Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Accommodation supplement based on 2005 housing market

Accommodation supplement decision based on 2005 housing market and outlier research

4 JULY 2017
FOR IMMEDIATE RELEASE

The accommodation supplement increase in Budget 2017 was based on research findings that differ from every other major economic research report on the subject of landlords absorbing increases in accommodation supplements through higher rents. In addition, the single study relied upon was based on the Auckland housing market in 2005 – a completely different beast to the housing market today.

Prior to the ‘Family Incomes Package’ in Budget 2017, the Government received advice from the Ministry of Social Development as to whether landlords would capture the accommodation supplement increase through higher rents. The research showed that a 2005 increase in the accommodation supplement had a negligible effect on rent (i.e. landlords did not hike prices to capture the increase in demand).

Mac Mckenna, an economist at the Taxpayers’ Union, says, “The single piece of research the Government has relied upon is a total outlier. Its conclusion differs from almost every other piece of research in this area – including advice from New Zealand Treasury.

“The literature on this topic suggests 30-78% of the increase in housing subsidy will be captured through higher rents - as the report's author, Dean Hyslop, points out. Yet this research, which led to the Government undoubtedly increasing the accommodation supplement in Budget 2017, concludes rents only increase by 2%.”

“Perhaps what is more concerning than the outlier results is that the data is based on the 2005 Auckland housing market. Nobody would dispute that the housing market is very different today than it was twelve years ago. As Eric Crampton from the New Zealand Initiative points out, the median house price to median income ratio was six to one in 2005. Today, it is approximately ten to one. So extrapolating results based on 2005 data is very questionable.”

“Only time will tell whether the increase in the accommodation supplement will add fuel to the housing market fire. But a responsible Government would do more to cut the RMA and other regulatory taxes which are choking housing supply.”

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Turei To Be Interviewed By MSD: Gordon Campbell On The Real Truth Deficit In Welfare

It has been astonishing to see the amount of time and energy being spent on what Greens co-leader Metiria Turei did or didn’t do properly as a beneficiary back in the early 1990s – as compared to how little time and energy is being put into the point of her personal example.

Turei was citing her case in order to query whether much has changed – especially when it comes down to whether the current benefit levels and targeting rules at WINZ are helping or hindering today’s beneficiaries to escape from poverty. More>>

 

Gordon Campbell: On The Bojo Visit

British Foreign Minister Boris Johnson is in town, just over a year since his political career peaked… and then wobbled off into a grey zone of indecision… Currently, Johnson is touring the former colonies, talking up the historical ties. More>>

ALSO:

Tertiary Ed: Government Responds To Productivity Commission

The work programme will focus on four key areas. • Creating a more student-centred system • Meeting the needs of industry through relevant, responsive, and supportive teaching • Improving performance across the system • Enabling and encouraging innovative new models and providers More>>

ALSO:

PM's Science Advisor: Youth Suicide In NZ Discussion Paper

The paper discusses the multiple factors involved in youth suicide and possible and evidence-based approaches to prevention. It points out the very different context in which young people now live their lives and the challenges of the transition from childhood to adulthood. More>>

ALSO:

Drug Deaths: Accurate Information Is Vital

Drug Foundation: The spike in hospital admissions and reported deaths in Auckland as a result of people taking unknown substances is not being helped by an information vacuum. More>>

ALSO:

Backing Dunne & Seymour: National Signals Election Intentions

“We are encouraging National supporters to give their electorate vote to ACT candidate, David Seymour, in Epsom, and United Future candidate, Peter Dunne, in Ohariu – and their party vote to National." More>>

ALSO:

Climate Policy: Govt's New Proposals For ETS

“Last year, as a result of stage one of the review, we announced the phase out of the one-for-two measure in the ETS. I am now announcing further changes as a result of stage two of the review.” More>>

ALSO:

PM's Press Conference: Boris, Infrastructure, Immigration, Drugs

Prime Minister Bill English opened this week's post-cabinet press conference by revisiting that day's announcement of 'Crown Infrastructure Partners'... More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election