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Alliance Policy Devastating For Thousands

Media Statement By
Roger Sowry
Minister of Social Services

Tony Ryall
Minister Responsible for Housing New Zealand Limited.

4 October 1999

Alliance Policy Devastating For Thousands Of Low Income Families

"The Alliance Housing policy has so many serious flaws it's hard to know just where to start," Social Services Minister, Roger Sowry, and Housing New Zealand Minister, Tony Ryall, said today. "They are letting ideology get in the way of helping kiwi families into a home."

"The Alliance wants to give help only to low income families who happen to rent their home from the state, and make thousands of low income families renting privately pay for it.

"Alliance has said that, after a transition period, it will scrap the Accommodation Supplement. In September 1998, Labour also said it preferred to cut the AS in favour of a bigger subsidy to state house tenants alone.

"Alliance says it expects rentals for private houses to also reduce as state house rentals reduce. But, such claims don't make sense.

"There are currently 310,000 New Zealand families receiving the Accommodation Supplement. There are 60,000 state owned homes.

"That leaves 250,000 low income families who are receiving assistance with their housing needs and who are either renting their home privately or paying off a mortgage.

"Alliance's policy would create massive waiting lists as those families join the queue for a state house. But with every state houses full there would be no incentive for private landlords to reduce rents.

"The problem for low income families is that Alliance promises to build just 1000 new homes a year. At that rate it will take 250 years for the Alliance to get rid of the waiting list.

"The Alliance also wants to build houses in the Wairarapa, even though there is no unmet demand there, and 541 families are right now renting their former state homes from a charitable community based trust.

"The Alliance wants to spend precious taxpayer funds on cheap loans when interest rates are the lowest they have been for 30 years. A family paying off a $100,000 mortgage is now saving $134 a week compared to 1990. Perhaps the Alliance knows what would happen to interest rates under a Labour-Alliance government.

"Alliance's policy is grossly unfair and undemocratic.

"It would create homelessness and over crowding as the Accommodation Supplement disappears, and too few state houses are available to take their place.

"It would force people to live in towns where they have little or no chance of finding work just to take advantage of the cheap state houses - increasing inter-generational dependence on the state.

"It would mean substandard state housing could not be removed and replaced.

"It would mean too few houses available for those in urgent need.

"It would do nothing to address the social problems that exist right now in our vast state housing areas. And, it is a recipe for a repeat of the state housing failures of the past.

"As a package Alliance's policy is socially and fiscally irresponsible, grossly unfair, and ideological," said the Ministers.

ENDS

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