30-04-2012
POLITICAL & REGULATORY REPORT for April 2012
WELLINGTON BREIFINGS – Housing Spokespersons
During the month and as part of an ongoing contact program a number of meetings were conducted in Wellington with each of the major parties housing spokespersons, including:
- Hon Phil Heatley – Minister
- Hon Annette King - Labour
- Holly Walker - Greens
- Denis O’Rourke – NZ First
The Federation took the opportunity to brief Parliamentarians on the current state of the rental property market; views were exchanged on the proposal to merge the Department of Building & Housing into the Ministry of Business, Innovation and Employment and concerns were expressed with the current level of Tenancy Tribunal and tenancy services.
Labour’s Annette King told the Federation she was in favour of minimum housing standards and NZ First’s Denis O’Rourke was in favour of regulation of rents "immediately" (in the Christchurch rental market).
The Minister of Housing, Phil Heatley, reaffirmed his attendance at the Federation’s upcoming 2012 annual conference.
SUPER MINISTRY – Merger of DBH
Whilst in Wellington, the Federation also met with the Hon Steven Joyce responsible for the new Ministry of Business, Innovation and Employment. The Federation acknowledged that the Department of Building and Housing (DBH) is important in the regulation of one of the most significant industries in New Zealand - the building and construction industry but the DBH’s Tenancy Services and social housing functions might not be the best fit.
A separate meeting was held with the State Services Commission’s Iona Holsted who had been instructed by the Government to conduct a round of consultation and engagement with relevant stakeholders concerning implications of the DBH being merged with the ministries of Labour, Economic Development and Science and Innovation.
The Federation urged the SSC to remain mindful that the DBH does a great job for the rental industry and that services provided by the DBH should not be diminished by the merger.
The new Ministry of Business, Innovation and Employment is to come into effect on 1 July this year and is to be led by current Ministry of Economic Development head David Smol. The position of the current DBH chief executive, Katrina Bach, will be made redundant.
PRODUCTIVITY COMMISSION – Final report released
As reported last month, the Productivity Commission delivered its final report into housing affordability to Finance Minister Bill English on March 23. The report was publicly released on April 11.
Of interest to the Federation there were no turnarounds on the Commission’s earlier report.
Specifically, the Commission reiterated its preliminary findings that:
- Taxation was not a key driver of the recent housing boom and
- Regarding the claims that housing is tax advantaged, concluded that any advantage is much smaller than often suggested, and
- The government should monitor the impact of the removal of depreciation allowances on commercial properties – which includes rental housing – to check that the absence of depreciation deductions, particularly if there were a falling market, does not result in resources being diverted away from the rental sector.
Overall, the Commission does not see a case for changes to the taxation of housing.
In other commentary, the Commission noted:
- The quality of rental housing is generally low and the tendency (is) for short term tenancies
- Increasing the Accommodation Supplement would be costly and may be appropriated by the landlord through higher rents
- The costs associated with mandatory rental housing standards are likely to be passed on to tenants through higher rents
- That the Department of Building and Housing review the legislation and regulations relevant to rental accommodation quality for their effectiveness, and consider options for improvement, including their implementation and enforcement, in the medium term.
The Government will provide a thorough response once the report has been considered in detail over the coming months.
WELFARE BILL - Direct rent payments
As reported last month, the Social Security (Youth Support and Work Focus)
Amendment Bill (designed to reform the welfare system) is currently before Parliament.
The Bill was referred to the Social Services Select Committee for examination and written submissions closed on 13 April.
On behalf of the Federation draft submission was prepared putting forward a case for the reforms to include more flexibility in the direct crediting of rent to all landlords, including those from the private sector.
The Committee has commenced the consideration of oral testimony and the Federation had been invited to speak to its submission. The Committee intends to present its report and recommendations to Parliament by 31 May 2012.
ISSUES UNDER WATCH – Summary
- Social Security (Youth Support and Work Focus) Amendment Bill
- Written submissions closed 13 April. Select Committee hearing of oral testimony underway.
- ?Review of the law of trusts (especially family trusts) – Law Commission recommendations of possible reforms to trust law expected mid-2012
- Trustee Amendment Bill (clarifies functions, duties & rules for trustees) - Awaiting 2nd reading
- Energy Efficiency Conservation (Warm Healthy Rentals) Amendment Bill (to require all rental properties to have minimum standards for warmth and insulation by 2018) - Awaiting a ballot selection for Parliamentary debate
- Amendment to the Land Transfer Act 1952 – modernisation of the law to reflect the current use of electronic conveyancing and other technical improvements be made - pending
END