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Speaker 1: Bryan Bridge.

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Speaker 2: Government has announced a rafter changes. It should make it

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Speaker 2: easier for local councils to finance infrastructure around new housing developments.

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Speaker 2: Currently rate payers are left picking up the tab for

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Speaker 2: sewage lines, local streets and water. Changes will in theory

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Speaker 2: ensure that developers are paying their fair share. Christ Bishops

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Speaker 2: the Infrastructure Minister. He's announced it today, minister.

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Speaker 1: Welcome, good afternoon.

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Speaker 2: So at the moment, what is the shortfall at the

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Speaker 2: moment between what the developers are paying to the councils

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Speaker 2: and what the councils are having to make up.

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Speaker 1: It will vary from development to development. Just give you

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Speaker 1: an example I talked about in the speech today at

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Speaker 1: at Drewy. The Auckland Council's short three hundred and thirty

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Speaker 1: million dollars because there the development going on out there

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Speaker 1: and the way the rules work is complicated. But the

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Speaker 1: way the rules work is they could only charge development

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Speaker 1: contributions on a very small amount of the development and

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Speaker 1: they're short about three thirty million, So all of that's

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Speaker 1: being paid for by every other ratepayer when in reality

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Speaker 1: it should be falling on the developers and also the

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Speaker 1: benefities of the new housing and that's why we're changing

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Speaker 1: the system today to move to a more flexible levy

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Speaker 1: based system.

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Speaker 2: What about places like the one that you're describing where

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Speaker 2: there's already a shortfall. There's a place out west we've

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Speaker 2: found around a few developers today out Wes whether it's

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Speaker 2: so bad they haven't planned obviously, haven't planned for this,

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Speaker 2: and they having to use wagons in some areas to

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Speaker 2: remove waste. I mean, what do you do about those situations?

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Speaker 1: Well, that's precisely the problem we're trying to solve, right,

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Speaker 1: So that the funding system for infrastructure for housing is broken,

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Speaker 1: you've got under recovery of the growth charges. We're not

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Speaker 1: planning ahead far enough when it comes to wastewater and

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Speaker 1: storm water, for example, and that's because the system underlying

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Speaker 1: it in the Local Government Act is broken. So what

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Speaker 1: we're doing is changing it to a much more flexible system.

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Speaker 1: We're giving councils the ability to recover for all of

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Speaker 1: the growth charges that come from new housing and make

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Speaker 1: sure that when a development turns up that the council

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Speaker 1: can say, okay, well you can build there, but the

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Speaker 1: charge is for your wastewater? Is this the charge for

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Speaker 1: your stormwater? Is this? The charge for the community infrastructure,

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Speaker 1: your parks and the beautification is this. The charge for

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Speaker 1: the local streets is this. Everyone knows where they stand.

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Speaker 1: The council knows how much they'll get, The developer knows

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Speaker 1: how much it will cost. They can make their decisions

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Speaker 1: around where and what they build based on that, and

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Speaker 1: so there's a much more predictable transparency everybody.

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Speaker 2: But we know the developer is not going to pay

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Speaker 2: this and sales. They'll pass it on to the home

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Speaker 2: buyers potentially first home buyers. Do you know how much

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Speaker 2: it might push house prices up by well?

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Speaker 1: And actually what we're trying to do is lower house

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Speaker 1: prices over time because the problem at the moment is

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Speaker 1: we've got a shortage of land right because we zone

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Speaker 1: land in a very restrictive way, and then we don't

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Speaker 1: sort out the infrastructure funding that I'm talking about so

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Speaker 1: that the land can actually be developed. So what's happened

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Speaker 1: over in Auckland in particular over the last.

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Speaker 2: I can see yeah, long land, I can see the

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Speaker 2: long term benefit that you're talking about, But in the

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Speaker 2: short term you will have I mean, if you're a

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Speaker 2: developer and you were going to build something that the

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Speaker 2: Council was going to pay three hundred million dollars for

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Speaker 2: and now they're not. That's going to cost you, right,

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Speaker 2: it will.

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Speaker 1: Go backwards into the land price, so it will be

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Speaker 1: reflected in prices that people are willing to pay for land.

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Speaker 1: And so our aim is to actually drive down the

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Speaker 1: cost of land. And the price of land. Land is

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Speaker 1: so expensive because there's the shortage of it. But we

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Speaker 1: don't have a shortage of land. We have a shortage

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Speaker 1: of land that can actually be developed. That's the problem.

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Speaker 1: So we're fixing that with the ANNOUNCEMCE today.

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Speaker 2: Chris Bishop, thanks your time the Infrastructure Minster Chris Bishop.

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