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

 

The facts about the Accommodation Supplement

The Child Poverty Action Group (CPAG) has called for Government to remove the Accommodation Supplement (AS) and significantly raise the incomes of all benefit recipients and low-wage workers.

“CPAG claims that the AS keeps rental prices high however their own report disproves this” said Andrew King, Executive Officer of the NZ Property Investors’ Federation (NZPIF).

The report shows that private tenants pay 25% to 30% of the relevant benefit towards rent and the AS only covers 70% of any additional cost above this, up to a maximum ceiling. This design prevents landlords from simply being able to raise rents as the CPAG claims, because the tenant still has to find 30% of the increase and 100% of any rent above the maximum.

Maximum rates were increased in April 2018, which caused an increase in the AS from $1.2b to $1.5b. While many people believe that the AS is paid directly to landlords, this is not the case. While the AS increased 25% in the year to April 2019, rental prices only increased by 4.6%. This was also at a time of large cost increases and new regulations.

If, as the CPAG claims, the AS drives up rental prices, why did rental prices not increase more when the AS limits were raised?

The report claims that “in a period of cynical neglect of the AS between 20005 and 2018, there was no change to the maximum rates”. However rental prices increased during this time, suggesting that the AS doesn’t have any impact on rental prices.

The report wants a significant increase in state house building so people can move from private rentals into publicly funded houses. This would mean an increase in the Income Related Rent payments, which is the equivalent of the AS for state house tenants.



The report also says that by the year 2021, the AS will increase to $1.5b while the Income Related Rent subsidy will increase to $1.3b.

The AS provides assistance for around 290,000 households (an average $5,170 per household), while the Income Related Rent subsidy assists around 70,000 state tenants (an average of $18,570 per household). Do we really want to move people out of private rentals?

While the CPAG claims that rental property providers are getting wealthy from the AS, their proposal to wipe it will cost an extra $3.5b of tax payer funds per year in increased benefits. If it is such a poor use of Government funds, why are state house subsidies rising at a faster rate than the AS and why will it cost an extra $3.5b in Government funds to remove it?

“This is a poorly thought out proposal that is not in the best interests of tenants or tax payers” said King.


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

SCOOP COVERAGE: CHRISTCHURCH MOSQUES TERROR ATTACK


"Clumsy Response To A Serious Issue": Treasury Head Was "Unreasonable" On Budget Breach

Outgoing Treasury secretary Gabriel Makhlouf was "clumsy", unreasonable and fell "well short" of expectations in his handling of the Budget data breach, a government report has found.

The State Services Commission report was ordered in the fallout of Mr Makhlouf claiming Treasury's website had been "deliberately and systematically hacked" and referring the matter to police...

The Commission's report - released today - said Mr Makhlouf did not act reasonably in his use of the word "hacked" or his subsequent explanations to media. More>>

 
 

Principals Reject Offer: Primary Teachers Vote For Settlement

Primary teachers have voted to ratify a proposed settlement that will give them pay parity with their secondary colleagues, but disappointed primary principals have rejected a settlement that was unchanged from a previously rejected offer. More>>

ALSO:

Pike River: Weeks Of Work Before Team Gets Beyond 170 Metres

No items of interest have been found in the latest forensic search of the tunnel between 30 and 170 metres, however, both the police and the Pike River Recovery Agency say it has been useful. More>>

ALSO:

Remaking Elections: Call For Four-Year Term, More MPs

A Victoria University report is proposing extending the parliamentary term to four years, and increasing the number of MPs, so politicians can plan better for the future. More>>

ALSO:

Health: Ban On Smoking In Cars With Children Passes First Reading

The Smoke-free Environments Amendment Bill would allow police to issue $50 fines for those smoking with passengers under 18 years of age. More>>

ALSO:

Fair Pay Agreements Good: CTU Releases Report On Sector Bargaining

The Council of Trade Unions has released an independent report conducted by economic research company BERL into the validity of sector bargaining. More>>

ALSO:

Goldsmith New National Finance Spokesperson: Amy Adams To Leave Politics In 2020

Amy Adams has announced she will retire from politics at the 2020 election and as a consequence of that decision she has chosen to stand down from the spokesperson roles she holds in the Party. More>>

ALSO:

Gordon Campbell: On The Government's Cosmetic Banking Reforms

The elephant in the room as the government carries out its latest bout of tinkerings with our banking practice is the extraordinary level of profit-taking still being extracted by the Australian Banking Gang from ordinary New Zealanders. Yes indeed, ... More>>

ALSO:

IPCA: Offensive Language, Misuse Of Pepper Spray

The Independent Police Conduct Authority has found that, following a pursuit in Auckland, a man was dealt with inappropriately and unprofessionally by a Police officer during his arrest. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels