Post-Cabinet Press Conference: Monday, 17 June 2024

Good afternoon. Firstly, our thoughts are with Green Party co-leader Marama Davidson and her family. We wish her well, and our hopes are with her for a speedy recovery as she faces this difficult health challenge.

Now, Cabinet met today dealing with various matters, including making it more affordable to build granny flats, which we will talk about more, shortly.

During the past two weeks, we’ve visited four countries as part of the coalition’s greater focus on South-east Asia. Across our meetings with our counterparts and leaders in Vietnam, Malaysia, and the Philippines, and then Timor-Leste, which is seeking to join ASEAN, we had a number of very important engagements. We noted great enthusiasm to engage more with New Zealand to advance mutual trade, economic, and defence interests. Since coming to office, we have made 16 visits to countries in Asia and the Pacific, reinforcing our active diplomatic reengagement as part of the coalition's foreign policy reset, with several more trips scheduled during the second half of this year. With the Prime Minister and colleagues in internationally connected portfolios such as trade, defence, and climate change also highly active, the Government is delivering on its reenergised foreign policy engagement to help grow the New Zealand economy and strengthen our security relationships across the region. The Government has today announced that it's making it easier to build granny flats for people who want them. This is delivering on a New Zealand First - National coalition agreement commitment to amend the Building Act and resource consent system to make it easier to build granny flats or small structures up to 60 square metres, requiring only an engineer's report. Making it easier to build granny flats will make it more affordable for families to live in the way that suits them the best. Now RMA reform Minister, Chris Bishop, is here today to outline this announcement in more detail.

Thank you, Acting Prime Minister. As the Acting PM has said, Cabinet's agreed to legislative changes that will make it easier for people to build granny flats. High housing costs have a big impact on Māori, Pasifika, people with disabilities, and seniors, so unlocking the space in the backyards of family members opens the door to new ways of living. We know granny flats are a great option for seniors, but they're also increasingly popular with other families such as those who want homes where their university age children can live at home and maintain some privacy, or families who want to provide extra support for a loved one. The National - New Zealand First coalition agreement commits the Government to amending the Building Act and the resource consent system to make it easier, and this plan is the first step on delivering that.

Today's announcement fits within the Government's wider package of work to streamline the building consent system and address the housing crisis through our “Going for Housing Growth” agenda. Today, we've published a discussion document with proposed changes to the Building Act and the resource management system. Our proposed legislative amendments include coordinated changes across the building and resource management system.

Many district plans already allow granny flats without a resource consent, but there's a lack of consistency and different standards across the country. So we are proposing a national environmental standard to require all councils to permit a granny flat in rural and residential zones without a resource consent. An NES—a national environmental standard—means these changes can come into force quickly. District councils won't have to go through the plan change process. The NES gets superimposed, essentially, into the existing district plans and requires councils to do that.

We're also proposing a new schedule is added to the Building Act 2004 to provide for simple stand-alone houses up to 60 square metres in size. The building system proposals in the discussion document include conditions these homes would have to meet to be exempt from a building consent, amongst other things. The MBIE website has a copy of the discussion document, and we encourage people to have a look at it.

Removing this red tape will not only speed up the build process, it's estimated to also save up to $6,500 just in the standard building and resource consenting fees per build, not to mention, of course, all the savings in time and resource as well. There will be safeguards to ensure granny flats continue to meet our expectations for building quality and appropriately managed environmental effects. We want these to be safe, healthy, and durable homes.

Consultation is open now until 12 August. Final policy decisions will be made after that, and we expect legislative changes to be in place by mid next year. Back to you, Mr Peters.

All right—any questions?

Yeah, so a couple of things there. The first is all the buildings have to comply with the building code, so there's no change there. The second point is that the people doing the Building Act work will have to be licensed building practitioners or supervised by a licensed building practitioner, and there's a range of criteria to be exempt from requiring a building consent that the discussion document canvasses. So, for example, the granny flat can't be more than one storey; there are a range of requirements around height to boundary rules to mitigate the spread of fire, for example, to other buildings; there have to be interconnected smoke alarms throughout the building; electric and gas heaters only; there are design and building requirements. So the discussion document canvasses a range of those things. That's partly why we've gone out for consultation; we want to make sure we get the policy right. We could’ve just published a proposal to legislate and sent it to a select committee, but we think it's worth just going out for a couple of months to make sure we get the fine-tuning right before we put it into the House. But we’ve thought quite carefully around the requirements to make sure, as I say, we end up with safe and durable and healthy homes.

Also, also, we're five years on from the 30 square metres on which this is based—or expanded now—and we had no such experience; it was quite brilliant, actually. When you come to leaky homes—and they weren't leaky homes; they were just rotten build in the first place.

Well, that's one of the things we're looking at as part of the discussion document and part of the consultation. We know from the existing data that there is a demand for smaller homes. I mean, you'll all have seen some of the media stories in the last few years around tiny homes and how we need to make it easier and people having big struggles with councils around the country that are really struggling with this sort of stuff. There is an increasing demand for smaller homes; there's an increasing demand for housing more generally, because we have a housing crisis in this country. We've looked at some of the examples from what's happened internationally, and this is in keeping with what other countries are doing. So, Victoria, in December last year, has actually done very similarly to what we are proposing; California, interestingly, has done very similarly as well. So I think if you look internationally, there's been a big demand for that, and we expect the same thing here. And, as Mr Peters says, the 30 square metre change that was made a few years ago has been very popular, and I expect we’ll see the same with this as well.

Yeah, we’ve talked to the officials; we've gone into quite a bit of detail on that. So engineers don't currently produce reports that provide sign-off for an entire building, so we didn't want to require a report that imposed engineering services where they otherwise wouldn't be required; that would just add to cost. So, instead, what we've settled on is requiring that the work be done by a licensed building practitioner, and we think that meets the—you know, that's an appropriate requirement. But that's one of the issues we canvass in the discussion document.

Well, we're going to find out what that cost is, but in an emergency you take emergency action, and I think we had the two experts there when it comes to aviation, where this country’s concerned: one was the Prime Minister; the other one was Mr Foran, who heads Air New Zealand. So how embarrassing is it? Well, the reality is you’ll have everybody make comments, but the experts that I've talked to say to me the reason why that plane doesn't fly the way it should: it's not been flown nearly enough, and I kind of think we need to use it far more extensively, but in the past there's been a reluctance to get on the plane because of the potential attacks back home of wasting taxpayers’ money, when we should be offshore getting the maximum out of our trading relationships.

No one's ever suggested that at all, and I’m surprised it came from the media.

Coming from the media? Next question, please.

Oh look, between 2017 and 2020, we turned things around significantly enough to get respect from countries internationally, where we simply were not pulling our weight, and we need to address that again because there’s no short cut here. We have got, as a country, to learn to spend a bit more on every Budget, and not just have a crisis every now and again, and try and redress all the areas of, or the vacuum of, negligence from a political point of view. So, yes, I’d like to, but we’ve got so many priorities in a seriously troubled economy that we inherited, and I don’t think people quite grasp how bad that economy was. So it’s a matter of choices, and I think to the question that you’ve asked, of course, it’s better placed in the hands of the Minister of Defence, Judith Collins.

No, I’ve never been stranded.

No, the plane didn’t take off, so we had get on like paratroopers and head off to the Islands. But it doesn’t matter; if you think about it, we didn’t have to go by waka, did we?

Well, that’s a question for the Minister of Defence, having discussed it with the air force and various staff; if I was to jump in and give that answer, it would not be treating with respect her portfolio. But—

Well, we have positions when we’re campaigning, but when we’re in a coalition, we try and understand what a coalition looks like—that’s why we’re such a trusted partner.

Well, I hope they go about it with the zealousness of the inquiries in Canberra on the same issue, and I notice that Finance Minister Myles, or Treasurer Myles yesterday was setting out further refinements that he would expect from the banks, and I hope we’re paying very close attention to that, because there is a precedent and I like to see us do the job properly.

Well, they’re not New Zealand banks, for a start; they’re Australian banks, and the question you’ve got to ask yourself: if Ned Kelly was caught ripping off Australians, why would Ned Kelly not be doing it in New Zealand?

Were you not here at the start?

Sorry, but I mentioned it because, regardless of the politics, this is a human circumstance, and we feel that everyone in the Parliament would expect and hope that she gets better as soon as possible.

Well, it’s an ongoing work by Mr Reti and his team. It requires a significant amount of work with the particularity and exactitude that’s required, and it wasn’t ready by Cabinet, but it will be ready for us to keep that commitment in 2024.

Well, this is 2024—

—not 2025; you’ve got to keep up. Next question.

Look, we’ve had discussions with Prime Minister Marape at the time when we were in Papua New Guinea. We also talked to those who are connected to Bougainville. There is the question of a mediated way forward, and that’s what they’ve been looking at and they’re looking at at the moment, and we should not be premature in giving our view, but we have said that we supported the mediated pathway to a future they can both accept as soon as possible.

Well, with respect, that is not the view from Bougainville that I heard from the Bougainvillean I was talking to. Some might think that, but in the end, this is a difficult way forward. To start a new nation would be enormously expensive, and so whether or not we could get that kind of status by way of a mediator is open for those alternatives to be put to us, or the PNG—and, dare I say it, even the Pacific Islands Forum would be interested in this—as we go into the future.

Oh, look, we are determined to cut through the red tape that is holding our housing system back. It just costs too much to do things in this country. We know, for example, that the cost of building a house in New Zealand has grown by 40 percent in the last five years. So we're determined to get those costs under control. So Chris Penk is working his way through quite a comprehensive programme of work around remote inspections, around building consent reform, around competition and building materials to drive down the cost of building. This is part of those proposals. He's doing an excellent job and he's obviously got the earthquake-seismic review soon to be under way as well.

But we are determined to get on top of how expensive it is to build a house in this country. I'm in charge of the land-supply issues—part of our Going for Housing Growth agenda, going out at the edge of our cities, going up inside our cities. That's really important. So is sorting out the infrastructure cost to connect services to those new houses as well, and making sure that councils have got innovative funding tools to allow that to take place. Both those elements are very important, but also very important is the work that Chris Penk is doing on building costs.

There's no silver bullet to our housing crisis. It's about flooding the market with a supply of land. It's about sorting out the infrastructure system. It's about making it cheaper to build, while safeguarding quality. It's about liberalising our planning rules, and this is an example of liberalisation of our planning rules to make it easier to build. I think granny flats will be one part of the solution. There's no silver bullet; if there was, Governments would have fired it a long time ago, but this is one useful thing we can do.

Well, it's meant to be for cost recovery. So they will no longer be requiring a resource consent, or the BCA will be requiring a building consent, so they won't have to do the work. So it's meant to be on a cost recovery basis, so I hope they're not making money out of this stuff. So it's meant to be cost-neutral for them. So, hopefully, they won't be worse off. I’d be slightly horrified if they were. But we are considering revenue streams for councils. I gave a speech on Friday, which some of you have seen, around how we're considering sharing the benefits of growth with councils. ACT’s got an idea around GST sharing; we're considering that. We campaigned on a slightly different model. So we're just working our way through that. That's part of, you know, workstream 3—to get technical—and now our Going for Housing Growth agenda, and once we've landed on a position there, we will make an announcement.

Well, there's quite a degree of detail in the discussion document. So, for example, if you go to page 11, design and building work: “Any design or building work not covered by MultiProof or BuiltReady must be … supervised.” There's a whole degree of things in relation to plumbing work. Now, I'm not going to pretend to you that I'm an expert when it comes to building houses. So we have published a whole range of different things that we're asking for feedback on. When we publish the—when we eventually land on a bill to amend the Building Act—add a schedule to the Building Act—all of that will be laid out. But we want to consult with builders and the industry, and also councils, to some extent, just to make sure we get the finer details right.

We're going to hire workers that understand that water can run uphill, particularly with a huge wind behind it, and the second thing is if they're carrying around a cartridge of junk, don't hire them because they want to measure things properly.

Yes, housing is too expensive in New Zealand.

We want housing to be more affordable for New Zealanders. That is a major workstream of this Government. Average house prices in New Zealand are too expensive. Average house prices to average household income are too high by any objective measure. They are severely unaffordable by international standards. We now have one of the most expensive housing markets in the developed world.

Well, I’m not sure I would put it in the way that you put it. So the flip side of house prices falling for people who own homes is that they become more affordable for people who don’t own homes, and there is a whole generation of young New Zealanders who have been locked out of the housing market because average house prices are too high, and then you ally that with deposit requirements from the Reserve Bank through the LVR restrictions, it takes an enormous amount to pull together a deposit to get on the housing ladder. So the flip side of making housing more affordable for Kiwis is, yes, people who own homes may look at that and say, “I’m a little bit worried about that.”, but they also have, in many cases, children and younger people who are trying desperately to get on the housing ladder and can’t right now. So the flip side of that is it becomes more affordable, and if we’re going to be a property-owning democracy, which we used to be, we need to make housing more affordable. It is outrageous that average house prices in New Zealand have risen faster than any other OECD country in the last two decades. There are many reasons for that. A big one is our planning system, which we are sorting out, and today’s announcement is just one small parcel of the wider planning reform we’ve got under way.

Well, you write a column every week, Tom, so no doubt you’ll write a commentary about it. But there are lots of ways to make housing more affordable. One way is sustained moderation in house prices. Another way is to go for growth and have a sustained lift in incomes in this country so that people are better able to afford housing that is more relevant to them, and we’ve got a massive programme of work under way to lift incomes in this country, because that is one of the great challenges for the New Zealand economy as well.

I wake up every day, Jenna, determined to try and improve housing affordability in this country. That is my driving mission in politics.

By the way, it never was three times the income. It was really four times the income, but people could get by with 25 percent of their pay paying for the mortgage, the insurance, and the rates. And the other 75 percent of their money was for their personal expenditure. That’s dramatically changed. Now, if we can get it down to five or six times we’ll be doing seriously well over the next six to nine years.

Well, build to rent is one part of the solution to get more houses built. Ultimately, people will make choices around where they live, when it comes to renting. We opened the build to rent developments in Sylvia Park the other day. The reality is that a lot of people rent in New Zealand, and we want renting to be more affordable Build to rent is another option—it’s not for everybody. It will be for some people. It’s an option that’s available, particularly long-term secure tenancies—it’s been quite popular in parts of Australia, for example, and other parts of the world. So I’m not pretending for a moment that build to rent is the answer to our housing crisis. The answer to our housing crisis is land supply, infrastructure settings, and incentives for councils, and that’s what we’re focused on.

Three more questions.

I don’t mind if people want to own houses as investments as long as there are plenty of houses so that people can afford the homes that they either rent or want to buy, and that is about land supply. There’s a lot of work that’s been done by the economists on this, and the big driver of house prices over the last 20 years is we just have not got enough land available for housing. We layer restriction upon restriction on using land in our cities, and at the edge of our cities, and we look back after 20 years and say, “We’ve got a housing crisis.” Well, hello, the RMA is a big part of the problem, and we’re fixing that.

And also, you’ve forgotten that in the ’87 share market crash, of the world’s worst 10, we had six, and of the world’s worst four, we had all four. We had such a jungle of a share market, people went straight back to property as being the only secure investment from there on in, and that had a profound effect on where we are now. And those who want to be ideological about this, maybe they should own up to where they were guilty in the first place.

Well, I wouldn’t have said it otherwise.

Well, look, I don't know—if you'd sent me a written note, I'd have come down here with the diary and perhaps been able to answer you, but if this is going to be a memory contest, I can't remember the exact week that I said that, but I know that that was a fact and that's why I said it.

Well, I'm not the Minister in charge, am I?

No, but the Acting Prime Minister cannot remember everything. If you'd have come and sent me a text an hour ago saying, “I'm going to ask you this question.”, I'd have come down here fully informed having consulted the Minister, or the two Ministers that are concerned.

Yeah, well, I want a decent media in this country; I want to make sure the fourth estate is the fourth estate, and I want to make sure that the central part of any democracy, being held accountable, does exist. I'm wanting to see a great fourth estate back in this country.

Did you see the reform package?

Yeah.

Well, I mean, it's a work in progress, still.

Look, the reality was I think—we didn't make, but we became part of, the coalition agreement where that was one of the things we agreed with, but it was to commit ourselves to those drugs and perhaps more, but I think the work that was required, once Minister Reti got into it, was much more complex. However, we're confident that it'd be a matter of months when we're ready to go, in 2024.

I’ve got no reason not to think that at this point in time, but as I say, detailed work is going into it, and a commitment's been made by the Minister of Finance and the Prime Minister and Mr Reti.

But we're going to deliver on it—in 2024, not 2025 like you’ve suggested. One more question.

I’ve got no doubt that it did improve New Zealand - China relations; otherwise, he wouldn't have come in the first place, and in the number of people he brought with him. So it was a success, and a timely one in that sense, because they’re a very serious trading partner. We wish to do more work with any trading partner we can possibly work with, including those that are in the market with us in such a volume now—almost $40 billion— plus the new ones we're trying to find, as hard as we can go at this present time.

Well, the question about those things: a judgment you make wherever the investment is coming from, and at the end of the day, where would be the value for us in terms of infrastructure if we're now paying for the next 40 years for it when we should’ve been a saving nation and being able to pay for it like smart countries do—like Singapore; like Ireland, for example; like Croatia, who’s heading out to do it now with a savings programme; and like one member of Parliament recommended all those years ago, when he was ignored.

Look, the constitutional nature of this Government and our political system is that select committees are the master of their own destiny. It’s not for me or the Prime Minister to say what they should be doing. That’s the marvellous thing about an accountable democracy. I know we haven’t had it for a long time but we’re getting it back.

Well, I would support more scrutiny—well, enhanced scrutiny by our two official agencies doing that. It also requires us to cooperate more internationally to find out what we may not know, because at the moment a lot of things are being said when people don’t know exactly what they’re talking about. But, also, because it’s parliamentary democracy, the select committee’s got a right to say whether they want or don’t want one, and we’ll come down with what the select committee thinks.

Nothing surprises me.

It’ll be eroded if we do nothing about it. But in the terms of our democracy, we had $350,000 of taxpayers’ charity money given to a political party. What on earth are the institutions of government doing about that? That’s number one. The second thing is you’ve got one of the most famous Māori names in New Zealand politics—it looks like he might have been robbed of his seat by 42 votes, and a whole lot of systemic goings-on, which, as someone who seriously knows a bit about electoral law and malpractice and began my career in a major court case on this very matter, I am concerned about it and I want the system to work properly. And I want to know also—more like a plea: I’m asking the Labour Party, because you’re part of the electoral and constitutional process, what are you doing about it in supporting your own member? That’s—

Well, they shouldn’t have had to. The reality is none of those things should have happened. But please don’t tell me that what’s coming out of the Māngere marae—pardon me, the Manurewa marae is not true. Some of us know a bit more about that place than others, and we know something about the witnesses and they are not lying. So I want to know what on earth is the system doing that has oversight over the purity and the effectiveness and the honesty of our electoral system.

Well, I will, when the time comes. Thank you very much.