversteps appropriate decision-making, particularly where legislation impacts on people. Those people most affected should have a strong stand in this legislation, and they have been very clear.

Those in the community of Glen Innes have been very clear that this bill has been sold to them—these reforms and this transfer of power have been sold to them—as if it is going to uplift and revitalise disinterested communities. They have been vindicated by the ongoing overstepping and ongoing bad treatment of their community, and they are well aware that that is not the intention behind this bill and that is not the intention behind Part 1 of this bill.

The New Zealand I hope for, as a mother with young children and with intimate knowledge of exactly how hard it is to find housing and exactly what we do need for solutions to our housing crisis—I want a New Zealand that truly is going to be driven by our most struggling. I know that Part 1 of this bill, and, indeed, this whole bill, is not about that. Therefore, I strongly oppose Part 1 of this bill.

If there was ever a bill that truly defined the character of this Government, it would be this bill, the Social Housing Reform (Transaction Mandate) Bill, because it is a bill that is based almost entirely on National ideology and its intention to privatise everything it can get its hands on, and now that includes social housing—State houses. If there was ever a bill that evidenced the failure of the National Government’s housing policy and programme, it is this bill. It demonstrates so clearly the failure to provide opportunity for people to buy their own homes who, therefore, become dependent on the rental housing market. And it is a bill that shows the Government’s failure of its intention—even its intention—to actually concentrate on the upgrading of State houses and the expansion of the number of State houses in New Zealand to meet the very real needs that exist out there. And of course all it does, fundamentally, as a bill is to change the ownership of State houses from the State to a number of private providers. That is actually not going to do anything to help solve the housing crisis whatsoever. So there you have it. Fundamentally, what we have got is a bill that defines what the programme is all about. It is about ideology, and that evidences actually the total failure of the National Government’s housing policy across the board.

I have two fundamental questions that I want to ask of the Minister in the chair, the Hon Maggie Barry. I have mentioned these in speeches I have already made on this subject, and no member opposite has yet answered these questions. The first is this. There are something like 2,000 State houses to be sold by this unseemly fast-track method, and that means billions of dollars in sale proceeds. So the question is who is going to get those proceeds, and what are they going to be used for?

All I see in the bill is subsection (7) of new section 2A, inserted by clause 4, which says the proceeds “… must be paid to a Crown Bank Account.” That is all it says—we are not informed of anything beyond that. So what is the Government’s mandate for this money? What is it going to do with it? The public of New Zealand want to know and need to know that. How do we know whether the funds will go back into new social housing or, indeed, into any social housing at all? How do we know whether they are going to improve the number of State houses, for which there is such a significant demand at the present time? And will that money, or part of it, actually go back to the Government as a dividend from Housing New Zealand Corporation? Is that what it will be used for? If that is the case, then that would be disgraceful, because that corporation should be spending all of its resources on the provision of new and better social housing in New Zealand, because that sector is crying out for Government investment.

Many commentators have made the point over and over again that New Zealand’s housing crisis will never be solved until the Government realises that it needs to invest in housing in this country because the private sector cannot solve this crisis by itself. That has been said many times, and yet to me this bill seems to say just the opposite—let us take Government money out of the social housing sector. If that is not the case, I want to hear from those sleepy members opposite exactly what this money is going to be used for. If it is going to be paid into a Crown bank account, what happens to it after that? Which Crown bank account? Is it going to Housing New Zealand Corporation; if so, is part of it going to become a dividend? If it is not going to be paid into that Crown bank account, then which Crown bank account, and what is the money going to be used for? Will any of it actually be invested in any way whatsoever to solve housing in New Zealand? And, in particular, will it be invested in the social housing market in New Zealand, for which there is such a massive demand?

Following on from that question, I want to ask one more, and it is this. It concerns the reporting requirements under the Housing Act. What you will see from the committee’s report is that it inserted as its main contribution—like it will really make any difference, but it is its main contribution—new section 2A(8) by way of clause 4. That says that because it would not be appropriate—in the committee’s words—for Housing New Zealand to provide reports on these issues because it would no longer have control of the land, the report should instead be included in the responsible ministry’s annual report. Well, what that will actually mean in practice is that nobody will know because those reports are buried in Government papers and nobody reads them. That is not in any way at all an effective way of communicating with the public on such an important matter—such huge amounts of money—and there will be no information that the public will actually be able to understand at all.

So why not actually have the reporting in both the department’s reports and also in the Housing New Zealand Corporation’s reports? Although the housing will not at the time of sale be actually controlled by the corporation, those houses are nevertheless, even at that time, still corporation houses. So the corporation should—must—actually report on what has happened so that we will know the size of the sale proceeds that have been received and we will know to whom the houses have been sold, whether they have been sold overseas, what the sale prices were, what the process of sale itself was on a house-by-house basis, which houses were sold, and, as I have already said, where the proceeds are going to go and whether they are going to go back into social housing. It is very important that this issue be answered by the Government via the Minister in the chair, so I am asking the Minister these questions. Why not report more effectively and properly on all of those matters that I have referred to so that the public can be fully and fairly informed? This bill will not fairly and fully and properly inform the public on any of those absolutely vital pieces of information, which we are all entitled to know.

Furthermore, as I have already said, we do need to be assured by the Minister that these proceeds are not actually going to form in any way just a dividend back to the Government so that it can claim that it has solved the Government’s deficit problem. I want to hear answers to those questions because they are important ones. I have asked the question twice already, in my first reading speech and in my second reading speech, and now I am asking it again. I want answers to that question, and the New Zealand public want answers to that question, too. It is simply not good enough for such huge amounts of money to disappear without any explanation about where they are going to or what they are going to be used for.

I want to hear those answers today because I have asked the question several times. It is an important issue and I want this Minister in the chair, or whichever Minister it is going to be, to stand up and give us some information about all of that so that it will be on the record and so that we know what we can hold the Government to in the future.

I also particularly want the Government to say why the Housing New Zealand Corporation is not being involved more in this process, because that is the body that the Government has set up as an agency for the very purpose of providing the expertise for these particular purposes: the sale and purchase and investment—or whatever it is going to be—of State houses. So why—why—is all the power going just to a couple of Ministers? When you think about all of these provisions, you come up with one answer: secrecy.

I rise to speak on what I think is a very, very important piece of legislation being put through by this Government that affects thousands of New Zealanders, and many of them have no idea of this Government’s agenda. I begin by saying that this enables the Minister to be able to sell off State houses when and where they want to.

The first State house in New Zealand was built in my electorate, at 12 Fife Lane, Strathmore. It was built, along with quite a number of others, to give secure, warm, dry housing to New Zealanders who could not afford to buy their own home, and who probably would never be able to afford to buy their own home, but who deserved the security of living in a home that they could call their own for as long as they needed it. That has been the basis of our State housing policy for as long as I can remember.

I can remember, as a child, living in Milton Street, Murchison, where my parents were able to build a home with a State Advances loan, and next door to us was a State house, next door to that was a home that somebody owned, and next door to that was a State house, but there was no distinction amongst the children or the families who lived there. We lived side by side and our houses looked the same. There was no distinction between us. We played together—we were the same.

But this Government has made the people who live in State houses scapegoats. They are people who, to this Government, are worthless people—they got themselves into this trouble. Therefore, if they are in this trouble, it says we have got to get them out of these houses as soon as we can. So what we are seeing now is a meaner—meaner—approach to New Zealanders, a less compassionate approach.

It was brought home to me that the selling off of these State houses is going to have a huge impact, particularly on people who have lived in them for a number of years. They have brought up their children, they have been on low incomes, and they have got the knock on the door. They have had Housing New Zealand come and tell them: “Your time’s up. Shift out. Find yourself in the private market.”

I had two come to see me on Monday—two men. They were two men who came to see me. They were almost in tears. One has been disabled for many years and is unable to work. He has got a very small, two-bedroom little apartment up on Beacon Hill Road in Miramar. He has been told, after 17 years of living there: “Your time is up. Move out.” He is still a man who is unable to work because he is sick. He was told: “Move out because we want your two-bedroom little apartment. We’re going to put you in a one-bedroom apartment, but we’ve got none.” And I note that one of the issues that Housing New Zealand, or the Government, says it has is that there are very few one-bedroom houses. So it is going to shift this poor man and his wife out, if it finds a one-bedroom place, but he has been given 3 months and he has got to leave.

His next-door neighbours are migrants who came to this country. They are on a low income, with a husband who does not work and a wife who does, but who is on not much above the minimum wage. They have been told: “You have to shift because you’ve got a two-bedroom little apartment.” They have been there for 15 years. They have been told that these are no longer their homes. They are to be given away for someone else to live in, or to manage or to sell off. That is not the New Zealand that I know or want to live in. That is not the way we treat those who are not as lucky as us, who can afford to buy our own homes.

I was very, very interested in the regulatory impact statement about this particular bill. What it told us was that it was prepared by Treasury, in a hurry. It was prepared without impediment or delay because the Government wants to be able to transfer State houses out of State ownership. It said there was a very short time frame for Treasury to prepare the regulatory impact statement. That always annoys me, because if it does not take the time to work through a policy properly, it ends up making big mistakes. What we find out from this regulatory impact statement is that “the proposals have been prepared in a short time-frame, to ensure they are in place to enable the transfer process.” It is not about whether they have been put in place for the good of the people, or put in place because it is good policy. They are being put in place to enable the transfer process, so the Government can get rid of the houses as fast as possible. The Government says there was very little public consultation on this policy at all. Why? The Government wanted to rush it through. So the consultation was basically with Housing New Zealand. They say that “wide public consultation was not possible within the timeframes of the process.”—of the process. So the process and the transfer were far more important to this Government than the people who live in those houses, whose lives are affected by the changes being made in this bill.

I think that reflects on Government members. Not all of them—there are some good people across there. I can see one or two over there. But what it does reflect is the prejudice and privilege of some of those who are running this Government. The prejudice and privilege: the prejudice against those who live in State houses because they are not as good as those members, and the privilege of their being homeowners themselves. I see a member screwing up her nose. There can be no other explanation for wanting to treat people who are, by the very fact they are in these homes, our lowest-income earners. These are people who are on benefits, people who are unwell, people who perhaps have never worked, and people who are now older in life. I think we do have a meaner, nastier country, from a meaner and self-interested Government. I have to say that we should be ashamed of this Parliament if we pass this bill.

I agree with Denis O’Rourke. Where is the rationale for this? What is the underlying rationale that we would want to get rid of State houses for New Zealanders? Why are we not building more of them? There is a housing shortage in New Zealand. Homeownership is going down, private rental costs are going up, and people’s wages are hardly moving. We are saying: “What will we tackle first? Let’s get rid of the houses that people are living in that are State house rentals.” So we are going to get rid of them out in the provinces. The Government says: “Oh, well, nobody wants them.” Well, how come there are people desperate for houses in those provinces, who drive past and walk past empty houses and wonder: “Why not me? Why haven’t I been able to get into one of those houses, in one of these smaller towns?”. Every town in New Zealand will have a need for houses for people who are finding it very difficult to get one.

We should not go down this path. We should not be going down the path of not providing good, affordable housing for those who will never be able to go out and buy their own house, so we will argue against this bill until it is stopped by the Government. We will argue as long as we can because we do believe in a fairer society—one where the Kiwi Dream can still live, one where people can own their own home or rent a home that is affordable and know that when they go home from their jobs or from school, theirs is a safe, secure home that is not going to be whipped out from under them by a Government that has very little interest in their well-being at all.

Again I rise to take a very short call to also continue the Committee stage debate on the Social Housing Reform (Transaction Mandate) Bill, which the Green Party and I strongly oppose. Part 1 of this bill transfers the power into two Ministers’ hands. I wanted to take a short call, not just because short videos are popular on social media but because I wanted it to be clear: whenever in the history of the world has the transfer of power to a few ever worked out for the people? I wanted to clearly state that.

I am also thinking about the definition of power, in relation to Part 1 of this bill. I am also thinking about tikanga Māori and Te Ao Māori and how power is supposed to benefit everybody. I have already been in the Hansard talking about the definition of rangatira, in that it is supposed to be the weaving together of a group. So I stand again to say that I oppose Part 1 of this bill, with its transference of power to a few, because when has that ever worked out? Kia ora.

The housing market, for people in New Zealand—if you exclude the people who are in collective housing; for example, intellectually handicapped people who might be living in a sheltered house—is broadly broken down into three sections. There are people who own their own house, people who rent a house in the private sector, and people who rent from the community sector, including in that broad definition the State. It is clear that we have got problems in all parts of that at the moment in New Zealand in every sector. We have got overpriced housing in some of our markets. We have got increasing concentrations of wealth, meaning that we have got more people owning a lot of houses and a fewer number of New Zealanders being able to own their own homes. We have got problems that are so entrenched now that we have got the lowest rates of private homeownership since the 1950s. So we have got problems in that part.

In the private sector, in the rental sector, I think as a country we have rested on our laurels in that we had a relatively young housing stock. When I was a kid most of the houses that were in the private rental stock were no more than 50 years old. There was not much of a need to regulate for a minimum standard. As a consequence of the passage of time over the next 50 years, those houses are now 100 years old. They are well out of date in a technological sense. A lot of them are rundown. They can have gaping holes in them and still be legal to rent. So we need a minimum standard in that private sector. We have obviously got problems there that need to be addressed, which are not being addressed by the Government.

But then you come to the community sector, which is what the Social Housing Reform (Transaction Mandate) Bill is about. You have got to reflect on what has happened here in the last couple of decades. You know, what happened the last time a National Government was in power was that it sold down that capital stock by 13,000 houses. It left fewer State houses at the end of its 9 years in Government. The last Labour Government built some more. We did not build as many as we probably should have.

💬 Phil Twyford: More than 9,000.

It was more than 9,000. We actually increased the total stock substantially, but not enough to meet the need. The current Government is selling it down again. It is reducing the number of State houses. There are a number of reasons why this is, in my opinion, wrong. The first reason is an intergenerational one. This Government takes the assets that have been built up by generations of New Zealanders and then sells them for the benefit of that one Government. National ran down the number of State houses in the 1990s, and what did it do with the money? It spent it on something else so as to keep itself in power and fund things like tax cuts. What is the National Government doing this time? It is actually something similar. Despite the fact that we have got unprecedented housing need at the moment, the Government has been taking dividends out of Housing New Zealand, and in respect of the houses that it is selling, it is not replacing them with other houses that are owned by the Government. The Government is renting houses. The stock of houses that are under the control of Housing New Zealand is now no longer owned by Housing New Zealand. Often, it is renting them.

Members of this House very frequently get approaches from people in the community who are in need. What has the Government done in order to suppress the ability of MPs to deal with that need? Do you know that MPs now cannot deal with Housing New Zealand? The doors are shut. We cannot deal with—we have the saddest cases coming to us. We have people who are living in cars, we have people who have exited abusive relationships and who have got no income, and we have people who have got kids whom they cannot accommodate, and yet we cannot actually use the wisdom of MPs and experienced electorate staff to phone up Housing New Zealand and say: “Hey, this is a case of serious need. We need to do something about it.” Those systems are not able to be recorded in a rule book, and they rely upon trusting relationships between the Government department and MPs’ offices in order to winnow out the cases of real desperate need.

Annette King just said that those issues of need arise in every part of New Zealand. What the Government is doing at the moment in Southland, which is the first of these areas that is going to have its houses sold off, is it is saying: “Your need is not as great in Southland as it is in South Auckland. Therefore, we should sell off the Southland houses and rent a few more in Auckland.” That is essentially what is happening there. That is because the baseline for eligibility for a Housing New Zealand house has become so deprived that most of those who are at the extreme level of deprivation do actually live in South Auckland. So by weight of numbers they do exist in Auckland, but the answer to that is to do more in Auckland, not to do less in Invercargill, because there is a social need in Invercargill for social housing.

While I am on my feet I want to respond to one of the issues that is often raised by the National Government, which is to say that the state of some State houses is inadequate. Well, that is true—there will always be more maintenance that needs to be done. It does gall me when I hear the National Government claim credit for the work that has been done on retrofitting insulation in respect of a lot of Housing New Zealand houses. It is true that that has happened during the course of the last 6 or 7 years, but in truth it was done because Jeanette Fitzsimons promoted that as a Budget bid for the Green Party when the Labour Government was in power. I was involved in this, and Jeanette Fitzsimons did that very wisely because she knew that until the Government put its own housing stock in order, it would not be willing to regulate for a minimum standard for every rental house. It was Jeanette Fitzsimons who raised that with the Labour Government—and I actually backed her in that Budget bid. But it was a Budget bid from the Green Party that it use its political entitlement, if you like, as it was part of the Labour-Green Government of the time—I forget what the proper terminology was. The National Government has continued with the implementation of that, and I thank it for that because it is a good thing that has been done.

Can I return to the regulatory impact statement? It starts with a summary. At the second paragraph it provides an analysis of options to ensure the Crown has the authority to transfer Housing New Zealand houses without impediment or delay. Well, that is actually what this bill is about—it is actually another of these dictatorship clauses. It is effectively taking power away from the department and giving it to the Minister to do as the Minister sees fit, in what I think is quite a dictatorial way, without the checks and balances that come if that is done through Housing New Zealand. I think for all of those reasons this is wrong.

Can I also say that there is this unfairness between regions because the regions are going to get less out of this. There is unfairness between generations because what has been built up over many generations is just being squandered by this Government inside a 3-year period and it does not, in my opinion, do anything substantial to meet this always-present need in society to be able to house your most vulnerable people in social housing that has long-term tenure. I think that the Government should be owning those houses, rather than just leasing them.

It is my pleasure to take a call on Part 1 in the Committee stage of the Social Housing Reform (Transaction Mandate) Bill. Of course, as other speakers have described, this is the legislation that puts in place the legislative apparatus for this Government to be able to sell off State houses, first of all in Tauranga and Southland, but, of course, that is a preliminary to doing it further, throughout the country.

I have been listening very closely to a number of the contributions, and very sensible contributions they have been from a number of colleagues. There are a number of questions that I would like to put to the Minister in the chair, the Hon Maggie Barry, and I would like the Minister to answer, because these have failed. Denis O’Rourke brought up and asked a very sensible question about some kind of clarification around where it is that the proceeds from the sale of these houses are going to sit. Are they going to go back into the consolidated account? Will they be used exclusively for housing? Where exactly will that money be, and where will it be used?

One of the other questions that I would like the Minister in the chair to address—if she has got time in between discussing the flag—is who is currently being lined up to purchase these houses. Because I think that cuts very much to the smoke and mirrors that this Government has hidden behind when it comes to this legislation.

The policy has been an absolute dog from the word go. The Government changes its mind on it every couple of months, and is making it up as it goes along. As the Hon Annette King pointed out, this is very much evidenced in the regulatory impact statement—of course, those bits of the regulatory impact statement that we can read and have not had great bits of it redacted.

Of course, people making decisions about legislation are not actually allowed to see the official advice that is being received. But, first of all, we had National saying that it was about building up local communities and housing groups and that it only wants to sell to large interests that can buy hundreds of properties—effectively, eliminating local groups.

National said that the Salvation Army and iwi were keen to buy into these houses, but the Sallies do not want them—they made that really clear to the Government. So, clearly, when the Government came out and said that the Sallies were going to buy the houses, it had not actually taken the time to talk to them. Iwi said they would take them only if they got them for nothing. This Government is not interested in giving them away for nothing. But then it said that the houses would only go to non-profit groups. However, Bill English changed his mind on that one, and now he wants banks and property developers to buy these up.

So I would like to hear from the Minister in the chair who it is that is currently in the running to buy these houses. Can she give an assurance that it will not be property developers and banks? That is what New Zealanders are afraid of.

So we have a very sharp differentiation here. We have on the opposite side of the House a Government that absolutely wants to denigrate what we as New Zealanders collectively, across the political spectrum and for many generations, have held dear—that is, that New Zealanders have a right to housing and that the State should be an active player in New Zealand’s access to housing. From Seddon right through to Savage, to Kirk, to Lange, and to Clark, Labour Governments have stood for this. It is absolutely critical to what we believe.

I have some members looking very confused about Seddon. I will come back to the Seddon issue in a moment, because it was not Labour. Of course, the first involvement of a Government in housing in New Zealand was the Liberal Government, and it was Seddon. It was the 1905 Workers’ Dwellings Act that gave workers the right to buy houses, and the right to rent houses when they did not. The 1905 Act and the 1910 Act were absolutely fundamental in terms of access to housing in this country. In fact, far be it from me to correct the Hon Annette King when she claims the first State house in her electorate. It might have been part of the first tranche of the 1930s State houses, but one of the first houses built in this country that the State assisted people into was at 23 Mandeville Street in Riccarton, which, of course, is in the Wigram electorate—I would just like to point that out.

But this goes back and it cuts very much that Governments throughout our history in this country have believed in the New Zealand dream. They have believed that New Zealanders need access to housing and that they should be part of helping New Zealanders into homes, be they homes that they rent or homes that they buy. [Bell rung] Mr Chairman.

The CHAIRPERSON (Hon Trevor Mallard): I am going to call Megan Woods again, but I am going to remind her that we are on the Committee stage of this bill, debating Part 1. Clause 4 should not be a hard clause to debate, but the member has to somehow link her comments to the particular part of the bill.

Thank you, Mr Chairman, and your direction is appreciated, as always. I would like to talk specifically to clause 4 in Part 1 of this legislation, with clause 4 being, of course, the clause that inserts, in new section 2A, the power for the housing Minister to “exclusively administer land declared subject” under this legislation. This gives extraordinary powers to Ministers to be able to sell off this land.

Of course, the right of Ministers and the ability of Ministers does not exist without our putting in play this legislation, because it was never envisioned by this Parliament, or by generations of politicians on either side of this Parliament before, that this is something that Ministers should be able to do without some kind of wider mandate than just making the decision themselves. So what we are doing in this part of the legislation is setting up that extraordinary power for Ministers to do that. That is not something that we can tolerate. It is not something that we see as part of the Kiwi Dream. Under this Government that dream is slipping away, and nowhere is that more evident than in clause 4 of this piece of legislation. When this is a Government that is having to turn away more than a hundred years of history in this country of both parties’ commitment to housing, this is a Government that is absolutely giving up on that Kiwi Dream. It is putting in place special provisions so it can literally sell off that Kiwi Dream and abandon it, and that is not something we should tolerate.

If you compare clause 4 of this legislation with the actions of members on this side of the House, Andrew Little started off the year by setting out a very clear agenda about how it is that New Zealanders can take part in the Kiwi Dream. He did not spend his time talking about how we could put in place special powers for people to sell off part of that dream—that is not acceptable. It is not something we on this side of the House can tolerate.

I return to the questions that I have put to the Minister in the chair. We would like to know, in terms of what it is that these special powers are providing for, what will happen to the money. Where is it going to go? Is it being dedicated to housing? Will we see more housing as a result of it, and can she give us that assurance? Who is going to purchase these properties? Is it, as the Prime Minister and the Minister of Finance initially announced, going to be non-governmental organisations and iwi, or are there property developers and bankers lining up for their slice of the New Zealand dream and denying ordinary New Zealanders their right to it? So I would like to see the Minister get up on her hind legs, wave the flag a little bit, and give us some answers. Labour does not support this legislation.

It is an honour to speak in this debate around the Social Housing Reform (Transaction Mandate) Bill. I am a State house boy. I grew up in the electorate of Wigram, Haslam Crescent, and I spent most of my childhood growing up in a State house. But unlike one other MP in this Committee who also grew up in a State house, I am going to stand up in this Committee and say that we should defend and protect State housing here in New Zealand.

Because I got to live the Kiwi Dream. I got to live the Kiwi Dream of having the State help my parents, who could not afford to buy their own house when I was young, and of having the support of Housing New Zealand to make sure that our family—my brothers and sisters—could live in a good house that was warm and dry when I was growing up. I got to be able to go to university and get qualifications so that at one stage of life I ended up in this place, so that I can stand up and protect the things that were important to me and my family. So I am going to stand up in this Committee and say that the Government is absolutely and utterly wrong for the vulnerable families and those families who want to try to live the Kiwi Dream, by selling off State housing in this bill. Not only do I protest the selling of the State houses but I protest the way in which this Government is selling these houses.

In clause 4, as other colleagues have mentioned, the housing Ministers themselves are giving themselves extreme powers to be able to exclude the public servants who would usually be part of a sale process from the process. It is going to be left in the hands of those Ministers. I think that puts extreme power within their hands to do any deal that they like. And the Government has got form on this, whether it be Skycity, whether it be Rio Tinto, or whether it be other organisations that it has done dodgy deals with. This also allows those two Ministers to do whatever they like, to get any price they like.

And also within clause 4, I understand, in subsections (6) and (7) of new section 2A, we do not know where this money is going to go. Is it going to go into an account that is for Housing New Zealand? Well, no. According to subsection (7) of new section 2A, it is going into a Crown bank account. So it is not guaranteed that the money that is going to come from these sales is going to be ploughed into more social housing for those families who need it, who cannot afford market rent.

Over the Christmas break—and social media is a great thing—I got a message via Facebook from a single father who was living with one of his children in his car. That is pretty extreme. So we did what MPs do: we moved, and we helped him get into a house. If this Government is saying that there are enough market rentals out there, or enough social housing out there, that it can sell off State houses because there is not a demand, then I think that is nuts, because there is demand—and I think it is extreme demand. Instead of selling off our State homes we should be building more.

This morning those National MPs who were at the Salvation Army breakfast—not their National Party flag crisis breakfast, held across the road—would have heard that.

💬 Phil Twyford: Who was at the flag breakfast?

There are a couple over there who did not go to the flag meeting, who were at the Salvation Army meeting, and got the message from the Salvation Army that we need more social housing, not to be selling it off. I think that this bill, and this clause 4, in its current form—I protest it because I do not like the way the Government is selling State housing, and I do not like the fact that it is selling it.

This is a picture of Iris Grove in Porirua about 5 years ago, just before these houses got bowled by Housing New Zealand. I would love to show you a picture of new houses and a community flourishing around Iris Grove, but unfortunately Housing New Zealand has sat on its hands for the last 5 or 6 years and done nothing for the people of that community. There are no new homes. It is a big, bare piece of grass. So that kind of outlines the priority that this Government has around social housing. Instead of moving to replace some houses that it bowled over and promised that it would replace back in mid-2011, we get, in this piece of legislation, it moving with great speed—at almost breakneck speed, as Annette King said is pointed out in the regulatory impact statement—to give itself power not to build more homes but to sell more homes.

It seems appropriate that Minister Maggie Barry is in the chair for this debate about Part 1 of the Social Housing Reform (Transaction Mandate) Bill, because, as we know, clause 4, which adds new section 2A to the principal Act, the Housing Act, is all about the housing Minister being able to exclusively administer the land. If there is one Minister who knows about overstepping the boundaries of administration it would be Maggie Barry, who, of course, hand-picked her own friend to do some of the landscaping on Pukeahu rather than using the original landscaper who had won the original competition, which was an open and transparent process for choosing who the landscaper should be. No, Maggie Barry chose her mate.

That is one of the principal concerns we have with clause 4 of Part 1 of this legislation, that what this does is it gives two Ministers the power to hand-pick whom State houses can be sold off to. As we said, this Government does not have a good track record when it comes to hand-picking its mates for sweetheart deals. Skycity, Rio Tinto, the Warner Bros—the list goes on and on and on.

The last thing that this House should be doing is passing legislation that takes financial decisions out of the hands of the Crown agency that has been dealing with this stuff for years—the Crown agency called Housing New Zealand. The clue is in the name, Minister Barry, in terms of what it does and what its expertise is. We are taking that role away from Housing New Zealand—the Government agency that has to be transparent and that has to report back not only to the Government but to this House and to the public at large—and handing that responsibility over to one or two Ministers in a Government that has a poor track record. That scares the bejesus out of the Opposition and out of the people of New Zealand.

I would like to look closely at a couple of the subsections under new section 2A, in clause 4. First of all, I will look at the one that has been struck out by the Social Services Committee. It would very useful for me if one of the members opposite who sat on that select committee could explain why subsection (4) has been struck out, because it reads as follows: “All amounts payable to the Crown in respect of land declared to be land that is subject to this section (including all amounts that, if this Act had not been passed, would have been payable into the Housing Account (if any)) must be paid into a Crown Bank Account.”

Why have they struck out the subsection that says the money raised from selling State houses has to go into a Crown account? It just seems so obvious that that is a necessary clause—that that money must be, by legislation, required to go into a Crown account. It is possible that there is a sensible answer to that, but we have not heard from any of the members opposite about what the sensible answer might be. So my question is to the Minister in the chair, Maggie Barry, and to the members opposite: why was new section 2A(4), in clause 4, struck out by the select committee? It would be very helpful to the Committee if that could be explained to us.

Then we have subsection (5): “The Corporation is not responsible or liable for the Minister’s performance or exercise of functions, powers, or duties under subsection (2).” As I said, the corporation is the Government-mandated organisation to be the expert on housing. But never mind that fact, that the Government organisation that is the expert on housing is not required to be liable for the Minister’s performance—my question is: who is? Who is the Minister accountable to? Who is the Minister responsible to for the decisions that they make about whom these houses should be sold off to? I want to give the Committee a view that was expressed to me—it is not a Labour Party view—by a constituent of mine who, it is fair to say, does not naturally align with our view on politics. He is a property owner—

I move, That the question be now put.

I am going to indicate that I will take extra calls. I will reiterate a ruling I have made previously, and that is that where reasonable questions have been asked, they should be responded to, and if they are responded to, then it is more likely that a closure would be given. Having said that, I think it is fair to say that this particular part of the bill contains a clause that is quite unusual and gives extreme powers to Ministers, and it requires substantial debate.

I want to start my reflections on Part 1 by referring back to the regulatory impact statement that applies to this bill, because it sets out the objectives that the Government hopes to achieve through this bill generally and, presumably, through Part 1—in particular, the transfer of powers that Part 1 executes. It states in the regulatory impact statement that before drafting Part 1 of this bill, Cabinet decided that it had an agreed set of objectives around the Social Housing Reform Programme, which, presumably, this bill is intended to capture. I really want to just compare whether, in Part 1 of the bill, those objectives have indeed been captured.

It states in the regulatory impact statement that one of the first objectives is to “a. ensure that people who need housing support can access it and receive social services that meet their needs”. That sounds, probably, like a description of Housing New Zealand’s objectives, as it stands. This is, I would assume, the mandate as set out in the Housing Act 1955. That was one of the relative stated objectives of that Act, so, again, it is not different and not new.

Moving right along: “b. ensure that social housing is of the right size and configuration, and in the right areas, for those households which need it”. Again, one of the objectives of the Housing Act 1995, which Part 1 of this bill amends, was about the acquisition of land in, of course, areas where there was need for the establishment of Housing New Zealand properties. So, again, there is not a need to reform the Act there; just a reason to stick to the objectives of the 1955 Act.

Paragraph (e) states: “help increase the supply of affordable housing, especially in Auckland”. That is not really something that this part particularly achieves at all, or that the Government has indeed achieved with its agenda thus far. I guess my point is that we are amending a principal Act significantly in order to supply a set of principles that, actually, the original Act, if followed, would have been able to provide. So what is the real agenda behind the amendments we see in Part 1?

I want to reflect, then, on the amendments we are making and on the original powers of the Ministers, which we are in fact changing. If you go back to the Housing Act 1955 and you look at the powers that the Minister has in the Act, you see that it states: “The Minister may from time to time determine either generally or in any particular case what land or classes of land may be acquired for State housing purposes.” The entire focus of the powers of the Minister in that original Act was about the acquisition, the development, and the growth of Housing New Zealand properties. It was about building State housing stock. It was about ensuring that people’s needs were met through acquisition. What we are changing with this amendment in Part 1 of this bill is we are fundamentally depleting the idea that a primary role of that Minister is to build up that stock—the idea of provision for the people who need it. Instead, we are turning it on its head and giving them the power to hock it off. That is essentially what we are doing. We are giving them the power, carte blanche, without any of the checks and balances we would usually require. We are giving two Ministers the absolute discretionary power to hock it off. Claiming that it is going to social housing providers just seems to be a cover of sorts.

Our point on this side of the Chamber is that shuffling the deck chairs on the Titanic does nothing to resolve the overall problem. If you are simply passing around what stock you have, you are not fixing the dire situation. I want to reflect, very quickly, on the impact of something like Part 1, because the groundwork was obviously laid quite early for this. In central Auckland, where there are high housing needs—high housing needs—we have examples of rough sleepers due to the lack of emergency housing in central Auckland. You would think it would be a particular focus of the Government to grow the housing stock, as the Minister had the discretion to do under the 1955 Act. You would think that that is what we would see.

What do we see instead? When Auckland Council started developing its unitary plan, Housing New Zealand contracted—from memory, it was Beca Group—to go through and make a submission to Auckland Council to remove protections on every single Housing New Zealand property. There were screeds and screeds of pages where Housing New Zealand had contracted someone to independently go through and do things as small as remove the protections around the cone viewshafts for Housing New Zealand houses. They even did it in blocks of property where Housing New Zealand, for instance, owned one flat in a block of, say, 15 flats. They applied for those protections to be removed, even though they affected private landholders. And why would they do that? Why would Housing New Zealand have gone to that great expense to remove those protections? One reason: preparation for sale—the preparation to remove anything that may bring down the potential sale price for Housing New Zealand to sell off the housing that they owned in those areas.

I have heard the argument time and time again—and this is what this bill is trying to imply—that we are just transferring that responsibility on to other providers. That is not what is happening. They are going into private ownership, we are not growing the stock that we need, and this bill allows that to happen at a much greater rate.

I have another quick example that I just want to reflect on, which this bill will make even more acute. This is not to discount the role of community housing, but to demonstrate some of the silly decisions that are being made. A street called Spring Street in the area that I work across is currently housing—from my recollection—up to 40 pensioners in that area. Anyone who knows Auckland knows that we have a significant problem with a lack of pensioner housing, particularly since John Banks went a little bit crazy and sold a whole lot of it off. Spring Street has a number of units owned by Housing New Zealand. It is, of course, very valuable land, so Housing New Zealand decided that it wanted to sell that land to a private developer. It just wanted to sell it. Of course, that got the local community up in arms. What a silly thing to do. Where are we going to put the pensioners who currently access services in the central city and who have lived for a long period of time in these purpose-built pensioner flats?

The response from Housing New Zealand was: “We will make sure that when we tender out to those private developers, they have to retain the same number of units to be available for Housing New Zealand purposes.” The end outcome that Housing New Zealand was proposing was to sell the land, lease back the same number of units at considerable cost, and then have a private developer bank the amount that made from further developing the land and selling off additional units as part of the transfer of that land. How does the New Zealand taxpayer end up benefiting out of such a short-term decision? If you wanted to develop Spring Street—sure. If you wanted to put in a few more units, I can understand that. But to sell it, in its entirety, to a private developer, and then in the longer term have Housing New Zealand paying out to that private developer for the same number of units—what a short-sighted, short-term decision.

That is exactly the thinking that is captured in this bill. We are not thinking about the long-term costs for New Zealanders of selling these assets. We are not thinking about the long-term ability of Housing New Zealand to provide for the needs that our community has. We are not thinking about how we can properly support the community sector to provide the houses it ultimately wants to provide. That is not what this bill is factoring in. Of course, we acknowledge the role the community sector has to play. We want to support it to do that, but that is not what this bill is ideologically about.

I challenge Nick Smith to demonstrate—just use one example to tell us how many additional Housing New Zealand properties in central Auckland, over and above the ones that have been sold, have been purchased since that Minister has been in Government. How many? I know how many you lease at great expense. I know how many you have sold at a great loss to taxpayers and at a great loss to the community. All that that Minister’s agenda has done has led to people who are currently in social housing being pushed out to the edges of Auckland, losing their community and losing their connections, and we no longer have mixed-community housing. We are losing that at great rates, and I would not be surprised if there is an ongoing agenda for that to continue. So, overall, I am extraordinarily disappointed in the concentration of power in Part 1.

Tēnā koe, Mr Chair. Tēnā koutou e te Whare. I would just like to take a short call as a non-housing expert, because this is not an issue just about housing; it is an issue about our society, our community, our history, and where we are going as a country.

Part 1 is very much about an interesting development in the transfer of powers. The clauses in Part 1 give two Ministers far more direct control over housing than we have seen in the past. What it reminds me of, actually, is when the Department of Conservation decision making around mining was handed over to two Ministers: instead of just the Minister of Conservation you then had any other Minister in Cabinet—i.e., the Minister of Energy and Resources having that decision-making power. There is a pattern here, and this Government’s pattern is to transfer power, to centralise power in the hands of the Government more and more—and not merely for the fun of it, but to drive through a certain agenda.

The agenda with housing is to privatise the housing stock because, ideologically, it believes that we will all be better off if we are all competing over everything. From the beginning of the day to the dark of the night, it has all got to be the market. In housing this is clearly laid out in Part 1, and what it does not do is acknowledge what has actually happened to Housing New Zealand and what the impact will be of handing the power over to the Ministers.

Housing New Zealand was never the perfect institution—or maybe it was in the 1930s. For a long time it has been in need of reform, but the kind of reform that is being introduced here is a disturbing ideological breakup of community. It is all described in two words: Glen Innes. With the police dragging people out of their houses they broke a community because of a plan that is being driven by Ministers rather than being driven by communities—let alone the meat in the sandwich, which is Housing New Zealand. I was an advocate for people in Tai Rāwhiti dealing with housing under the previous Government. It was not perfect: there were long lists then, there was overcrowding then. But what we have now is a proposal to so-called “reform” this in a way that will prevent the very desperate and the very needy having access to housing. All the rhetoric about social housing is not what the social housing groups mean; it is what the Government means. This bill is particularly disturbing because in Part 1 it entrenches the idea that the Government understands what social housing is. It does not, it did not, and it will not, because all it thinks it is about is making a profit out of people who need homes, and that is not what social housing is about. It is not about the market; it is about meeting an incredibly important need.

As someone who has lived in social housing at a time in my life when I needed social housing, I really appreciated the State house I lived in. It is long gone. It was on Wellington Street in Freemans Bay—all gone. All of that housing, actually—as I think a previous speaker, Jacinda Ardern, described it—was a mixed community. It was a diverse and mixed community, but those communities are not on the agenda with this change to the Housing Act and to Housing New Zealand.

The regulatory impact statement says that “More fundamentally, this option changes the relationship between the Crown and HNZC from one at ‘arms-length’ to one where the Crown has direct control over HNZC’s stock.” As a former advocate for people who needed housing, I have to be very afraid, because it will be based on efficiency. It will be based on phrases like “What is the most efficient way to manage these units?”—i.e., human beings—and whether or not they will get the housing they need at an affordable rent will not be the main priority. The regulatory impact statement also says that “Ring fencing and limiting Ministers’ mandate will mitigate the impact of the provisions on HNZC, and provide greater transparency of Ministers’ actions”. I find that a little difficult to believe. That is not our experience of Ministers having more power—that, therefore, suddenly there is more transparency and the public and the people in need of housing will get more out of that model. Housing New Zealand was created by our money for the public good. Public service may not be real to this Government, but it is real to the rest of us. The public good and public housing for people who need it are core values of a society that has changed a great deal.

We in the Greens would love to see Housing New Zealand reformed to a genuine, progressive public servant that actually knows how to listen and work with not the people who will have the ability to develop sites—

I am very happy to answer some of the members’ questions on the Social Housing Reform (Transaction Mandate) Bill. Firstly, I want to respond to the honourable member from the Green Party, Catherine Delahunty, in respect of the Government’s intent around social housing and her question around whether this is ideologically driven. I would draw her attention to very constructive discussions I have had with the Green Party housing spokesperson from Tasmania. In the state of Tasmania they have actually been doing just what we are doing in this bill, expanding the community housing sector, via the Tasmanian state Government moving community housing over to community housing providers. The experience of that Green Party spokesperson was that it was hugely beneficial in that state. I am sure there would be the same result for New Zealand.

The second point I want to make is to the question of who is going to buy these houses. The answer is registered community housing providers, of which there are about 30. I do not claim to know the details in Auckland Central; I have got total confidence in the very effective member of Parliament there, Nikki Kaye. But I can give a very local example in my own Nelson constituency. The Nelson Tasman Housing Trust is a very successful organisation. It has recently purchased three very run-down properties in Orchard Street, in Stoke. The area has been referred to as the Bronx of Nelson. It desperately needs redevelopment. The Nelson Tasman Housing Trust is going to build 12 houses on where there were previously three houses. What that means, I say to members opposite, is that nine more families get a house. That is a good thing. What is more, I have to tell you, from the community of Stoke there is a very warm welcome for that community housing organisation now running those former Housing New Zealand properties, and getting stuck in and upgrading them.

Members have asked where the money for these transactions will go. It goes into the funding of Housing New Zealand, and Housing New Zealand today has the most ambitious capital programme—

💬 Phil Twyford: It goes into the consolidated account, Nick.

Well, the advice I have had is that the funding goes to Housing New Zealand. We are spending more money as a Government on the upgrading of properties than has ever been done before. The broader programme for the Government is that we actually think a mix of housing, rather than the Labour ideology of having large blocks of State housing, works better. We actually think communities work better with mixed housing. That is where we are heading with the redevelopment in Tāmaki. That is what we are heading to in terms of other redevelopment projects, and in Christchurch, and other parts of New Zealand. The truth here is that the ideology is actually coming from the left side of the Chamber. If you look at the changes that have occurred in the United Kingdom around community housing organisations—I have had so many solid Labour Party supporters come to meet with me and say: “My goodness, Labour in New Zealand has to move away from a 1930s notion that everything has to be owned by the State.”

If Labour was a modern social democratic party, it would embrace the content of this bill, because it is actually the outcome that is far more important than who owns the bricks and mortar. On that note, I challenge the backwards-thinking that we have heard from the Opposition parties this afternoon.

I am pleased to take a call on Part 1. Just in response to the Minister in the chair, the Hon Dr Nick Smith, in regard to where the money will be going from the sale of social housing—it says in the bill, under clause 4 inserting new section 2A, that “(7) All amounts payable to the Crown … must be paid to a Crown Bank Account.” It does not say that the money is going back to Housing New Zealand and will be used to replenish the housing stock. The Minister, in my mind, has misled the Committee because he directly contradicts what is stated in this clause in Part 1.

But can I just take a step back, and say how I join with my colleagues in saying that we are completely opposed to and protest the passage of this legislation. This legislation cuts to the very heart, the very DNA, of our society, of us as Kiwis. For decades we have had the provision of social housing by the State, which has been to the benefit of thousands and thousands of families up and down the length and breadth of this country. I know the Minister likes to talk about expanding the social housing sector, but that is actually a real nonsense, because on a plain reading of Part 1, this legislation effectively gives unbridled power to the Ministers to dispose of the complete Housing New Zealand estate.

If we look to new section 2A, all it takes is a declaration from the Ministers that they want to round up all of Housing New Zealand’s estate—and it is not just State housing land. It is more. It is the dwellings, the buildings, and the chattels. Just by a simple declaration, they can take control and absolutely sideline Housing New Zealand, which has had its job affirmed through decades of legislation. It is being dismantled through this Part 1. Just by a simple declaration, the Ministers take control of, conceivably, the entire Housing New Zealand estate. There is nothing to stop them. It does not say here that it is about expanding the social housing sector. They can take control, sideline, and cancel out Housing New Zealand so that they can go and pursue their agenda of selling the social housing stock.

Far from being expansionary, Part 1 provides unprecedented power to two Ministers to be able to take hold of what has been a public asset that has a clear statutory purpose and function in history. Once the Ministers do present their declaration, they can go ahead and sell.

I just want to focus on new section 2A. I mentioned how the moneys will be paid into a Crown bank account. But we see the complete dismantling of Housing New Zealand by virtue of the fact that there is a new ministry, which has been defined in clause 3A. There will be a new ministry that will be responsible for reporting to Parliament on all of the former Housing New Zealand properties that have been disposed of under this part.

What is that ministry? I assume that it would be the Ministry of Business, Innovation and Employment for building the—I just forget the name. But forget the full name—by this part, we are seeing the complete end to Housing New Zealand, in its role. We are seeing the moneys that will be plundered through the sale of the Housing New Zealand stock going to a Crown bank account. It is not going back into the renewal of the housing stock. There is a complete contradiction that this Minister has said in—

I just want to crisply answer the question that has been raised by the member Rino Tirikatene, so that the Committee can have a well-informed debate on this part.

In respect of where the money goes in respect of Housing Act land, which is not necessarily Housing New Zealand land or buildings, the money goes to the Crown bank account. Let me give you an example. The member would be well be aware, as the member for Te Tai Tonga, of the demands for housing in Christchurch. There was a block of surplus New Zealand Transport Agency land at Awatea. The Government, under the Housing Act, declared it for that purpose, so it came over from the New Zealand Transport Agency to my ministry. We have entered into a contract with Fletcher’s in that case—it was a contestable process—and the houses are being built on that site. In fact, next month I am due to open them. They will be very welcomed in Christchurch, with a large number being in the affordable range. In that case the proceeds of that land and that deal that we have with Fletcher’s goes into the Crown bank account.

In respect of where the bulk of the controversy has been about this bill—and, actually, not in this part—the transfer of the State houses of Housing New Zealand, those funds go into the Housing New Zealand bank account. That is where there has been some confusion about where these funds go.

I am very pleased that the Minister in the chair is in a mood to answer questions, because I have got some that are very important. Will there be full transparency around all of these dealings and around how much the land is sold for and how much the houses are sold for? And what does the Crown get in return for those? There has not been transparency thus far, to date. I will use an illustrative example.

In respect of the whole community of Pōmare, which was largely owned by the Housing New Zealand Corporation, the Minister could, under this clause, remove it from the corporation, and basically say that he is going to take control of the entire redevelopment in Pōmare and make the decisions around that. Of course, that would have been the case if this had been in place when that happened—that development has already happened. Around about 130 to 140 houses, I think, were either demolished or transferred to the ownership of a private developer there.

What we have not got is the transparency around all of that. So we do not know how much they paid, we do not know the value of what we are getting back—when I say “we” I am talking about the taxpayer, the Crown, and the Government. So they transferred all of these assets into the ownership of a private company, a private developer. Around about 130 to 140 houses in total—around a hundred of those were demolished, and that land was completely redeveloped and new houses were built on that.

My understanding is that, thus far, Housing New Zealand has got back somewhere in the vicinity of a dozen houses—it may be more than that. Just do the basic maths. We are talking about tens of millions of dollars, probably, if you added all of the rateable value of the land and the housing that were transferred to the developer. And I do not see, thus far, that the Crown has received—if it is simply a swap—a corresponding value in what it has got back. So the question is: is this an asset sale, or is it an asset give-away? The only way the taxpayers will be able to judge that, and be able to judge whether the Ministers are responsibly using the powers that they are taking with the clauses afforded to them in Part 1, will be if there is full transparency around those dealings.

If they simply decline to release that information on the basis that it is commercially sensitive, which has so often been the case when it comes to these sorts of deals, then the taxpayer will never be in a position to judge whether, in fact, the Ministers have used the power that they are giving to themselves—and let us be clear, it is no longer the corporation that is going to be doing these deals. The corporation will be covered by a whole host of other responsibilities in terms of its financial reporting and so on. It is going to be the Ministers executing these deals. Will there be full transparency? I hope that the Minister will answer that, because under Part 1, the Government is going to be able to designate whole classes of land, basically to bring under its own control. So it can designate whole neighbourhoods, for example, and bring them under the control of the Minister—no longer under the control of Housing New Zealand.

I think that that is potentially going to have a significant impact on the overall provision of housing throughout New Zealand. Whole communities, which do not see this coming, may well find themselves subject to this, and I definitely think that the Minister should be very clear about the level of transparency that will be required. The transparency should also extend to the effect on the value of the Housing New Zealand Corporation. So if you look at new section 2A(7) inserted by clause 4, for example, when we are talking about the money and where the money is payable to, money that previously would have been payable into the housing account will now be payable into the Crown account. There is no getting around that; that is what that clause actually says.

💬 Phil Twyford: Clear as day.

It is clear as day. Anyone can read it. So therefore, what will the overall effect on the Housing New Zealand Corporation’s value be? Is this going to result, effectively, in a write-down of the value of the Housing Corporation, and will the Government be absolutely transparent with the people of New Zealand about what that means?

Bearing in mind that this was the Government that went to the last election promising New Zealanders that there would be no more asset sales—that was clear as day. John Key said it, and anyone can find the records to check him on that. So is this simply another way of getting around that promise? If they are massively writing down the value of the Housing New Zealand Corporation by transferring stuff out of it, that is an asset sale—or an asset give-away—by another name.

So I look forward to the Minister’s assurances that there will be full transparency around all of the deals that are done under this clause, because if there is not, then that simply leaves the Government open to a whole host of other challenges around inappropriateness, and a whole lot of other things that I cannot mention in the House without getting into more trouble.

I will just take a brief call to respond to some of the Minister of Building and Housing’s comments and to ask some further questions, and also to express my appreciation to the Minister for being prepared to answer questions in the chair—it is very helpful. I am very familiar with Orchard Street, which the Minister has brought up. I do not think I have ever heard it referred to as “the Bronx”, but perhaps the Minister moves in different circles from those that I do in Nelson. It is certainly true that that street is an example of some of the shameful neglect of the State housing stock that has occurred, and, certainly, the Nelson Tasman Housing Trust becoming involved is actually, I think, something that the Green Party would welcome and that I know would be welcomed by that community.

We are debating Part 1, and the profound and unusual provision in clause 4 of Part 1 is entirely unnecessary for the kind of transformation that the Minister has referred to—completely unnecessary. The Minister, so far, has not actually addressed that point around clause 4. That provision is sweeping in its effect. So the Minister “may perform and exercise the functions, powers, and duties of the Corporation”. That is a reversal of one of the underpinning tenets of the way we have established the State sector. In the State Sector Act we made explicit—or Parliament made explicit—that we were separating out political decision-making, which would remain the domain of Ministers, from implementation of policy. Implementation would stay with those with subject expertise in their ministries. That is why we have agreements between Ministers and ministries.

There were various objectives of that reform, not all of which I support. But several of them were these: one was to protect citizens from the capricious actions of Ministers, from the arbitrariness of political decisions being made almost randomly; another was to ensure that citizens would continue to have recourse to the remedies of administrative law, and those remedies are far less certain in a situation where decisions and implementation is undertaken by Ministers. I can see no reason at all, in the objectives that the Government has for this bill, for this extraordinary reversal of the State Sector Act’s provisions and intent that occurs here in clause 4, new section 2A(2), in particular.

So not having transparent rules around that is a very deep problem, and I would like to ask the Minister a series of questions about that. Why, if the Government believes that having powerful Ministers is essential, has it not yet made out the case for that? What is the case that the Government has for Ministers taking on these actions, and not simply instructing Housing New Zealand on the criteria and the situations in which it would wish particular actions to be taken? Instead, there is this almost “Henry VIII” power that Ministers will retain to themselves. The bill, as it stands, contains no test—no criteria at all—for the Minister’s action. It is entirely a matter of political choice on the part of the Minister.

I ask the Minister in the chair, the Hon Nick Smith, to explain to the Committee why the bill contains no criteria, and why it could not? Will he be prepared to insert some criteria so that, even if the Government retains its case for Ministers taking on this power, there would be at least, for the public, some level of protection about the circumstances in which Ministers would take on this extraordinary power. I will leave it at that. Thank you.

I want to answer two questions quite crisply. In response to the question from the Opposition, the question about transparency is very clearly covered in new section 50L, inserted by clause 8 of the Social Housing Reform (Transaction Mandate) Bill, in that it requires the Minister as soon as possible after a social housing transaction is settled to both publish in the Gazette and table a copy of the report of exactly what the transaction is, and that should easily satisfy the concerns about transparency.

The member who has just spoken, Kevin Hague, asked the question as to the intent behind what the Government is doing in Part 2. Yes, given that for both that party and the party on the Opposition barely a week has gone by—

💬 Kevin Hague: Part 1.

—in Part 1—without them asking “What is the Government doing about building more houses and more affordable houses in Auckland?”, when we come along with this bill and we do something that will deliver on it and they are opposed to it. They are opposed to it. Let me tell you—

💬 Phil Twyford: Nick, you’re just selling houses, not building them.

💬 Carmel Sepuloni: You’re selling houses.

Well, the members should just take a breath and listen to exactly what these provisions do and why.

Specifically, to answer the questions of Mr Hague, Moire Road is an area of land that has sat vacant for over a decade. Previously it was held by the Ministry of Education—it is in the Massey area of Auckland. Under the Housing Act we can avoid the normal process of disposal for the Ministry of Education to sell that land off—i.e. the normal process of disposal is that there is offer-back to the previous owners, there are processes of it then going for offer to other Government agencies, and there are other potential processes for disposal, which take some time.

The Housing Act enables me or the other Ministers to put their hand up and say: “Well, actually we think Auckland has got a housing need—surprise, surprise—and we’d like to use that education land for the purposes of housing. But we want to make plain that it might not necessarily be just State housing, but that we might be able”—and I think it is most likely; the negotiations are under way—“to partner with iwi to develop housing on that particular site and mixed housing.” What we are able to do, under this new section inserted by clause 8 of Part 1, is use that land to then partner with the private sector and build housing on that land.

Why would there be a member of the Committee who is opposed to the Crown land programme of using land that has sat around vacant for years—using the powers of the Housing Act to bring forward bringing that land on stream for the development of houses? Whether it be ex-Ministry of Education land, whether it be New Zealand Transport Agency land, and other land that I am in negotiations for, I am not going to have members of the Opposition cry out that we make progress on using that land, and then, when we bring legislation to the Parliament to enable us to build those houses, they block it at every step of the way. That simply shows they actually are not serious about building the houses and building the affordable houses that cities like Auckland need.

I am going to speak to Part 1 and the fact that this does give the Minister the ability to sell off land to private providers. I just want to reflect a little bit because the power in Part 1 of this bill is all going to, as we know, the Minister for Social Housing, Paula Bennett, and the Minister responsible for HNZC, Bill English.

I just want to reflect on some of the things that have been happening in the Housing New Zealand space over the last year, at least, because it really does cause us to have to stop and think whether or not the Government is making the right decision in terms of whether or not those Ministers have the competence to be able to make decisions on behalf of New Zealand with regards to these sales.

I was just saying to my colleague Phil Twyford that I just had another constituent case come through where a couple with major health problems who are not able to find a private rental made an appointment with Housing New Zealand and at the Work and Income office. They got there, there was a mix up, and they were told: “Sorry, no one can see you about your housing right now.” They are very upset. They have 1 week to get out of their house. They said to Work and Income “What will happen if we can’t find a private rental by next week?”, and Work and Income said to them: “Well, we can help you with emergency accommodation. We can put you up in this motel for the week. It will cost $168 per night, but Work and Income will pay for it.” What Work and Income never seems to tell these people is that, actually, they have to pay that money back.

Why are we in this position anyway? We are in this position because we have a major housing demand going on in places like Auckland. These people cannot get into private rentals, Housing New Zealand is not responding to their needs, and so Work and Income are saying: “Go to a motel for $168 per night.” This family, who cannot even afford a private rental, are being told to pay $168—but they are not being paid that, actually; they are going to have to pay it back. They are being told that Work and Income will pay it.

But the issue here is that in front of us is this piece of legislation where we are looking at the fact that the Government is going to sell off Housing New Zealand houses and yet coming through our office doors are people who need access to Housing New Zealand houses. We listened to Nick Smith saying that this is the Government’s attempt to do something about the housing crisis. Well, it is not building on the stock that we currently have and it is not increasing the stock, it is shifting the stock over to the community housing providers. I think Mr Nick Smith fails to recognise that that is the case.

I have got a question for the Minister in the chair. I want to know from the Minister what happens if the social housing provider goes bust and, all of a sudden, those houses are going to be sold. Does the Government or does Housing New Zealand have the first opportunity to buy that back? I am asking that question, but I am also going to say with that that I have got concerns, even if that is the case, because we are seeing with projects like the Waterview Connection project—

The CHAIRPERSON (Lindsay Tisch): That is not in Part 1, which you are talking about now. That is not in Part 1.

OK, well I will talk about it in Part 2, then. Going back to what I was saying before about the way in which we are seeing Housing New Zealand being run into the ground, it does mean that for many of us we have questions in our mind about the competence of the Minister to be able to make decisions around land sales, to make decisions around housing sales.

In the Social Services Committee we had it made very known to us that the Minister, yes, would have all the power when it comes to selling these houses, but it is concerning because the Minister has none of the responsibility if anything goes wrong in the transaction. All of the responsibility is going to fall back on Housing New Zealand, despite the fact that it does not get to make the decisions. It does not have the power to make decisions about the sales. It makes no sense to us on this side of the Chamber. In fact, it seems incredibly unfair.

If the Minister is going to have this power—which, of course, we disapprove of but the Government is pushing for—the Minister should also be held accountable if anything goes wrong in the transaction. So I am concerned that that does not seem to be the case. In fact, in many of the submissions that were made during the select committee, that was raised as a real issue for those making the submissions as well, because they could see the unfairness in the way in which this was panning out.

So, going back to what we are seeing here in Part 1, this is about the power that is being passed on to the Ministers and we have never seen anything like this before. As many of my colleagues have said—

I move, That the question be now put.

It is good that Dr Smith is the Minister in the chair, because he was the housing Minister so he knows a thing or two about selling the Government’s housing policy. This was before he was so cruelly stripped of his responsibilities, and the politically sensitive job of selling the Government’s carve-up and privatisation of State housing was handed to, let us say, colleagues with a safer set of hands: Paula Bennett and Bill English.

You know, up to Dr Smith’s arrival I was disappointed that we had not had a single contribution, in nearly 2 hours of debate, from the National Party members in the Chamber today. I can only assume that they have a feeling of shame and of unease about the Social Housing Reform (Transaction Mandate) Bill because they know that this bill that they are pushing through Parliament is dismantling a system of State housing that has been absolutely central to the values that New Zealanders have had for decades—that the most vulnerable, struggling members of our society at least deserve a decent roof over their heads.

But what did we get from Dr Smith? Well, what we got was a recycling of the tired old spin lines that we have put up with for the last 2 years and that have been used to try to confuse the New Zealand public about this privatisation of State housing. The first question he addressed was who was going to be buying these houses. Dr Smith—it was very retro—went right back to the beginning of this political episode by trying to say that it is the community sector, that it is charities and community organisations, that are going to be buying these houses.

Well, Dr Smith, nothing could be further from the truth. Did you not get the memo? That spin line was thrown out the window 18 months ago, after the Salvation Army said it was not interested in buying these houses or taking them off the Government. And the Government is now actively courting Australian companies. Bill English, yesterday, was widely reported as saying that he wants to see private equity firms and retirement village - like companies buying up State housing because they can make a big profit on it. Did you not get the memo, Dr Smith?

It is no longer about community organisations. That particular justification was dispensed with years ago, and your colleagues are actively talking to merchant bankers and property speculators and public–private partnership firms from the UK. It is no longer about that, Dr Smith.

The CHAIRPERSON (Lindsay Tisch): Come back to Part 1.

I want to comment on amended section 2(1) in clause 3A because I do not think anyone has done justice to that. It defines the term “ministry” for the purposes of this bill, saying that it “means the department of State that, with the authority of the Prime Minister, is responsible for the administration of this Act.” I presume that the Government intends that the Ministry of Business, Innovation and Employment, which has carriage of most of the housing issues that Dr Smith is responsible for—I am assuming it wants the Ministry of Business, Innovation and Employment to be the undertaker of State housing under this Act. I assume that is what is going on here.

But it is absolutely appropriate that the authority of the Prime Minister is cited in this bill, because the current Prime Minister will walk away from politics with his political epitaph being that he carved up and sold off the very system of State housing that gave him and his mother a decent, secure roof over their heads in the 1960s. The New Zealand taxpayer provided that assistance to John Key and his mother, and it gave him a very good start in life. No one is going to argue about that. He got a very good start in life, thanks to the New Zealand taxpayer, and then he constructed this finely crafted political backstory about how he was a State house boy done good. That has been part of his charm and his mystique, but he has no qualms dismantling the very system that gave him this start in life.

It is that inconsistency, it is that hypocrisy, that I detest from the National Party. I absolutely have contempt for it. That is what this bill does. It pulls up the ladder, it dismantles the very system—

I move, That the question be now put.

Order! We have been on this debate on Part 1 for well over 2 hours now and I have heard most of the arguments, so I am going to put the question.