ACT Housing Spokesman Dr Muriel Newman is calling on Minister Mark Gosche to instigate an inquiry into Housing New Zealand's processes for monitoring the use of its properties.

This follows allegations that two empty Housing NZ rental properties in the Palmerston North suburb of Highbury have been converted by the Mongrel Mob into a gymnasium and bar - and incredibly, a dog kennels.

"The mere fact Housing New Zealand couldn't immediately dismiss these allegations outright demonstrates lax monitoring processes.

"The Minister has allowed this situation to develop and now he needs to get to the heart of the problem quickly. At a time when waiting lists are soaring, when the needy are without homes, we see taxpayer-funded property turned into gang headquarters and tinny houses It must be stopped.

"I was very surprised to hear that Social Services Minister Steve Maharey and not Mr Gosche has been meeting with Housing New Zealand staff over the matter and wonder why this should be the case.

"If the Government doesn't trust Mr Gosche to handle his portfolios - and we've already seen evidence of that with him being removed from the Air New Zealand refinancing negotiations - then he should have the portfolios removed from him.

"Housing New Zealand is handling billions of dollars of taxpayer-funded property. Only a full inquiry will give the public confidence it is doing its job properly," Dr Newman said.

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