Judith Collins is calling for the Government to work with the National Party when reforming the Resource Management Act (RMA), after Finance Minister Grant Robertson wrote to the Reserve Bank in an attempt to curb housing prices.
Collins says while it's good that Robertson "came on board with the National Party" with the move, housing supply also needs to increase for prices to become affordable.
Speaking to TVNZ1's Breakfast this morning, she called the Reserve Bank letter a "remarkable turnaround" for the Government.
"On Monday, we had the Prime Minister saying that would be 'Muldoonist' and we had Andrew Bayly for the National Party having suggested it in the first place," she says.
"[Robertson] may not wish to give credit where it's due, but good on Andrew Bayly, first up as shadow treasurer getting out there and doing the job."
The Reserve Bank is an agency independent from the Government managing monetary and financial policy, with an aim to keep inflation within reasonable levels.
Previous tinkering added sustainable employment levels to its mandate, but yesterday's letter suggests the Reserve Bank also consider housing affordability when making its decisions.
Recent house price surges, despite the Covid-19 pandemic's effect on the global economy, have been partially attributed to low interest rates after the Reserve Bank slashed the Official Cash Rate (OCR) to 0.25 per cent.
"It is really clear that when we have huge amounts of money going into the banking system — and most of it going into the purchases of existing houses, not new houses, and not going into business, so that creates jobs — I think that is something to be concerned about," Collins says.
Robertson, who also appeared on Breakfast today, says the letter was sent because housing affordability is "everyone's problem".
The Government can only do so much with its policies, he says — which are also being reviewed.
"We're doing our bit, we're taking a look at that, but I also think it is timely to think about the role the Reserve Bank has, both in monetary policy and financial stability," he says.
As well as policies intended to curb demand — such as extending the brightline test to five years and ringfencing rental losses — Robertson admits supply is also an issue.
"We know we want to be building more houses. We did a good job, I think, in the last term of building state houses, public houses, but we want to continue and build on that, and work with other developers to see that affordable housing come on stream."
One of those policies being reviewed is the RMA, which dictates where, how and how much housing can be built in particular areas.
National campaigned on scrapping it entirely; Labour on reform.
Currently, the Government has indicated working with the Green Party on reform, but Collins wants to see it go further.
"The best thing to do is to have more houses built. The RMA is absolutely crucial," she says.
"I'd say to the Government: 'Talk to us about it so we get cross-party support, long-lasting support and change, rather than going down the Green Party way.'"
Robertson says the Government "recognise[s] [its] job".
"Because no New Zealander can be comfortable with the rapid escalation in house prices that is putting some people out of the housing market."
The median house price is currently up 19.85 per cent on October last year, according to data from the Real Estate Institute of New Zealand (REINZ).
Even at its lowest point this year, in May, the median price was up 6.9 per cent on the same time last year.
The median price hasn't decreased year-on-year since November 2015, when it dropped 0.2 per cent.