Wednesday, 17 February 2016

WEDNESDAY, 17 FEBRUARY 2016

WEDNESDAY, 17 FEBRUARY 2016

Mr Speaker took the Chair at 2 p.m.

Prayers.

Visitors

Solomon Islands—Ministers

Mr SPEAKER: I am sure that members would wish to welcome Ministers from the Solomon Islands Government, Ministers Tuki and Kuku, who are present in the gallery.

Oral Questions

Questions to Ministers

Student Debt—Growth and Effect on Homeownership

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement in relation to the comparative rise in house prices and student loans that “I don’t know, but I suspect it’s a terrible amount”?

Rt Hon JOHN KEY (Prime Minister): Yes, in the context it was made.

Andrew Little: Is he aware that both student loans and house prices have risen faster than the wages of young people?

Rt Hon JOHN KEY: They certainly did under a Labour Government, when house prices doubled, but under National the median house price has risen 33 percent over—

Kris Faafoi: 7 long years.

Rt Hon JOHN KEY: —in a bit over 7 years, and the average wage has risen 30.5 percent. So they are pretty much the same.

Andrew Little: I seek leave to table official statistics showing that student loans have risen by 26 percent, house prices—

Mr SPEAKER: Order! I just want to check: is the member simply seeking to table figures that are published on a regular basis by Statistics New Zealand?

Andrew Little: There are a number of sources: the Student Loan Scheme Annual Report, the Real Estate Institute of New Zealand, and Statistics New Zealand.

Mr SPEAKER: I think it is a very marginal call, but I will put the leave and the House can determine it. Leave is sought to table those particular figures. Is there any objection? There is objection.

Andrew Little: In light of the Prime Minister’s previous answer, how are young people meant to save for a deposit when student debt is rising faster than their wages?

Rt Hon JOHN KEY: I am glad the member asked that question, because under National’s KiwiSaver HomeStart programme they can get nearly $50,000, actually. That has been tremendously popular. The other thing that is worth noting is that if one looks, in the 7 and a bit years that National has been in Government median house prices have risen 33 percent, as compared with under a Labour Government—the last one—where those prices nearly doubled.

Andrew Little: Is it acceptable to him that since National introduced the student loan scheme the homeownership rate for adults under 40 has gone from over 50 percent to now just one in four?

Rt Hon JOHN KEY: Those statistics have been there for quite some time. What we do know about student loans is that they allow people to access tertiary qualifications that allow them to earn a great deal more. From what I can see from Labour’s trumped-up policy it announced on a Sunday afternoon—which is getting no traction so they keep coming to the House with it; as opposed to the Trans-Pacific Partnership, which was apparently the big issue—you are not looking at getting rid of student loans. And, by the way, if you are laughing, go and have a look at the column inches and see how many you have got: zero. [Interruption]

Mr SPEAKER: Order! A little less interjection from both sides of the House.

Andrew Little: Given that he is now such a fan of Labour’s interest-free student loan policy, can he name a former finance spokesperson who in this House once described it as expensive and irresponsible? I will give him a clue: the initials are JK.

Rt Hon JOHN KEY: That may prove to have been correct, actually. It is an expensive policy, and that is the point, is it not, that, actually, in New Zealand we are the only country in the world that has zero percent loans for people studying for tertiary qualifications, and about 70 to 80 percent of what is currently subsidised is paid for by the taxpayers. I personally think that setting is in about the right place.

Andrew Little: Does he see any link whatsoever between the $15 billion of study debt young people now owe and the fact that three-quarters of them now cannot afford to buy their own home? Is there any link at all?

Rt Hon JOHN KEY: I would have to see where those dodgy statistics come from. [Interruption]

Mr SPEAKER: Order! A little less interjection please.

Andrew Little: Does he agree that falling homeownership is even a problem, and why will he not follow Labour’s lead and have an affordable housing programme and make it easier for young people to save for a deposit by removing student debt?

Rt Hon JOHN KEY: There has been a worldwide trend of reduction in homeownership rates, and that has been happening in New Zealand over the course of the last 30 or 40 years. But that is why under a National-led Government we have the KiwiSaver HomeStart programme and why it is so popular.

Andrew Little: Why is his Government’s policy to saddle young people with debt, knowing that it takes years to pay it off and it affects their ability to start a family, buy their own home, and to live the Kiwi Dream?

Rt Hon JOHN KEY: Under Labour’s policy, from what I can see, students will still have debt. In fact, actually, some students, if they live away from home, and even if they are going to a course that has no fees charged for it, will still have debt that is incurred for an asset they will not even have because it will be some part-time course they have not completed. In the end, actually, the system is working pretty well.

Hon Member: What are you doing about it?

Rt Hon JOHN KEY: I will tell you what we are doing about it. Wages are going up faster than inflation. The unemployment rate is falling. The economy is rising up the OECD. The country is getting better connected with the rest of the world—[Interruption]

Mr SPEAKER: Order! The answer is now too long—I admit, I do acknowledge, responding to an interjection.

Economic Programme—Support for Vulnerable New Zealanders

2. DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What steps is the Government taking to support vulnerable households and families?

Hon BILL ENGLISH (Minister of Finance): The Government is focused on reducing long-term dependency on public services by getting better results for vulnerable households and families, and we are seeing results. For example, the Government delivered a $790 million child hardship package—part of last year’s Budget—which raised benefit rates for families with children by $25 a week from 1 April this year, the first increase above inflation since 1972. The Government lifted student allowances for families with children, and it increased childcare assistance rates for low-income families, targeting 160,000 families, with 300,000 children. That is in addition to measures taken in Budget 2014, which delivered a $500 million package covering paid parental leave, extended parental tax credits, children’s teams, and additional support for early childhood.

David Bennett: How is the Government helping to ensure that the benefits of a growing economy are being shared by vulnerable families?

Hon BILL ENGLISH: The rising tide lifts all boats. The economy is growing. We are one of the few developed countries with sustainable economic growth, and that is flowing through to our families. In Budget 2015 we increased obligations for those on a benefit to be available for work and increased the support for parents finding work. In addition, the Government has extended free GP visits to under 13s, breakfast in all schools that want it, social workers in all low-decile primary schools, and has raised the minimum wage every year since 2008.

Jacinda Ardern: Was the Children’s Commissioner wrong when he stated this morning that “we don’t have a plan for poverty, we don’t have targets for poverty. It’s much bigger than getting people off benefits when the minimum wage is $15 an hour.”?

Hon BILL ENGLISH: We actually do disagree with the Children’s Commissioner on that matter. The Government has a broad-ranging programme, including lifting the lowest incomes in New Zealand—the incomes Labour did not lift in 9 years of reasonable economic growth—through to long-term changes in Government services, which, when run badly, create dependency rather than reduce it.

David Bennett: How are the Government’s Better Public Services targets increasing transparency and accountability to deliver better results for New Zealanders?

Hon BILL ENGLISH: The Better Public Services targets are unique because no previous Government has published indicators of our social sustainability in the way that this Government has, and then reported against them regularly. Our Government has confidence in the integrity of this process. Statistics New Zealand provides advice to agencies to ensure that the data is robust. Many of the Better Public Services measures incorporate or, in fact, are tier-one official statistics, which are the most important and rigorous statistics, overseen by the standards set by Statistics New Zealand. We welcome independent external scrutiny, such as that in the Salvation Army report, which I would say is way ahead of the scrutiny that has been applied by the Labour Party.

David Bennett: What recent reports has he received showing progress across a range of social indicators under the Government?

Hon BILL ENGLISH: The most recent one is the Salvation Army report released earlier today, which shows good progress across many but not all of the results. The number of children living on benefits has fallen by 24 percent to the lowest level since 1998; the number of children facing material hardship has fallen by 11 percent on one measure and 31 percent on another; substantiated abuse, including emotional abuse, has fallen by 26 percent; the number of working-age benefits paid has fallen by 15 percent; infant mortality is down by 22 percent; and pregnancy among 15 to 19-year-olds is down by 36 percent. That is according to the Salvation Army report.

Metiria Turei: Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. How many of the children whose parents and caregivers have moved off benefits under his Better Public Services targets are still living in poverty?

Hon BILL ENGLISH: That would depend, of course, on what measure, out of the many, the member uses to measure the income or the hardship status of those children. The Government tends to use a range of measures, one of which is the children in hardship measure, and I could go and find out for the member. But, generally, for families, one of the best things a parent can do to move their child out of hardship is to get work. [Interruption]

Mr SPEAKER: Order! The level of those sorts of interjections coming from my left-hand side has to settle down.

Metiria Turei: Does he agree with the Salvation Army report’s critique—he just referred to that report—that the Better Public Services targets are being used by Government “in a less than straightforward and reliable manner”, which risks poverty-related policies being “fundamentally misconceived”?

Hon BILL ENGLISH: No, I do not agree with that assertion. In fact, that is not borne out by the report. The report refers to two particular numbers where the Salvation Army raises questions. They are legitimate questions; they are questions we would want to see answered. We encourage independent scrutiny of all the numbers. In fact, the Government will tomorrow be releasing even more data, to make it available to people like those in the Salvation Army precisely so that they can monitor how the Government uses the information, bearing in mind that no measurement system is perfect. These are proxies for what we are trying to achieve, and that is improved welfare for our most challenged, most vulnerable families. The Salvation Army report shows, overall, some progress in that respect.

Metiria Turei: How does the Minister then explain the fact that the number of children—[Interruption]

Mr SPEAKER: Order! The same ruling I have just given to the left-hand side applies to Mr Brownlee. I cannot hear the supplementary question when there is an interchange going across the two sides of the Chamber. If Mr Robertson and Mr Brownlee want to have a discussion, they are welcome to leave and have it in the lobby.

Metiria Turei: How does the Minister then explain the fact that the number of children living in benefit-dependent homes is decreasing, but the number of children living in poverty—under those measures—is the same?

Hon BILL ENGLISH: Again, you would have to look at the particular measure the member is applying, and I am happy to do that, if she can tell us what measure that is. But, in general, families are better off in work, not just because of the income but because of the greater social cohesion that comes with being able to realise some aspiration, having connections in a workplace, and building a bit of a community and some order into families who, on benefit, often lack direction and structure in their lives. So we will continue to pursue the policy of encouraging and supporting people getting off benefit and into work.

Better Public Services—Salvation Army Report

3. DARROCH BALL (NZ First) to the Minister of Finance: In light of the publication of the Salvation Army report, “Moving Targets”, does he stand by all his statements?

Hon BILL ENGLISH (Minister of Finance): Yes, in particular any number of statements to the effect that the Government is making progress on dealing with some of the more challenging issues among our vulnerable and lowest-income New Zealanders. The Salvation Army report, by and large—in fact, almost without exception—backs up those statements.

Darroch Ball: Does he stand by his statement, when asked about the New Zealand First member’s bill requesting that the Office of the Auditor-General review the Better Public Services targets, that “We do better than that; we get them scrutinised by the New Zealand public.”?

Hon BILL ENGLISH: Yes. Anyone is welcome to scrutinise the numbers and how they are calculated. It happens that the Auditor-General and the Audit Office do have a look at them, and central agencies do. We are actively encouraging external organisations. In fact, I think the social sector has taken a bit long to organise itself in a way that means it can apply some real expertise to holding the Government to account. We would welcome that.

Darroch Ball: If that is the case, does he agree with the Salvation Army’s Alan Johnson that Better Public Services targets should be debated publicly, given that it is already critically examining the “often flimsy information offered by officials … [on] accuracy of data.”?

Hon BILL ENGLISH: Yes, and I am pleased to see the Salvation Army actually doing it. It is creating a public debate about the numbers, and, probably, some people who are listening to that debate will be surprised at how much progress is being made on some of our core long-term issues. With regard to flimsy data, yes, there are a lot of areas where the data is flimsy, because in the past Government has not bothered much about whether it is making a difference to people’s lives. We are trying to find out whether we are, and are quite willing to be held to account where we are not making enough difference.

Darroch Ball: How can the public have confidence in the target results, when trusted organisations like the Salvation Army are now saying: “Some Government agencies appear to be using targets and the numbers behind them in a less than straightforward and reliable manner.”, and “changing the definitions behind indicators, so results appear better, to inventing new numbers.”?

Hon BILL ENGLISH: As I think I have said before, I think the Salvation Army is overstating a couple of concerns it has about two particular measures. Any of these numbers that are used are open to debate about exactly how they are calculated and used—and we are quite happy to have that debate. In fact, I think we have been trying to contact the Salvation Army, because when you look in its document, it is hard to see just what the problem is that it is referring to. But the public can have confidence because this is the first Government ever to publish this sort of data and report against it, and to welcome debate about the performance in changing people’s lives.

Darroch Ball: Does he agree with the Salvation Army’s Alan Johnson, when he says public scrutiny and analysis undertaken by Treasury is “not the same thing as tangible results, verified by a party that does not have a vested interest in reporting good news stories.”?

Hon BILL ENGLISH: Well, of course the Salvation Army is an independent entity, which has the intelligence and capacity to look at the data, actually verifying tangible progress. I mean, if there are 24 percent fewer children on benefit, we regard it as progress. They have looked at the information, which is Statistics New Zealand information, and they are saying that it is progress. I would hope that more organisations will do what the Salvation Army has done, because that can only improve the performance of Government in changing lives.

Darroch Ball: Will he back New Zealand First’s member’s bill that calls for an independent audit of the Better Public Services targets by the Office of the Auditor-General, this now being the third time in the last year that we have asked the Government to do so?

Hon BILL ENGLISH: No, because there is no need for it. The Salvation Army is conducting an independent audit, it has raised two issues out of hundreds of statistics, and we are quite happy to look at them. It is free to get the experts from all the universities in New Zealand to come in and pore over every detail in it. We welcome that kind of public scrutiny, because it will make us better at changing the lives of the most vulnerable.

Darroch Ball: I seek leave to introduce the Better Public Service Target Results Independent Audit Bill, which ensures that all Government Better Public—

Mr SPEAKER: Order! The motion has been moved. I will put the leave as sought for that course of action. Is there any objection? There is.

Transport Infrastructure—Accelerated Regional Roading Programme

4. JONATHAN YOUNG (National—New Plymouth) to the Minister of Transport: What recent announcements has the Government made on progress with the Accelerated Regional Roading Programme?

Hon SIMON BRIDGES (Minister of Transport): The Prime Minister recently announced up to $115 million of funding for regionally significant roading projects in Taranaki, Gisborne, and Marlborough. Two of the projects are newly identified and on State Highway 3 in north Taranaki, which connects with the Waikato. Up to $90 million will be spent building a bypass at Mount Messenger, while up to $15 million will be spent on building a bypass of the Awakino Gorge tunnel. Supporting Taranaki’s growth is a real priority for the Government. That is why the bypasses, along with other planned safety improvements to the tune of $25 million to $30 million will ensure this important stretch of road is safer, more reliable to travel on, and supports the ongoing economic growth of this region.

Phil Twyford: What about Northland?

Hon SIMON BRIDGES: Ask your supplementary question.

Jonathan Young: What other projects has the Government announced to support regional roading priorities in Marlborough and on the East Coast?

Hon SIMON BRIDGES: There is a lot of interest in this and there is a lot of good news from the regions. The existing Ōpawa Bridge on State Highway 1 in Marlborough is an important gateway to Blenheim but can be prone to real delays. That is why the Government is stepping in and spending up to $17.5 million on a new bridge. It will be wider and see traffic flow more freely, resulting in fewer delays and road closures. We are also spending up to $5 million to replace the Mōtū Bridge on the East Coast, which is the only one-lane bridge on the stretch of road between Gisborne and Ōpōtiki. The new Mōtū Bridge will strengthen the East Coast’s main link with the Bay of Plenty and help boost the region’s economic growth and productivity.

Jonathan Young: What reports has he seen on the Government’s recent announcement that it will fund up to $115 million of funding for regionally significant roading projects in Taranaki, Gisborne, and Marlborough?

Hon SIMON BRIDGES: Oh well, the Prime Minister’s speech has been widely applauded in the regions. For example, I have seen a media statement from the Taranaki Regional Council—

Hon Member: Ha, ha!

Hon SIMON BRIDGES: —which the member opposite for some reason laughs about, saying that this is the best single decision in several decades for our road network and the economic activity that relies on it. We have been pushing hard for improvements and our expectations are high but today’s announcement exceeded them. The Minister and local MPs deserve our thanks. We are a Government that is putting its money where its mouth is and getting on with supporting regional New Zealand. [Interruption] Ask a supplementary question.

Pita Paraone: Tēnā koe. Supplementary question to the Minister and thank you for the announcements—

Mr SPEAKER: Order! Can I just have the supplementary question.

Pita Paraone: Can I ask the Minister when he will be announcing the allocation for roading in Northland?

Hon SIMON BRIDGES: I thank the member for the acknowledgment of the great work that we are doing. It may have escaped his attention—I appreciate he is a busy member—but we are spending many, many millions of dollars in that important region and indeed the procurement on a billion dollar piece of highway is going on as we speak, not to mention the bridges and the other roading improvements. I think—[Interruption]

Mr SPEAKER: Order! The question was asked by New Zealand First but with the level of that interjection they are clearly not that interested in the answer.

Government Financial Position—Dairy Price

5. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: What price per tonne of whole-milk powder in the Global Dairy Trade auction has been factored into the calculation that there is now a $17 billion shortfall from Budget 2015, and if this was not done, what calculation was used to model the effect of “weaker dairy prices”?

Hon BILL ENGLISH (Minister of Finance): Treasury does not forecast specific dairy product prices or results from the Global Dairy Trade auction—if only because it is in US dollars. Instead, Treasury uses an index of New Zealand dairy export prices based on past experience. Between the Budget and the Half Year Economic and Fiscal Update, Treasury lowered its dairy price forecast over the period through to June 2017 by between 15 and 20 percent—that is, between the Budget and the half-year update. In total, between the Budget forecast and the half-year forecast nominal dairy exports were lowered by a cumulative $1.3 billion over 5 years to June 2019. Most but not all of the recent price reductions had been incorporated into Treasury’s latest forecasts, but we are likely to see further reductions when Treasury revises its forecast for Budget 2016.

Grant Robertson: In light of the further decline in global dairy prices since the half-yearly update and the resulting further decline in revenue, will he confirm that the $17 billion hole in his Budget just got bigger?

Hon BILL ENGLISH: No, actually, because the $17 billion was the reduction in total GDP over 4 years in the half-year update. But of course alongside reductions in dairy prices we are seeing stronger immigration, lower unemployment—

Hon Nathan Guy: Tourism.

Hon BILL ENGLISH: —stronger tourism, and other prices that are higher than expected, so we will just have to wait and see. But it could well be that there is no further reduction, or it could be that any reduction is driven by, for instance, lower oil prices and lower inflation rather than lower dairy prices.

Grant Robertson: If dairy is now of such diminished importance, why was it the only sector specifically named in the Prime Minister’s statement in reference to the $17 billion hole in the Budget forecast?

Hon BILL ENGLISH: Probably because at the time that that $17 billion was removed from the GDP forecast over the next 4 years, it was probably the single biggest driver. In the next forecast it may not be the single biggest driver. It has already fallen quite some way and, as I have pointed out, there are other parts of the economy going very well, in particular tourism and the export of services, which is as big as the dairy industry. In fact, through this year it may pass it in size.

Grant Robertson: Has he sought assurances from banks in New Zealand about their approach to New Zealand dairy debt in light of projections of a third year below break-even payout and Federated Farmers saying one in 10 farmers is facing pressure from their bank?

Hon BILL ENGLISH: In ongoing discussions with the banks, myself, the Minister for Primary Industries, the Reserve Bank, and Treasury—I think we need to keep in mind here that although prices have dropped further, and look like they will stay low longer than was expected, this is an industry that has a very positive long-term view about its prospects, which is reflected, for instance, in the current land prices, and it also has pretty solid balance sheets that can absorb losses—hopefully, not for 3 years but certainly for 2 years. There will be some farmers with very high debt levels who will be under pressure, unsurprisingly, from their banks.

Grant Robertson: Why have he and the Prime Minister insisted for month after month that dairy prices will come back very soon, when they were warned in July 2014 that there was a 5-year oversupply of milk in the global market?

Hon BILL ENGLISH: The best response to that, I think, is what was published in Treasury’s forecast, which accounted for a significant drop in dairy prices. In retrospect, there are all sorts of experts—in fact, that is the only way the member seems to be able to demonstrate his expertise. Dairy prices are down—that is one factor of the global economy affecting New Zealand. There are others that are positive, and fortunately, we are one of the few developed countries with the prospect of steady, moderate growth over the next 2 or 3 years, despite lower dairy prices.

Richard Prosser: What is his Government’s tangible financial plan right now to help farming families struggling with bank debts and the prospect of being thrown off the land, rising farmer suicides—including those found hanging by Fonterra tanker drivers and those who phone our offices in tears talking about suicide—falling returns, and the $167 billion in subsidies paid to their competitors in the US, Europe, and Japan, which have just been enshrined by the Trans-Pacific Partnership agreement?

Hon Gerry Brownlee: What a load of nonsense.

Hon BILL ENGLISH: Well, that dignifies it. For those farmers in extreme circumstances, there are, of course, the various rural-based organisations around the country who are well organised and very attuned—

Hon Nathan Guy: The rural support trusts.

Hon BILL ENGLISH: —the rural support trusts—to the ongoing mood in the farming community. But the Government does not intend to initiate financial support for dairy farmers under pressure.

Child Health Services—Free GP Visits

6. SIMON O’CONNOR (National—Tāmaki) to the Minister of Health: Can he confirm that since the launch of free doctors’ visits for children under 13, rates of children under 13 visiting their GP is 23 percent higher than the same quarter last year?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes. The Government is committed to supporting families by giving children the best possible start in life. That is why this Government committed $90 million over 3 years to extend the free GP visits and prescriptions to children under 13. Removing this cost barrier is making a real difference to many families and is supported by the extra $400 million being invested in the health sector this year.

Simon O’Connor: How do these rates compare for Māori and Pacific people?

Hon Dr JONATHAN COLEMAN: The data also shows that more Māori and Pasifika children are being seen by their GP. There was a 25 percent increase for Māori and a 21 percent increase for Pasifika children. That means children are seeing a health professional earlier, taking pressure off emergency departments in hospitals and, most important, kids are prevented from getting sicker.

Simon O’Connor: How many practices have opted in and how many children are benefiting from free under-13s GP visits?

Hon Dr JONATHAN COLEMAN: I am pleased to report that 99 percent of general practices across the country are now offering free GP visits for children under 13. That means that 780,000 children under 13 can benefit from free GP visits and prescriptions. Just 10 general practices out of 1,015 have not signed up, and in all cases there are easily accessible alternatives.

Barbara Stewart: Can the Minister confirm that, unlike New Zealand First’s free doctors visits for under-13s policy, his policy does not cover casual visits for under-13s and that after-hours surgeries and emergency departments are under increased pressure because families are waiting to seek medical assistance when it will be free?

Hon Dr JONATHAN COLEMAN: I do not know what the New Zealand First policy covers, but I have been very clear about our policy.

Child Poverty, Measurement—Salvation Army Report

7. CARMEL SEPULONI (Labour—Kelston) to the Minister for Social Development: Why is the Government, according to the Salvation Army, “inventing new numbers like pseudo-service-level indicators that are difficult to verify and have no point of reference”; is it to hide the true state of poverty in New Zealand?

Hon ANNE TOLLEY (Minister for Social Development): I fully reject the member’s assertion. The Salvation Army report does not question how poverty numbers are measured. The Ministry of Social Development regularly puts out the household incomes report, which looks at a large number of measures around hardship and poverty in New Zealand, and the Salvation Army report makes a fair and reasonable use of this ministry data. To say that this Government is deliberately inventing numbers is ludicrous, and the member should read more than just the first page of the Salvation Army report.

Carmel Sepuloni: Does she agree that “government agencies appear to be using targets, and the numbers behind them, in a ‘less than straightforward manner’ ”, and is this not just another example of her department being disingenuous?

Hon ANNE TOLLEY: No, I reject that assertion too, and I think the Minister of Finance has already addressed it. Many of the statistics used and quoted in the report are actually tier one statistics from Child, Youth and Family statistics that are used in the report. Actually, the Audit Office does have a look at those statistics, and if it had any concerns, I have no doubt it would have raised them when it came to the select committee.

Carmel Sepuloni: When will she stop her officials “changing definitions behind indicators so results appear better”, a practice confirmed in the Salvation Army reports?

Hon ANNE TOLLEY: I think the member is jumping to great conclusions, because there is no evidence produced in the report. It asked some legitimate questions about changes in practice and what effect that might have had on the reporting, all of which have been answered today very clearly by the Chief Social Worker, Paul Nixon.

Carmel Sepuloni: Does she agree with the Children’s Commissioner, who said in the select committee today: “The Government’s own data does not show change when it comes to child poverty.”?

Hon ANNE TOLLEY: Well, no, I do not necessarily agree with the Children’s Commissioner, because I do not know upon which measures he is commenting. As I have said, the ministry produces a regular report that has a number of measures of poverty and hardship, and which particular ones he is using, I have no idea.

Carmel Sepuloni: Does she agree with her own ministry’s report on household incomes that 305,000 kids are in poverty on her watch and this number has gone up by 45,000 in 1 year alone?

Hon ANNE TOLLEY: The member misquotes the Ministry of Social Development’s report mischievously. As the report itself stated, to use that figure would be mischievous, because in fact it reflects the median income raised by 3 percent. The opposite to that is that you could reduce child poverty by reducing the median income, which just shows how stupid the member is to quote that figure.

Mr SPEAKER: Order! The last part of that answer will clearly lead to disorder.

Carmel Sepuloni: I raise a point of order, Mr Speaker. I take offence at the last comment made by the Minister. I ask her to withdraw and apologise.

Mr SPEAKER: I was about to do that, but then there was so much interjection coming from my left. On the basis that it has now been raised by the member, I require the Minister to stand and withdraw the last part of that answer.

Hon ANNE TOLLEY: I withdraw the last remark. [Interruption]

Mr SPEAKER: Order!

Grant Robertson: I raise a point of order, Mr Speaker.

Mr SPEAKER: A point of order, Grant Robertson, and this will be a point of order, I expect.

Grant Robertson: You required the Minister to withdraw that statement. She subsequently interjected across the House that she was not going to apologise for it because it was true, which I believe runs counter to your ruling.

Mr SPEAKER: If the Minister did interject, I would be most upset. I am asking the Minister: did she interject in that vein?

Hon ANNE TOLLEY: I was reacting to a comment—

Mr SPEAKER: Order! If the Minister then did—

Hon ANNE TOLLEY: No, I am sorry, it was to another comment that told me I was supposed to apologise. I said: “No. It’s true.”

Mr SPEAKER: For the benefit of all members, when offence is taken at any remark, I consider the tone of the question, the words, the way they were used. I am the sole determinant of the action that is then taken. It might, in some cases, require a member to withdraw the comment. It may, in some cases, require a member to withdraw and apologise for the comment. And in very extreme cases it may require the Minister or member to leave the House, if I so decide. But I am the determinant of that, and I determine it on the basis of each incident. It is difficult for any member to compare one with another. I will make the decision.

Chris Hipkins: I raise a point of order, Mr Speaker. I absolutely understand that, and I do not think that that is the issue in question. The issue in question is where a Minister, or any member, is required to withdraw, or withdraw and apologise, and then basically uses an interjection to say: “But I don’t mean it.” In this case the Minister withdrew her comment and then interjected, whether it was in response to you or to someone else, to say: “I didn’t mean any of that.” That actually makes the whole process meaningless.

Mr SPEAKER: The difficulty is I did not hear the interjection. [Interruption] Order! I then took it up with the Minister, who said at that stage that she was responding to a further interjection from somebody else. It is difficult to go back. If the Minister had taken the opportunity of then saying she did not agree with the withdrawal of this comment, I would do something about it. I cannot be sure that that was the case.

Corrections, Department—Prison Population

8. DAVID CLENDON (Green) to the Minister of Corrections: Is she confident the Department of Corrections will be meeting all of its targets by 2017?

Hon JUDITH COLLINS (Minister of Corrections): It is going to be tough, but if anyone can, the Department of Corrections can.

David Clendon: When did the Department of Corrections first inform the Minister that the muster is due to hit close to 10,000 by the close of this year, a blowout of some 1,200 inmates?

Hon JUDITH COLLINS: Probably in our first meeting, actually. But I would say that I would not call it a blowout. I would say that the right people are in prison for the right time.

David Clendon: I raise a point of order, Mr Speaker. I appreciate that the Minister—[Interruption]

Mr SPEAKER: Order! This is a point of order. There will be no interjections from anybody. Ministers, front-benchers from either side—if they are going to continue to interject on points of order, they will leave me with no choice but to ask people to leave the Chamber.

David Clendon: The Minister did address the question, but I am not party to knowing when her first meeting with the head of the department was. I would like to—

Mr SPEAKER: Order! I gather the point. If the Minister could assist us by telling us approximately when the first meeting took place with her officials.

Hon JUDITH COLLINS: I was sworn in as the Minister of Corrections on 18 December 2015, so it would be some time after that. But if the member really wanted to know, he could pop it down as a primary question.

David Clendon: What is the extra cost to the taxpayer of the unforeseen increase in the prison population?

Hon JUDITH COLLINS: Well, that depends very much on what the Department of Corrections has to do in relation to that, but I would say to the member that the cost to the taxpayer is nothing compared with the cost to victims of being victimised by violent offenders.

David Clendon: Is the Minister aware that inmates are being denied parole because of the backlog of inmates awaiting rehabilitation programmes that they must complete before they can be granted parole?

Hon JUDITH COLLINS: I think that the Parole Board always tries to get people to undertake their programmes, but I would also say to that member that sometimes it is not—

Andrew Little: It’s not the Parole Board’s responsibility; it is the Department of Corrections’.

Hon JUDITH COLLINS: Oh dear, well, ask a question, Mr Little, if you really want to. The Department of Corrections cannot force people to undertake rehabilitation programmes, and quite often it has said to me that it cannot get some offenders to do that.

David Clendon: Will the Minister allocate more funding to rehabilitation and reintegration, given comments made to the select committee this morning by Ray Smith, Chief Executive of the Department of Corrections, that more spending on reintegration and rehabilitation will reduce the prison population?

Hon JUDITH COLLINS: The member will have to wait for Budget 2016.

David Clendon: Does the Minister now regret some of the policies that she has effected in her term as Minister of Justice, given that those same policies have contributed to the blowout in the prison population?

Hon JUDITH COLLINS: Oh, well, definitely not. In fact, I would say to that member that what has in fact led to an increase in the prison population is that very serious violent offenders are being treated as very serious violent offenders.

Small Business Confidence—Growth

9. MELISSA LEE (National) to the Minister for Small Business: How are Government policies contributing to increasing confidence among small businesses?

Hon CRAIG FOSS (Minister for Small Business): Confidence amongst small businesses continues to grow, as highlighted in the recent Westpac Business Growth Monitor, which showed over half of New Zealand’s small and medium businesses are confident of growing their businesses over the next 6 months. The ANZ Business Micro Scope also showed increased investment intentions across the small business sector. Government policies such as the roll-out of ultra-fast broadband, implementing the 90-day trial, our ongoing programme of pursuing free-trade agreements, and policies that have led to low interest rates are all contributing to increased business confidence.

Melissa Lee: What other policies are contributing to the increasing confidence among small and medium businesses?

Hon CRAIG FOSS: Small and medium businesses will take confidence from this Government’s programme to pursue free-trade agreements, and to abide and honour those free-trade agreements. Our agreements with Korea, and Chinese Taipei, and the recently signed Trans-Pacific Partnership agreement will give small and medium businesses more confidence through the many opportunities that are created. This is especially important in regions such as Southland, Tasman, Marlborough, and Hawke’s Bay, where around 40 percent of jobs in those regions are in the export sector. New Zealand small businesses can have confidence that the National Government will abide by our free-trade agreements.

Jacinda Ardern: Can he confirm that the same Westpac survey that he boasts from found that only 16 percent of small to medium sized enterprises intend to hire more staff over the next 12 months, and that “their view on the economy is a red flag against hiring staff”?

Hon CRAIG FOSS: I cannot confirm that, but what I can confirm is that in the ANZ sector—let me have some quotes—hiring intentions with the small business community rose eight points over the quarter. I think it is no coincidence that the increased confidence in the last quarter of 2015 coincides with the signing of the Trans-Pacific Partnership.

Question No. 8 to Minister—Amended Answer

Hon JUDITH COLLINS (Minister of Corrections): I seek leave to correct an answer that I gave to Mr Clendon.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is none.

Hon JUDITH COLLINS: Thank you. I said that I was sworn in as a Minister on 18 December 2015. It was, in fact, 14 December 2015. I apologise for that error.

Mr SPEAKER: I am surprised you forgot.

Hon JUDITH COLLINS: I know.

Earthquake Commission—Confidence

10. Dr MEGAN WOODS (Labour—Wigram) to the Minister responsible for the Earthquake Commission: Does he have confidence in EQC’s oversight of all claims related to the Canterbury earthquakes?

Hon GERRY BROWNLEE (Minister responsible for the Earthquake Commission): I was not sure it was me for a minute there, but yes. As of 31 January the Earthquake Commission has managed more than 67,000 home repairs, made 97,000 cash settlements, and resolved more than 60,000 land claims. Ninety-nine percent of homeowners scheduled for cash settlements have been paid. Ninety-eight percent of those in the managed repair programme have had their repairs completed. The Canterbury earthquakes were one of the largest insurance events ever, anywhere in the world. The Earthquake Commission has managed hundreds of thousands of claims and has made good progress, although it has not always been easy for either the Earthquake Commission or its customers.

Dr Megan Woods: Why should Cantabrians share his confidence when the Earthquake Commission is having to redo thousands of those repairs, and thousands of other homeowners have unresolved claims 5 years on?

Hon GERRY BROWNLEE: Of the 67,000 completed home repairs, just over 5,000 homeowners have indicated that they would like to have a second look at some of the work that related to that repair. That is a rate of 8 percent—an 8 percent return rate on 67,000 homes. I present to the House and will seek leave to table a Building Research Association of New Zealand report indicating that when someone gets a new home built it is not uncommon for more than 80 percent of those homeowners to call the builders back. I think the 8 percent rate on the Earthquake Commission repairs is exceptional.

Dr Megan Woods: Does he think it is a reflection on his leadership of the Earthquake Commission when 60 percent of staff do not have confidence in the leadership of the organisation and nearly three-quarters of staff do not believe that the Earthquake Commission delivers on the promises it makes to customers?

Hon GERRY BROWNLEE: The answer, fundamentally, is no. What I would say is that when you look at a set of results from a survey picking out specific questions without seeing them in the context of the whole survey is hardly reasonable. I would suggest, for example, that this means that there is a 40 percent confidence rate. Let me be clear: if that were a result in any poll for the Labour Party, the member would be dancing in the aisles.

Dr Megan Woods: I seek leave to table the survey that shows that the Earthquake Commission—

Mr SPEAKER: Order! [Interruption] Order! Whose survey?

Dr Megan Woods: It is the IBM Earthquake Commission engagement survey 2015—

Mr SPEAKER: On the basis that that is not freely available, I will put the leave. The House can decide. Leave is sought to table that particular survey. Is there any objection? There is not.

Document, by leave, laid on the Table of the House.

Dr Megan Woods: Does he consider that the Earthquake Commission spending $23.5 million in legal bills fighting the people of Canterbury is a good use of taxpayer money, or could it be better used fixing people’s houses?

Hon GERRY BROWNLEE: Once again you would have to look at each of the individual cases that are finding their way to the courts. If you look at the headline analysis of the work that has been done, it is overwhelmingly positive. We are talking about a very small percentage of cases at the end of a programme. What I would say is that the Earthquake Commission is like any other insurer: it cannot step outside its policy bounds. If it does so it comes at a cost, in this case to the taxpayer, but in the long term, because of the effect it may have on the purchase of reinsurance, to every single New Zealand household insurance purchaser. So I think it has acted appropriately. I think the board has managed the situation well, and, frankly, for an event of this size, the litigation surrounding it has been absolutely minimal.

Dr Megan Woods: Why should Cantabrians believe that the Earthquake Commission’s response to claims from Sunday’s earthquakes will be any better handled than the mess of the last 5 years?

Hon GERRY BROWNLEE: Firstly, I do not accept that there is a mess from the last 5 years, and any reasonable person looking at the statistics would have to agree, remembering that it is the taxpayer of New Zealand who backs this scheme to the hilt. There have so far been, as I understand it, at just around about midday today, some 1,700 claims lodged as a result of Sunday. It is expected that up to half of those could be for contents only, and we would expect that the assessment process will be carried out as efficiently as is possible, but the work will be done first for those who are still waiting.

Australia—Offshore Detention Centres

11. DENISE ROCHE (Green) to the Prime Minister: Will he ask Australian Prime Minister Turnbull to close the offshore detention centres, when he meets with him this week?

Rt Hon JOHN KEY (Prime Minister): It is not my intention to, no.

Denise Roche: Is it humane for babies and children to be detained in offshore detention centres?

Rt Hon JOHN KEY: That would depend on the circumstances they were in, but anyway that is a policy that is one of the Australian Government’s. Funnily enough, it seems to me that the Green Party wants to be opposed to the Trans-Pacific Partnership because it does not want other countries telling us about our policies—

Mr SPEAKER: Order!

Kiwifruit Industry—Exports and Trans-Pacific Partnership

12. TODD MULLER (National—Bay of Plenty) to the Minister for Primary Industries: What reports has he received on growth in kiwifruit exports?

Hon NATHAN GUY (Minister for Primary Industries): Zespri’s December forecast shows that Green volumes have increased 16 percent to over 80 million trays, and SunGold volumes are up nearly three times on last season. Zespri is closing in on total sales of nearly 21 million trays in Japan, which is a record result for this market. The forecast payment for growers is $1.1 billion, which is up $177 million on the 2014-15 result. This demonstrates the industry’s strong recovery from the impact of Psa.

Todd Muller: How will the Trans-Pacific Partnership (TPP) help our kiwifruit growers?

Hon NATHAN GUY: The MP for the Bay of Plenty will be excited to know that the TPP will eliminate all kiwifruit tariffs at entry into force. [Interruption]

Mr SPEAKER:Order!

Hon NATHAN GUY: There is a lot of excitement about the TPP on this side of the House, Mr Speaker. This is worth $15 million per year and equates to an average saving of $6,000 per grower, per year. Importantly, the industry will save over $15 million from tariffs into Japan, which is Zespri’s largest market. This will benefit Japanese consumers and our exporters by supporting our overall competitiveness against other fruit in that market. Zespri is expecting annual sale volumes to Japan to increase by around 10 percent over the next 5 years.

Todd Muller: What reports has he received from the kiwifruit industry on the importance of the TPP?

Hon NATHAN GUY: Zespri’s chief executive, Lain Jager, said: “This is an excellent result for our industry, which is set to earn nearly $2 billion in sales revenue this season and growing strongly.” He adds: “The reality is that New Zealand is a small nation reliant on exporting to earn our way in the world and these agreements are vital to our future prosperity.”

Debate on Prime Minister’s Statement

Debate on Prime Minister’s Statement

Debate resumed from 16 February.

Hon Dr JONATHAN COLEMAN (Minister of Health): It is a great privilege to be here making a contribution to the debate on the Prime Minister’s statement, the first with my Minister for Sport and Recreation hat on. I would like to pay tribute to a great New Zealander, Brendon McCullum, the Black Caps captain, who will be retiring this Saturday after playing his 101st test for New Zealand, 100 of them consecutive. He is a man who scored 14,000 runs in all forms of the game for New Zealand. He scored 11 test centuries and he has led that team fantastically well, and I think it is no euphemism to say he is a great New Zealander.

I see parallels between the way Brendon McCullum approaches cricket and the way our Prime Minister approaches politics—confident, assertive, on the front foot, and inspiring; a man whom people want to follow. Meanwhile, on the other side of the House you have got Andrew Little cowering in the dressing room on all fours, looking for his groin protector, knowing that he is soon going to face another well-directed kick from team-mate David Shearer. The contrast could not be greater.

Meanwhile, old Grant Robertson has been roly-polying off to Paris to learn about the future of work. I hope he has learnt that there is more to work than sitting in Copperfields eating sausage rolls. But I think he has changed his form somewhat. I hope is no longer sending strategy and communications expert Clare Curran off to the photocopier with old copies of The Economist to put together the manifesto. No, he has actually been writing some of it himself. And you have a look on the website. He has got his Future of Work Commission, which he is putting together, and he has made a very interesting connection. He says—and he has written this himself—“The big challenge for business is money.” So Grant Robertson has finally made that connection between business and money. And do you know what he thinks one of the answers for New Zealand business is? It is crowdfunding. You just send out an email, you put it on the net, you send a tweet, and the money rolls in.

It has been a great summer for New Zealand, not just on the sporting field but also in terms of the economy. We have got a growing economy. We have got real take-home wages growing by 3.1 percent over the last year, well ahead of the rate of inflation at 0.1 percent; 175,000 extra jobs over the past 3 years; and almost that number again coming into the economy by 2020. Net migration is through the roof. People want to actually come into this country. It is very different to when we had the previous Government, when people were leaving in droves. Unemployment is at the lowest since 2009—the third-highest employment rate in the world. There is a lot to be very, very pleased about.

But what I want to know is, what is up with Phil Goff getting a special dispensation to oppose the Trans-Pacific Partnership (TPP)? What is all that about? I would have thought the only person who needs a special dispensation would be Andrew Little because he needs to be able to vote with the unions and against every former Labour leader who is still living. So you talk to Mike Moore, you talk to Helen Clark—they are all totally in favour of TPP. So what I want to know is why can Stuart Nash not have a dispensation? Why can Kelvin Davis not have a dispensation? Why can David Shearer not have a dispensation? Because they know that this is a deal that actually opens up 800 million new consumers for New Zealand, removes tariffs from 93 percent of our exports, and adds $2.7 billion to the economy by 2030. It is absolutely essential.

I want to know why, in the first week back in Parliament, was there not one single question in the House from the Labour Opposition members opposing TPP? They have gone on about it all summer. Why was it left to poor old Rino Tirikatene over there to be dragged out of the deep freeze on the backbenches, to be thawed out? They put in an electric charge to try to get a pulse and a brain wave, and then what is he talking about? Customs—the big issues. You really have to wonder what is going on there.

Then, of course, you have got Annette King. She is terribly impressed with herself, because she is the only person who actually wanted to be deputy leader and they made her deputy leader. She spent 6 years trying to wreck the health system—just brought back from the brink—so, I mean, how can she speak with any authority on health? She has been criticising us this week for asking for a 1 percent efficiency saving from district health boards. But do you know what? When Labour was in Government, it asked for an efficiency dividend automatically during its Budget. If that does not make a spokesperson look hypocritical, I do not know what does.

But I can tell you the health system is going extremely well—an extra $4 billion in funding under this Government, $400 million at the last Budget. We are focusing on services for New Zealanders. It is about quality of services. We have upped the rate of electives—50,000 extra electives over our time in Government. We have an extra 110,000 specialist appointments and 5,500 more doctors and nurses. What is Labour’s strategy on health? Frankly, there is not one. Its only answer is more money, and when it was in Government it doubled the budget, delivered 2,000 fewer operations, and sent 800 people to Australia for cancer treatment. Today in question time we were talking about free GP visits for under-13s. Labour hates that policy because it knows that it would have liked to take the credit for that, but, in actual fact, it is us who have delivered it. We are delivering for New Zealand families the best possible start in life.

But there are a lot of things, actually, that Labour would like to secretly support, like a change of flag. I mean, as you know, that is actually its policy—that is its policy—but it just cannot bear the fact that it is going to be someone else who gets to change it. I want Grant Robertson to really get up and say that he does not want the New Zealand flag to change.

So there is a lot of good stuff going on right across the health sector. We are focusing on Christchurch. Health in Christchurch—$147 million per year goes into the mental health ring-fence there, up $23 million on when National came into Government. The budget for the Canterbury District Health Board is now $1.37 billion. That has gone up $254 million under this Government. What we need to hear from the Labour Party is whether it has a plan for health, because I am pretty sure there is absolutely no plan there for it. We have also tackled the tough issues, things like Health Benefits Ltd. We have reformed that. That is now going to drive the back-office savings, which is going to fund more operations and more medicines for New Zealand. Pharmac—$150 million of extra funding there during our time in Government. We are very focused on providing the medicines that New Zealanders need.

And what Opposition members need to explain, if their strategy on health is just more and more money, is what that is going to do to their ability to maintain a surplus. Grant is shaking his head. I do not think he actually knows. I do not think he would actually have a clue how he is going to run the economy. So, when you look at it, the only party that can both manage the books and deliver better services for New Zealand is National, and we are continuing to do that. If you look at obesity, what is Labour going to do? It has decided it is going to regulate the amount of sugar in your food. Well, I do not think that is actually going to be very popular with New Zealanders.

What you can see there is Labour Opposition in complete disarray. Those members do not like their leader. They have not got a unified position on TPP. Actually, most of them would love to vote for it, and I think it will be very interesting when it is voted on in Parliament. Will the Labour Party oppose it? Because I can tell you that if it does, it is headed straight for oblivion.

Meanwhile, we have got a very busy programme of work. We are focused on the issues that matter to New Zealanders. It is jobs. It is growth. It is education. It is definitely health. It is law and order. I can tell you that if you had been at the National Rugby League Nines and you went out there amongst the people and you really saw the reception that John Key got, the Labour Party should be very, very worried.

Hon TREVOR MALLARD (Labour—Hutt South): I seek leave to table the Black Caps cricket schedule, which indicates that the match starting on 20 February finishes on 24 February, to indicate that this Labour Opposition has confidence it will last for 5 days, rather than be all over on the first day as indicated by the Minister for Sport and Recreation.

Mr SPEAKER: I do not think that would inform the House.

PHIL TWYFORD (Labour—Te Atatū): I move, That this debate be now adjourned.

Motion agreed to.

Debate interrupted.

Business of the House

Business of the House

Hon GERRY BROWNLEE (Leader of the House): Following discussions at the Business Committee yesterday, I seek leave for the debate on the Prime Minister’s statement to be set down for resumption on Tuesday, 1 March, despite Standing Order 355(2).

Mr SPEAKER: Is there any objection to that course of action? There is not.

Bills

Social Housing Reform (Transaction Mandate) Bill

In Committee

Part 1 Amendment to Housing Act 1955

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chris Hipkins: Steven Joyce will do it.

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

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

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

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

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

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

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

The CHAIRPERSON (Lindsay Tisch): I call Marama Fox—Marama Davidson.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Phil Twyford: More than 9,000.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Phil Twyford: Who was at the flag breakfast?

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

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

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

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

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

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

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

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

JONO NAYLOR (National): I move, That the question be now put.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Hon Dr NICK SMITH (Minister for Building and Housing): I just want to crisply answer the question that has been raised by the member Rino Tirikatene, so that the Committee can have a well-informed debate on this part.

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

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

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

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

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

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

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

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

Phil Twyford: Clear as day.

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

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

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

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

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

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

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

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

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

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

Kevin Hague: Part 1.

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

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

Carmel Sepuloni: You’re selling houses.

Hon Dr NICK SMITH: Well, the members should just take a breath and listen to exactly what these provisions do and why.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

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

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

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

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

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

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

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

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

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

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

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

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Motion agreed to.

A party vote was called for on the question, That Part 1 be agreed to.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Part 1 agreed to.

Part 2 Amendments to Housing Corporation Act 1974

PHIL TWYFORD (Labour—Te Atatū): 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.

MARAMA DAVIDSON (Green): 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.

MARAMA DAVIDSON: 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.

MARAMA DAVIDSON: 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.

Hon Dr NICK SMITH (Minister for Building and Housing): 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.

Hon Dr NICK SMITH: 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.

POTO WILLIAMS (Labour—Christchurch East): 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.

ALFRED NGARO (National): 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.

ALFRED NGARO: 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.

ALFRED NGARO: 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.

DENIS O’ROURKE (NZ First): 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.

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

SUE MORONEY (Labour): 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.

SUE MORONEY: 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.

MARAMA DAVIDSON (Green): 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.

MARAMA DAVIDSON: 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.

MARAMA DAVIDSON: 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.

The CHAIRPERSON (Hon Trevor Mallard): 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.

PHIL TWYFORD (Labour—Te Atatū): Your guidance, as always, is appreciated.

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

PHIL TWYFORD: 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.

STUART NASH (Labour—Napier): 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.

STUART NASH: 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!

STUART NASH: 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.

POTO WILLIAMS (Labour—Christchurch East): 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.

CARMEL SEPULONI (Labour—Kelston): 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.

Hon PAULA BENNETT (Minister for Social Housing): 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.

STUART NASH (Labour—Napier): 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.

STUART NASH: 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.

STUART NASH: 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.

MARAMA DAVIDSON (Green): 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.

The CHAIRPERSON (Hon Trevor Mallard): Meka Whaitiri.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): 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.

MEKA WHAITIRI: 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.

CARMEL SEPULONI (Labour—Kelston): 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.

POTO WILLIAMS (Labour—Christchurch East): 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”—

CHRIS BISHOP (National): I move, That the question be now put.

The CHAIRPERSON (Hon Trevor Mallard): We are getting close.

STUART NASH (Labour—Napier): 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.

STUART NASH: —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”.

STUART NASH: —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!

STUART NASH: 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—

TIM MACINDOE (Senior Whip—National): I move, That the question be now put.

The CHAIRPERSON (Hon Trevor Mallard): 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.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Motion agreed to.

A party vote was called for on the question, That Part 2 be agreed to.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Part 2 agreed to.

Part 3 Amendment to Housing Restructuring and Tenancy Matters Act 1992

PHIL TWYFORD (Labour—Te Atatū): Speaking about Part 3, there is really only one matter here to discuss. The principal Act is the Housing Restructuring and Tenancy Matters Act 1992. Part 3 of the bill amends that principal Act with a provision that is designed to provide some certainty and reassure people that the provisions of the Public Works Act 1981—that is, sections 40 to 42 of the Public Works Act “do not apply (and have never applied) to the sale or disposal [blah, blah, blah]” of State housing land.

Tim Macindoe: That was the best part of the speech.

PHIL TWYFORD: Thank you. This provision should be dedicated to the Hon Dr Nick Smith, because he has form when it comes to the disposal of State housing land and the buy-back provisions attached to that land. As followers of this issue will note, he got himself into a terrible pickle last year with his vacant Crown land project, which was unveiled with wonderful fanfare in the Budget and a promise of 500 hectares of vacant Government land that would be developed for housing in Auckland.

What happened because of the buy-back provisions—not dissimilar to those that exist within the Public Works Act, but existing, in this case, in Treaty settlement agreements by a number of the iwi in Auckland—was that the good doctor failed to negotiate, or consult I should say, with iwi who have those rights of first refusal. He got himself into a terrible mess, to the extent that 4 months after his grand Budget announcement he found himself in court with Ngāti Whātua and Tainui and others who, through their legal action and negotiation, were able to extract some pretty amazing concessions from the Minister for Building and Housing by way of giving them first dibs as development partners on all that vacant Crown land. Even more remarkable, actually, is that there was a commitment that the Government would provide in one case, I think, 30 percent of the houses in those projects to be affordable, which is something that this Government hates to do. It just shows you what a mess Dr Smith got into by failing to properly take into account the buy-back provisions that are found within the Public Works Act but which in this case existed within Treaty settlement agreements around the right of first refusal.

I think it is good to get some clarity on that, in this case. There would be a lot of people wondering, for example, with the National Government intending to dispose of so much publicly owned State housing land, whether or not much of that land—or probably a significant chunk of it—would have been acquired under the Public Works Act, quite possibly. People would be wondering whether the buy-back provisions in the Public Works Act applied. What this part does is it basically makes it very clear that those provisions do not apply to State housing land and never have. I think that is probably all there is to say about that provision.

A party vote was called for on the question, That Part 3 be agreed to.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Part 3 agreed to.

Clauses 1 and 2

PHIL TWYFORD (Labour—Te Atatū): I am speaking to the title and commencement clauses of the Social Housing Reform (Transaction Mandate) Bill, as we draw this debate towards its inevitable conclusion. It is traditional at this time in a debate to make proposals about alternative titles for the bill.

Tim Macindoe: Blah, blah, blah.

PHIL TWYFORD: I do not think the suggestion from the Government whip, that it be called the “Blah, Blah, Blah Bill”, is a very sensible suggestion. But from this side you will soon hear that we have some constructive proposals for the renaming of this bill. I for one would like to start off by proposing that this bill be called the “State House Sell-off (Charter for Corruption) Bill”. That title conveys, I think, two of the critical themes that have been discussed in this debate—that, for all the blather and the spin that we hear from the Government benches and from the Ministers, this bill is about social housing reform. Actually—let us be brutally honest about it—this is an old-fashioned privatisation programme of billions of dollars of publicly owned land and housing. That is all it is.

Chris Bishop: You told the community houses that you were in favour of it.

PHIL TWYFORD: Bill English has decided that the Government has no business owning land and housing for the purpose of State housing. He simply wants to get it off his hands. He will sell it to anybody who wants it, Mr Bishop. First, it was the Salvation Army. Then it said it did not want it. Then he thought that iwi would buy it. They said they wanted it only if they could have it for free. And now the Government is hawking these billions of dollars of assets to anybody who will take them. The Government is meeting with merchants bankers, public-private partnership outfits, banks, consultants, property speculators, and financiers. The latest on Bill English’s wish list is that big private equity funds will see this as an opportunity to establish a business model like the retirement village companies in New Zealand. Nothing could be more crazy than to think that the retirement village business model—by which companies like Summerset Group Holdings Ltd and Ryman Healthcare make huge dollars by working over the wealthiest quartile of the New Zealand community, the wealthiest 25 percent of New Zealanders, who end up pouring their life’s assets into these retirement villages. Nothing could be more different to the job of actually delivering decent and affordable social housing and State housing to the 5 to 10 percent of the poorest and most struggling New Zealanders.

It is obvious that that business model would not work in terms of State housing unless, and here is the kicker, the Government is prepared to pour unlimited volumes of taxpayer subsidies directly into the pockets of those companies. But do you know what? That is probably exactly what Bill English is thinking of doing. How else would those companies make the kinds of returns that they currently make on their assets in the retirement village sector? They typically make something like a 25 percent return on their assets. They are highly successful property development companies. How would they make that kind of return on the provision of social housing in New Zealand? Only with massive and ongoing public subsidies. So the other possible title for this bill is the “Snouts in the Trough for the National Party’s Mates (Social Housing Sell-off) Bill”. It is sad that we have got to this point. But the way that the Government has handled this whole process over the last 2 years has made the public very cynical. It has stripped away any pretence that this is about building up a more diverse and innovative community housing sector. The community housing sectors are alive to that. They feel like they have been manipulated, lied to, and used by this Government as a way of dressing up a highly unpalatable policy: the privatisation and the flogging-off of billions of dollars of land and housing that have been paid for over generations.

KRIS FAAFOI (Labour—Mana): I would like to continue from where my colleague Phil Twyford left off. Following the parliamentary tradition of looking at alternative names during the debate on the preliminary clauses, I would like to praise whoever the policy person is who dreams up the names of these bills. They try to flower up these names. The bill’s current title is the Social Housing Reform (Transaction Mandate) Bill. But I would like to offer an alternative, to get precisely to what this means to the people who will be affected. I would like to see us change the title to some pretty precise language—the “Evict, Sell, and Abandon (Who Cares?) Bill”. That is exactly what this piece of legislation will do. We have had wave 1 of this policy from the Government, and that has reduced the amount of social housing by evicting people.

I have got an example of that right here, in my electorate. This photo is of Iris Grove in Cannons Creek, Waitangirua, about 5 or 6 years ago before the demolition men came in and took away all of these houses. If anyone on that side of the Chamber would like to tour Porirua and this rough area around me, it will not look like this anymore; it looks a lot different. Imagine beautiful, green, no houses at all, just grass. That happened in about 2011. At the same time Housing New Zealand promised that community that some houses would go back in. Well, we are still waiting. So there is phase 1: evict. Just get the people out of their houses—make up any old excuse you can just to get these people out of their houses. They were told the houses were earthquake prone—evict. They were told “We are going to build you some more houses.”—evict. Get them out of the houses—we do not care how you do it; get them out. So, phase 1 of this strategy from the Government has happened: fewer homes, fewer people in them. What do they care; they are not their people anyway—so, get them out.

Phase 2 under my new title for the bill is called “sell”, and this is exactly what this piece of legislation does. It gives unprecedented power to two Ministers in this National Government to sell this land that I have talked about here—and houses in communities like mine in Porirua—to whom the hell knows who they are going to be, for whatever price. No accountability whatsoever, and, as was debated in a previous part, if something goes wrong, we do not know who is responsible. This is because, apparently, the Ministers avoid any trouble and then later on their officials will not be responsible either, so whatever dodgy deal these guys cook up, no one is going to be accountable. They can sell a house for a dollar, give it to someone who has given them some money—it does not matter. No one is going to have any dirt on their hands, but the houses will be sold.

Then it is all about abandoning the people who used to live in these houses. Apparently, there is not any demand for social housing. So much so that in January this year the social housing Minister said: “We are going to move people out of Auckland—because there is such a problem there—and we are going to send them to places like Wanganui, New Plymouth, Porirua.” Well, as I was finishing up my summer holiday I nearly fell off my chair, because—Holy moly—there are apparently a lot of empty State houses in Porirua that the Minister wants to send Aucklanders to. Well, apparently so in January, but not so in December, because when we asked the Minister a question about the need, the demand, in Porirua, we were told that it was high. So somewhere over Christmas the Government apparently found a whole lot of empty homes in Porirua that it can send people from Auckland to live in. I do not know how this happened, but somehow it magicked up some homes so that people could be sent down from Auckland into all the empty houses that I see every day in Porirua.

I would also invite someone from across the Chamber—anyone, just one person—to take up my offer of an invitation to my electorate office any day of the week, where it is constantly housing-related issues—

David Bennett: Oh, you’re never there. You’re never there.

KRIS FAAFOI: David Bennett, you crack me up. Here I am talking about people who contact us via Facebook because they are living in their cars, and, you know, MPs live in their nice houses—and Mr Bennett thinks it is funny. But he is selling them off, so what does he care about? What does he care about—because he is part of a Government that does not care about people who live in their cars. I am not sure whether he would get people contacting him and saying: “Excuse me, my local MP, but I am living in my car with my kids, and I need somewhere to stay. Can you do something about that?” Well, I would like to do something about that: “I am sorry but the current Government wants to sell all those houses that would be really good for you and your kids to live in.” I know that there are some decent people on that side of the Chamber—not a lot, just some.

Phil Twyford: Name one.

KRIS FAAFOI: I will not name names. I will not name and shame them—I will not name and shame them. But I think some of them are aghast at what could happen here.

I would like to tell you a little story about a man who grew up in Christchurch. He lived in a State house; did all right for himself; came to Parliament. It is actually a story about two people: me, who is standing on this side—who wants to defend and protect social housing and State houses—and someone on that side of the House who had pretty much the same upbringing as me, but he made $50 million and then wants to sell State houses. Sell them. So the very privilege that he and I have had to live in a State house—I am on this side saying: “Do not sell them, because, actually, Mr Prime Minister, people like you and me, who are vulnerable, and families who cannot afford market rental, actually need some of those houses to live in.” But, no, he wants to sell the very privilege that he had—a lot like the free education that he got at university. A lot like the free university education that he had: “Oh, it is good enough for me, but let’s not have it for anyone else. Let’s not have it for anyone else.” Well, there is a double standard right there.

So, I think that the Government should have a look at itself, and think about what it is doing, because it is evicting the most vulnerable people in our country—those people who cannot go to the market and say: “I can afford that rent.” The market does not work for them. But on that side of the Chamber the market is perfect: it will sort everyone’s problems out. Everyone’s problems—the market will sort them out. But we know that the reality is that there are people who cannot afford market rent, who are struggling every day to do the basics, and the help that they need is a State house. Instead of building more houses for these people, this Government wants to sell off State houses for God knows what reason, for God knows what price, and it thinks that is going to help people—it thinks that is going to help people who are the most vulnerable out there. I think that is completely and utterly crazy. It is pretty basic. If people are out there and they need help with their accommodation, and they cannot afford market rent, when the market fails, the State has to come in. That is why State houses are there. That is the way that my family got our start in life, and that is the way that the Prime Minister’s family got their start in life. But there is a difference between this side of the Chamber and that side of the Chamber. Those members would like to evict, sell, and abandon the people who live in State houses. On this side, we actually care about the most vulnerable people in our community. We want to make sure that they have got somewhere that they can afford to live in, that is safe and warm. That is why this piece of legislation is a complete and utter shame for that side of the Chamber.

JACINDA ARDERN (Labour): As my colleague Kris Faafoi—whom I acknowledge for his excellent contribution to this debate—so eloquently outlined in his last address, this is the traditional time in the House when members have the opportunity to propose alternative titles for bills, in this case for the Social Housing Reform (Transaction Mandate) Bill. I want to highlight how sterile the title of that bill comes across—as absolutely sterile. It sounds almost like it is meaningless, like there is no substance necessarily—it is non-threatening. It certainly does not symbolise or adequately convey the depth of change that this bill is proposing.

Because, as we have discussed in this debate, this bill fundamentally changes ministerial powers, fundamentally changes the idea that Housing New Zealand is there to make sure that we have adequate community housing, and answers a problem by creating a problem. So that is why I think this bill would almost be better labelled “The Problem with the Wrong Solution Bill”. I think this is almost really well-timed in the way that the problem was highlighted in the Salvation Army’s state of the nation report that came out today. It always does a section on housing and housing supply. Of course, that means that over the last few years there has been a significant focus on Auckland and the pressures that exist in Auckland. But what it is starting to highlight is the contagion: the spread of, almost, the housing supply disease coming out of Auckland and into surrounding areas.

If members on that side of the House have conversations with people who live in areas like Cambridge, like Te Awamutu, and like Hamilton, they will hear the pressure that is coming down on those communities as the result of the housing crisis in Auckland. There is a flow-on effect. This is not solely an Auckland problem now. A significant part of this housing problem, of course, is the lack of community housing, of State housing, and of emergency housing to provide for those most vulnerable who are the first to suffer in a significant housing crisis. So what we heard from the Salvation Army today was that when you have a massive supply problem, obviously, as you can deduce, simply transferring the stock from one agency to another does nothing to resolve that problem. It does absolutely nothing to solve that problem—but nor do any of the other solutions in this area that the National Party has proposed lately.

The last proposal we had was from Minister Paula Bennett, who suggested that we should simply ask those on waiting lists to transfer to other areas. I do not know how many members on that side of the Committee believe of the waiting lists they have in their area that they should simply go to those individuals and tell them that they should just move—they should just move. First, that assumes that we do not have pressure in other parts of the country, and we do, thus proving that the idea of a bill that simply is transferring stock from one provider to another is not going to solve all problems. So the “Misguided Bill”, perhaps, would be a better title. If you asked people in the other parts of the country, they would say they have waiting lists, too, so how is this solving the problem?

I know that Jenny Salesa, in particular, has done some work in this area. She knows the impact that transferring people from the waiting lists in her areas would have—or how little impact it would have. So it assumes stock in other areas. The second assumption is that it assumes that those on waiting lists are not working. There is this derogatory message that is sent by saying we should simply tell people on waiting lists that they should go and move somewhere else; it assumes that they are somehow just sitting there waiting for a house to come up, with no attachment to anything in the area, such as employment. Sure, it might be insecure employment or it might be multiple part-time jobs, but there is a distinct assumption from the Government in that announcement that there is no connection from that person to that place.

The next point I would like to make is that that connection is, of course, not just about work. The interesting point that Alan Johnson made around people who are connected to a community and the importance of housing, in the state of the nation report this morning, was that when we see those differences that emerge between two measures of poverty—material deprivation versus income poverty, so there are two distinct measures there—they are both important. But someone has asked the question: how can you have income poverty, but not have as high a measure on material deprivation? That is things like not having shoes to wear to school, beds to sleep on, or a warm, dry home. How can you not show so highly on that measure, and yet definitely be in income poverty?

The answer to that question? Community—community. If you have connection to your community, if you have family, if you have support around you, they can cushion poverty. Of course, that is not an ideal situation. That is not the environment that we want—people in poverty existing simply because there are people around them who are propping them up. We want them to have that dignity for themselves, but that speaks to the importance of community. What almost every policy, including the Social Housing Reform (Transaction Mandate) Bill, ignores is the importance of keeping housing stock in the areas where people need to be connected to their community. That is what is so devastating about that Government’s policy. So I would say that this bill needs to be renamed the “Loss of Community Bill”, the “Destruction of the Sense of Community Bill”.

All too often, I think, as MPs, we do—if you are listening and you have your eyes and ears open—hear examples and have manifestations of what the reality of these policies mean coming through our office doors. I still remember to this day the young woman who came to see me a few years ago, now. She had grown up in a Housing New Zealand home in central Auckland. So it is fair to say, of course, that that has been an increasingly affluent area, an increasingly gentrified area, but by virtue of its history it has a significant number of Housing New Zealand homes, or has done. This young woman had grown up in one of those homes. She had, tragically, lost her parents early—because she was a young woman—both of them within a relatively close time and proximity to each other. There she was left—she and her brother. This young woman, sadly, also suffered from a severe case of epileptic seizures. It prohibited her from holding down consistent work, but she also had the care of her younger brother.

She came to see me because she had grown up in a Housing New Zealand house that was made for a family, not for two young people, and Housing New Zealand had determined that it was time for her to move on. She came to see me because Housing New Zealand was not offering for her to stay in the community that she knew. It wanted her to move a significant distance outside of that community, to another community entirely where she knew no one, where she had no connections. That woman’s only family had become her local church, and Housing New Zealand was asking her to move 20 minutes’ drive away from the only community that she had left, as a young woman caring for her younger brother.

This is what the policies that that Government is implementing around Housing New Zealand—the loss of stock, the transfer of stock, and the review of tenancy—are doing to people. It is easy for us to debate these things on paper, as policies that sound as distant as the Social Housing Reform (Transaction Mandate) Bill, and forget that behind that sit people who are affected by these reforms. She was one of them. And what could I do for that young woman, in a city where more and more Housing New Zealand stock was being sold and where there were fewer and fewer options for her and her brother to move into? She accepted she did not need a big house. She just wanted a house closer to people who could look after her, and that is not a lot to ask.

This is just an extra cog in the wheel of devastating housing reforms in the social sector that we have seen under this Government. They are like a plague on our ability to cater properly for our most vulnerable citizens, and Labour cannot support a bill that simply moves the deckchairs around the Titanic.

JONO NAYLOR (National): I would just like to return—as we are debating clauses 1 and 2—to the title of this bill, because this is actually a really important part of what is going on here. We have heard a number of alternative titles, but the actual title of this bill, I believe, is actually very good. It is about social housing reform. That is actually what we are talking about doing here. We are having a reform of a system that has been essentially the same for a number of years. And let us be honest—if you are going to reform something, if you are going to change some things around, it is probably likely to result in a change of ownership of some description, so, of course, we need the word “transaction” in the title. So the title Social Housing Reform (Transaction Mandate) Bill is actually, although it may be a little dull for some people, an incredibly appropriate name for this bill.

I think it is important, as we move towards the end of the Committee stage of this bill—we have had a wide-ranging discussion—to come back to what the whole point of this bill actually is. The whole point of this bill is that we can actually start to provide for vulnerable New Zealanders who are, for whatever reason, unable to either live in their own home or rent in a normal commercial sense. That kind of social housing environment is going to be flexible, it is going to be responsible, and it is going to ensure that they get the very best care, the very best housing that they can have, and the best kind of wraparound services.

In order to do that it is important that it is not just the Government that is involved in this. We have got a number of very, very good agencies right around New Zealand that are providing an excellent service to their clients, to their customers, to the people who are living in the houses that they look after. I would like to see those people be able to do even more. I would like to be able to see those very good organisations, which are doing a really, really good job of looking after vulnerable New Zealanders and their housing needs, be able to do even more of that. Some of our housing stock is not necessarily fit for purpose anymore because the demographics have changed. It just makes sense to me that we have an ability not necessarily to withdraw housing services from those people but to transfer the delivery of those services from the Government to other agencies.

In order to achieve that, it seems a very good idea—and this is not saying that all 65,000 houses are going to go on the block—for the Government to allow some other people to access those properties so that they can provide those very, very good services. The system we have currently has, by and large, done a pretty good job. In many ways it has done a very good job of looking after vulnerable New Zealanders. But just because we have always done it that way, it does not seem to me that we should always do it exactly the same way.

Coming back to where I started from, this about having a system that is more flexible and more responsive, and in order to do that some transactions will need to occur for us to bring in appropriate, well-balanced, and good social housing reform for those people of New Zealand who need it. I happily stand by this title, the Social Housing Reform (Transaction Mandate) Bill.

MARAMA DAVIDSON (Green): I stand to address the title clause of the Social Housing Reform (Transaction Mandate) Bill and suggest some alternative names. I have done a bit of a Facebook post and have a number of options here and contributions from the public.

Chris Bishop: Oh!

MARAMA DAVIDSON: Yeah, a good 5 minutes’ worth, at least.

Chris Bishop: Crowdsourcing rubbish.

MARAMA DAVIDSON: I know. You are going to love this. We have got some suggestions here including the “Sell Off to Make More Homes to Sell Off Bill”; the “Social Housing Elimination Bill”; the “Kāinga Elimination Bill”; I like this one though, the “Tent Pole Bill”, because that is all you are left with; this is good, the “Property Development Handout Bill”; the “Death to the People Bill”; this is an interesting one here, the “Balancing Our Budget Because it Doesn’t Balance Bill”; the “Housed to Homeless Bill”; the “Antisocial Housing Reform Bill”; and, lastly, one of my favourites, the “One Percent Get Richer By Selling Homes Meant For Lower-income Families Sponsored by the Trans-Pacific Partnership Agreement, Anadarko, and Nestlé Bill”. I did want to stand up and offer those public contributions with myself as a mouthpiece.

I have my own final contribution, which does refer to Part 3 of the bill. Part 3 of the bill talks about how land taken under the Public Works Act, including freehold and customary Māori land, does not have to be offered or returned to Māori under the first right of refusal principle. So, effectively, the Government will be able to sell off State house properties without offering them to Māori first, if they were those publicly confiscated lands. For me that is an ongoing Treaty breach as well.

So my final offering, and I would like to hear from them, is “Why Is the Māori Party Supporting this Bill? Bill”. Thank you.

SUE MORONEY (Labour): I want to refer to the contribution from Jono Naylor, prior to the one that we have just heard, because that was the sound of the National Party, of the Government, abandoning its responsibility towards the citizens of New Zealand—all they want to do is have decent life. That was the sound of what we had from there, because the truth is that this bill is about flogging off State assets and, more important, doing it in a way that actually affects the most vulnerable in our society. I think the National Party should be ashamed of this bill. It should be ashamed of its track record when it comes to housing, both the housing crisis that it has presided over in Auckland, which is now moving around the country, and of going back to its bad old ways of selling off State housing, because let us face it, we have been here before.

Phil Twyford: Back to the 90s.

SUE MORONEY: We have absolutely been here before. I remember in the 1990s standing around State houses in Waharoa, one of the poorest communities in the Waikato, forming a human chain to stop those houses from being picked up in the middle of the night and transported by that Government up to Auckland so that they could flog them off for more money than they were worth in the poor community of Waharoa, while the residents of Waharoa lived in garages, lived in cars, and lived three families or four families to a three-bedroom house. We are seeing that being repeated all over again.

I particularly want to talk about the commencement date, clause 2, of this bill, because it says that “the Act comes into force on the day after the date on which it receives the Royal assent”. Assuming that this passes through the House in a timely fashion, that means that is going to happen sometime this year. The timing could not be worse.

For communities like Hamilton, the timing could not be worse. What is occurring as we speak is that that Government’s failure to address the housing crisis in Auckland is now spreading to the rest of the country. One of the first communities to be hit by that has been the city of Hamilton. What is happening currently is that Aucklanders cannot afford housing in their own city, so they are moving to cities like Hamilton, where the housing is not cheap but is more affordable than what it is in Auckland. What that is doing is it means the housing prices are shooting up steeply in Hamilton, making those houses more unaffordable for people who already live in the city.

But, worse than that, the rental prices are following suit. So the rental prices—

The CHAIRPERSON (Hon Trevor Mallard): Order! I am just going to remind the member that we are debating the title and the commencement date. There is some latitude, but members do have to address the bill.

SUE MORONEY: Thank you for that guidance, Mr Chair. I am attempting to describe why the timing of what the Government is doing affects this community so badly, because right now in Hamilton rents are going up at such a high rate that the people at the lowest end of the rental market cannot afford those increases. They cannot afford those increases.

They need more State housing, because that is the contract that we have had with New Zealanders, that the Crown has had with New Zealanders for decades—that there will be that safety net, that there will be a safety net for people to be able to live in decent housing. That is what this bill is abandoning. It is abandoning the Government responsibility towards that.

Chris Bishop: Oh, it does not.

SUE MORONEY: Well, it does, Mr Bishop, it absolutely does, because—and I will refer to the title now—it is the Social Housing Reform (Transaction Mandate) Bill. We do not talk about State housing any more. This Government refuses to call it State housing because it does not want the State to be involved in it at all. So it is now called social housing reform, because the Government is washing its hands of it, and it is in the title, Mr Bishop. It is absolutely in the title that you refuse to call it State housing anymore, because you simply do not care about the Government having any responsibility in this. The title gives it away. It gives it away, Mr Bishop—the Social Housing Reform (Transaction Mandate) Bill.

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

Hon DAVID CUNLIFFE (Labour—New Lynn): I take a short call here in this clauses 1 and 2, “Title” and “Commencement”, debate on the Social Housing Reform (Transaction Mandate) Bill. Let us call it the “Social Housing Transaction to Treat People Like Commodities Bill”, because that is what it does. I would like to acknowledge my colleagues who have spoken: Jacinda Ardern, with her passionate plea about treating people as part of communities; Sue Moroney, who talked about her community of Hamilton and how this will affect it; and my west Auckland colleagues Carmel Sepuloni and Phil Twyford, who have spoken so eloquently and passionately about the way that this iniquitous bill will affect the real people of west Auckland, our constituents.

I want to take a couple of minutes to talk about my constituents. Housing is the No. 1 presenting case problem in my electorate, and it is not hard to understand why. There are not enough places for people to live in, and they simply cannot afford to pay the rent, let alone buy a place to give security to their children and their families. It is that simple. At very best, this bill, which sets up draconian powers for Ministers to transfer at the stroke of a pen vast numbers of State houses to private hands—offshore hands at that—does nothing positive. It will not build one house. It will not home one west Auckland or New Zealand family. That is at the very best. At worst, what it will do is it will strengthen the profit drivers for the new owners, who will cut corners, who will put on pressure, who will put on rents, and who will put people out of their homes and displace them out of their communities.

The fact is, the Government already makes a huge dividend off Housing New Zealand, and that is shameful. Housing New Zealand used to be a social housing provider. It was there to provide a safety net for people who could not afford it themselves and for whom hard times or bad luck or, sometimes, bad decisions or ill health or incapacity meant that they were in trouble. It was a leg up and a way back. Now it is a profit-making body nominally owned by the State, and the Government wants to go the whole hog, treat people as possessions, and turf them into the hands of foreign property developers. It is iniquitous, but it lays bare the drivers of this Government. Somebody said, charitably, that Government members know the cost of everything and the value of nothing. They reduce people to commodities. They reduce people’s lives to saleable units. They take an asset that has taken generations to build up, and propose through this bill to give two Ministers the power to transfer that public asset into private hands. It is the biggest privatisation we have seen in decades.

New Zealanders need to wake up and understand that once it is done it will be extremely hard to undo, because, amongst other things, under the Government’s Trans-Pacific Partnership agreement we will stand to be sued by those private investors if they can argue that they have been expropriated of the property rights that they are being gifted by the stroke of this pen. This bill is an outrage. That is why the Labour Opposition, with a very full bench, is here debating it for as long as the Committee will let us, because another hour without this bill in force is another good hour. Another day without this bill in force is another good day for vulnerable New Zealanders.

The people of New Lynn have housing very much on their minds. Over summer, we had a group of people sleeping rough in the bush just behind the main street of our town centre. It has just taken place that we have been able to move those people on—move them into family homes; move them, in some cases, into temporary accommodation. We are now dealing with the aftermath, which is a rise of related or unrelated street crime around that area, because when you have homelessness, other problems follow.

You know what the Government’s solution has been? To trumpet the fact that it was voting a whole—wait for it—$2 million for the whole of Auckland for emergency housing. But it will not tell us what it is for yet, and it will not tell us how much is going to west Auckland. What is it going to buy with $2 million? A shack in Ponsonby? Or will it give a quarter of it to west Auckland, and buy one garage in Kelston? Or is it just going to bypass that and buy tents and hand out canvas? Maybe that is what the $2 million is for, because it is nothing more than a public relations con. It is manipulating numbers to manipulate public opinion, and when the Salvation Army has to call out that despicable Government for that kind of manipulation—

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

IAIN LEES-GALLOWAY (Labour—Palmerston North): Well, we are on the title and commencement clauses of the Social Housing Reform (Transaction Mandate) Bill. I think we could all come up with a range of titles for this legislation, but what we need is a title that captures the things that this bill actually does. What it does is it vests enormous authority in the hands of Ministers, with absolutely no transparency and with absolutely no accountability. Also, what it does is it allows for the corporatisation of our social housing stock.

The other thing that it does, which does not appear to have been considered in any great detail in this Chamber, is that it allows for the massive confiscation of property rights that have been held for over a century in this country. That is in Part 3, where it talks about how the Public Works Act 1981 does not apply and has never applied. So, in other words, under the Public Works Act, what normally happens is that the previous owner of land that was acquired under that Act would be able to have first right of refusal if the Government decided this land was no longer going to be used for housing. That does not apply under this legislation. That no longer applies.

So we could call this legislation, considering the title and commencement clauses of this legislation, “The Most Massive Confiscation of Property Rights in New Zealand History Bill”. That would be a far better and more appropriate title for this legislation than the rather bland Social Housing Reform (Transaction Mandate) Bill. Another name we could give it is the “Vesting Enormous Power in the Hands of Two Ministers Bill” because that is another thing that this legislation does. It takes away decisions from Housing New Zealand—the Government agency that has the expertise to deal with housing—and hands them over to two Ministers.

This could be the “Handing over Social Housing to the National Party’s Mates Bill”. That is a far better title for this legislation, because what we have got is a piece of legislation that gives the National Government the ability to hand more of the State infrastructure to its buddies, to its rich mates, than it has already done. Think Rio Tinto, think Skycity, think Warner Bros. Well, the next thing will be the Aussie banks that will be able to get their hands on our social housing stock under the “Give the National Party’s Mates Our Social Housing Stock Bill”, which would be a far better title for this legislation than this bland title that we have got.

As for the commencement date, I have got a suggestion: never. Never ever allow such an ugly piece of legislation to be enacted. How about that? I propose that as an amendment. Let us never commence this legislation, because it is a land-grab, because it is the corporatisation of our social housing system, because it is giving more wealth to the National Party’s mates, and that wealth will come from our most vulnerable people. The rents that people will be paying in social housing will be going directly into the hands of the Aussie banks, under this legislation, and that is appalling.

So how about never? How about we do not commence this legislation? How about we do not pass it, for a start? But if we are going to pass it, how about we have a commencement date of just never? “We never meant to do that. It was folly, it was a really bad idea, and even though we passed the legislation, let’s just not start doing it, because New Zealanders just know that this is the wrong kind of direction for us to be taking our social housing stock.”

Let us not privatise more of our social housing. Let us not hand over more of our social security net to Australian banks, to American movie companies, to Australian gambling corporations. Let us not do that. Let us actually do what works. Let us have a solid social security net. Let us have a State housing stock that is sufficient to actually meet the needs of New Zealanders. Let us not sell off houses in one part of the country—

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

Motion agreed to.

A party vote was called for on the question, That clause 1 be agreed to.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Clause 1 agreed to.

A party vote was called for on the question, That clause 2 be agreed to.

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 58

New Zealand Labour 32; Green Party 14; New Zealand First 12.

Clause 2 agreed to.

The Committee divided the bill into the Housing Amendment Bill, the Housing Corporation (Social Housing Reform) Amendment Bill (No 2), and the Housing Restructuring and Tenancy Matters (Social Housing Reform) Amendment Bill (No 2), pursuant to Supplementary Order Paper 149.

House resumed.

Bill reported without amendment.

Report adopted.

Bills

Building (Earthquake-prone Buildings) Amendment Bill

Second Reading

Hon Dr NICK SMITH (Minister for Building and Housing): I move, That the Building (Earthquake-prone Buildings) Amendment Bill be now read a second time. After the further quake in Christchurch on Valentine’s Day last Sunday, we have had a harsh reminder of the vulnerability of both Christchurch and our country to the risks of earthquakes. It is entirely appropriate, as we approach the fifth anniversary of the Christchurch earthquakes next Monday, for us to be debating this bill and to be taking very seriously the risks to life and the risk of injury from our system of regulation for buildings.

I think every member in this House will have etched in their memories the experience of 22 February—when, for most of us, it was actually the worst tragedy for New Zealand, with the loss of 185 people and the injuries of 164—and the very serious responsibility this Parliament has to learn from that experience and to have good building law in this area.

I want to acknowledge the considerable effort that has been made by the Local Government and Environment Committee, particularly by the chair, Scott Simpson. But I also want to acknowledge the Opposition members, who have played a very constructive role in the refinement of this complex bill, and for it being reported back to Parliament with unanimous support. This broad support is important because the laws we pass in the area of requiring the upgrade of buildings are going to span many Governments. I think it gives a level of security for both building owners and for councils that work in its implementation if there is some consistency of public policy in this area.

The bill seeks to balance the risk posed by earthquake-prone buildings with the very significant costs associated with their upgrading and the impacts on heritage. The select committee listened very intently to the large number of submissions that were made on the bill, and in this second reading speech I want to comment on some of the significant improvements that have been made to this proposed new law.

I want to acknowledge the quality of the submissions that were made to the select committee—121 were received on the original bill, a further 51 were made in response to the committee’s interim report—and a number of members of the House have commented to me that they have been some of the highest-quality submissions that they have ever seen before a select committee, which is entirely appropriate for a bill that is so important to our country.

Although many of those submitters supported the intent of the bill, especially having a national framework, compared with the previous law, which said each council takes its own approach, there was also a perception that a one-size-fits-all approach, as recommended by the Canterbury Earthquakes Royal Commission, needed to be refined, and that we need to take a more risk-based approach. In May last year I announced a revised approach to that policy, and the bill, as reported back, includes many of those changes, as well as some other important improvements and clarifications.

As introduced, the bill required territorial authorities to undertake assessments on earthquake-prone buildings within 5 years, and for building owners to strengthen those within 15 years of assessment. The bill now varies the time frames relative to the level of seismic risk. New Zealand is to be categorised into areas of low risk, of medium risk, and of high risk. I have to say, even though I have a background in civil engineering, I was quite surprised by the GNS evidence about the degree of variability in the level of earthquake risk across New Zealand and the fact that, even within relatively small distances, it varies significantly.

If you take a council like the Southland district, actually there is very low earthquake risk on the coast in areas like Balclutha, medium levels of risk around Invercargill and, actually, very high levels of risk in a community like Te Ānau. That reinforces the importance of taking this risk-based approach.

The time frames of identification relative to those low, medium, and high levels will be varied from 5 years to 10 and to 15, and then the time frames for strengthening those buildings will be varied from 15 to 25 and out to 35 years for those low-risk areas. Those variations in time frames have a huge impact on the costs for communities to be able to strengthen the buildings. I do not think people necessarily appreciate that there is actually a constant upgrade of buildings for other reasons, and there is also a significant number of our older buildings that are being continuously replaced. So as a consequence of varying those time frames, for a community like Auckland, where it is now 50 years for an upgrade, and if it is a heritage building a further 10 years, that has a huge impact on the cost-benefit analysis, and actually makes it far less costly for those areas.

A second change in the bill is that it now prioritises the identification and strengthening of earthquake-prone education and emergency buildings. Schools, universities, and hospitals in those medium and high-risk areas will have to be identified and upgraded within half the time frame of other buildings.

The first reason for that, associated with education buildings, is actually that those buildings have a far greater density of people in them, and I think we all look tragically at that CTV Building and whether it was indeed appropriate for a building that has high earthquake risk to have had very high densities of people who are associated with classrooms, or, for that matter, a facility that hosted overseas education students. The reason for the prioritisation of buildings like hospitals or emergency facilities is somewhat obvious in that we think that there is a real need to make sure that those sorts of buildings are functioning post-earthquake, and so they have half the time frame.

The select committee received very strong submissions from Canterbury earthquake survivor Ann Brower, and the bill particularly prioritises those areas of an unreinforced masonry building like a parapet, a façade, or veranda that could fall on to a public road, a footpath, or other thoroughfare that has been identified by a council as having sufficient vehicle or pedestrian traffic to warrant prioritisation.

A third significant change is that a large number of buildings have been exempted from the legislation because they pose low risk, or because it would be impractical. I dealt with issues like statues, like fences, like wharves, like bridges, like tunnels, and storage tanks that would not necessarily meet the common-sense definition of a building, but were included in the original bill. I also note that the changes, in respect of giving a longer period for category 1 heritage buildings, is because, through this process, we do want to be able to retain some of our heritage, and there is also an exemption for low-risk builds.

Again, I want to pay tribute to the select committee and to the officials who have worked closely with its members in getting this bill into better shape. I think it is appropriate that this Parliament gets on and gets law in this area clear. I look forward to working with other members of this House as we take this bill through the Committee stage and ensure that New Zealand building stock is safer for whenever nature chooses that next earthquake that may strike one of our communities.

Dr MEGAN WOODS (Labour—Wigram): It is my pleasure to take a call on this piece of legislation and to make it very clear, as the Minister for Building and Housing indicated, that Labour supports the passage of this bill through the House. I would like to acknowledge the words that the Minister just said, and I would also like to acknowledge the work of the Local Government and Environment Committee. But, most important, as the Minister has alluded to, I think it is incredibly fitting that we are debating this legislation 5 days out from the fifth anniversary of the Canterbury earthquakes. I would, most of all, like to pay tribute to the 185 people who lost their lives in those earthquakes, and their families and their friends who are still living with that loss 5 years on. I would also like to pay tribute to the 35 people who were killed by unreinforced masonry, and the four people who were killed in the street in Christchurch, and I will come back to those reasons throughout this speech.

I think that what we saw 5 years ago in our country—in Canterbury—probably changed many of our views of what we needed to do around making sure that our buildings were, above all, safe and that they were not going to put people at risk. The other person I would like to pay tribute to here, where the Minister also finished his speech, is to Ann Brower and her incredibly tireless efficacy in making this a better piece of legislation that we are seeing in the House tonight. Ann Brower was the only survivor of a bus on Colombo Street that was crushed by unreinforced masonry. The 12 other people on the bus that she was on were killed. Ann suffered horrific injuries, and she came and spoke to us, incredibly movingly, about how it is that we could avoid the fate that she had been through, and what she had witnessed. Ann never gave up on her quest to improve the piece of legislation that first went to select committee, so I commend her for that effort that she put in and I am very pleased to see that her efforts have paid dividends in our having a much stronger piece of legislation that we are here debating in this House tonight.

The piece of legislation that was first referred to the select committee is vastly different from the bill that we have before us here. If I can speak personally for a moment, this has probably been one of the most productive exercises that I have been on as a parliamentarian, in terms of working in a very non-partisan way to genuinely improve a piece of legislation and work for a good outcome at the select committee. So I would like to acknowledge the way in which our committee worked and to acknowledge the chairmanship of Scott Simpson and the willingness for us to be flexible and to listen and to be responsive to what people were telling us.

I think that what we have before us is an incredibly sensible piece of legislation. Instead of saying that we should treat the whole of this long land of ours as one risk zone, we have divided this up, and this is a piece of legislation that is about the evidence. First and foremost, it is based on the science. It is based on the advice of GNS Science scientists telling us what the actual seismic risks in actual parts of New Zealand are. Once we know that risk, we can make assessments as to the risk that is posed to people by buildings and dwellings in that area. As Minister Nick Smith has described, the country is divided into three bands, with time lines that are commensurate with the band depending on whether they are at low, medium, or high risk of seismic activity, and the time frames around that are different for different places. So if you are an owner of an earthquake-prone building in Auckland, your time frame for fixing that and getting it up to the code standard is entirely different from if you are a building owner in Christchurch—although I would hazard a guess that most buildings in Christchurch are now above, well above, code because they have either been repaired or rebuilt to that standard—and other parts of the country that are identified as areas of high seismic risk.

But the contribution that Ann Brower made was that we needed to look beyond just the seismic risk in taking this very pragmatic approach to how it is that we carved up the country and that we really did need to reach right across the country for the lowest-hanging fruit—that lowest-hanging fruit being unreinforced masonry in verandahs, and the risks that this posed to people. As I alluded to in my opening, of the 185 people who lost their lives in Christchurch 5 years ago, 35 people lost their lives either in the street or inside a building, and I think this is incredibly important for us to remember. Ann, as I said, has been a tireless campaigner for this and I would like to just enter into the Hansard some of the words that she said that I think are incredibly important and that we should always take into account as regulators. She said: “There was nothing natural about the disaster”—that being the Canterbury earthquakes—“that befell the 13 of us. It wasn’t the earthquake. It was the building, decisions made about the building, and the failure to enforce those decisions.”

We as regulators have a responsibility. We have a responsibility to ensure that we put in place laws and regulations that are going to keep people safe. That is why we are elected to positions of responsibility. All too often we hear shrieks in this House about cutting through red tape. We hear shrieks about what a burden regulation is, and how it is that we have to be more pragmatic and more sensible about these things. But I think that this piece of legislation stands as a very poignant reminder of why it is that regulation matters and why it is that when we actually take off the ideological blinkers about the role of regulation we can come up with very sensible, very pragmatic, and very bipartisan or cross-partisan solutions. As the Minister identified, in this kind of area we have to give regulatory certainty to the building owners. People need to know that the repairs they are going to embark on with their building are not going to change with a changing Government. This is a piece of legislation that is going to span a wide of period of time, and we have to give people that certainty. So I would like us to remember that.

A further comment from Ann was: “Regulatory failure at its most murderous made Colombo St run red that day.” I think that is a sentence that we should always remember: that it was regulatory failure that cost people their lives—the failure to put in place standards that would have kept people safe. This legislation is doing that. This legislation is taking a very sensible approach; it is balancing out the risks in the real sense that they are risks, and measured risks, and putting in place solutions to address those. This is the kind of model of legislation that I think that we can all take heed of, because the piece of legislation that was first introduced into this House—not by the Minister who has just given the second reading speech, Nick Smith, but by his predecessor, the Hon Maurice Williamson—was a piece of legislation that did not take heed of the Royal Commission of Inquiry into Building Failure Caused by the Canterbury Earthquakes.

A royal commission was rightly set up to find out why it was that people died as a result of building failure in an earthquake. A royal commission made recommendations, and there was a Minister who did not heed those recommendations. There were some quotes where the Minister was saying things that were, essentially, that the Government’s decisions were “broadly in line with the recommendations in Volume 4 of the [Canterbury earthquakes] Royal Commission’s report”. When it comes to putting people’s lives in the hands of regulation and making sure people are safe, “broadly in line with” is not good enough. So I commend the current Minister for realising that the piece of legislation was not strong enough—the legislation that was referred to the Local Government and Environment Committee—and for giving the committee the latitude to fix the legislation and to bring back to this House a much stronger bill that we can be discussing here tonight.

Debate seems too strong a word, because I get the feeling there is going to be a lot of congratulating each other for the good work done; because there was a tremendous amount of work. The changes that were made were the result of a collaboration, really, between the submitters and the committee members. We have come up with a piece of legislation that not only balances the risks—and that is the kind of rhetoric we often hear—but also takes the safety of people first, and for that, I am happy to commend this bill to the House.

SCOTT SIMPSON (National—Coromandel): As chairman of the Local Government and Environment Committee, which considered this piece of legislation, it gives me enormous pride to be speaking in the second reading debate.

The Minister for Building and Housing and the previous Labour speaker, Dr Megan Woods, have both alluded to the fact that we are coming up to the fifth anniversary of the Canterbury earthquakes. Really, a greater tragedy than the earthquakes themselves 5 years ago would be for us as a Parliament, and for us as New Zealanders, not to take heed of the lessons learnt and not to act upon the knowledge gained as a result of those tragedies. That would be utterly remiss of us as a Parliament, utterly remiss of us as a society, and utterly remiss of us as New Zealanders. This process of getting this bill back for second reading has been an example of the Parliament of New Zealand working, I think, at its very best.

The bill as first introduced caused a lot of angst and concern, across the whole country, in fact, but we were able—through a process of consultation, of listening, of taking advice, of working with each other, of going back to work with the Minister and his advisers—to come to what I think now is a very good, satisfactory solution. It will not ever guarantee that risk from future earthquakes will not occur, but a much diminished risk for New Zealanders in the future will be the case as a result of this legislation passing its way through the House.

Our report back was a bit unique in that it had the unanimous support of the committee, but we went through a process of seeking submissions early on, on the first iteration of the bill as it was first presented. We received 121 submissions and then, as a result of work done with the Minister and advisers and listening to the very good submissions, we significantly redrafted the bill.

We felt that it was necessary to give submitters an opportunity to come back to us again with their views on our significant proposed changes to the legislation. I am pleased to report to the House that 51 of those submitters did that, and almost all of them were congratulatory of the work that had been done because we actually had listened and taken note of their submissions.

I too want to refer to the very passionate, very compelling, and committed submission from Ann Brower, who was, as other speakers have already mentioned, the sole survivor on the bus on that day. She gave remarkably confronting evidence to the committee that made us sit up, take notice, and really get to grips with the risks that were prevalent in terms of unreinforced masonry.

I think we have got to a very good spot in terms of addressing those issues, and so the balance of public policy versus risk versus time versus cost across the country will now be spread, I think, quite evenly and quite equitably in a way that reflects the seismic risk to the geography of the nation.

We all know that in different parts of the country there are different elements of risk. We know, for instance, that—well, I was always taught that in Auckland the great risk was of volcanic activity, and I was always taught as a kid that the great risk of earthquakes would actually be in Wellington. But it turns out that Christchurch, which actually was not mentioned as an earthquake risk when I was going to school, was actually where the problem was.

But we have much better information now than we had in those days, and we are able to get sensible, intelligent, scientific information about the risk to the nation. We overlay that with a sensible, pragmatic approach in terms of the time frames involved, then we spread those out, determined by the risk and by the seismic information that we have, and then we overlay that further again by acknowledging that some buildings, some public facilities, and some infrastructure is more important in terms of sustaining services after an earthquake and also in terms of the likely impacts if an earthquake was to occur—for instance, in educational facilities. So all those layers have, I think, been very neatly and satisfactorily addressed in this redrafted bill.

I too want to thank members of the committee for their work. I particularly want to thank the advisers, I want to thank the Minister, and I particularly also want to acknowledge the incredible amount of work done by submitters—not once but in many cases twice—in giving of their valuable time and resource to the committee in both appearing and preparing written material for us.

As I said, in my view this was an excellent example of the select committee process working, as it often does. For many people who watch the proceedings of this House, they often see us just barracking at each other across the Chamber and, sadly, they do not necessarily get to see the work that is often done in select committees, where good, constructive, bipartisan work is done with the intention of creating good legislation and good outcomes for the citizens of New Zealand. It is a great pleasure, as the chair of the committee, to endorse with enthusiasm the second reading of this bill, and I commend it utterly to the House.

PHIL TWYFORD (Labour—Te Atatū): I did not serve on the Local Government and Environment Committee as it considered all the submissions on this bill, but I have been briefed on it, and I have read it and taken a real interest in it. You know, we have been highly critical of many aspects of this Government’s handling of the aftermath of the Canterbury quakes. We have been critical of the wasted opportunity for the rebuilding of an urban form that would be good for the future of Canterbury; we have been critical of the painfully slow residential rebuild—you name it, we could go on for a long time—but we are not critical of this essential piece of the puzzle in the Government’s responding to the aftermath of the Canterbury quakes.

It became pretty clear after Maurice Williamson brought the bill in its early form to the House that all around the country small communities, businesses—particularly the Whanganuis and the Ōāmarus—were horrified at what that bill would have meant for them. Whole areas of heritage buildings might have been lost. It would have imposed a huge cost, potentially, on businesses around the country. And the view that it had embodied a one-size-fits-all approach, I think, came to be shared by a wide range of people. So a lot of credit is due to the select committee and to the Minister for the way the whole job of going about reviewing what is a complex piece of legislation—

Mr DEPUTY SPEAKER: It is tragic to interrupt the member, but the time has come for me to leave the Chair.

Debate interrupted.

The House adjourned at 10 p.m.