More on housing in question time in Parliament today.
3. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Ka tū a ia i runga i tāna i whakapūrongotia, “suggesting the Government needed to build more houses was a ‘misplaced’ idea”?
[Does he stand by his reported statement that, “suggesting the Government needed to build more houses was a ‘misplaced’ idea”?]
Rt Hon JOHN KEY (Prime Minister): I stand by my full statement, which was: “I think if you ask the Minister of Finance, the first thing he will tell you is that by far the biggest asset that the Crown owns is Government housing. I think there’s $20 billion sitting in there, broadly, within Housing New Zealand. Secondly, I think the issue of the claim that the Government should start building houses itself I think would be a misplaced one. The Ministry of Works used to be the provider of roads and schools and houses in New Zealand. It wasn’t a very successful model. It’s been much better, actually, for us to go out there and to contract those services.”
James Shaw: Why does he keep saying the Government should not build houses, when previous Governments have successfully built thousands of affordable houses for New Zealand families, like the one he grew up in?
Rt Hon JOHN KEY: Because the private sector is well and truly equipped to build the houses. What it ultimately needs, though, is planning laws that support that, council plans that support that, and infrastructure that can support those builds. All of those things are happening under this Government. I really seriously think if the member is telling us the answer to resolving the challenges in Auckland’s housing—or indeed housing issues around the country—is to get people employed by the Government as chippies building those houses, I think we would be better to leave it to the private sector.
James Shaw: What has changed between last month, when his Minister for Building and Housing told a Local Government New Zealand delegation that it would be wrong for central government to help out with infrastructure costs, and this month, when he announced a billion dollar fund to help out with infrastructure costs?
Rt Hon JOHN KEY: As is always the case with quotes, and as I demonstrated with the one from the member before, they are often taken out of context. But the Government, and in fact the Minister, has been talking to Local Government New Zealand for over a year. These issues of infrastructure have been raised for quite some time, not only by mayors and councils but by others. I would have thought the member would be applauding the fact that the Government is making it easier for the councils to connect up the main infrastructure, to allow affordable and other homes to be built.
James Shaw: Will the Government prevent landbanking and make sure houses actually get built in areas developed with the infrastructure fund, or will it look the other way while speculators make a quick buck, like they did in the special housing areas?
Rt Hon JOHN KEY: I think it is important to understand that the infrastructure fund is used for infrastructure that connects these subdivisions—ultimately it is the core infrastructure. Developers still have responsibility for the infrastructure on the land that they develop. Interestingly enough, if the member wants to ask the Minister for Building and Housing I am sure he can give you the exact information. But I think of the 200-odd special housing areas, over 130 of them now have works on them. Landbanking is always an issue if there are, potentially, blockages in the system, but ultimately people hold on to land for longer than they otherwise probably should do only if it is such a long way out that they are taking an incredibly long-term view or, more likely than not, that the price rise in land is faster than the cost of capital. By releasing a lot of land on to the market, as we did in Christchurch, you can demonstrate quite clearly that it actually resolved that issue.
James Shaw: Are the Government’s musings about using a Public Works Act to take private land for housing a confession that he has let this crisis get totally out of control?
Rt Hon JOHN KEY: No. The Minister for Building and Housing was simply making the point that under an urban development authority (UDA), the powers of a UDA could be quite broad. It is always possible that within an area defined as part of an urban development authority there could be one particular piece of land—or block of land—that might need to be acquired to allow the overall block to be developed; or there may need to be changes in designations like reserves, which could then be replaced somewhere else. That is not really the preference of the Government—to be riding roughshod over property rights—our preference is always to negotiate with parties. But, ultimately, the member himself is admitting that this is a significant challenge and we do need to release more land, faster.
James Shaw: When he said, over the weekend, that there is no room for Government complacency, is there a different word to describe a Government that has stood by while the average Auckland house price shot towards $1 million and the number of people who are homeless increased to record levels?
Rt Hon JOHN KEY: I do not think it would be a fair criticism to say that the Government has stood back. We have a record level of activity taking place. We have significant parts of the plan—that, actually, the member’s own party has resisted. I think it is worth remembering that if you go back and have a look at the first 3 or 4 years when I was Prime Minister, the issue of housing was not a significant issue. What has turned round in that time is that New Zealand has become a much more attractive destination, interest rates are lower, optimism in the economy is very strong, and the Government’s policies are working—which is actually driving much greater demand in the New Zealand economy. So we have responded to that—that is why there are so many more houses being built in Auckland. Do we need to build some more? Yes, but we are working on that.
James Shaw: Amongst all of the announcements that this Government is making about housing, why is it that the one thing it consistently refuses to do is to actually build more houses?
Rt Hon JOHN KEY: Well, I thank the member for confirming that the Government has a comprehensive plan for housing, because it does. The very point about building a house is not who employs the builder. It does not matter whether the builder is employed by a ministry in the Government or Fletcher Challenge; they will still face the same issues about the length of time that it takes to put in infrastructure, the length of time that it takes at council to issue the plans, the amount of land that is ultimately available, and the infrastructure that is required to support that. The member seems to miraculously think that, just because the cheque for the wages of a carpenter would come from a Government department and not a private sector company, somehow it would make things go faster—it will not. If the member wants to go faster, then come and support the Government in its Resource Management Act reforms.
Full transcript to all questions and answers.