Social Housing Reform (Transaction Mandate) Bill

As we move into Part 2 of the Social Housing Reform (Transaction Mandate) Bill, which consists of amendments to the Housing Corporation Act 1974, I want to direct my comments in this part of the debate to new section 50D in new Part 5A, which is inserted into the Housing Corporation Act by clause 8 in Part 2. New section 50D sets out a number of social housing reform objectives. We have been very critical of the fact that this legislation gives to the Ministers—in this case, Bill English and Paula Bennett—these sweeping, unfettered powers to do whatever deal they like with whoever on whatever basis. We have reason to be worried about this because it is very clear that this Government is hell-bent on privatising and carving up this asset, which is worth $20 billion by the latest valuation—it is a $20 billion asset sheet. It is very clear from the way that the National Government has conducted itself over the last 2 years on this issue that it is hell-bent on privatising this, by hook or by crook. This bill gives it unfettered powers to do that, and the way that the Government has changed its story every few months about why it is doing this, how it is going to do it, and who it is going to sell these houses to gives us real reason to be concerned that the Ministers empowered by this bill will do who knows what kind of deal in order to try to salvage some scrap of reputation and keep their policy alive.

We have been highly critical of that because of two things. Firstly, who knows what it means for the kind of value that the New Zealand taxpayer and New Zealand citizens will get as a result of this, given this Government’s horrendous track record negotiating deals with the likes of Skycity and Rio Tinto and Warner Bros. Who knows what it will do to try to meet its political objectives? It has got a track record of sacrificing the interests of the taxpayer. But all we have got here are some objectives that I want to talk about—these so-called social housing reform objectives. What the bill says in subsection (2) in new section 50D is that “The social housing reform objectives are relevant to decisions by the Minister to enter into transfer contracts … but may also be relevant to other decisions by the Minister under or in relation to this Part.” Well, that is not very reassuring. The Minister is not required to have their decisions tested against these values; they are just there. They are not a guideline—they are not even a recommendation. But let us look at these objectives.

The reform objectives are “any 1 or more of the following: (a) people who need housing support can access it and receive social services that meet their needs:”. Well, that is interesting, because if you look at this Government’s record in State and social housing over the last 7 years, that has hardly been a priority for it. We have seen a blowout in the waiting list with more than 4,000 families now waiting to get into a State house, massive unmet social need that has been well-reported, and a rising tide of homelessness, with people living in overcrowded and substandard conditions.

The second objective is: “(b) social housing is of the right size and configuration, and in the right areas, for households that need it:”. This was the first spin line that we heard from the Government about the need for social housing, and basically it was saying that Housing New Zealand stock is in the wrong place and it is the wrong size. The Government does not know. It has never ever provided the data publicly to substantiate that spin. It simply cannot tell us how many houses are in the right place or in the wrong place, or are the right size or the wrong size, but it has used that as a justification for this privatisation programme, in spite of the fact that Nick Smith or Bill English or Paula Bennett have never ever explained to this House or to the New Zealand public how selling these houses to Ryman or Summerset or some public-private partnership company from the UK or anybody else—some merchant banker or property speculator—will magically ensure that these houses are then in the right place and are the right size. That is the logical fallacy behind that particular spin line, which somehow makes it into here as a so-called social housing reform objective.

The third objective here is that “(c) social housing tenants are helped to independence, as appropriate:”. Paula Bennett, the Minister for Social Housing, day after day gets up in the House and makes out that she is rescuing social housing tenants from the terrible dependency of having a State house. Well, I have got news for the Minister. Actually, there are many times more poor-quality, cold, damp, mouldy, risky, unhealthy houses in the private rental sector than there are in the State housing sector. Any electorate MP in this House worth their salt will tell you that they are besieged by people who are desperate to get on the waiting list and who, by the reckoning of any New Zealander, would be poor and vulnerable and at risk, and they cannot get anywhere near the State house waiting list under this National Government because National has overseen a reduction in the number of State houses. Because of the housing crisis of Nick Smith and the National Government, there are so many people who are desperately in need, with families living in garages and cars and campgrounds, but they cannot get a sniff of being on the waiting list for State housing because of the scale of the crisis under the National Government and its running down of Housing New Zealand. But Paula Bennett wants to rescue them by kicking them out of their State houses, and we have seen this absurd policy from the National Government.

It has done tenancy reviews on more than 3,500 State house tenants who have been put through the wringer because they have committed the sin of earning enough to pay a market rent. What we have found is that 300 of them out of the 3,500—less than 10 percent of those people—have been found to be ineligible for a State house, and National wants, basically, to kick them out instead of making them pay a market rent and recycling that money back into the building of new State houses. It does not want to do that—it does not want to build State houses.

Nick Smith, we cannot live in your ghost houses—we cannot live in the houses that you have failed to build. Dr Smith, the Minister in the chair, needs to know that New Zealanders cannot live in his ghost houses. They cannot live in the houses that he is failing every day to build, and they cannot live in the houses that this Government is privatising and selling off. People need more houses and I cannot understand why this Government is hell-bent on doing everything but the obvious thing—that is, build more State houses. This whole bill that we are debating here today is all about giving these Ministers unfettered powers to sell off the houses that people desperately need, and they are going to go to any number of parties that Bill English is trying to convince can make a healthy profit at the expense of the taxpayer by taking these houses on.

The fourth so-called social housing reform principle is “(d) there is more diverse ownership or provision of social housing:”, and that is Nick Smith’s big thing. He fondly imagines that the likes of the Nelson Tasman Housing Trust are going to be the future custodians of State housing, but nothing could be further from the truth.

Take those scales off your eyes, Dr Smith, and open yourself to the truth: this is a privatisation programme because Bill English does not think the State has any business owning State houses in the 21st century. He wants public-private partnership companies, he wants merchant bankers, and he wants the likes of Ryman and Summerset to make a dollar off the backs of the New Zealand taxpayer and State house tenants. It is not about growing the community housing sector. The community housing organisations that you have cited, Dr Smith, feel cynically used and abused by this Government because you and your colleagues have used those community organisations as some kind of front for your privatisation programme. They see what this Government is doing. They see you running off to sell these houses and billions of dollars’ worth of land to overseas companies and merchant bankers.

We are on Part 2. The Greens absolutely oppose the Social Housing Reform (Transaction Mandate) Bill. I refer to Part 2, which, essentially, extends extraordinary and unprecedented powers to Ministers, who can overstep the Housing New Zealand board at their own discretion, I understand. This is where I want to go back to what Minister Nick Smith referred to when he tried to accuse the Greens of not supporting progressive housing. Mr Smith, the Tasmanian Greens’ policy launched by Cassy O’Connor is about community housing. It was with an organisation that has had 30 years of experience and was willing to take homes that were not in a terrible state, not like the homes that were trying to be flogged off and like the homes that the Salvation Army said “No, those are terrible.” about. So, Mr Smith, there is quite a number of important distinctions here that you have tried to snap us back with.

In relation to Part 2, about transferring contracts at the Minister’s discretion, we would absolutely welcome good community housing programmes. That is absolutely the Greens’ policy, and I said that yesterday in my speech to the House. Good community housing programmes with organisations that have the capacity and the experience and that can deliver good, safe housing are absolutely part of an essential infrastructure, alongside State housing. So, Mr Smith, I wondered—

💬 Jami-Lee Ross: Dr Smith.

Dr/Mr Smith—the honourable—I do not believe that you were able to answer my colleague Kevin Hague’s question when he was asking whether it was truly necessary, as it says in Part 2, that these huge powers be conferred upon the Ministers to achieve community housing. I want to ask, does the Minister not have faith that Housing New Zealand can instead take instruction and take direction, and can you not just instruct the housing agency to do that? Do you absolutely need those huge powers to be conferred upon those Ministers? Also, Part 2 talks about these powers. Has the Government considered the risk that this transferral of power puts the Ministers in—open to allegations of corruption, open to actual corruption? And we have certainly—

The CHAIRPERSON (Lindsay Tisch): Order! The member cannot imply actual corruption. That is an unparliamentary term, and I ask the member to withdraw that comment.

I withdraw that comment. Thank you for that guidance. Instead, I ask, then, is the Minister not concerned about the huge risk of allegations of corruption that the Ministers may face, or is it simply that the Government believes it can get away with what it wants? Thank you.

I am pleased to take a brief call to answer a few points. Very interestingly, we heard from Mr Phil Twyford that the Government is changing its story. Well, I have got in front of me a speech from Mr Twyford to the community housing association in 2014. In that speech he said he supported having a more diverse housing sector and that he supported the transfer—

💬 Carmel Sepuloni: I raise a point of order, Mr Chairperson. I am going to ask for your guidance around relevance to the actual bill. If it is a wide-ranging debate, we could go even wider than that.

The CHAIRPERSON (Lindsay Tisch): I am the judge of that. The Minister is responding to comments made earlier—there is a degree of latitude; this is a rebuttal—and the Minister is responding to that. I am the judge of relevancy.

Part 2 of this bill is about transferring Housing New Zealand houses to community housing associations. Mr Twyford, in 2014, gave a speech to the community housing association and said that he supported that. Now he has got the cheek to roll down to the Chamber, do a flip-flop, and then say that somehow he has a different position. It is so typical. Whether it is the HomeStart scheme or whether it is loan-to-value ratios, the Labour Party has no idea what it stands for—on this issue that is clear.

I have a very important second point. Every member of this House understands that we need more houses, we need better quality houses, and we need a more diverse social housing sector. The very first transaction that will be enabled under this part is the transfer of Housing New Zealand houses at Tāmaki—3,000 State houses—to the Tāmaki Redevelopment Co., which is a partnership between this Government and the Auckland Council. That will enable us to grow the number of houses on that site from 3,000 homes to 9,000 homes. That is 6,000 more homes for New Zealanders. Why are members opposite opposed to that, I ask them—why are they opposed?

I challenge the Greens—why are they opposed to more intensification of housing in the Tāmaki area, which I think every member of this House knows is part of Auckland’s solution? Every one of us also knows that the new homes that are being built in Tāmaki—and we will be opening more of them next month—will be far better quality homes that are better insulated and better provided-for houses in that community. Equally so, I want to say to members opposite, why are they opposed, in an area like Tāmaki, to having not 100 percent State housing but a mix of housing—privately owned homes and community association homes, as well as State homes? That is what we stand for. I am yet to hear a member opposite explain why we would not want to facilitate that sort of development at Tāmaki. That development at Tāmaki can go ahead only with these provisions in Part 2, and that is why we should get on with them.

Firstly, I want to start with the name of this bill. I know we will go through the title and commencement at some stage, but I think it is really interesting that we are calling this bill the Social Housing Reform (Transaction Mandate) Bill when this is actually about State housing—State housing owned by the people of New Zealand. That is every member in this Chamber, every member sitting in the gallery, and people watching at home—State housing. When did State housing become social housing? State housing is the provision of housing for the people of New Zealand. Social housing is about providing for vulnerable communities.

Mr Smith, State housing has long been a treasure, a taonga, in the State’s arsenal to keep people well in communities. There is no doubt that for people who are able to put down roots in a community long term, the benefits to them and to the wider community and wider society are exponential. Social housing is about providing a specific need for a specific, vulnerable group.

My understanding, from my interactions with Housing New Zealand as a provider of refuge accommodation for women and children who experience family violence, is that Housing New Zealand was set up to support the delivery of State housing when people could not access housing themselves. It had a community arm that took care of the social needs of specific, vulnerable groups like the disabled, like the mentally unwell, and like women and children escaping violent relationships. When did State housing become social housing? It was when this Government decided to confuse the two, to make it an issue around the provision of just social housing. It is not. State housing is the State’s commitment to house its people. That is what this is about, and that is why we oppose this bill.

Labour has been housing its people since the day we first became a Government. It sits at the heart of who we are, as Labour. It is our core value to ensure that people have a decent roof over their head. In times of record homelessness this Government is seeking to sell off our assets—what is owned by us as people. That is despicable.

And then we have this issue of accountability, where the Ministers have complete control over the sale process. They have complete control over whom they sell to and what they actually get for that asset. That is unprecedented in this Parliament. The departmental disclosure statement says: “The transaction mandate is an unusual legal mechanism.”—an unusual legal mechanism. Does that not cause us some alarm? Well, it should do. If you are listening to this speech at home, you should be alarmed, because the Ministers will have unfettered powers to do what they like with our assets. That is not right. They can determine whom they make the transaction with and how much they sell the asset off for. This is our housing. These are our tenants.

These are the people about whom the Minister is wanting to say, when there are issues around State housing tenants, that they are actually vexatious. When State housing tenants want transfers, the Minister says: “Oh no, they turned that transfer down because they did not like the colour of the door.” Well, that is rubbish. I have never had a constituent who is desperate for a house or wanting a State house transfer say to me: “No, I don’t like the colour of that door. I’m not going to take that house.”

I want the Minister to actually prove those statements, because what they are doing is making the people of New Zealand think that people who access State care, whether it be State housing or social service provisions, are worth less than anybody else. Well, they are not. They are completely entitled to the provision of social services, and they are completely entitled to that State care. We should support them to do that. We should not vilify them. This Government does vilify people who access State services. This Government would really want those people to go away. What does the Government do? Rather than actually providing the types of mechanisms that will develop people, give them strength, and allow them to get on with what they need to do, it pulls the rug from underneath them.

Who is going to purchase these fine assets at the fire sale that will happen? Well, it will not be community housing providers—the ones that actually will provide for the most vulnerable. Do you know why? It is because they do not want the houses in such poor condition, the houses that this Government has let get rundown. I can see Mr Ngaro looking confused. I am sure, Mr Ngaro, if you were to have a look at the State houses around the areas where people live close to where you live, you would see that the condition of some of our State houses is not that good. Community housing providers did not want to take on this stock because of the cost, not only to purchase it but to actually bring it up to some kind of standard. They do not want their clients, the people whom they service, to live in damp, mouldy homes that need maintenance. They did not want them.

So where will these houses go? They will go to corporates. We know that corporates are not driven by social outcomes. They are not driven by delivering warm, dry, affordable homes to people; they are driven by profit. For me, the profit motive is not one that actually delivers good social outcomes.

I am really concerned that when these houses are moved on to corporates, the tenants of these homes are not going to have security of tenure. Security of tenure is really important. Whether you are a tenant or whether you own your own home, the ability for you to raise a family, to put down roots, to engage in community life, and to build some social capital from the people who live in your neighbourhoods and close to you is the very fabric of good society. We know that a lot of our social harms at the moment are because our populations are so transient that we cannot get services to stick to them because they move from place to place, from couch to couch, and from one desperate housing situation to the next.

I am really angry that we are at the point where we are selling off what is an absolute taonga to this country—something that Labour has built up over time and that National Governments have actually recognised the value of. We introduced low-interest loans and we introduced the capitalisation of the family benefit to get people into owning their homes, and when a National Government came in after us it kept those policies because it knew how vital it was to a good society to have people own their own homes. It knew the value of having secure homes, whether you owned them or whether the State owned them. It knew the value of housing its population.

We should not feel that being in a State house means we are worth any less. Being in a State house should be a gold standard. Unfortunately, our State houses have been so poorly maintained that they are no longer a gold standard, and the people who live within them cannot guarantee that they will be healthy and well. Mr Chairman, I am going to contribute more during the course of this Committee stage, but I thank you for your indulgence.

I take a call on this bill. I just want to make some comments. Mrs Poto Williams did actually talk about the look on my face when she was talking about the State houses that were in disrepair, and Mr Twyford has his head in his hands because he realises what is coming. Mrs Poto Williams probably needs to talk to Mr Twyford. Let us not talk about the Community Housing Aotearoa Impact Conference in 2014; let us talk about Hansard, because that is right here in this House. Let us talk about when, on the record, in Hansard, Mr Twyford, actually said this—and here are his words, which he said in the debate around the extending of income-related rent subsidies to community housing providers: “We are not opposed, in fact, to the Minister’s intention to shift housing stock across to community housing providers.”—and I love these three words—“That makes sense.” That makes sense.

I have to say that Mrs Poto Williams has talked about her disgust. She may need to talk to her fellow colleague about her disgust at his even agreeing with the transfer of stock—the transfer of stock. It does not make sense, but that seems to be the way it is.

Mrs Poto Williams also talked about State houses that are in disrepair. She makes an absolutely valid point. Look, for any of us here in our roles of leadership and roles of responsibility, we would want to make sure that the families that are in State houses do have homes that are warm, that are dry, and that would also cater for their care, their well-being, and their needs.

Mr Twyford was there—in fact, it is a pity because we had Mrs Poto Williams on our select committee, but she was changed over for Mr Twyford—and when we had the annual review of Housing New Zealand he questioned Mr Glen Sowry about the state of repair of those homes. Mr Twyford questioned that and what the conditions were. Mr Sowry, in his report that I have here in front of me, talked about $400 million of maintenance and upgrades. He also followed that up with this comment to Mr Twyford: “We have to say this,”—and he did not say it when the Government came in—“that for a long period of time many of those houses were in a state of disrepair. There had not been the focus, the energy, and the effort to repair those homes.”

💬 Hon Member: They’ll always blame the Labour Government.

Yes, the member may go on, but it is fact.

Let us deal with the evidence that comes from Housing New Zealand itself, that for a long time there had been no attention paid to this. So what do we have now? We have homes that are warmer, we have homes that are drier, we have homes that are ventilated, and we have homes that are heated, for the care and well-being of tenants.

Let us also make the point—and we are talking about Part 2, the transactional mandate of this bill. I know that Mr Twyford and Mrs Williams have been talking about the great State housing sell-off. Let us talk about this. In 2008, when the National Party came into Government, the current stock was around 62,000, right? As of last week, what we were told was that it is about 67,000. That is what we are talking about—67,000. OK? These are the homes—

💬 Phil Twyford: That includes leases, Alfred. You are confusing two different numbers.

Well, we have it here. This report was submitted to us from the annual review, OK? This is what came through: 190,000 people are actually tenanted into those homes. What is important is in here.

When we were talking about the so-called great State sell-off, the first transfer of the stock was around 2,800 to the Tāmaki Redevelopment Company. In comparison with what we are talking about, this is not a huge sell-off. It is not 30, 40, or 50 percent—it is not half of the stock. It is the stock that can go into the hands of a social housing provider and that can meet its needs.

Can I acknowledge the VisionWest Community Trust out in west Auckland: Lisa Woolley, and Mark Bridges, who is the chairman. In the work that they are doing they are a fine example of a social housing provider. Here also from Mr Twyford’s own words himself, when he said that there is sometimes the need for another provider—and here is Part 2. It is a transactional mandate. It is a partnership with a provider that has the means and the ability to meet a variety of different needs that the State cannot provide. However, what it does is it keeps its responsibility of providing a housing provision. So the transfer of that stock—approved by Mr Twyford—into the partnership of housing providers is the right thing to do. It is the right thing to do.

We know that the rent reviews—the tenancy reviews—were absolutely the right thing. In fact, Major Campbell Roberts was also part of that.

I want to speak on clause 8 in Part 2, and especially new sections 50E and 50D. New section 50E is what I would call the operative clause. It is the one that actually confers the power on the Minister. It says—and I quote with abridgement—that “(1) The Minister may enter into a contract, … if the Minister considers that the entry into the contract is for the purposes of any 1 or more of the social housing reform objectives:”. In subclause (2) it says: “A transfer contract may be on any terms and conditions (including as to consideration) that the Minister may agree with the transferee.”, so those are very wide powers.

The Minister can sell to anybody on any terms, and all the Minister has to do is to relate it to the social housing reform objectives. Those objectives are set out in new section 50D(1), so let us have a look at them. In paragraph (a), the first one, it says that “people who need housing support can access it …”, and so on. Well, that does not require the sell-off of existing State houses or land. That can be done, and should be done, without that.

Secondly, in paragraph (b), “social housing is of the right size and configuration, …”, the same thing applies. New State houses and developed State housing land can achieve that without having to sell any land to anyone for any reason. And in paragraph (c), “social housing tenants are helped to independence, …”, the same thing applies. In paragraph (d), “there is more diverse ownership or provision of social housing:”, again, the same thing applies. Why do those objectives justify—and how could those objectives justify—the sell-off of State houses or State housing land for development?

In paragraph (e) we see “there is more innovation and more responsiveness to housing tenants and communities:”. Innovation and responsiveness—what on earth does that mean? Does it mean selling it off to private buyers so that they can do what they wish? This is not necessarily a social housing objective at all. When I look at new section 50D(1)(f), “the supply of affordable housing is increased, …” it does not even say “social housing”; just “affordable housing”. So that is clearly not a social housing objective whatsoever. In fact, it is not even clear what “supply of affordable housing” means. How does that improve the social housing stock, in quality or in number, in New Zealand? It just does not. It should not even be there. It is not a social housing objective whatsoever.

So what does this mean? It means, actually, that the objectives are only generally defined, and yet this is the crux of the bill. This is the reason why the Minister can sell to anybody for any reason and on any terms, and yet the objectives themselves are only generally defined and not well defined. Some of them are irrelevant to social housing, yet the contracts would have to be specific as to what is to be achieved in terms of those objectives. So what will they look like? What will the effect be? All of that is very, very unclear indeed. It includes bare land sold for housing development, as well as existing houses.

When you follow this on as a sequence, you can see what could happen. You could have, for example, the Redcliffs School, which the Government says it wants to sell, being sold and then designated by the Gazette as State housing development land, and then, under this bill, being sold off by a further Gazette notice for “affordable housing”. Affordable to whom, and on what basis? So it could just be sold off to anyone under any terms and conditions, and I think that is what will happen to the Redcliffs School. I think it will just be sold off to anybody who comes along, and it has got nothing to do with social housing objectives. That is the error in this bill, and it is the reason why what we have heard from the Minister sitting there, Nick Smith, actually simply is not true.

This bill means a lot more in terms of its width and scope than this Minister has claimed. It can actually mean just the sell-off of land, or even schools, to anybody, on any terms and conditions, if they were called “affordable” sections, for example. That may be fine for those people. The point is that this bill is supposed to be about social housing, improving the quality—and if the Minister keeps shaking his head his brain will fall out of his ear, because he knows that what I am saying is actually true, and it will be true. This bill is actually stated to be about social housing and the Minister has talked about social housing, and yet it can be that that is not what happens under this bill.

The bill itself is badly drafted, and it is misconceived as a piece of legislation in the first place. What is really intended, despite everything that the Minister and other members opposite have said, is simply to find a way to privatise land that is currently State housing or land held for State housing purposes. It is a sell-off. It is a privatisation process. It is not genuinely an attempt to improve the social housing stock in terms of numbers of State houses or intensification of existing State housing stock, nor to improve the quality of housing for people who rely on State housing. These days that is something like half of all people because about half of the total population is now dependent on renting homes, and a big chunk of that is social housing.

So, despite what the Government has said about this and implied about it, it is not a bill about improving social housing at all. It is just a sell-off, and it is not clear what the effect of this bill is going to be in the end. It will be patchy. Some land and some State houses will just be sold off, and there will be no increase and no benefit to social housing at all. Some may be. Some may be—I will concede that—but the point about this particular legislation is that it is badly drafted and badly conceived, and if it were to do what the Minister said it was going to do, it would be a different bill altogether. New Zealand First will certainly continue to oppose it.

I move, That the question be now put.

I appreciate the opportunity to make a contribution to this debate, although this is the first time I have spoken in the House this year, and I would wish to have been speaking on something a lot more positive than this. I want to say happy New Year to everyone to start off with, but now, I am sorry, it is going to have to be completely negative because what this part of this bill does is atrocious.

I want to take a few minutes just to explain what this means for the people of Hamilton, because the timing of this could not be worse. At the moment what is happening in Hamilton is there is a flood of people coming out of Auckland because they can no longer afford housing in Auckland. The members opposite are nodding—they know that this is true. People are moving to try to get more affordable housing in Hamilton, so guess what is happening? The housing crisis in Auckland is being transferred from Auckland. It is marching on down over the Bombay Hills and it is landing in my city. The house prices are going up substantially as a result of that. The rents are following, and are going up substantially as a result of that. That means that as a local MP, I am getting increasing numbers of people coming into my office who are falling out the bottom.

What does that mean? Well, it means they cannot afford the rent increases—they cannot afford the rent increases. They are coming into my office and saying “I need help. I need a State house.” because that is what we set up our State housing system for. And I am sorry to say as a local MP there that is not a lot that I can do for them because the Government is flogging off the State housing stock. That is what Part 2 of this bill enables it to do—to flog it off.

In Hamilton we are seeing the exact results of this because, as a forerunner to it, the Hamilton City Council is about to flog off pensioner housing flats. Exactly the same thing that has happened in that debacle I am predicting will happen because of Part 2 of this bill. It enables the Minister, under new section 50E in clause 8, to agree to a transfer contract. It sounds all very easy, does it not? But this is transferring the ownership away from the Crown to a private entity. Let us be clear about it—that is what it is, in fact, doing. This is privatisation of State assets. So the Government is transferring this ownership contract, and it can do that “on any terms and conditions … that the Minister may agree with the transferee.”

Well, in the Hamilton City Council situation the council has done that. It has sold off a ratepayer-owned asset—pensioner housing flats—at 25 percent below Government valuation. I can tell you, nothing in Hamilton is selling for Government valuation, let alone 25 percent below. So the ratepayer is being ripped off, but here is the thing that really breaks my heart: the immediate effect on the people who are the tenants of those pensioner housing flats is that their rent has gone up by 18 percent—their rent has gone up by 18 percent. Here is the reason for it: the new owners want to get rid of those pensioners from those housing units as soon as they can so that they can put new tenants in. They want to do that because when they get the new tenants in, those new tenants, under this bill that we are debating today, will attract an income-related rent subsidy from the Government.

So that is exactly what is going to happen under Part 2. This land and the housing associated with it is going to be flogged off at below the value that the taxpayer should be getting in return for it, and the existing tenants are going to have pressure put on them to move out because under this legislation—and, Minister Smith, I am going to ask you if I am correct in this, because my understanding is that this is where the Government has landed—those existing tenants will not attract the income-related rent subsidy. Is that correct? The Minister in the chair is shaking his head. They will not, or it is not correct?

💬 Hon Dr Nick Smith: I’m not allowed to answer.

Oh, OK. Well, I would like the Minister to answer that question, because that is critical to what is going to happen next. If the tenants do not attract the income-related rent subsidy, then those new owners will want those tenants out as quickly as they can possibly march them out the door, and the way they will do that is they will just increase their rent, and they will increase the rent, and they will increase the rent until they leave.

As Part 2 says, this is—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.

Sitting suspended from 6 p.m. to 7.30 p.m.

We are talking about Part 2 of the Social Housing Reform (Transaction Mandate) Bill. This particular part of the bill is the part that enables privatisation and, therefore, is a really important part of what this legislation is trying to do. I want to address earlier statements about the Glen Innes community and issue a challenge to ask the Opposition side—and particularly because the Green Party has been mentioning them a lot—what else we would do, because Part 2 of this bill concentrates on removing State and public assets for a mix of private ownership, community housing, and State housing as well. But the key point here is I can, and the Green Party can, actually discuss the mix of some private housing alongside community housing and State housing as part of solving the housing crisis. However, the driver has to be solving the housing crisis. There are no guarantees that the driver of this bill is to actually do that. It is simply a State assets flog off. We have to be really clear about the drivers, particularly as set out in Part 2.

What has happened in Glen Innes should be a very clear warning to us. Those people have been very clear that the process has been wanting, the process has been flawed. They are feeling very disposable as a community. They have been displaced in order for megabucks housing—megabucks private housing, upwards of $600,000, which is not at all affordable and accessible to the already established community. Those are the words that they have been telling us in their plea and in their campaign to be listened to. There is some nice water there, there are some nice boat clubs along that water, and it is a fertile community—sorry; it grows plants well—and so they have been feeling very displaced about the intentions behind the drive of the State housing evictions that they have faced. There are no guarantees that those properties and lands will not end up in private hands eventually, even though there is an incremental step to flog off public houses. It has gone to the Tāmaki Redevelopment Co. as part of an incremental step to eventually be able to flog off public housing and public land. So yes, I do want to stick up for the Glen Innes community, particularly around the process of what has happened there.

Sometimes I just wish there was a little bit more honesty about what is driving legislation from this Government. That is all—a little bit more honesty about what is driving the legislation from this Government, and particularly in this bill. There are no guarantees. There are no guarantees that more and more State assets will not end up profiting private owners and particularly property developers.

💬 Hon Member: What a load of hogwash.

Yes, I know! Therefore, if we are talking about private development, the private market has never been successful in providing healthy, affordable, and accessible homes for people who need them. There is so much need. There is a crisis at the moment, and this bill is not the answer to it. This bill has got nothing to do with solving the major issues in front of us about the housing crisis.

I did want to take a short call, in particular to respond to the raising of the Glenn Innes community issue. Thank you.

Before the next member takes a call I am going to issue a warning to the Committee. We are now in the Committee stage of the Social Housing Reform (Transaction Mandate) Bill. We are discussing Part 2. It has got a very big new part inserted by clause 8. I was listening to the debate from my room earlier and what I am going to indicate to people is that the general principle of the bill has been accepted. What we are now discussing is whether Part 2, in particular clause 8, is the proper way of implementing it—why and why not. I want to leave that to members because there has already been a closure moved and if there are ongoing non-relevant speeches then, of course, it becomes much easier to accept one.

Your guidance, as always, is appreciated.

The CHAIRPERSON (Hon Trevor Mallard): Yes, except you do not comment on rulings. The member must learn that.

OK. Point taken. I wanted to make some comments about, in Part 2, new sections 50E, 50F, and 50L inserted by clause 8 of the Social Housing Reform (Transaction Mandate) Bill. Those are the new sections I want to comment on. One of the two main objections that Labour has to this bill, besides objecting because it enables a policy that we fundamentally disagree with, is that we also object to it on a basis that it is, as we have already said, a charter for corruption. It gives unfettered powers to two Ministers to dispose of in any way they see fit billions of dollars of taxpayer-owned assets of land and housing. I want to refer members and any listeners to this debate to new section 50E in clause 8 in Part 2, “Minister may enter into transfer contracts as Corporation or subsidiary”. The designated Ministers acting as if they were the corporation may enter into transfer contracts—or contracts for sale, that is. Subsection (2) reads: “A transfer contract may be on any terms and conditions (including as to consideration) that the Minister may agree with the transferee.” This is unbelievable. We are talking about billions of dollars of land and housing owned by the people of New Zealand. The National Government is in the process of giving Bill English and Paula Bennett the power to dispose of these publicly owned assets on any terms and conditions they see fit, including as to consideration, and that means that they can do a deal on any basis. So if they are desperate to hock off assets to some public-private partnership company, to some private investors they can do any deal about the amount of money that changes hands, the subsidies the Government is going to pay them, the pay-back period, and they can bankroll them into the deal. You name it, all the options are there.

Do you know why the Government is doing that? It is doing it because Government members are desperate to be able to flog off these incredibly valuable public assets in any way they see fit. They do not care about the need to deliver value for the taxpayer. They do not care about stewardship of assets that generations of taxpayers and State house tenants have paid off. Government members want the ability to do deals with their mates and, as I said, that is a charter for corruption. There is a reason that we have the provisions in the Public Finance Act. There is a reason that Ministers are governed by a raft of legislative provisions that govern, control, and put limits around them, and hold them accountable in the work that they do as Ministers, particularly when they are doing commercial deals with publicly owned assets. We have already had the spectacle in the new year of New Zealand slipping down Transparency International’s Corruption Perceptions Index. As reported by the New Zealand Herald, “The 2015 Corruption Perceptions Index, released today, points to the Oravida affair, Saudi sheep deal and SkyCity convention centre debacle, as reasons New Zealand has slid down the transparency rankings.” These provisions, new sections 50F, 50G, and 50L, illustrate my point. They give carte blanche to the Ministers. They are unfettered powers that give these two Ministers the freedom to make any kind of deal they want with billions of dollars of publicly owned assets. I do not even see a raised eyebrow on the other side of the Chamber. They do not think this is a problem. They are quite happy to see two of their members disposing of these hugely valuable public assets with no controls and no accountability.

If you look at new section 50G, inserted by clause 8, it has a provision in a similar light: “Minister may do other things as Corporation or subsidiary relating to and to implement social housing transactions”. It says that “The Minister may, for and on behalf of the Corporation … do anything—(a) that the Minister considers necessary or desirable in relation to the negotiation of, or entry or potential entry into, a transfer contract or a transitional services contract:”. I mean really, folks, it could not be clearer that these Ministers are being given a free pass to do any kind of deal they like with their Cabinet club mates, with any public-private partnership firms—you name it. I think it is a shocking and appalling abdication of the Government’s responsibility to steward public resources in the interests of the nation and the public good. We have had some debate already this evening about what will happen to the proceeds of the houses that are sold. Nick Smith, the Minister formerly responsible for State housing, really, I think, sold us a pup in trying to convey the idea that, actually, the proceeds of the sale of the houses would be reinvested back into Housing New Zealand. Well, nothing could be further from the truth. Nick Smith also tried to make the point that there will be transparency in this whole process because after the sale is made they are going to have to publish something—a notice in the Gazette.

If you look at new section 50L, it says: “The Minister must, as soon as practicable after a social housing transaction is settled,—(a) publish a notice in the Gazette describing the general nature of the social housing transaction:”—“describing the general nature of the social housing transaction”. Well, that is not transparency. That is not accountability. My goodness! All they need to do is say: “Well, we’ve sold a few houses in Invercargill to an Australian company.” They do not need to say what the valuation of the properties was, they do not need to say how the sale was financed, they do not need to say what the properties were sold for, they do not need to say what is going to happen to the proceeds. This is the most pathetic kind of effort at providing any kind of transparency and accountability. To correct, I think, the mistaken statements uttered in this Chamber before the dinner break by the Hon Dr Nick Smith, this bill is very, very clear, and it says that once land is declared to be social housing land for the purposes of disposal under this bill, then the proceeds of that sale will go into a Crown account. It does not say “go back into Housing New Zealand.” It does not say that these funds will be then reinvested in the provisions of State or social housing. And, in fact, repeatedly, National Government Ministers have declined to give that assurance. They have been asked in the media and in this Chamber whether or not the sale proceeds would be reinvested in State housing, and they have refused to do that.

My point is that if you take into account the provisions in new section 50L, which is the best that this bill can offer in terms of transparency, all it is is a very insubstantial attempt at telling the public what has happened. There is no rigour; there is no detail. In all likelihood, people will have no idea about the substance of what has happened when large volumes of publicly owned assets are sold into what could well be private ownership. My point is that when you take into account these provisions in Part 2, there is no accountability, there is no transparency. The Ministers are given huge, wide-ranging powers to do whatever they like. It is a charter for corruption. It will cast the Ministers involved and put them in a very vulnerable situation if they are seen to be doing deals with private interests that will benefit from these deals, and with the Hon Bill English talking in the last couple of days about large amounts of State housing being sold off to international funds so that they can operate on a business model like the retirement village companies do, I think there is a real risk that these deals will besmirch further the reputation that New Zealand has for probity and integrity.

I would like to talk about new section 50H, inserted by clause 8, titled “Provisions applying to things Minister may do”. Mr Twyford made a very good point when he said that, basically, how people judge us is their perception of how we do things. So something may be right technically, but if it is perceived to be wrong or there is a general perception that it may lead to corruption, then it will affect not only how people perceive us but whether they decide to invest in this country, etc. When I look at new section 50H, “Provisions applying to things Minister may do”, new section 50(2) says “However, the Minister is not constrained by, and sections 50E to 50G apply despite,—” and it says ”(a) the objectives, functions, or powers of the Corporation or subsidiary:”. So, again, as Mr Twyford said, the Minister can do anything. But worse than that, if we work our way down here—and the thing that really alarms me—is paragraph (d) of this, which says “the role, authority, powers, or duties of any relevant board:”. So what this is basically saying is the Minister is not constrained by the governance arrangements that had been put in place to ensure good governance is practised here.

If we have a look at the definition of “governance” or “corporate governance”, it is—and this is from Investopedia, which, by a number of measures, is one of the top investment websites on the net. I go to it a lot, actually. And I will quote: “Corporate governance essentially involves balancing the interests of the many stakeholders in a company—these include its shareholders, management, customers, supplies, financiers, government and the community.” What this bill says is that despite what the board members, who are supposed to be experts in how you govern a company and in good practice—the overarching guidance—despite what they may think, do, say, the Minister has the right to overrule them.

There are two things I would say to that. First and foremost, who in their right mind would accept a board position for Housing New Zealand if they knew that no matter how good the governance they practised was or how good they were as a corporate governor or as a director of a board, they could be completely overruled? Therefore, their reputational risk is so high you would not go on this in case that did happen.

The second thing I would say is, despite what we may think, Ministers are not experts. Ministers very rarely are experts in the area with which they are charged. So what Ministers do is they make sure that they have experts in place to give them the advice they need to make really good, sound decisions. One of the things they do is they make sure there is a really robust process in place to ensure that the people who sit on boards of organisations like the Housing Corporation are very good at what they do. They make sure that when the New Zealand Herald says “What is going on at Housing Corporation?” they can say “Ah, well, let’s talk to the board.” or “This is an operational matter, and I have complete faith in my officials and I have complete faith in the people sitting on that board.” That is the right thing to do because that is why we make sure that we have a series of experts, because corporate governance is an art and skill that is learnt over time, and you have got to bring a lot of experience.

What this says is, no matter what that board of learned experts say, the Minister can ignore it and go and do whatever he or she wants. That is wrong. But the perception that that sends is almost as damaging as what the Minister himself or herself could do. The reason I say this is that I have had a good look at this because when it came out that we had dropped from first in the anti-corruption measure down to second, to third equal, and now to fourth, I thought: “What is going on here?”. The countries above us—it is Finland, Singapore, and, I think, the Netherlands—are still countries that we perceive have very good systems in place. But this slow slide affects our global brand, and that is a real concern.

I am sure there are other ways that the Government could achieve what it wanted to achieve without giving itself such wide-ranging powers. When I see something like this, what it says to me is that the Minister does not trust the officials or those charged with maintaining good corporate governance to do the right thing. This is the thing about governors and directors: they are supposed to act in a way that is unbiased but in the best interests of that corporation. What this says is that the Minister does not have to act in the best interests of the community, of the Government, or of the stakeholders—because if he or she thought that they were acting in the best interests, then they would seek advice from the board, and then they would take advice accordingly.

If I go down to new section 50H(2)(e) it says “anything to the contrary”—so the Minister is not constrained; remember that—“contained or implied in this Act, the Crown Entities Act 2004, or the Companies Act 1993”. I do not know—and I have not been here for a great length of time—but I do not know any Minister in any portfolio anywhere who has powers that can actually override the Companies Act. Again, that just sends an incredibly poor message to corporate New Zealand, as well. It is a big business. What we have said to big business, through the Companies Act, is: “This is a set of rules that you must stick to, and if, as a corporate, you don’t stick to these rules, then we’re going to haul you over the coals.” This bill says that there is one exception in New Zealand, and that is the Minister. I think that is extremely dangerous, and I think it sends a very bad message.

What I would like is to hear from a number of those gentlemen sitting in the back row of the Government benches, who I know have been in high-level positions in organisations. They must be feeling incredibly uncomfortable about this piece of legislation. They must be feeling incredibly uncomfortable, because they know that this is just really, really bad governance. It is bad legislation, because it does not deliver the level of accountability that I believe New Zealanders demand from our Ministers and that they demand from our parliamentarians. This really is not right. It is not New Zealand. I will just make this point one more time: this will, I believe, damage our global brand, and that is substantial. Our global brand in 2005 was valued at $20 billion a year.

💬 Chris Bishop: Oh, here we go.

It was $20 billion a year, Mr Bishop, and you know what I mean because you have heard me say this a number of times. One of the few things we have to take to the world is a fantastic global brand. If we start diminishing it by giving Ministers unfettered powers to override boards and override Acts—then we will diminish it. I would bet $10 that when this goes through in that next—

💬 Carmel Sepuloni: $10!

It is just a figure; it is just showing that I believe that in the next corruption index, because of new section 50H in this piece of legislation, we will be down to No. 5. People may say there are 174 countries below us, but this is bad legislation. I think that as a Parliament we need to think very, very hard before we give the Ministers the sorts of powers that Part 2 of this bill does. Thank you very much.

I want to speak to clause 8, particularly in that it introduces new Part 5A, which is about the Social Housing Reform Programme. I want to refer to the regulatory impact statement, where it actually sets out the Social Housing Reform Programme. I just want to quote from it and make some comments about this, because it is very relevant that the Government has set itself some standards by which it wants this bill measured and by which the work measured against it. I want to make some comments on that.

The Social Housing Reform Programme “intends to improve the lives of vulnerable New Zealanders by getting them into housing which meets their needs for the duration of that need.” That is an interesting statement, except for the fact that we have reviewable tenancies. The Government will then determine that tenants may not need a particular house, and will put them into the private tenancy market. “In December 2014, Cabinet agreed a set of objectives for the [Social Housing Reform Programme]”. The first one is to “ensure that people who need housing support can access it and receive social services that meet their needs”. That is a great objective.

In Christchurch East, you could say that we are “frequent flyers” of accessing housing for our constituency. We have a great relationship with our Housing New Zealand partners, so much so that we are in daily contact with the Housing New Zealand Corporation. We have a real understanding of what our community needs and the partnership that we have out into the community for those providers, including Housing New Zealand.

One of the things that we have found most troubling was when the assessment function for social housing moved from Housing New Zealand to the Ministry of Social Development. We understood the logic that sat behind that, because you are talking about a similar cohort of people accessing both the provision of services from the Ministry of Social Development and Housing New Zealand. We could understand that. However, in the intervening year or so, or year and a half—nearly 2 years—since that transfer of assessment function has occurred, I cannot see a demonstrated improvement in accessibility of housing for vulnerable people. I do not believe it has achieved what it was supposed to have achieved.

In terms of the first Cabinet objective, around accessing housing support that meets people’s needs, I think there has been a failure already, and we have not even gone through the process of selling off the houses to private providers. The second objective, as discussed in these Cabinet objectives, is to “ensure that social housing is of the right size and configuration, and is in the right areas, for those households which need it”. I have yet to see the Government actually build the houses that are needed for the population of most need. It is well known that the types of houses that we need are single bedroom, two bedroom, and four bedroom or more. Those are the configurations that are needed for our social housing tenants.

Although there are lots of two-bedroom homes being built, particularly in Christchurch in response to the extra need that is there, we have yet to do anything about the most needy of our housing tenants, who are single men. Generally speaking, they are men who are difficult to house because they come with their own sets of issues, usually mental health concerns and drug and alcohol dependencies. I have not seen that population group have their needs met, and it is not likely to happen under a private arrangement.

Looking at Part 2, I want to focus particularly on new section 50J, “Objectives of Corporation for this Part”, inserted by clause 8. It reads: “(1) The Corporation’s principal objectives for this Part are to facilitate the transaction processes and to facilitate and implement social housing transactions. (2) The Corporation’s principal objectives for this Part prevail over the Corporation’s other objectives.”

My question to the Minister is whether or not the facilitation of these transactional processes is actually taking precedence, now, over what Housing New Zealand’s major role has been since the inception of Housing New Zealand—that being to provide warm, dry houses to those New Zealanders who are most in need. This clause clearly states that the primary objective of this particular part of the legislation is that the corporation’s objectives are shifting, so that the facilitation of the transaction becomes the primary concern. That concerns me as a New Zealander, because we have a proud history of what Housing New Zealand has offered New Zealanders.

I, like many other people in this room, at one point in time, at the beginning of my life, was housed in a Housing New Zealand house. For many of us it was the stepping stone for our parents to then be able to go on and live the Kiwi Dream, and purchase the house. But that starting point was that Housing New Zealand house. The primary objective of Housing New Zealand was to provide those warm, dry houses. So have we shifted this much now, that the primary objective becomes about the transaction or about the sale? Is that what the primary objective is now? Is that what new section 50J in clause 8 is spelling out to us?

I have a number of constituent cases in my electorate, which actually used to be part of Minister Paula Bennett’s former electorate, that highlight why the focus and the primary objective of Housing New Zealand should continue to be providing warm, dry homes to those New Zealanders who are most in need—not the primary principal objective being to facilitate the transaction process and to facilitate and implement social housing transactions. It is a huge shift. Let me just talk about a couple of those cases—actually, let me start with one not in my electorate; let me start with Emma-Lita Bourne. Housing New Zealand should be focused on providing warm, dry, healthy homes for New Zealanders—that should be the primary objective—and that particular case illustrates really clearly why that should be the primary objective of Housing New Zealand. There we saw a coroner’s report that told us that this child died because of the fact that she was not living in a warm, dry, healthy home.

We have other incidences in my electorate. One that was in the media recently was parents who have a child with a disability, who cannot take that child to school because the mother cannot carry that child in and out of the home every day. But they cannot get access to a home that can be modified, through Housing New Zealand, because of the shortage of housing. That is not being rectified with this particular bill. In fact, it is being made worse because of the fact that the Government is doing nothing to build on the stock. It is actually intending to sell off the stock to social housing providers. As we see here, its primary concern is not for that young boy who cannot get in and out of his home every day; its primary concern is for the facilitation of the transaction process, and to facilitate and implement social housing transactions. How far we have shifted from the original vision for Housing New Zealand!

Let me talk about another example where you would think that the Government would focus on the provision of warm, dry homes to New Zealanders. I am talking about another case—a west Auckland case that was in the media recently—a young woman called Sharayne who was pregnant, living in her car. The only reason that she was able to get access to a Housing New Zealand house was because the media made a story of it, put it out there for the public to see; she had not only the media working on it, but she had an MP advocating for her as well. That is the only way that, when she got to 9 months and was ready to give birth to that child, she had access to a Housing New Zealand home—because of the pressure that we had to put on Housing New Zealand to enable that to happen. So, yeah, I am really concerned about the direction that this Government is taking Housing New Zealand in; that it is moving away from the focus on Housing New Zealand’s role to provide warm, dry, homes.

I would just like to address a couple of things that have come up—and one in particular to the member who was just speaking, Carmel Sepuloni—in Part 2 of the Social Housing Reform (Transaction Mandate) Bill. Housing New Zealand’s existing legislative framework was not designed for the social housing transactions, and does not allow Ministers to execute transfers of Housing New Zealand properties. In particular, Housing New Zealand is a Crown entity, governed at arm’s length from Ministers and according to its own legislation. As such, we do not want to change that legislation. We do not want to change the main purpose of Housing New Zealand. We certainly agree with much of what the member was saying. That is why we are putting this into the bill, so that, yes, the Government has a programme where we are admitting transactions. Members have opinions on whether that is the right thing to do, or not, and that is perfectly their right. But what this does is it actually allows us to put the Government’s programme into place, and not change what the board is there to do and what its role is.

The member before Carmel Sepuloni, Stuart Nash, certainly spoke about the governance of Housing New Zealand, and how he felt that this was putting undue influence on it, and he certainly quoted what that meant—to be on a governing board and the responsibilities. I would say to him that that is exactly the point—that we want to ensure that we are making sure that the board members are true to what their role is, what they govern for, and, as I have already said, it is within their legislative framework that they are not designed to actually execute these transfers, and, instead of messing with what their governance role is, we take that, so that we can actually administer the Government’s programme. Going to the speaker before that, Phil Twyford, who talked quite a bit about how we ensure that there are a number of provisions to ensure that the transaction mandate powers are exercised appropriately—one of the first things that I would say is that we have two Ministers there. There is a reason for that. We have joint accountability, and we ensure that that is there. We actually did not have to do that. It could have been just one, but we felt that having the two gives it that “double trouble”, I suppose.

The power to execute social housing transactions, as proposed in new section 50E in clause 8 can be exercised only for the purpose of one or more of the social housing reform objectives, and we purposely put that in so that everyone can see what we are doing, and that it is true to the objectives. The bill also ensures that there is public and parliamentary visibility, as the member said—that they have to be gazetted in a notice outlining the transaction, and it must be tabled in this Parliament. We purposely put that in to make sure that there is that visibility, and we are actually there. Ministers are subject to the usual public and administrative law requirements to act reasonably, fairly, and lawfully. If a member of the public, or an organisation, or Housing New Zealand thought that the Government had executed a transaction that did not serve the social housing reform objectives, for example, they could apply for a judicial review. So all of the concerns that the members have raised we had actually thought through and implemented into this bill to make sure that we have the right checks and balances, to ensure that what we are doing is ensuring that Ministers can administer the Government’s programme, and that we stay true to the legislative framework of the governing board of Housing New Zealand. Thank you.

I disagree with what the Minister has said, with all due respect. I think what she has outlined, and what is in this bill, is actually poor governance. I am sorry but under every single definition, when a Minister has the right to overrule a board, that is not good.

But there are a couple of other things that I would like to just pick up on. New section 50L in clause 8—this is “Publication of social housing transaction”. There are just a couple of terms here that I think we need to clarify so we know exactly what we are talking about. What is says under new section 50L(1) is: “The Minister must, as soon as practicable after a social housing transaction is settled,”—what does “as soon as practicable mean”? I would say in this sort of situation with this sort of transaction, with such a public good or a public interest component, that it should be within 24 hours. It continues that the Minister must “(b) present a copy of that notice to the House of Representatives”. The interesting thing, though, is that under new section 50M(1)—and this is the thing that strikes me as a little hasty and again poor legislation but, more than that, it is poor process—it says: “The Minister must give written notice to the Corporation or subsidiary, as relevant, of the Minister’s intention to enter into a transitional services contract, at least 5 working days before entering into the contract.”—5 working days? So what this actually says is that the Minister has no legislative right whatsoever to tell his or her staff what he or she is planning to do with any sort of social housing contract before a 5 working-day period. The Minister may turn up on a Monday and say to the chief executive “I’m signing something on Friday.”

Goodness me! I just do not think that 5 working days is at all enough to allow any sort of corporation to respond in a way that would allow whatever needs to be transferred or the proper process to go through in any way, shape, or form. It says that the notice must be accompanied by a copy of the proposed contract. Well, hallelujah! Thank goodness for that. Of course it should be.

But I can imagine that these contracts, when you are selling off State houses or chunks of State houses, would come with a pretty meaty contract. The sale and purchase agreement of a stock standard house requires—well, you get 60 days to complete it before it becomes void or you need to seek an extension. What this piece of legislation is saying is that the chief executive officer has 5 days—only 5 days—to consider the contract if the Minister is entering into something. That is woefully inadequate. I think it is woefully inadequate.

I would also like to go to subsection (1) of new section 50O, set out in clause 8. This is a very interesting subsection. I am not too sure why it is here but what it does do is it says to me that there is a lot of malcontent—discontentment—within Housing New Zealand. New section 50O(1) says: “The Corporation or subsidiary must supply to the Minister any information requested in writing by the Minister to facilitate transaction process, or to facilitate the implementation by the Minister of a social housing transaction.”

💬 Phil Twyford: You can’t blame them for being unhappy.

I agree with you, Mr Twyford. This is saying “Officials, you must obey the Minister.”

💬 Meka Whaitiri: No, it’s that they have no faith in them.

Exactly. What this is saying is the Minister does not have any faith in her officials to give her or him the right information to make sure this proper process is implemented, so what we must do is actually put in legislation a requirement for the officials to obey the Minister.

I speak on a lot of tax bills and that sort of thing and I have never seen a clause in a bill that says the officials must obey the Minister. In fact, I actually believe that that is part of the State services contract. Mr Bishop would know more about this. Perhaps you could take a call on it. But I would have thought that if an official did not obey a Minister or did not give the relevant information that a Minister had asked for, then that official would be in really big trouble. But the fact it has to be in a clause in the legislation says that there exists a level of distrust between the officials, who probably know this is the wrong thing to do, and the Minister, who just does not trust the officials. If I were an official I would feel pretty slighted about that, actually—I really would.

The other thing that I perhaps want to ask the Minister a question on is, if we go down to new section 50Q, the rights of delegation—it says in subsection (1): “The Minister may delegate all or any of the Minister’s functions and powers under this Part to the chief executive of the Ministry.” So what that in essence says is that the chief executive has the power to override the board.

In addressing Part 2 of the Social Housing Reform (Transaction Mandate) Bill, I thank you, Mr Chairman, for giving me an opportunity to look at the clauses and why this bill is drafted in a way that is heavily swayed towards privatisation. It basically says that the Ministers can do what they like—and I will outline why that is not a good thing, at the end.

New section 50G, set out in clause 8, states: “Minister may do”—it actually says this—“other things as Corporation or subsidiary relating to and to implement social housing transaction”. That is basically that the Minister can do what they want. The Minister can do anything and need only consider—the word is actually “consider”—one objective of the social housing reform objectives. That is in new section 50D, “Meaning and relevance of social housing reform objectives”, and the Minister need consider only one section.

You could choose new section 50D(f), which says: “the supply of affordable housing is increased, especially in Auckland.” What does that mean? Does that mean that this legislation is open to being able to sell off any quantity of land or houses, no matter that 90 percent of it might be to private and property development, but we may have increased social housing by one house? Is that what the legislation leads us to? In that case, yes, absolutely I agree with the Minister when she says that they have thought through this legislation. They have thought through it, all right. They have thought through how to adjust the law to suit the power, rather than adjust the law to substantially increase affordable housing and making that quite clear and making it binding rather than something that the Minister may consider. What is the definition of that word “consider”? Oh yes, they have thought through this legislation.

So I will end by saying that of course we must oppose this because this is legislation that lends itself to an accusation of corruption. Thank you.

Meka Whaitiri.

A good call. Tēnā koe, Mr Chairman. Tēnā tātou katoa. Thank you for allowing me to take this call on the Social Housing Reform (Transaction Mandate) Bill, at Part 2. My contribution is really probably hoping to get some clarification from the Minister in the chair, the Hon Paula Bennett. I want particularly to address new sections 50D, 50E, 50F, and 50G, as inserted by clause 5, and if I have time I will also touch on new section 50L.

When we look at new section 50D it talks about the social housing reform objectives. Clearly, there are six objectives. My question to the Minister is really—the experience of being in this House and asking Government Ministers for measurements around poverty, for example, is that we get a whole lot of confused responses. So in particular for new section 50D, I would like to ask you, Minister: what measures will be put in place to measure that these objectives are being met and who will be responsible for monitoring them? Given that this legislation is likely to go through the House I would like to put a stake in the ground that we get measurements early on in your piece of legislation, so that when we monitor the performance of this in meeting these social objectives we do not have any confusion as we have in other areas of the Government. So that would be nice to hear from the Minister.

In terms of new sections 50E, 50F, and 50G, they talk about enabling the Ministers to have these enormous powers, basically, to do as they will in terms of the social housing programme. I listened intently to the Minister. As a former public servant, I valued the independence of delivering and administering the programme of the Government of the day. I listened intently to the Minister’s response around why we feel that we need to empower Ministers when we not only have Housing New Zealand officials but actually have an independently appointed board.

What I heard the Minister say was that it was about administering the Government’s programme. That is what she said. She said that “The reason why Minsters are in this legislation—the enormous power that we are giving to Ministers—is that we simply do not trust our public servants in Housing New Zealand, we simply do not trust the board members on the incorporations, we do not trust them, and that is why we have to put ourselves in the role.” If I have got that wrong, please correct me, Minister, but when you said “administer the Government’s programme” that is what we have public servants for.

💬 Hon Judith Collins: No, no, no.

Yes, we do. That is why we are renowned, because we are at arm’s distance from the Crown, which is why you have public servants. But these particular new sections that I have mentioned—50E, 50F, and 50G—clearly allow the Ministers to act over and above the advice that they may get from the board, and over and above the advice they may get from their officials.

When we get to that point—and may I just slightly diverge to say that in the late 1980s the Secretary of Labour at the time, Jas McKenzie, led a public sector review on the basis that Ministers of that time had way too much power. He led a public sector review to ensure that there was arm’s distance between the Crown, the Ministers, and the Public Service.

My entry into the Public Service was in those late 1980s, and I valued that we administered the programme on behalf of the Crown. The State Sector Act gave us that responsibility, and I feel that this piece of legislation calls that State Sector Act into question. Perhaps the Minister would like to comment on how she feels that the public servants in this country, who do a great job, now are seeing a whittling down or removal of the role and function and impartiality that all public servants—well, in my time—valued. I particularly have issue with those sections.

Moving to new section 50L, and everybody on both sides of the Chamber, well, particularly, the ones who are working tonight on this side, talked about the notification that—when I look at subsection (1)(a) in new section 50L it talks about the publication of a social housing transaction. It says: “publish a notice in the Gazette describing the general nature of the social housing transaction;”. Perhaps the Minister could actually explain to the House what the test of “general nature” is, i.e., could “general nature” be that “I just sold some homes.”? Could “general nature” be that “It was two, but really it was 10.”?

Really, I just feel that there is not enough information, and I want to hear from the Minister herself what the test is that will meet “general nature”. Because we are allowing Ministers so much freedom to do what they will, I believe that we need a lot more specificity around the frame, or the two words “general nature”.

The second point of clarification I would like the Minister to address is subsection (2)(b) of new section 50L, where we say: “ensure that the notice remains on the site and accessible to members of the public at all reasonable times.” Again, if the Minister would like to explain to us what the exceptions are of what is reasonable. When is it not a reasonable time? It is important, because this document is so wafer thin when it comes to accountability of the Ministers—I would implore the Minister that we need to tighten up on statements like “general nature”, that we do need to tighten up on what “reasonable times” is, simply because you are asking for much more power than we have ever seen any Ministers have in terms of our social housing stock and our social housing objectives. Right now, this particular legislation does not meet any of those tests. Thank you.

I want to move to new sections 50R and 50S, which are under the heading “Legal effect” in new Part 5A, which is inserted by clause 8. I am a little bit confused, and so I am going to seek clarification from the Minister. In new section 50R, the “Legal effect of things done by Minister” is discussed, so “(1) The Corporation or subsidiary is responsible and liable for anything done, or not done, under section 50E, 50F, or 50G as if the Corporation or subsidiary had acted, or not acted, under those sections with the same powers as the Minister.” That tells me that the corporation or subsidiary is going to be responsible and liable for any decision that the Minister has made.

If we refer back to new sections 50E, 50F, and 50G, basically, they are, respectively, around entering into “transfer contracts as Corporation or subsidiary”; entering into “transitional services contracts as Corporation or subsidiary”; and “other things as Corporation or subsidiary relating to and to implement social housing transactions”. But then we see that new section 50S is headed: “Protection from liability for board, members, individuals, etc”, and it says: “(1) No relevant board or member, nor any office holder or employee of the Corporation or subsidiary, is liable to any person for—(a) a decision of the Minister under this Part; or (b) the exercise by the Minister of a power under section 50E, 50F, or 50G.”

So, on the one hand, it looks like the corporation or subsidiary is going to be responsible and held liable for anything that goes wrong in the transaction, but, on the other hand, in the next new section it looks like no one will be liable for anything that goes wrong in this process. I think it is very fair for us as members of Parliament, and also for the general public, to ask: “Who do we point the finger at if something does go wrong?”. My instinct, or what seems fair, is that it would be the two Ministers, who have all these powers that are being endowed on them, who would be held responsible if anything goes wrong in the decision making or in the transaction. But then here it looks like no, it is actually going to be the corporation or subsidiary that will be. So you assume—or I would assume—that that would mean the board members, any office holders, or anyone employed by Housing New Zealand, but then that new section 50S seems to contradict what is happening in new section 50R.

So I am seeking from the Minister just some clarity around that so that we as members of Parliament know who is going to be held liable if anything does go wrong in the transaction. I think the general members of the public deserve to know what is going to happen here as well. So I seek that clarity and clarification from the Minister.

Apologies to my colleague Stuart Nash. I just want to continue on the theme that I started before, and that is on the actual objectives of the social housing reform. I got up to, in my last call, talking about the population of people who have the greatest need, as I understand it, who are single men.

As far as I am aware—and my colleagues can assist me if they are aware—there appear to be no building programmes in place by the Government to address this need for, particularly, single men who have some issues. They come with some particular concerns, generally around mental wellness and often with addictions as an added issue to deal with. They are a population of serious need, and I have yet to see the Government’s Social Housing Reform Programme adequately address that group of people.

The next part of new section 50D, inserted by clause 8, that I want to refer to is subsection (1)(c) “social housing tenants are helped to independence, as appropriate:”. That is an aspirational statement if ever there was one. “As appropriate” is also interesting—that we would not want all of our social housing tenants to have a level of independence. But what does that actually mean on the ground? Often, it means actually exiting social housing and going into private rentals. Although on the face of it that sounds like an OK proposition, for people to get into private rentals, we know that there are some real problems with private rentals.

There are real problems with the stock, for example. Private landlords are not required to have their stock meet any kind of standard of fitness, whether that is around insulation, whether that is around weathertightness. So we can be, potentially, putting vulnerable people who require social housing into the hands of some unscrupulous landlords. Not all of them are like that, but when there is no requirement for them to have their homes at any kind of standard, by and large, people will go to the lowest common denominator and will not provide housing of a good, quality standard, if it is not required of them.

The next social housing reform objective is that “there is more diverse ownership or provision of social housing:”. We know that what is going to happen will be slightly more diverse, but not in a way that will actually meet any good social outcomes for people requiring social housing, because, as I have said before in speaking on this part, it is likely that public-private partnerships will be involved, or that there will be organisations for whom the profit motive is the most prime objective. Profit does not necessarily mean good social outcomes. In fact, it invariably does not. It means that the objective is to make profits, not actually to meet good social outcomes.

So the next objective is that “there is more innovation and more responsiveness to social housing tenants and communities:”. As I have already said, there is obviously one population that is so far missing from this. More innovation and more responsiveness by having less housing stock in State control—those two things do not make sense to me. When people want to access housing, we know—as many electorate MPs and other MPs know, who are daily being asked for assistance to support people into housing—that there definitely, at this point in time, is not more responsiveness to social housing. And how will selling off the stock actually force more responsiveness and innovation into the market? I cannot see this. I would like the Minister to perhaps take a call and respond to that.

The last item of this particular group of objectives is that “the supply of affordable housing”—

I move, That the question be now put.

We are getting close.

The speaker before last, Carmel Sepuloni, asked some interesting questions of the Minister in the chair, the Hon Paula Bennett, which she refuses to answer, so let me take a stab at doing this.

We are talking about new section 50R in clause 8. This is entitled “Legal effect of things done by Minister”. We have heard that the powers of the Minister are basically to do whatever he or she may want to do—override the Companies Act, override the board, etc., etc. But what this does—this is a remarkable piece of legislation just basically devolving any responsibility of the Minister for the Minister’s decisions. For example, here in subsection (1) it says that “The Corporation or subsidiary is … liable” for any decision the Minister makes. So if they get something wrong, who do you sue—who do you go after? You go after Housing New Zealand. But what makes it even more humorous is that in the next subsection it says “Neither the Crown nor the Minister is responsible or liable …”.

What I spoke about in my last speech was that, in fact, the Minister must provide to the chief executive officer within 5 working days—that is all; 5 working days—a copy of the contract. Well, do you know what? If it goes wrong, in those 5 days, if something does not happen—

💬 Meka Whaitiri: They’re not responsible.

—the Minister is not responsible. The Minister puts up her hands and says “It wasn’t me. Don’t look at me. Go after those guys.”, and the thing is that at that point in time, the chief executive officer has no ability to influence what the Minister has done.

So the chief executive officer may well say to the Minister: “Minister, I do not think this is a good idea, for these reasons.”, and the Minister may say: “No, I’m going to go ahead and do this.” So the Minister goes ahead and does it, it turns to custard in a big way, and then the Minister says—well, what she does is she throws her chief executive officer to the mercy of the legal system. That is terrible.

But what makes it even worse—and this makes it even slightly humorous—is we go down to new section 50S, “Protection from liability for board, members, individuals, etc”. What this actually says is that “(1) No … board or member, nor any office holder or employee of the Corporation … is liable …” for any decision a Minister has made. You can imagine what happened—I can imagine what happened.

This piece of legislation went to the board and Adrienne Young-Cooper, who is the chair, and John Duncan, who is the deputy chair, said: “What! If you think that I’m going to sit in a governance role in this corporation and make decisions, for the Minister to completely overrule me, then you are joking.” So the Minister said: “Well, how about we put a special clause in this legislation that says you are not liable for any decision I may make?”. Then they might have said: “Oh, well, I suppose that might work. My reputation’s still at risk anyway because any decision I make can be overruled, but if I’m not liable for any decision that’s made on behalf of a corporation that I’m on the board for, then maybe that’s OK.”

I just think it is poor governance anyway, but you can imagine what happened—guess who else is on this board; Tau Henare. You can imagine what happened. He would have seen this legislation and said: “What! I thought they were giving me a plum job and they’ve thrown me to the wolves.” You can imagine what would happen when Tau found out that he—

💬 Tim Macindoe: “Tow”.

—when Tau found out that he could well have been liable for a decision that Paula Bennett had made. He would have gone through the roof. In fact, the Chair knows well what Mr Henare does when he is getting a little bit angry. But I just think that what this—

The CHAIRPERSON (Hon Trevor Mallard): Order!

My apologies. I think what this does is it cuts to the very heart of very, very poor governance.

So, again, what happens here is the Minister can make a decision, but the Minister has no accountability. The corporation has all the accountability, but it can be overridden by the Minister, and the board, which is supposed to oversee everything, and has no accountability at all, or no liability. I believe that that clause was probably put in there at the urging of the board because it knows that this contravenes everything around good governance.

There is one last point I would like to mention. It has been brought up before, but I would just like a bit of clarification. In new section 50L it does talk about how “The Minister must, … publish a notice in the Gazette describing the general nature of the social housing transaction;”. What I would like to know is what is the definition of “general nature”, because it really is as wide or as narrow as you would like to make it, and it is not defined in the Act in any way, shape, or form. It may be left to the courts to decide—I am not too sure. But I would like to know whether “general nature” actually means the price paid and the terms and conditions under which this social housing package is delivered. If the Minister could—

I move, That the question be now put.

Yes. I think we have had 27 calls on this part now and the Committee is in a position to decide whether or not it wants to vote on the matter.