12 December 2000 Media Statement

Housing Minister Mark Gosche has rejected criticism of the Government's new income-related rents policy from former Housing Minister and National MP Tony Ryall.

"The low-income tenants renting privately Mr Ryall refers to in his confusing press release would qualify for an Accommodation Supplement – yet he did not include this important piece of information," said Mr Gosche.

"More than $700 million is spent each year helping low-income people pay their rents to private landlords and in some cases their mortgages via the Accommodation Supplement."

Nationwide there are 164,857 people who rent from private landlords and who also receive an Accommodation Supplement to help pay their rent. There are also 68,446 boarders who receive a supplement to help pay their board and 48,548 low-income home-buyers receiving assistance to buy their home.

Last month Government scrapped National's market rents regime which saw state rents rise 106% while private rents rose 23%. Inflation during this period rose 12%. Turnover in state house shot up from 12% to 34% as families moved from house to house unable to meed the escalating rents being charged. Furthermore the previous Government sold off more than 11,000 state houses despite an acute demand for housing.

"Major Campbell Roberts from the Salvation Army has said National's housing policy was perhaps the most disastrous social policy that his country has seen for some time."

"Decent, affordable housing is fundamental to the health and wellbeing of families and communities – but before we restored income-related rents this was not the case when it came to state-owned housing in this country," said Mr Gosche.

"We restored income related rents because the previous Government's market rents were unfair, were causing undue hardship and were far too high. To use Mr Ryall's own words state house rents were 'at the top end of the market.'"

The new policy is expected to cost around $90 million a year and will mean low-income state house tenants will pay no more than 25% of their income on rent. In the past some tenants had been paying more than 70% in rentals to Housing New Zealand.

"In addition to this our Government has introduced a wide range of new initiatives that include making tertiary study easier, health care cheaper and paying bills less stressful for our elderly."

"In twelve months we have moved to address the legacy of poverty left by the previous Government."

"Other important initiatives we have made that will make a difference in the lives of low-income New Zealanders include:

 New Zealand superannuation increased by an average $11.47 per week. Income thresholds for entitlement to a Commuity Services Card also boosted.

 Income threshold for community services cards raised giving about 48,000 more people access to the cards

 Restored the Training Incentive Allowance to up to 100% of course costs
 Additional $32 million invested over four years to improve access to the Training Incentive Allowance for domestic purposes, widows and invalids beneficiaries
 Boosted youth wage
 Reduced costs to tertiary education by charging no interest on loans while students are studying
 Restored minimum wage
 Introduced Employment Relations Act"

BREAKDOWN OF LOW INCOME ACCOMMODATION SUPPLEMENT RECIPIENTS

Region No. Renting privately No. Boarding No. buying Own Home Total
Auckland Central 17016 4890 2838 24744
Canterbury 17266 5298 5679 28243
Southern 9852 3327 3943 17122
Wellington 14254 5672 3262 23188
Nelson 6182 1826 2487 10495
East Coast 8700 4446 2703 15849
Waikato 11951 5477 3173 20601
Taranaki 7367 3362 2558 13287
Northland 7341 3336 2829 13506
Bay of Plenty 14315 6919 4241 25475
Central 15760 6374 4200 26334
Auckland North 19474 6141 5811 31426
Auckland South 15186 11303 4742 31231
Other 98 62 27 187
Veterans Pension 95 13 55 163

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