Housing Infrastructure (GST-sharing) Bill

Thank you, Madam Speaker. I move, That the Housing Infrastructure (GST-sharing) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill.

Every week, ACT MPs are in the community, hearing from Kiwis at public meetings, local shops, at street corners, or visiting local businesses, and we hear many concerns that we bring to Parliament, and our job is to represent everyday New Zealanders. We hear concerns about rising levels of crime and rising costs of living, but there is one concern that I hear often, and it’s whether young Kiwis will ever have the chance to own their own home and feel like they have a future in this country. That’s a real concern that my member’s bill addresses. From Northland to Southland, I’ve met Kiwis who’ve said, “I’m not sure I will ever own my own home.” Too many people put more and more money aside every week and feel like they get nowhere closer to putting an offer on a home. They can’t see a future where they have a shot at the Kiwi Dream. We hear young Kiwis and their families say that it might be better for them to move to Australia, and that is saddening.

We have a housing crisis in New Zealand. There aren’t enough homes for the number of people who want and need a place to live. My bill, the Housing Infrastructure (GSTsharing) Bill, would fix this. It provides an environment for more housing development so more Kiwis can have access to a warm, dry, affordable home. Over the past few years, we’ve seen successive attempts to address the housing crisis, from the KiwiBuild failure—the Government’s flagship promise to build 100,000 new homes, which failed to get off the ground—thousands of Kiwis placed into motels, the Government’s attempt to tilt the housing market away from speculators and towards firsthome buyers by increasing costs to landlords and tenants, and the Government teaming up with National to create a new law that would allow three three-storey homes built on any section.

Everyone—and, I believe, everyone—can accept that there is a significant housing shortage in New Zealand. What is causing this frustration is the lack of enduring solutions being proposed to actually fix it. None of those policies that I mentioned come anywhere close to addressing the housing crisis and making it easier for builders to build or Kiwis to have stability and a future where they can own their own home. That’s because they’ve misdiagnosed the problem. They don’t address the problem that’s preventing houses from being built.

The housing crisis is an infrastructure crisis. Infrastructure is expensive. Councils don’t have the funds for the vital infrastructure needed to connect new homes to the community. Councils face poor incentives to build. Every new development that goes in involves costs to existing ratepayers to provide new roads, water, sewerage connections, which acts as a disincentive for councils to approve new homes and subdivisions.

The Housing Infrastructure (GST-sharing) Bill works like this: the Government would share 50 percent of the GST revenue of a new house with the local council that issues the consent to help them cover the infrastructure costs associated with new housing developments. This would provide the environment for local councils to approve more housing consents and enable builders to build with less delay. The GST-sharing scheme is estimated to deliver over $1 billion every year to support local development - enabling infrastructure. But councils that consent more will get more—it’s that simple. ACT has realised for a very, very long time that the housing crisis is an infrastructure crisis, and the idea behind my member’s bill, the Housing Infrastructure (GST-sharing) Bill, is that it would change the incentives that councils face for building and development.

The only time that you get prompt service from a council is when they’re issuing you a parking ticket. They’ll come to you anywhere, anytime, because there’s money in it for the council. Imagine how many consents councils would issue if there was money in it for them. I’ve spoken to too many builders to count that say it takes longer to get consent to build than it actually takes them to build a home. Imagine how much faster the process would be, and how much faster a family could make a new house into a home, if councils faced the right incentives to allow for building and development.

This is an idea whose time has come. ACT has been campaigning on this bill since 2017, and a recent poll, released within the last few months, showed that an overwhelming number of Kiwis support it—70 percent support versus 15 percent opposition. I’m not surprised by that at all; Kiwis recognise practical solutions are needed to address the housing crisis that we face.

Currently, councils have to come cap in hand to the Government and hope to get a grant for infrastructure from the Housing Acceleration Fund. The problem with this is that it means that central government, essentially, has total control over what projects get the go-ahead and which ones get put on the scrap heap. The Government shouldn’t be picking and choosing winners; councils should be allowed to set plans that work for the local community and to plan for the infrastructure for that community.

This transfer of funds from central to local government that my member’s bill proposes would be a long-lasting solution that would ease the imbalance that local councils face. Central government currently gets all of the benefits, while the local councils stomach all the costs, and that is wrong. Under my bill, every time a new home is built in the area of the local council, they would receive funding for the vital infrastructure to connect that home to the community—and that is the right thing to do.

We know that there is a need for better infrastructure. We also know that councils don’t have the money for it. Councils are crying out for the funding to connect homes to the community, to have money for that vital infrastructure. If we care about getting more houses built faster for more Kiwis to live in, we need real change. We need this bill to become law so that Kiwi homeownership dreams can become realities.

Parliament tonight has the ability to support a practical solution to free up infrastructure funding and get houses built for the next generation. Other parties here should vote in favour of this bill. It would be a vote for better housing for the next generation. We don’t need more central planning; we need incentives to consent more developments. Because there are Kiwis living in motels, struggling to compete for rentals, and finding the dream of homeownership slipping away, I am bringing this bill to Parliament to create a better environment for building and investment so that everyone can have a better future in New Zealand, and more Kiwis can know that they can achieve the Kiwi Dream.

I commend this bill to the House, and I hope and urge all of my parliamentary colleagues to support it. Thank you, Madam Speaker.

Thank you, Madam Speaker. It’s my pleasure this evening to speak on the Housing Infrastructure (GST-sharing) Bill. The points that my colleague Brooke van Velden raised tonight—there are some good ones in there. We all have hope and aspiration for young people to buy their first home. We all acknowledge that there is a housing crisis. The infrastructure crisis is somewhat something else, but I acknowledge the point there that there is a dire need for better investment in infrastructure, particularly in cities like Auckland.

While it’s well intentioned, this bill, this bill is an example of how the only thing that National and ACT delivered in housing between 2008 and 2017—the only thing that they delivered—was a housing crisis. Despite the eye-watering annual cost and price tag, this bill would only deliver the wrong types of homes in our city and in our community. And that’s only if the funding ends up being spent on infrastructure, while this Government is already providing much-needed targeted investment in essential infrastructure, like roads and pipes and the $1 billion infrastructure package in the Infrastructure Acceleration Fund. [Interruption]

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Members may not want to actually hear the speech, but I would like to be able to hear what the member is saying. Other members will have an opportunity to make their own speeches soon. Thank you.

Thank you, Madam Speaker. It’s good to keep us all awake at this time of night. And while our approach under this Government is about investing in essential infrastructure, like roads and pipes, it’s important that, as we do such things like this Government with record consents in cities like Auckland, the thing that our community does ask for us is, alongside that, to ensure that we have good infrastructure.

I have one of the best housing stories in the country, in Northcote—one of the best housing infrastructure stories in Northcote. And I can acknowledge that, yes, the housing policy of Northcote development did start under Helen Clark and, yes, I can acknowledge that it was held by Bill English and by John Key for seven years. For anyone that lived in Northcote at that time, that project was on hold, because what we know—and under that policy, we all acknowledge it now and all take certain ownership—is that the story of the Northcote development, which in my view is a great housing development, is great community design, and it has the desperate infrastructure that growth in Auckland desperately needs. But what we know is that that development—1,700 new homes for families in Northcote; that’s from 315 old, tired State houses that were demolished and that have been rebuilt. We’re about a third of the way through the development. Alongside that, not only have we built 350 new State homes for families in need but we’ve also built another 250 for first-home buyers on the open market, and we’ve still got hundreds to go.

But what my community tells me is, yes, that infrastructure is important. And it’s great that the Opposition is highlighting the importance of better infrastructure for growing places like Auckland. This is one of the conversations of why we’re talking about water infrastructure reform. One thing that we all agree about is that we need to invest in the pipes, that when we build houses and we go into the hundreds and into the thousands of new homes, actually we do need to have good water infrastructure. And that’s exactly what the Housing Acceleration Fund has done.

I’ll use another example in Northcote, because it’s such a great national story in housing. What we saw in the floods at the start of the year is the sad case of Wairau Valley. Sadly, we lost lives, because we have poor, ageing water infrastructure in Auckland that did not cope with a significant weather event. In the Northcote development, thanks to the Government’s acceleration fund, we have fitted new water infrastructure that, within 24 hours, the floods had raised the amounts of water in the area and, within 24 hours, that water had disappeared—that water had disappeared out of the community. That’s the difference of great water infrastructure.

And just last weekend, we opened Te Ara Awataha, which is the stream down the middle. It opens up the whole community, and the ecological matters that used to be below the ground have now been brought out as the centre of the design of the Northcote housing development. It backs on to new schools that the Government has built: Onepoto Primary, $19.5 million; 12 new classrooms for Northcote Intermediate. And on the back of that are new classrooms that come into the beautiful ecological areas of our awa in our backyard.

Now, I share this story, because the things that we do agree on is that we want to build houses. And I’m really proud that our Government is doing that, particularly in Northcote. And you’ll hear me in this House, when people talk about a housing crisis, I’ll say, “Come to Northcote, come to Northcote, come to Northcote.”, because I am proud that it is one of, if not, the best housing developments and designs and communities that this country has ever seen.

And so the Opposition, the Nats, can take some acknowledgment that they have contributed to that, but the reality is that this Government has not only built houses, not only increased the number of consents for houses in Auckland but we’ve also invested in the pipes in the ground. We’ve also invested in the schools around it. We’ve also invested in our awa. We’ve also invested in playgrounds for our tamariki to play in. That’s the level of planning that’s required.

I acknowledge the good intention of the member that’s putting this forward, but if we sliced that off—and it’s not just about saying “let’s build more houses”, because we all agree on that, but it’s about how do we ensure that that infrastructure is allocated to what is needed. And we know, when it’s privatised, that money isn’t always used for what is needed. That’s one of our biggest fears of water infrastructure reform: that it’s privatised. We don’t want that to happen. We want to ensure that it’s retained in New Zealand ownership.

I’ve rattled on. I have to say once more: the Northcote housing development—and if anyone in this House hasn’t been, I’m happy to host you. The design elements, the infrastructure, the forward-thinking, the short amount of time that this Government has been able to accelerate the number of houses to be built, both for families in need, for first-home buyers, and for those on the market has been significant.

Sadly, tonight, this isn’t quite the bill that we’re looking for. I’m confident that we’re getting on with building houses. I’m confident that we’re getting on with building communities, and we need to push on ahead. I do not commend this bill to the House.

Labour’s track record on housing is one of incompetence and failure. That last speaker, Shanan Halbert—his speech was an absolute disgrace in terms of what is a track record of six years by this Government that has failed at every nail they’ve attempted to put into a piece of wood to build a house in this country. At every opportunity, they’ve missed the nail—they’ve missed the nail—with that hammer and they’ve hit their thumb, and they’ve hit that thumb every time. That last speaker’s speech, while at times was an eclectic bit of a laugh, was a complete waste of time and actually forgot about the bill that’s on the Table.

So let’s have a little chat about the bill on the Table, the Housing Infrastructure (GSTsharing) Bill first reading. Brooke van Velden, well done on this bill—a sensible piece of pragmatism, which is sorely missing in this House. I get the feeling that while on this side of the House, National will be supporting this bill because there is a little bit of sensibility left in this House, the other side continue to reinforce their incompetence when it comes to housing. So we’re going to talk a little bit about this bill and we’re going to let it go for a little while, but not too long. But I think it is important to recognise that the backdrop in which it is required is that we need some fundamental levers that are actually going to address the underlying problem that we face in regards to encouraging the increase in housing in this country.

This bill—while National are supporting it, it is fair to say that we do think that there are some areas of improvement, but I’m sure that’s what the select committee process will go through. One of the challenges of a bill such as this is that it can be challenged around “is it targeted enough in regards to what it’s trying to achieve?” The reality is that while GST is collected, as are all taxes, those taxes do fund Government expenditure. So while we use that mechanism to collect the revenue, there is a quid pro quo in terms of where that revenue is spent. While this bill articulates that it will be spent on infrastructure, the unintended consequence or the consideration around that is what doesn’t get funded as a result, and I think it is just more around the mechanism to acknowledge this is how this bill will go.

The other aspects which I think the select committee—on the basis that this probably isn’t going to see the light of day, based on what we heard from the other member. Sorry, Brooke, but it sounds like it isn’t. But the other consideration is obviously in regards to some of the definitions around—you know, with Statistics New Zealand, in terms of determination around some of those numbers.

There’s also some elements in regards to Kāinga Ora. I think, for the record, Kāinga Ora’s probably in the same basket case as this Government’s housing policy, and I think we probably agree on that. I mean it is a basket case of an organisation. It’s got 60 years of unmanageable debt, modelling shows that it’s, basically, insolvent, and it’s got no hope in hell in terms of being able to repay its $28.9 billion debt within the next 60 years. So the challenge with that organisation, when you try and get that part of a mix of a solution, is you’ve got a few issues on the horizon to deal with.

But, irrespective of that, I think the principle is sensible—we need to invest in more infrastructure. We actually need to be able to remove the bottlenecks in bureaucracy to allow growth and to allow us to build more houses—a lot of red tape in that regard, and this Government are pretty good at putting more red tape to block that process. But never fear, in 202 days from now, hope is on the way. On that basis, National will be supporting this bill and we wish it all the best.

I’m quite surprised, actually, that the National Party is supporting this bill, because I thought that they had a little bit more of a sophisticated understanding of the problem around housing and also what the solutions will entail, and I think the speech by the previous member, Simon Watts, has highlighted, actually, that they have taken a position without possibly knowing the contents of the bill or really understanding what it is that they’re supporting.

My main message to the member is: congratulations for having the bill drawn, but there are no silver bullets for housing. This bill attempts to be a silver bullet and it simply isn’t tenable. It’s $1.3 billion worth of taxpayer money that is not going to help solve what is a complex problem and where significant progress is already being made. The member Brooke van Velden talked about incentivising, and I agree that there does need to be the correct incentives. Whether it’s the councils that need to be incentivised is a really interesting proposition and I wonder if the politics is playing into that in terms of appealing to councils at a time when some of them may be feeling uncertainty around water infrastructure, and this could be a bit of a political ploy, because, actually, the ingredients for a comprehensive solution to the housing problem involve having enough land, which has been a decades-long issue, having a resource consent system that works and is pragmatic and is timely, having adequate infrastructure and also a tax regime that actually provides the incentives as well in terms of allowing enough supply of houses. And that’s certainly something this Government has addressed.

So the previous member did raise some issues himself, actually, around why this bill won’t work. One of them, as he said, is that it wasn’t targeted. It’s also impractical, and it doesn’t have decent outcomes; in fact, it’s got quite poor outcomes. One of the reasons that it is not targeted is it’s just not geographically nuanced. The housing scenario around New Zealand—there are different factors for different areas and it’s OK to say, “Let’s incentivise councils.”, but, actually, what will happen with the market is that developers and councils who want to take advantage of this will go to where the upfront costs are cheaper and that is going to disadvantage small councils. So, yes, as my colleague Shanan Halbert said, it’s going to be great for Auckland. It’s not perhaps going to be great for places in the South and the communities that I serve down in Taieri.

It’s also impractical and, as Shanan Halbert said, it’s not necessarily all going to be spent on infrastructure. There’s nothing in the bill that says that the money collected will go into infrastructure, and that’s a real problem. The poor outcomes as well—it’s hugely expensive and, really, if we look at what is already happening, the progress that we are making is more cost-effective than this $1.3 billion of expense, and that is through the direct investment that this Government is making through the Housing Acceleration Fund of $3.8 billion, but also the systems reform, and that is comprehensive reform around water infrastructure, around transport, around resource management, and around the build-to-rent incentives.

That is why this Government has embarked on such a comprehensive suite of reforms, because we know that there are no silver bullets. Actually, what is needed are incentives; it is access; it is the supply side around land; it is around the demand side which is providing the changes to the tax system, including the reduction of the tax deductibility, interest deductibility, but also then carving out exemptions so that there is incentivisation around building to rent. That is exactly what this Government has done.

The Minister of Finance has always talked in this House about having a number of different levers that are required to deal with the housing crisis. We have seen those come into play. We are looking at statistics at the moment which show that house prices have dropped significantly, and that is good for first-home buyers. That is taking the heat out of the market. That’s what we want to see. A silver bullet approach, like the one being offered by the member, while it may seem very attractive in a superficial level, simply isn’t going to cut it.

So, as I said at the beginning, I’m surprised that National is supporting it. I thought that they may have interrogated the bill before them more thoroughly. On this side of the House, we certainly won’t be supporting this bill—I don’t commend it.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. Interesting to hear some of the points raised across the House on this Housing Infrastructure (GST-sharing) Bill. I just want to take a moment, as is custom, to acknowledge Brooke van Velden for the luck of the draw.

But I do want to say that the reason that the Greens will be supporting this bill tonight is not because in any way, shape, or form, it’s a silver bullet for the housing crisis; I think that that would be absolutely absurd and preposterous for any of us to pretend that any single piece of legislation, even the housing-enabling legislation which we passed through was, by itself, going to solve the housing crisis. The reason that the Greens are supporting this is because, actually—similarly to the bill that was being debated just before, the Alcohol (Harm Minimisation) Bill—successive Governments have commissioned successive reports, reviews, inquiries, and advice that have told them precisely the same thing, which is that local government in this country does not have adequate resources to get on with the mandate that we, as a Parliament, have actually provided them and continued to expand.

So, to give some context to that, I don’t have the most recent figures, but, off the top of my head, I recall from 2016—when an annoying 22-year-old candidate was running for the Auckland mayoralty—the average amount of spending that occurs at a local government level as a proportion of local and central in the OECD is approximately 30 percent at that local government level. Here, in Aotearoa, though, it’s less than half of that, at 11 percent. You can see where we get to this issue of those infrastructural deficits and, actually, some of the issues that we’re currently grappling with in Tāmaki-makaurau with the slash-and-burn budget proposals from our current administration, who are pointing out that the only meaningful lever that they have at their disposal to increase their revenue is to increase rates. And that, of course, is a constant annual battle that local governments across this country are forced into. And, of course, what we’ve seen by virtue of the democratic deficit at that local government level—that is, not enough people engaging in that process—is that, time and again, local governments have largely and on the whole, in a trend, chosen that austerity pathway. That, of course, has been a real problem for the infrastructural deficit that we’re seeing today, and that’s the general premise or reason that the Greens are supporting this bill, because we will support the progression of any idea, any premise in this Parliament that takes us to a place in select committee where we can robustly discuss the need for more resourcing at a local government level.

The fact that this is limited just to housing, and obviously just to GST sharing, to that respect, I think needs to be expanded, and I think that we should be looking at, actually, potentially—as has actually been proffered by other parties in this House in the past—GST sharing, on the whole, when we’re looking at potentially all forms of goods and services and transactions that occur in certain territorial authority areas.

But just while I’ve got the ears of the House and we’re talking about housing development and the opportunity of where and how to build—and also, actually, the point of infrastructure—I need to use the example of Auckland, because obviously it’s my city, it’s my home, but it’s a perfect example of where we’ve done housing and infrastructure terribly for the past few decades—terribly. So terribly, we’re one of the largest cities in the world land mass - wise, and there’s been a doggedly concerted effort, for some reason, for the past few decades to expand out into all of it, to decimate our critical soil for food resilience. Not very smart or forward-thinking there. It’s not very good in terms of our carbon emissions—obviously, transport has the largest emissions profile in Tāmakimakau-rau, but it’s also the largest growing emissions profile nationally, but also for infrastructure: the more that we continue to perversely sprawl further and further out, the further that people are away from job opportunities, from education opportunities, from their families, from their communities—I know this; my old man just moved down to Cambridge because of the housing crisis—but, also, the more expensive it is to build that infrastructure to service those communities and provide those amenities, not the least our front-line emergency services.

So while we’re encouraging this conversation progressing, and we think that the baseline premise needs to be more revenue or resource sharing with local government, because we need to empower them to get on with the mandate that we legislate for, we need to bear in mind that the types of housing and the types of infrastructure that we’ve been building, particularly in our largest city with a third of our population, is just frankly daft, and we can do it a lot better. The Greens commend this bill to the House.

Debate interrupted.

ASSISTANT SPEAKER (Hon Jenny Salesa): This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow. Pō mārie.

The House adjourned at 10 p.m.