Returning minister lays out his priorities

NICK SMITH
Last updated 13:00 01/02/2013

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OPINION: I am relishing the new challenge the prime minister has given me as Minister of Housing and Conservation. These are practical, meaty portfolios in which there is the opportunity to make a positive difference for New Zealand.

My ambition in housing is to make the dream of home ownership a reality for more New Zealanders. It is a matter of record that New Zealand had one of the highest home ownership rates in the world, but that for the last 25 years that dream has been slipping away.

No-one should doubt the Herculean task that is required to bend this curve of history and make home ownership more affordable. There is no silver bullet. The solutions will lie in robust policy analysis, and a comprehensive package that deals with all of the complex factors contributing to home affordability.

It is basic economics that one of the most important factors impacting on home affordability is interest rates. I bought my first home, an ex-state house, in the late 1980s and can recall the panic I felt in my stomach when I got the letter from my bank telling me my mortgage interest rates were going up to over 20 per cent. It is no coincidence that this is when home ownership rates started dropping.

National's record on interest rates is exemplary. They dropped consistently during our nine years in government in the 1990s and the drop during the last four years under our governance has saved the average family with a $300,000 mortgage, $230 a week.

Low interest rates alone are important, but not enough. The problem in the last decade is that house prices increased significantly faster than people's incomes. This boom was enjoyed by many existing home owners who saw their equity surge ahead, but created a huge hurdle for first home buyers.

I've got my eyes focused on all components of the housing cost equation - the land, the infrastructure, the building materials, the labour and the compliance costs. We are going to need improvements in all five if we are to make genuine progress on housing affordability.

My No 1 target is the land costs. We need to be upfront that the Resource Management Act is not working to support home affordability. I have observed a real failure in urban development strategies.

In theory, councils have been keen on higher density housing as an alternative to expanding the urban boundaries of their city.

The problem is that when they have attempted to change the rules to allow multi-storey and infill development, all hell breaks loose in the local neighbourhood and the rule changes don't proceed.

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I'm also concerned that councils don't help housing affordability with their approach to subdivision. When they write the rules, the temptation is to prescribe the best. I've seen well-meaning but impractical and very expensive rules imposed on developers that just drive up section prices.

Nobody is going to build a $150,000 home on a $250,000 section.

We need a new culture where there are incentives to bring down the cost of land that in turn, will also help ensure smaller and more affordable houses are built.

Another area I want to have a hard look at is the Local Government Act and development contributions. A significant change was made by the previous government in 2002 to remove the appeal right to the Environment Court over these charges. They have increased enormously since and can now add as much as $64,000 to the price of a section. I want to review the law around development contributions and explore whether some sort of check needs to be made on councils setting these charges.

A further area of investigation for me will be building material costs. There is anecdotal evidence that our building components are more expensive than in Australia. I will need to be satisfied that we have sufficient competitive forces at work to ensure good value for money for everything from cement, framing timber, cladding, gib, roofing, plumbing and electrical supplies.

The final issue on which we need to look at cost savings is in the regulatory and compliance cost of house building. I am aghast at the level of paperwork now required for building even a simple standard home. We need to find more efficient ways of delivering quality in building work, including the complex questions over liability laws. There is a power of work required to address these issues but we have built a solid foundation with the comprehensive report last year by the Productivity Commission.

My last word on housing has to be on the situation in Christchurch. The prime minister has identified the rebuilding of Canterbury as one of this government's top priorities. My first full day in the job as housing minister today is going to be getting myself up to speed with the challenges in Christchurch. I am determined to ensure Housing NZ and the ministry play their full part in Christchurch's recovery.

My ambition in Conservation is to be an effective but practical and balanced minister. I will be championing a Blue Green agenda of wanting to marry together sound conservation policies with those that will grow the economy and help create new jobs.

There are four areas which I particularly want to improve on in conservation.

The first is engaging better with those who actually use the conservation estate - the hunters, the fishers, the trampers, the campers etc.

The second is we need to improve DOC's contribution to the broader economy and particularly by improving the efficiency of its decision-making on concessions and plans.

I remember writing as minister to DOC in 1997 seeking a change to allow mountainbiking in winter on the Heaphy track, an initiative supported by both Labour and the Greens. It took until 2011 for it to happen.

Just as the Government is putting a real focus on more efficient decision-making over the RMA, DOC also needs to become less bureaucratic.

I am taking a fresh look at the legislation that makes their decision-making so cumbersome. This does not necessarily mean saying "yes" more often.

Sometimes the right answer is "no".

The worst outcome for the economy and community is decision-making that takes forever to get an outcome.

My third focus is on how we get better conservation results in tight financial times.

I want to build on the work of Kate Wilkinson and help secure more partners for DOC in their species recovery work and push for the adoption of new technologies in areas like pest control.

The fourth area of work I want to give priority to is marine conservation. A particular focus will be delivering a new Marine Reserves Act.

We need a broader purpose for marine reserves, greater involvement of local communities and iwi in decision-making, and the capacity to have marine reserves in New Zealand's vast exclusive economic zone.

- The Nelson Mail

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