Housing Infrastructure (GST-sharing) Bill

Thank you, Mr Speaker. Very happy to be taking a call on this, the Housing Infrastructure (GST-sharing) Bill, and can I acknowledge the member that brought it to the House, Brooke van Velden.

The last time we chatted about housing so intensely was when we were tracking through the changes to housing intensification, talking about medium-density residential standards. It was a very important conversation. It was something that we tried to tackle as a cross-party solution, to try to get more houses in across New Zealand. It lately hasn’t—the Opposition have decided to back away from it. The ACT Party, at the time, also didn’t support it. But at the time, the member for the Opposition, Nicola Willis—she brought it to the Environment Committee as something that she believed wholeheartedly in, a way that we could grow more houses in our country and do a better job. The ACT Party didn’t support it at the time, and I would say that it was potentially a mistake, because we still have a real need around our country to be able to build more houses.

One thing that this side of the House have done is that we have introduced the Infrastructure Acceleration Fund, which is all about trying to build more houses, because that’s what we’ve got to keep focused on. That’s what this bill does—

DEPUTY SPEAKER: Well, in the meantime, we need a bit of focus on the bill before us too, Mr Coffey.

TĀMATI COFFEY: It is all connected, Mr Speaker, but I’ll come back to it—

DEPUTY SPEAKER: Well, connect them up for me.

TĀMATI COFFEY: I will, I will. Because whether it’s this bill—the Housing Infrastructure (GST-sharing) Bill—or the initiatives that the current Government are already facing, what we’re all trying to do is get more houses built all around the country in our various communities. So I acknowledge the member for bringing this to the House.

But as far as this side of the House are concerned, we won’t be supporting this bill. We do believe that there are mechanisms within any future Government to be able to do it without changes to legislation. We believe that it has got a very hefty price tag on it. We don’t believe that councils would necessarily be able to triage the GST portion in the way that it’s supposed to be, and intended to be, directed to.

This is a well-meaning, well-intentioned piece of legislation, but it falls short on a lot of fronts. I do want to say that I think that—I definitely acknowledge the fact that the member has brought this to the House in an attempt to try and get more houses built. I don’t believe that this is the way that we should be doing it. I do believe that the policy has the potential to cost about $1.3 billion a year. It’s a lot of money.

On this side of the House, we prefer things like the Infrastructure Acceleration Fund. I know that in Rotorua we were privy to $85 million of that. I know that our local council and our local developers are very happy about that. I know that it’s a way that developers and councils can help with the costs of building these developments. Investment into stormwater upgrades, investments into things like detention dams: these are all things that are currently being done with the systems that we already have, and, therefore, I don’t believe that this bill is needed. For that reason, members on this side, we’ve gotten together, we’ve put our heads together, and thought, “Is there any merit in trying to support this?” We don’t believe that there is. We believe that there’s already mechanisms in place. We’d like to think that the Opposition parties would continue to support the current initiatives that are in place.

With the $85 million that’s going into the Rotorua Lakes Council to be able to help with that infrastructure cost, we’re looking at an additional 3,000 houses in Rotorua. We are desperate for houses. We are desperate for housing. Unfortunately, the member’s part of a party that was part of a regime that ensured that we got rid of our State houses in Rotorua. They’re actually partly responsible for making sure that we were 44 short, after the decade that they were in charge.

So we just need to make sure that we’re following good practice and things that are currently succeeding in our communities to be able to develop good houses. This bill doesn’t do it. This bill falls short. The current initiatives that are in place—and I can tell, from my own experience back home in the geothermal paradise of Aotearoa, that we are currently making moves in that right direction. It’s because of good Government, good solid policy that’s already in place. For that reason, I don’t support this bill. I think it needs a whole lot more work.

Well, it’s a bit of a surprise to be standing and taking a call right at this moment, however I do want to acknowledge—

Shanan Halbert: Back in the 1970s.

ANGIE WARREN-CLARK: Back in the 1970s, obviously. I do want to acknowledge the member Brooke van Velden for having her bill drawn from the ballot and also for bringing the bill to the House.

I am pleased to be talking on the Housing Infrastructure (GST-sharing) Bill, and, I must say, I missed the beginning speeches last members’ day so I went back over and read the Hansard record of the member’s speech, and I still couldn’t understand that concept or how the member had got to this. So I just want to go through the bill in a little bit more detail. Now, I am a barrister and solicitor, and I do understand legislation and the legislative process, but I can’t for the life of me understand how you have created a system that is so complex for a matter that perhaps could be so simply clarified.

One of the matters in clause 8, the “Housing infrastructure development payments”: “After each financial year, Kāinga Ora–Homes and Communities must pay each territorial authority an amount calculated in accordance with the following formula: a = b × c × 0.5”. OK, so we get that. However, that is 67 territorial authorities—[Interruption]

DEPUTY SPEAKER: Carry on speaking, Ms Warren-Clark.

ANGIE WARREN-CLARK: Thank you. If you could direct me as to how much time I have at some point, sir. I could go for a long time around this.

So we’re talking about 67 local authorities that a statistician needs to calculate for. So we’re talking about the difference between one of those authorities, which has 1.44 million people in it, and we’re talking about another which has got 600 people in it. So I can’t, for the life of me, work out that is equitable when we know that, for example, the local authority of the Chatham Islands, with 600 rateable houses, needs to have infrastructure that costs a tremendous amount, just like other places in the country. So I cannot work out how the member thinks that that is a fair process or fair analysis. Nevertheless, I do understand that it has been a simple tool that the member has approached this with.

I’m also unsure why each financial year the Minister of Housing then must, on behalf of the Crown and without further appropriation, pay Kāinga Ora the money that Kāinga Ora has paid the local authorities—really complex. Now, this is from a party that keeps talking about cutting red tape; this is from a party that keeps saying to us that they think that there are too many bureaucrats as well—or is that the National Party? I can’t recall. So it is quite interesting that we have this process happening which is slow and cumbersome and needs to be paid in a way that is perhaps difficult; a statistician needs to be involved.

The second thing is that the calculations we talk about is $1.3 billion roughly per year. Now, the Infrastructure Acceleration Fund is looking at over $3 billion currently per annum. It certainly doesn’t add up.

We’re also doing a whole pile of things to support housing. Everyone agrees that housing is a massive issue. Now, I’m going to do it, because it’s actually my birthday today [Cheering]—thank you. It’s my birthday today, everybody. I was born in 1971, so that makes me 52. Do you know, Mr Speaker, that we have undertaken the biggest build of social housing since the 1970s? I’m 52 years old and we’re looking at having the most social housing—one in seven houses have been built in the last six years, social houses built, by this Government. We don’t actually need to have this level right now. What we do need to have is a series of consistent processes that happen. We’ve got a lot of different things going on, and one of the things is this complexity we don’t need; we just need more houses. I commend the bill—I do not commend the bill.

DEPUTY SPEAKER: The Speaker apologises to Ms Warren-Clark for the muck up around the time, and happy birthday.

Thank you, Mr Speaker. Happy birthday, Angie, good on you; that’s very exciting, and I’m very proud to hear that you support the bill as well! Thank you for that! We also support the bill on this side of the House. It’s good to see National and ACT, in this case, bringing sensible solutions to the infrastructure crisis to this House—in this case, GST sharing.

David Seymour: Smartest thing a King’s boy’s ever said!

SAM UFFINDELL: We recognise that councils do not have enough money—I missed the quip; I don’t know who it was directed at—so this bill is a good step in that direction to allow more revenue sharing, focused very strongly, in this case, on Kāinga Ora (KO).

Angie Warren-Clark: Tell us how it’s going to work.

SAM UFFINDELL: As we look at that—how it’s going to work, well, councils don’t have the money at the moment, Angie, and it’s a real shame because this Government expects them to do all of the heavy lifting without giving them the necessary funding. The National Party did have mechanisms in place when we were last in power; it’s a shame a lot of those haven’t been continued through. It’s a real shame, as well, that this Government has embarked on a bit of a war against landlords, and we’ve seen that with interest deductibility being removed and the brightline test. The recommendations to the Minister was that it was going to increase rents. Have they increased rents? Yes, they have indeed—up $175 a week under this Government; the largest contributor to the cost of living crisis.

When I go around and talk to people in the fine electorate of Tauranga, they tell me that they are suffering under this Government, they don’t have enough money to make ends meet, and accommodation costs are the number one contributor to that. So what we need to do—

DEPUTY SPEAKER: But they’ll be wanting to hear about the bill, though. So let’s talk about the bill, shall we?

SAM UFFINDELL: I know they are tuning in, wanting to hear about this bill, and I acknowledge the member Brooke van Velden, who has brought this very sensible bill forward.

We’ve got a few questions to ask around how councils actually get encouraged to develop more infrastructure, because, at the moment, I think they see it as a bit of a burden. So this bill, through the GST sharing arrangement from KO, will help to deliver that. I mean, we would have wanted to see it if they’d built over and above what their target was—which was what National took to the last election. We don’t have that here but we are very open to suggesting those generous amendments in the select committee stage. I see the wise members of the ACT Party looking up for wisdom from the member of Tauranga, which I am happy to continue to deliver! A few smiles in the Labour Party as well as they realise that if only the rest of the speakers had also supported the bill like the previous speaker, then this House would be in a better position.

We do note that there are a lot of families doing it tough, so it is important that we do develop more housing infrastructure. It’s the number one cost that families face. We have seen a significant rise in the number of families homeless under this Government, or living in motels or emergency accommodation, and I think that’s a real blight on our society. We’re currently spending a lot of money in this space and we really need to make sure that we are delivering the infrastructure, because that’s important. Because if we don’t have houses, then people aren’t going to move to where the jobs are, and if they don’t have houses, they’re not going to have dignity. So it’s really important that we address this.

We do think the bill could be better targeted. We have noted how it would be better for just paying above the target builds. We do raise serious concerns with Kāinga Ora and the way they’ve gone about doing stuff. We note that their debt obligations are going to be absolutely—

Shanan Halbert: Only because they’ve built more houses than you ever did.

SAM UFFINDELL: —significant. I hear the member from Northcote barking at me from the other side of the Chamber. I did note in the Budget that KO had been allocated $3 billion to build—what was it?—3,000 houses on land they already owned. It doesn’t take a mathematician to work out that that’s about a million dollars for a house where they already hold the land.

So the current system of this Labour Government empowering KO to go out there, buy the land well above market rates, take all of the people from the local councils to do the approvals, drive up the price of consents, and ultimately drive up the price of houses certainly is not delivering for New Zealanders. We would be much better off giving local councils, through a member’s bill such as this one, more money to fund the infrastructure, and then letting the parties who actually build houses—such as the many property developers out there—the opportunity to come into a market that hasn’t been ruined by KO being able to overbid any time they want, and then they could deliver quality, affordable houses for New Zealanders. I support this bill.

It’s a pleasure to rise and take a call on this bill. I congratulate Brooke van Velden for getting her bill out of the ballot.

David Seymour: It was just luck.

HELEN WHITE: Yes, that’s unfortunately where I have to stop because I can’t support the bill.

When I look at what this bill does—which is provide 50 percent of the GST from the construction costs or value of a new home to the local council—it doesn’t target spending in the way that we need to target it in a situation where we have a housing crisis. We need to build houses in the right places, and we need to fund the infrastructure in those places. So this would be a scheme where the amount of money that was produced went back to the local council, regardless of the infrastructure needs of that community. So in a place like Hastings the cost may be much more expensive than that, or in another place it may be less, and the GST would come back at the same rate.

What actually is happening at the present time is that there is big, good, supportive infrastructure funding going on. So we have an accelerated housing fund, and that is $3.8 billion—it’s a lot of money, and it’s going to be targeted and it is going into places where we need to build houses and where they make sense to build. That is how we’re supporting the local councils. That is the right way to do it.

Now, obviously, there is a need to have more than one thing going on at the same time, and so we have done some other really good things. I just want to go through them. One is, unfortunately, we came to an agreement with our—

DEPUTY SPEAKER: Just relating them to the bill as we do so, Ms White.

HELEN WHITE: Yes. Of course, this is actually relating to the bill because it is why we aren’t supporting the bill, because, in fact, we are doing other things that are a better use of the money. So the money that actually is gathered up in that way—the GST, etc.—goes into those funds. It goes into the accelerated housing fund—the $3.8 billion—it goes into the affordable housing fund, it produces money for those things.

It is actually with a little bit of sadness that I see that ACT is now joined by the National Party, moving away from the accord that we had that was actually releasing the capacity to build in our cities, where we need it. It is such a pity, because that gave a lot of certainty to private developers, etc. It meant that they knew that they could invest in that housing. Now, the carpet has been pulled out from under their feet. Unfortunately, New Zealanders are going to pay the price for that.

So this is not a bill that would actually target funding where it is needed, but rest assured that the reason the Government is not supporting it is it wants to target that money where it’s needed and it is doing so. That is what it will do. It will continue to make sure we build in the right places for our environment, for our building better cities. It is going to do that because that is what is necessary at this time. Unfortunately, this bill is one of those bills which is probably very well meaning, but it is not targeted in that way

So it cannot be supported by this Government because, let’s face it, this money’s actually taxpayers’ money. The GST collected, etc.—that’s taxpayers’ money. And guess what? We care what happens to taxpayers’ money. It shouldn’t just be spread; it’s got to be targeted. So in this situation, we have to be respectful of our taxpayers and make sure that the money goes into the right places. That is one of the great fallacies, isn’t it? That, in fact, people who want to do these kinds of things do need to be respectful. Actually, the fallacy is that ACT and National care about the taxpayer, when in fact it’s the Labour Party that’s sitting here, guarding the money that the taxpayer needs and making sure that it is used in the right places. That is what it’s all about, people. Thanks. I commend this bill to the House.

We support this bill from the noble Greenlane resident of the ACT Party. We’ve heard a lot of fuzzy math and foggy recollection today, respect for the taxpayer, a bit of candle-seeking for a birthday, and overstatements—happy birthday—from one member mentioning the geothermal paradise of New Zealand, where apparently 3,000 extra houses will go—who knows where?—but the folks at Tikitapu and Okataina will be very uncomfortable with that statement.

It’s a good idea to incentivise local councils to allow more homes to be sustainably built by recycling money out of the GST proceeds to help fund that new infrastructure. I know, as I had the great misfortune—as my Chiefs brother Jamie Strange knows—to try and interrogate the Hamilton City development contributions model many years ago. It was The Krypton Factor all over again. The idea of central government partnering with local government to fund infrastructure is nothing new. We had the Housing Infrastructure Fund (HIF) and then our colleagues over here had the HAF—Housing Acceleration Fund—and maybe we’ll have to have the “HUFF Fund” one day, but that might be for the vaping discussion.

This bill facilitates, after GST payable on a residential development, to be paid by Kāinga Ora to the territorial authority where the development took place. Prima facie, this is an idea worth considering and exploring. We’ll support it, albeit with some observations. Tuatahi, first, some houses would be built in some places were affordability might be less problematic. Councils in those situations could get a windfall gain. That’s all we need in Hamilton, Jamie.

Ingrid Leary: You’re reading your speech.

TAMA POTAKA: Second, target the change where houses are built above affordability for that place—and at least I’ve got a speech that ain’t about birthdays. Fund areas that are unaffordable. Thirdly, as many people who can count, and have taken a look at Kāinga Ora, the most important basket case of taxpayer wastage we’ve seen since the last one, which operates prima facie probably regularly on a Ponzi debt-funded scheme that’s going to have to fund itself for the next 60 years out of what taxpayers’ money—

DEPUTY SPEAKER: Mr Potaka, we’ll just—on the bill, please. Relate to what you’re talking about.

TAMA POTAKA: Whānau, we need to get the country back on track, and infrastructure is the key to make that happen in a smooth and credible manner. This GST-sharing bill will help support that, help incentivise councils to enable and permit developments in various areas. The country needs a more relevant and appropriate funding system, not one that’s funded out of the Government using your money every day to fund its wild and vain projects. Don’t get me started on light rail—don’t get me started on light rail—or the million dollars a day this Government spends on emergency housing because they can’t actually build it fast enough.

Do you know why? A million dollars a day—do you know why? Because Kāinga Ora starts driving up the value of land throughout the city, including Borman Road—where Jamie Strange is the MP—27 houses for $20 million. Couldn’t do it themselves, so it went to a private developer, surreptitiously, to buy it. No contribution to GST. So I say Kāinga Ora is the vehicle to fund this or to channel the payments—very worrisome indeed, Ms van Velden. KiwiBuild, need I say more—2 percent. This GST-sharing arrangement will not help it meet the target, because it was a failure. Gone, gone, gone by lunchtime.

Sharing the GST might be one step forward—it might be one step forward. It could operate and act with other dials, though. Getting away from these vanity projects and egotistical announcements—cutting ribbons means nothing if we can’t cut through on infrastructure. I’ll cut the ribbon to anyone’s birthday, but on infrastructure we need funds, and it’s not going to be funds that people are spending on vain projects.

Expanding the role of Crown Infrastructure Partners to establish a national infrastructure agency is something that we will be committed to. We won’t be committed to spending $30 billion on a light rail project road to nowhere; we’ll actually fund infrastructure that is needed for our communities. What we have right now is a Government with an agency called Kāinga Ora that just represents the development aspirations of some of the Ministers who couldn’t do it in their private lives. So instead, they said, “Let’s put our money in the taxpayers’ pocket to fund our ideas and our aspirations because we’ve never been able to do it ourselves.”

DEPUTY SPEAKER: In your last 30 seconds, back to the bill, please, Mr Potaka.

TAMA POTAKA: A more innovative suite of investment opportunities, particularly revenues to incentivise payments, to incentivise investment from private sector capital is useful. Right now, that’s what we need. We need private sector capital to invest in New Zealand. Do you know why? Because the private sector is scared of the Labour Government. It doesn’t matter if it’s an offshore sovereign fund, it doesn’t matter if it’s a super fund or ACC, the private sector capital is concerned that this Government wastes a whole bunch of money, cannot deliver anything on time, and cannot deliver for the future of New Zealand. Back on track! Kia ora tātou.

Thank you, Mr Speaker. It’s a pleasure to take this final call on my bill, the Housing Infrastructure (GST-sharing) Bill.

Everybody deserves the feeling of stability and security of having a home, and everybody should feel that they could one day own their own home. Too often, when I’m out in the community, I hear people say, “I’m not sure I will ever have the opportunity to own my own home.”—or even if they do have their own home, hearing from people say, “I can afford it, but I’m afraid of what the future looks like for my children and for my grandchildren.” and young people in their 20s and 30s saying, “Maybe it would be better to move to Australia because I just cannot see a future for myself in this country.” That is not good enough.

There aren’t enough homes for the people who want to live in them, and that’s why we have a housing crisis. This bill fixes that problem. It provides an incentive to councils to provide an environment for more housing development so that more people can have access to a home. It doesn’t promise 100,000 Government-built homes; it doesn’t promise three three-storey homes on any section throughout all of our large cities. It actually asks the question, “Why do we have a housing crisis?” and finds the solution.

We have a housing crisis because we have an infrastructure crisis. Councils don’t have the funds that they need to provide the vital infrastructure to connect new homes to the community. Currently, councils have very poor incentives to allow for more building. Every new home that goes in involves cost to the existing ratepayers for water, for sewerage, for everything that’s needed to connect that new home to the community. This bill will change that incentive.

It works by allowing for 50 percent of the GST revenue on a new house to be shared with the local council that issues the consent. That provides a very good environment for approving more homes, allowing for more consents and enabling builders to build without more delay. Our estimate is that it would be around $1 billion a year going back into the hands of local councils, but a local council that issues more consents gets more money; it gets more funds. That’s the beauty of this policy.

The only time that you get a prompt service from a council is when they’re issuing you a parking ticket. That’s because they know that they get funds every time one of those tickets is issued. Imagine what we could do, and imagine how much faster homes could get built, if councils knew that there was an incentive in it for them, that they got funding every time a new home got in. Builders that I talked to say that it takes longer sometimes to get the consent to build than just to build the home. We need to change those incentives.

The other great part about this policy is that this transfer of funds will be a long-lasting solution to the infrastructure problem and the imbalance of costs and benefits with council. We’ve heard from Labour members today about the Housing Acceleration Fund. That’s a slush fund that the Government gives for projects it likes, where it gets councils to approach the Government cap in hand and beg for money. Imagine if councils actually had the ability to put infrastructure in their own communities where they knew it was needed, rather than begging the Government for projects that the Government likes.

We know that we need better infrastructure. We’ve seen this with the floods and with the cyclones, we’ve seen it with the sewage on the beaches in Tāmaki. We know that councils don’t have the funds, so let’s change that. Let’s vote for this bill to go through Parliament, and I urge my parliamentary colleagues to support this through the House.

I think it’s great that the National Party has come to the table with ACT to support this bill. It shows that we can work together on a good idea whose time has come. But I’m proud to belong to a party that has the guts to put forward good ideas. We actually look at defining the problem before standing up on a podium to make big grand announcements. This is a policy that will work. It identifies the real problem with the housing crisis, which is an infrastructure crisis.

So if we want young Kiwis to feel like they have a future in this country, if we want more homes to be accessible and to be built in New Zealand, and if we want our homes not to flood because we actually have good infrastructure, we need a long-lasting, enduring policy—and this bill provides that. Thank you, Mr Speaker.