Key Points:

MP Hone Harawira last night pleaded for moves to fix impoverished housing in Northland, contrasting Government inaction with the "middle-class shock" over leaky homes.

The Maori Party MP for Te Tai Tokerau also said the criticism he received after calling Australian Prime Minister John Howard a "racist bastard" last week might have been right. "Maybe I should have been firing my bullets closer to home".

Mr Harawira was speaking in Parliament in support of a bill that allows compensation awards for mental distress and anxiety to be claimed under the Weathertight Homes Resolution Services Act.

But he wondered if the Government might fund "a Substandard Homes Resolution Service".

It might, he said, respond to the desperate needs in those homes where there was no bathroom, where a long-drop toilet hid behind a shabby wooden floor, where the wind whistled through paper-thin walls and ill-fitting windows and doors, where there was no heating or hot water cylinder, and where the only tap that worked was a cold one.

He described houses in his electorate built of "polyurethaned Weet-Bix," where sewage ran over sections and one Pakeha policy analyst was so shocked she had said, "If this was a white, middle-class community, there would be hell to pay".

Mr Harawira said that a few years ago "the middle classes went into shock" over leaky homes, which prompted the present legislation.

There was no question allowing awards for mental distress for leaky home sufferers was a good idea.

"But let us not be so blinded by this saga that we do not see a real crisis, rotting in our country forgenerations, a crisis of shoddy homes, of people in desperate need and a Government in denial."

Five years ago the Government announced a $187 million funding boost to Housing New Zealand to address substandard housing in Northland, eastern Bay of Plenty and East Cape.