The government needs to accept that New Zealand's housing market is dysfunctional, says ACT Party leader David Seymour.
Mr Seymour used his state of the nation speech in Auckland today to outline his party's plan to tackle housing affordability.
"The country has to get serious about the housing market, it's not something that people overwhelmingly disagree with, most people know that something has to be done, and most people are realising that what the National Party has pretended to do hasn't worked," he said.
He wants local councils to get a share of the GST collected from the construction of new housing - if they approve more housing consents.
Mr Seymour said sharing the GST revenue with councils would help them cover infrastructure costs associated with new housing developments.
"That would be an enormous incentive for cities to consent more land.
"For example in 2016 there was about $16 billion worth of construction activity - 15 percent of that is $2.4 billion. Sharing half of that with councils would wipe out Auckland's current transport infrastructure deficit overnight."
He said the cost of building roads, water and sewerage systems put councils off approving new houses and subdivisions.
Mr Seymour said another rewrite of the Resource Management Act (RMA) would be one of his bottom lines going in to this year's election.
He said the government was not doing enough and its proposed changes to the RMA were completely inadequate.
"The deal they've managed to strike with the Māori Party, in spite of being offered a better deal to be a lot more aggressive by ACT and United Future, left them passing legislation that is so weak there's not a chance that it's going to be any more effective than the last 18 reforms of the Resource Management Act."
Mr Seymour said new urban planning laws should be brought in for cities with populations of more than 100,000 people, which would prioritise supplying land and infrastructure, in response to demand.
He said urban areas could not be regulated and protected in the same way as undeveloped natural environments.
Mr Seymour said an RMA rewrite and the GST incentive - along with scrapping council building certification in favour of a compulsory bond over new buildings - was non-negotiable if ACT held the balance of power after the election.
Mr Seymour said he had not had any detailed discussions with National about making further changes to the RMA .
"If we get to the stage where they need us for support after the election, I think they'll be very willing because one thing about Bill English is that he does actually get the problem and he does actually get the economics of it.
"He's different from John Key, he does actually want to solve this problem, the question is - is it going to be politically possible? I suggest without ACT it won't be, with ACT it'll be necessary."