Home > Dollars & Sense, Social Issues > Can we do it? Bloody oath we can!

Can we do it? Bloody oath we can!

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STATE HOUSE RESIDENTS MOVED

Meanwhile, almost 400 tenants have been kicked out of state houses in the last three years.

Housing Minister Phil Heatley said 241 tenancies were ended in the last year.

Tenancies were ended because people had failed to inform Housing New Zealand about income from employment, business interests, assets, that they lived with a partner of sublet the house.

Since July 2010, 119 tenants were successfully prosecuted for fraud.

Housing New Zealand has also identified $6.6 million from the last 12 months that is owed to the Crown, largely for overpaid rent subsidies.

“The state housing system is designed to help people in their time of need. It’s unfair and unacceptable for people to abuse the system and commit fraud to get benefits they are not entitled to. People who deliberately rip-off the system deprive families in real need,” Heatley said.

The houses were now freed up for those with genuine need, he said.

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On most levels, the mis-use of State assets (ie; owned by us, the People)  is a rort that cannot and should not be tolerated.  Housing Minister, Phil Heatley is correct when he reminds us that,

“The state housing system is designed to help people in their time of need. It’s unfair and unacceptable for people to abuse the system and commit fraud to get benefits they are not entitled to. People who deliberately rip-off the system deprive families in real need.”

Although I note that Mr Heatley’s admonitions did not stop certain Ministers of the Crown from ripping of the tax-payer, when it suited them…

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And similar cases where Members of Parliament used their accomodation allowance in ways in was not intended…

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Defence Minister Wayne Mapp said his previous apartment had been very small and was not suitable for him and his wife, now he was spending more time in Wellington as a minister.

He confirmed the apartment was owned by his superannuation trust and was rented to National MP Bakshi Singh, for $400 a week.

As an MP Mr Singh can claim up to $24,000 year in accommodation costs from Parliamentary Service.

Dr Mapp also collected around $700 a week for his new larger apartment and said he could see why his rental income should be used to offset his expense claims.

“I can see why people have concerns and the review will deal with that,’ Dr Mapp said.

Housing Minister Phil Heatley also said he was renting out his old apartment and claiming a $1000 a week in accommodation expenses in a larger home to accommodate his wife and young children.

Mr Heatley would not say whether this was rented to an MP.  – Source

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It seems that rules are different for some folk.

The shortage of state housing is a serious matter, though. This critical problem of decent, affordable housing is not helped by the fact that the Fourth National government (1996-1999) sold around 13,000 State Houses in the 1990s.  These properties were supposedly made available to tenants – but actually went mostly to property speculators (who later sold them for tax-free capital gains).

When Labour was elected to power in November 1999, they immediatly placed a moratorium on the sale of state housing. According to HNZ, they currently ” own or manage more than 66,000 properties throughout the country, including about 1,500 homes used by community groups”

This government has re-instated the sale of state houses.  It does not take rocket science to work out that selling of state housing reduces the availability of housing stock.   Housing Minister Phil Heatley said that,

“… about 40,000 of the 69,000 state house stock will be available for sale,”  but then added,  “that the vast majority of tenants do not earn enough to be required to pay market rent means relatively few will be in a position to buy“. (Source.)

There seems to be nothing stopping tenants from buying their state house and immediatly on-selling it to a Third Party.

Is it any wonder that the shortage of state housing is not being addressed in any meaningful way? It certainly does help those on the current waiting list (as of 30 June);

  • 402 were Priority Eligible — A
  • 3,352 were Priority Eligible — B

Plus a further 5,132 in categories “C” and “D”.

Problem:  there are currently 8,886 people on the HNZ waiting-list.

Solution: build more houses.

This may seem like a ‘flippant’ answer to a desperate problem – but it is not.

The building of 10,000 new state houses may seem an outrageously expensive idea.  But it would address at least three pressing problems in our economy and society;

1. Persistantly high unemployment.

2. Low growth.

3. Inadequate housing for the poorest of our fellow New Zealanders.

At an average housing cost of $257,085 (calculated at DBH website @ $1,773/m for a 145 square metre, small house), the cost (excluding land) is $2.57 billion dollars,  including GST (approximate estimate).

By contrast, the October 2010 tax cuts gave $2.5 billion to the top 10% of income earners.

For roughly the cost of last year’s tax cuts, we could have embarked on a crash building-programme to construct ten thousand new dwellings in this country. The immediate effects would have been profound for the building industry and would have created work for;

  • architects
  • builders
  • glaziers
  • roofers
  • electricians
  • plumbers
  • drain layers
  • painters
  • plasterers
  • tilers
  • landscapers
  • bricklayers
  • concreting contractors
  • insulation installers
  • home-heating installers
  • carpet layers
  • etc, etc.

Work would flow through to associated contractors;

  • truck drivers
  • building waste disposal

Turnover would increase for timber and framing suppliers as well as other building supplies outlets.

In turn, those in the building and associated industries would enjoy massive increase in demand for their products.

And equally important, those on the unemployment queue would suddenly be in high demand, as we needed to train more tradespeople. Which would mean a flow-on effect to polytechnics as they suddenly needed to train hundreds more tradespeople.

A further flow-on effect would impact positively on service industries, as money flowed into the economy, into supermarkets; entertainment; clothing; and elsewhere into the retail sector. As Bill Kaye-Blake of  NZIER, said in April of this year;

The economy is sluggish because people are not spending.

It would be a boom-time, as two and a half billion dollars was spent on products and services.

Would it actually end up costing taxpayers $2.57 billion dollars? The answer is ‘no’.  Government would actually re-coup much of that initial outlay through;

  • gst
  • paye
  • other taxes
  • reduced spending on welfare for unemployed
  • and investment re-couped by rent paid for new rentals

Would it work?

Yes, it would.  An NZIER survey expects a strong pick-up in 2013 when the rebuilding phase hits full-flight, with 3.9% annual growth predicted from a previous forecast of 2.6%.

The government has a strong role to play in tough economic times. A “hands off” approach will achieve nothing except unnecessarily drawing out an already painful recession, and prompting more frustrated  New Zealanders to “cross the Ditch” to Australia, where their government has announced a  programme aimed at 500,000 new jobs.

There is no reason why a determined government cannot adopt a bold programme for economic growth.

Instead of borrowing to pay for tax cuts we can ill afford, we should be investing in jobs.  The rest will almost invariably take care of itself.

We have the resources. We have the money. We have the demand for new housing. What else is missing?

The will to do it.

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Updates

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Fletcher shares at 2-year low after warning

Wellington rental market tough for tenants

Major housing shortage looms

Business NZ sees no economic plan

Downturn in building sector ideal timing for state house build

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  1. Who Gnu
    8 August 2011 at 12:05 pm

    If Key had followed your simple premise, Frank, we’d have lower unemployment, a more vibrant economy, and no housing crisis. I don’t know who is stupider; the Nats for failing to take up such an idea, or those people who voted for such a visionless government

  2. Priss
    12 August 2011 at 8:20 am

    This is the sort of meaningful job creation the government should be looking at. Not Key’s idiotic national cycleway. This will not end well.

  3. Red
    12 August 2011 at 1:51 pm

    It makes total sense to build more housing. Otherwise, a shortage leads to house price increases, inflation, and higher interest rates. It beggars belief that National doesn’t understand this.

  4. 1 August 2012 at 12:29 am

    Engineers would benefit as would local bodies. But the greatest benefits would be social cohesion.

    Home ownership/long term rental have a highly positive effect on communities with a greater sense of ownership and belonging, engagement with society and reduction in crime.

    • 14 November 2012 at 4:34 pm

      “But the greatest benefits would be social cohesion.”

      Absolutely, 100% spot on, Ropata. With social cohesion comes a sense of community, and children’s attendance at their local schools.

      Everything about this issue would give New Zealand society very real benefits.

  5. Sue Mouse
    2 August 2012 at 12:30 am

    Ropata –

    +1

  6. Expat in Aussie
    28 October 2012 at 6:29 pm

    If National wants to gut the construction industry, they’re going the right way about it. This is why I headed off to Melbourne, more opportunities.

  7. Tauranga Expat in Darwin
    29 October 2012 at 6:25 pm

    Ditto Expat in Aussie.

    Key makes a lot of noise about aspiration and job creation but they’ve done precious little of that.

    Plenty of jobs here in Darwin!!

    Last one out of NZ flick the light-switch off!

  8. Unemployed Tradey
    16 November 2012 at 3:13 pm

    A building plan like you describe would be a big help in the industry. The company I worked for laid everyone off and then the boss headed off to Australia. I voted National last time because they are supposed to be pro-business. They may be pro-business but they aren’t pro-jobs.

    Key is so fucking rich he doesn’t know what the rest of us have to go through every day of the year. Probably has no idea what it’s like to pay a mortgage and try to put food on the table and try to find the cash to pay for the kids school fees. I thought education was supposed to be free in this country? What happened to that? Well I guess I deserve it for voting for him last year.

    If I’m still here in New Zealand, I’ll vote Labour or NZ First next time around.

  9. Theodore
    12 March 2014 at 12:01 am

    Just read your blogpost, Frank. Well reasoned. The impact of the Christchurch rebuild on our economy proves that a house-building programme would have generated immense benefits. Far better than the tax cuts. But that would have meant “interfering with the market” and the Nats have an aversion to that kind of proactive policy.

    We could have created jobs and more much needed housing but instead we got Key throwing money at movie studios and smelters. Crazy!

  10. Kay Tee
    18 March 2014 at 12:02 am

    Isn’t it tragic. This government can throw $30 million at Rio Tinto, and give big tax subsidies to Warner Bros, but can’t (won’t) find the money to build state houses for the poorest families in Aotearoa!!

    Shame on you, John Key, shame!

  11. 24 July 2014 at 3:41 pm

    Very prescient blogpost Frank. Three years later, as the housing shortage becomes a crisis, we can finally see where National’s policies (or lack thereof) have led us.

  1. 5 November 2011 at 10:51 am
  2. 29 November 2011 at 1:33 pm
  3. 19 November 2012 at 11:41 pm
  4. 9 January 2013 at 5:37 pm
  5. 25 July 2013 at 3:41 pm
  6. 13 December 2013 at 7:10 am
  7. 20 December 2013 at 8:01 am
  8. 8 May 2014 at 6:34 am
  9. 16 May 2014 at 8:00 am
  10. 24 May 2014 at 12:08 pm

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