5 December 2000

Housing Minister Mark Gosche obviously doesn't understand how the abatement rate will work under his Income Related Rents policy, National's Housing spokesperson Tony Ryall said today.

"When questioned in Parliament today Mr Gosche confirmed that the housing abatement rate will rise to 50 cents but he again ignored the additional claw-backs such as Family Support and additional taxation, all of which add up to 91.2 cents in the dollar.

"A 91% abatement rate will act as a huge disincentive for people to get out and find employment. Mr Gosche believes that State house tenants want this policy to work. I'm sure they do but they will soon be put off trying to find a job when 91% of their extra income goes back to the Government.

"If Mr Gosche doesn't understand his own policy he should listen to Susan St John, the People's Centre or the Ministry of Social Policy all of whom have warned that a high abatement rate will act as a disincentive for State House tenants to improve their circumstances.

"The Income Related Rents policy is nothing more than a poverty trap - with a waiting list of thousands," Mr Ryall said.

Ends

Note: Housing New Zealand and the Ministry of Housing appear before the Social Service Select Committee from 10am tomorrow in room 11.03, Bowen House. National MPs will be questioning officials about waiting lists, the abatement regime and other matters of interest. Media are encouraged to attend.

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