House plan may miss people on low income

18:21, May 11 2014

New Zealand's neediest could miss out on taxpayer-funded homes under a proposal being put forward by Work and Income, an expert says.

The Ministry of Social Development is considering applying an "investment" approach to social housing as Labour claims state housing stocks are expected to drop by more than 2000 in the coming decade.

A similar "investment" approach, taken from the insurance industry, has already been adopted for beneficiaries to help target groups that are expected to cost the state big money in future and push them into work quickly.

MSD, through Work and Income, took over assessing rent subsidies from Housing NZ this year, as part of a push to get more private players involved in social housing.

MSD investment approach general manager Damian Edwards said it was early days in the switch and adopting the investment approach for housing was far from a done deal.

But Victoria University public policy professor Jonathan Boston said while it was "perfectly reasonable" for the Government to seek independent advice, using an insurance model for housing would produce "perverse incentives".


If the Government was trying to minimise its long-term cost this could push them toward prioritising families and people in high incomes over lower incomes, undermining the whole purpose of state housing, he said.

"Those on higher incomes would be eligible for a smaller state subsidy, thus reducing public funding costs. Yet it is those on low incomes who have the greatest need for social housing."

The focus should instead be on the level of need in the community, he said.

Labour welfare spokeswoman Sue Moroney said the insurance model was not about providing support but limiting the Government risk.

"It's not a model for managing social services."

Figures compiled by Labour - using the Official Information Act requests and questions to the Government - show HNZ expected to have 2350 less houses in 10 years' time than they do now.

In March this year it had 65,546 properties nationwide. While most parts of New Zealand stand to lose state homes, Auckland stands to gain 2839, taking its total to 31,713. Poorer parts of the Wellington region - Lower and Upper Hutt, Masterton and Porirua - are all in for more state homes.

Housing NZ had become a "property management company owned by the tax payer" and was intentionally "running down" its housing stock Moroney said.

Housing Lobby spokeswoman Sue Henry said "investment" approach was the latest in a series of attacks on social housing tenants "right through the country".

Vulnerable people - including widows of servicemen, the disabled , elderly, and young families - were already being moved from state houses to rest homes or private providers, she said.

She believed MSD already had the policy in place.

"Why are they doing this when it is already well under way?"

Housing Minister Nick Smith last year introduced renewable tenancy for state housing and said up to 12,000 state tenants could be transferred to community groups and charities.

He wanted Housing NZ to provide less social housing.

The Dominion Post