The Special Housing Area programme, which the Government ditched, had worked better at providing affordable houses in the Queenstown Lakes than other parts of New Zealand, he said.

"We are really determined to provide key worker housing so that your firefighters, teachers and council workers and police officers can actually afford with their families to actually live in Queenstown, the community they serve.

"And if we don't fight to achieve that, then we will end up with a virtual gated community where people are forced to commute."

Service industry workers were "critically important" to making the economy work, he said.