Labour follows Greens in attacking 'landlord subsidy' Accommodation Supplement; ACT claims Labour attacking landlords, wants more land supply

Labour follows Greens in attacking 'landlord subsidy' Accommodation Supplement; ACT claims Labour attacking landlords, wants more land supply

The Green Party's call for the government to scrap a rent subsidy is getting further traction in Parliament, with Labour now calling for some Accommodation Supplement funding to be diverted to other housing affordability programmes.

And the ACT Party has also got in on the action, accusing Labour of attacking landlords and not understanding the "real problem" behind housing affordability - a lack of land supply for new residential housing, according to its leader John Banks.

Green Party co-leader Metiria Turei last year attacked the Accommodation Supplement - a government payment to people deemed unable to fully afford board, rent or mortgage costs - as a "subsidy for landlords." See: Accommodation Supplement: Landlord subsidy punching a big hole in govt books due to unaffordable housing, or an essential benefit?

Turei called on the government to wean people off the supplement by investing in a large-scale state house building programme and require action from the private and community sectors to help increase the supply of affordable housing.

A government housing advisory group warned in 2010 the Supplement might cost the government NZ$2.2 billion a year by 2016, almost double the official Treasury projections, up from NZ$1.197 billion in the year to June 30, 2011.

Labour gets in on the act

The Dominion Post on Monday reported Labour housing spokeswoman Annette King calling for an "urgent look" at the Supplement. Labour contested the 2011 election with a policy to "review the Accommodation Supplement and its effectiveness in improving affordability and housing outcomes."

"It is a major subsidy for landlords but it hasn't produced better housing or more access to housing or an ability for people to buy housing," the Dominion Post reported King saying.

"If we just let it keep growing year after year as more and more people struggle to pay rent, then we are doing nothing in terms of changing the ability to house people and it's time that we had a highly focused look at how do you turn that into something that is a whole lot better," she said.

"I think we need to take a hard look at how we could turn some of that accommodation supplement into providing affordable, decent, warm housing and how we could turn some of it into people being able to own their own housing."

ACT gets in on Labour

ACT leader John Banks said King's "attack on landlords" showed "a lack of understanding about the real problem behind housing affordability."

"Ms King was today reported as saying that the rental subsidy being given to low income tenants was simply being ‘pocketed’ by landlords and hadn’t resulted in better housing, more access to housing, or the ability for people to buy housing," Banks said.

“The real problem is not the subsidy, it is a result of a lack of land supply for residential housing which is pushing up house prices and therefore pushing up rents for all tenants,” he said.

“Increases in the cost of housing means that home owners have less money to invest in doing up their properties once mortgage payments, insurance and rates have been taken care of. Rather than beating up on landlords, Labour would be better to focus on improving the overall supply of housing. ACT has long argued that the biggest roadblock to increasing housing supply is the regulations that control the supply of land."

“In its report on Housing Affordability, the Productivity Commission found that over the past 20 years, the cost of a section has grown far more quickly than house prices, which indicates that ‘appreciating land prices have been a key driver of house price inflation in New Zealand.’

“This problem has been exacerbated in Auckland, with the price of land now accounting for 60 per cent of the total house price as compared to 40 per cent for the rest of the country," Banks said.

“It is the policy and planning practices of local and central government through legislation like the RMA that has created artificial barriers restricting the supply of land. ACT would undertake a dramatic reform of the RMA to ensure this problem is addressed," he said.

“If New Zealand is going to house another generation, whether in owner-occupied property or rental accommodation, the key is not to beat up on landlords but to get the regulatory environment right so that more land is made available for homes to be built.”

The latest skirmish on housing affordability followed a discussion about affordabillity on TVNZ's Q&A programme on Sunday. See the video above.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Scrap the subsidy!  It makes no difference to what prime central area properties rent for.  What it will do is get the riff raff out of good areas!
 
In smaller towns and less desirable areas the supplement is tiny anyway and makes little difference.
 
King's dingbat comments perfectly epitomise the view of Milton Friedman in the doco on today's top ten.
 
If you want a free market, we must at the same time bring back market rents for state houses so that there isn't a huge disparity between private and public rentals.
 
Rent subsidies make it too easy for people to sit on their bums and bludge their life from the taxpayer. 
 
Less handouts -> make the bumsitters more productive (or move somewhere else!).

So what exactly do you produce that makes you valuable to the community?

I produce buildings and houses for people to live and work in.  I employ contractors, consultants etc to build and repair buildings.  I pay taxes (the minimal amount possible!)  I plant trees on bits of land.  All that amongst all of the normal stuff, together with a few other side interests and a bit of moaning on a website!

From what have said here somebody else actually produces the houses you invest in, you just ride their coat tails.
 
If you have used interest at any time to accumulate your investments then you are a beneficiary of the productive work that others do. You are possibly a bigger liability to the community than the beneficiaries you so readily condemn.
 
How many working people does it take to support an unemployed person vs how many working people to support the average property investor would be an interesting study.

I build and develop property as well as invest.
 
Your idea on interest is rather strange, but as an investor I pay interest (to banks) rather than receive it.  I charge rents not interest and those rents are fair prices for the product I'm selling.

No your tenants (& the rest of society) pay your interest, otherwise you wouldn't be doing it all would you? Just be very clear that profits from interest(captial gain included) is unearned income, you are beneficiary of those that create geniune earnings within the productive side economy.

I don't think so. 
 
If I buy a vacant bit of land, pay other people to build on it.  Never sell it.  Then I've taken money from no one.  If I charge less than market rates for the rent (which I generally do), then I've actually given someone a discount to what they would paid had I not been involved.
 
So how is that unproductive?

In answer I will quote Tony Gibson, head of National party policy: "Nothing happens unless somebody makes something". 
 
That something does of course mean something that can be traded, houses don't count. Unless you, that is you physically, make something then you are a beneficiary of those that do. 

Well if it isn't true then what really defines a beneficiary? Make would include "grow' btw, as I point out below the 200k or so people that support all the rest in this country. 
 
Bashing beneficiaries is a bit rich coming from some quarters considering their behaviour and I can't let it go unchallenged. But yes I can accept where I personally am non productive. I have spent half my working life in the service of the greater community and am proud to have done so, but I can't kid myself that this was productive either.
 
You know what I am working on, so will pay back what I have accrued multiple times. Based on the average person spending 2 hours per week processing over winter the potential is there to save the labour of 15,000 people, or possibly even 3-4 time that. Probably worthwhile that I borrow their time for a short period don't you think?

You make some good points. The term beneficiary is actually incorrectly applied, but the comparison I make is still valid:-)
 
My community work was salaried BTW. That is what I mean by non productive despite being paid. Some would see them(more than one type) as essential, I am not so convinced myself and still see that sort of work as being a beneficiary in the same sort of way a Politician is.

Scarfie,
I rent out self storage units to  a number of businesses and a smal retail shop.
They pay me rent.
None of them get a accomodation benefit to rent out my properties.
They rent the self stoarge units for between three months and two years.
Do you seriuously belive these people should buy a unit for the three months while there new home is being build, or the horticultural contractor that stores his gear between seasons.
So do you view me as a beneficary the same way as someone in residential investment?
PS I take offence to being a beneficary: in the 28 years since I left school I have never been out of a job, never claimed any kind of benefit and never got a tax refund even with my property investments as they have always made a taxable profit.
Can you claim the same?
 
 

You don't get it do you, read my posts again if you need to get yourself out of the delusion that you are not a beneficiary. You benefit from the customers of the business you rent to, customers that actually produce something that is. Depending on what actually productive activity you have undertaken in your working life, the tax you have paid is like insufficient to offset the benefits that have accrued to you from those people that do real work. New Zealand has had a deficit for 40 years don't forget, which means some of those who work to support your lifestyle are not even in this country.
 
If you really want to analyse this fully then every time you sit down to a meal, track the supply chain back to the grower. The grower is the bottom line productive worker and all else are beneficiaries, New Zealand probably only has 200K people that support the rest.

So the guy that leases tractors or trucks in the peak season to enable crops to be harvested and taken to manufacturing plants are beneficaries as well?
What about the land owners who have unproductive blocks of land that lease these out to farmers or other entities who through economies of scale can make this land productive are they beneficaries as well?
So I get it!!!!!
The Maori Trust who leases the land (vineyard) next to where I live are beneficaries as they don't work the land themselves (but company which has leased land for 21 years and spent money on it is not). By the way the company employs local pepole and provides an income by lease payment to the trust.
The company simply can't afford to buy the land so they make best use of the capital they have. If they didn't lease the land I guess there would be a few sheep running in the paddocks but its far more ecomonic the way it is run now and from what I see everyone benefits.
 
 

Well surprising you haven't bashed the Maori in this scenario, because you probably should. Not because they are Maori but because they don't earn their keep. Have you ever read Iain Parker's work on Public Credit or Bust? Might be an eye opener for you.
 
Unearned income, tricky to get your head around the concept but why don't you give it a try. Tell me MM, did you every use borrowed money to invest in your commercial property? 
 
By the way the business about always having a job for 28 years is probably self centered and egotistical. Did you ever consider the jobs that might be available for your grandchildren or future generations. Even analysed the energy consumption of the work you have done? Do you expend energy derived from fossil fuels, energy that has been stored over millions of years that you have burnt off in a short few? Was it oil that was actually doing the work that you believe you were doing?
 
Just asking you think a bit deeper before you jump in and comment.

Well scarfie.  After exhibiting the chip on your shoulder and abusing a few others viewpoints it's time to front up.  What do you do exactly.  What is the exconomic basis of your living.  And what do you produce and contribute.
Genuinely interested to hear.

I am not sure if it is worth engaging with you if you really think it is a chip I am displaying. I think it is more a matter of bursting other peoples chips by breaking the issue down to some underlying facts.
 
I am careful not to post information that would lead to my identity, for reasons that others are not always trustworthy with that information. However I have engaged privately here with handful of posters, so my anonymity is not total.
 
I have at least been upfront about being the beneficiary of others work, the real question is can you display the same honesty? One of the qualities I do possess is to comprehend and accept information that comes my way that challenges my existing understanding and beliefs, then change my behaviour and attitudes to suit. Well I hope I do anyway and am always happy for someone to point out where I might be wrong. What about you KH, do you challenge your beliefs occassionally?

Scarfie.  I take that as a refusal to outline your work, income source and what you produce, even though you are happy to question the validity of what other people do.  You are welcome to refuse.   But ducking the question does utterly destroy the points you made.   Sharing that info does not lead to you being identified.

utterly destroy... Lol I don't think so. What is do is quite isolated from the points I make so I don't know why you are going down that line of thinking. Plenty of here attack me instead of my argument, don't make the same fallacious error because what that says is you are not capable. Anyhow what I have done is quite specific, and what I do is unique.

Weave and dodge scarfie.  Weave and dodge.

KH - in real terms (planet, impact, physics, biota) a person who does nothing, is better than someone who's activity is detrimental. Our 'get a job of work' attitude is stupid, i sustainability terms. You first have to ascertain the damage involved.
 
 

There would be less impact on the earth if you hold your breath, pdk!

But a hundred times less if you held yours.

I will not Maori bash and certianly won't take your advice to as well . They are doing the right thing by getting the best return for their land which is no different to anyone else.
You say they don't earn their keep (because they are land owners) but how did you earn your keep?
I am comfortable is saying I go off to an employer each day so I guess I dont earn my keep as well.
Yes I did borrow some money to buy the commercial properties but also put in my savings as well.
On the oil thing is there anyone who can claim they have not consumed any Oil or related products?
 
 
 
 
 
 

Unearned income Money Man, really take the time to understand that. Unless you made or produce something, or you trade something you have made for it, then you didn't earn it. The Maori Land Owners don't earn it either(nothing to do with being Maori). Usuary is a particularly nasty version of it, and I don't descriminate between those that receive interest and those that profit from it in other ways. If you are not physically doing it yourself, then you are a beneficiary of others doing it. We are all guilty of it to greater or lesser degrees it is what you do about it when you are enlightened that counts.

Are you saying unearnt income is bad or good because now I am confused.
If I work all my life making and selling widgets then I am okay but when I stop making widgets, sell my business then live off the interest then that is bad?
What am I suppose to do make widgets up to my 11.00 funeral?
 
 

Yep that is about it, although not quite. If you sold your business and bought enough supplies to last your retirement, no problem. Or if you made an excess of widgets in anticipation of retirement, then you could trade them for other stuff you need as you go. However by putting the money in the bank and earning interest, who pays the interest to you? Other people making widgets that is who, so you expect to take 5% of the widgets they make (or whatever amount) just so you can sit around and do nothing. You become a beneficiary from the labour of that other fella making widgets. Do you see? I am visual, so my semantics may not always be clear.
 
Unless you have been making widgets at some stage during your lifetime, then someone who has is actually been paying your way. Brings new meaning to the word beneficiary eh? If you have been making widgets at some point, then you were getting screwed over because in this system someone else was taking 5% (or so)of what you were making. Can't go on forever though and your grandkids are going to suffer for it. There is more to it than that, but one bite at a time ;-)
 
 

Scarfie, your understanding of economics is so fundamentally flawed I don't even know where to begin.  Perhaps the best place to start would be your lack of any concept of the importance of time in the eonomic process.  How can economic actors coordinate and run projects that may take years to produce a profit (and sometimes never do so)?  In order to so they need to borrow.

This brings up your second problem: your misconception of what borrowing involves.  When someone pays me interest (a concept you seem to really have it in for) I am not "stealing" from them as you seem to think.  What they are doing is compensating me for the privilege of using my money.  If they didn't, why would I lend it to them?  I would just keep the money myself. 
 
However, at a certain price (the interest rate), I am willing to temporarily forego my claim to the money in order to (hopefully) get back a larger amount in future.  In aggregate, interest rates reflects people's time preference: how much they value the present over the future and how much consumption they are prepared to forego in the present to enable a greater amount in the future.  This concept is called "saving".
 
Think of it this way: if I collect a bunch of sticks I could burn them straight away for warmth (consumption), or I could wait for a couple of weeks until I have collected enough wood to build a house, which will keep me warm permanently. 
 
However, I could give my saved sticks to Steve, who is much better at making houses than I am, so good he can sell them to other people for fish.  When he makes this profit he pays me some of the fish as "interest" on the saved sticks I lent him.  And while I await my loan reaching maturity I can rent one of the houses Steve built (maybe the owner likes fish).
 
While this example involves barter, the use of money as an intermediary doesn't change the underlying story of what is happening.  Instead of consuming the wood and being left with nothing, I saved the wood and loaned it to someone else who used it to build houses. 

You are all over the place here. How exactly does Steve profit from trading sticks for fish? Where does the "profit" orignate from? How did you stay warm or cook food since you gave all your firewood away? I could go on, but it is actually you that doesn't have a clue, did you bother to do a simple read this on unearned income before you spouted forth your drivel? Where under the qualities of money does it say that it should earn a profit simply for being money? It simply isn't necessary and actually ruins money.
 
Interest is a claim on future production, the production of others because you didn't earn it. A better scenario is this: You cut down all the trees on your property to get sticks, you then loan those sticks to your neighbour bearing interest. When your neighbour goes to pay you back he hasn't go any sticks to pay you with. See he had already chopped down all his sticks(as had all the neighbours) so he burned you sticks for cooking and heating. He has nothing to pay you with. That is the end game of interest, that is how Rome fell.

Hi Scarfie,
Going back to my third form ecomonics I was taught you need three things to produce a good or service (factors or production):
Land (raw materials)
Labour  (human imput)
Capital (plant machinary etc)
I am not sure how your theory relates to this as money fundementally is a means of exchange (if I need labour but have plenty of land and someone else has labour but no capital and the next person has Captal but no labour money can be used to exchange these three factors of production)
 

Okay I have tackled money as a medium of exchange on the other thread, hopefully to your satisfaction. To look at your land, labour and capital(actually previous labour in your context) then interest is a claim on the future of all of those. Say I lend you money to build something, you need to build more than you need to pay me the interest. Now if this process continues you end up with the thing that PDK often posts about, the exponential effect. If you keep growing(having kids that product stuff) then eventually you double the amount of resources you need, double the land, labour and raw materials. Keep the same rate of growth means you will double again in the same time period, except now you required 4 times the resources, double again you need 8 times etc. The earth simply can't support this and there are signs it has reached its zenith. The rate of growth of the worlds population peaked in 1961, a big warning bell for anyone listening. The future labour that supports interest is going to decline from this point on. That means deflation and negative interest. Agriculture relies on oil and water, both are finite and have likely peaked. Read up on the Australian and US Aquifers. Go to usgs.com and type in different minerals to see what reserves are left at current rates of consumption. Chromium is the worst at 18 years, Lead next at 19 years, Silver and Gold 20 years, Cadmium 28 years. Nickle, Zinc and Copper are all near the end. If you double growth again this times are halved until we run out.
 
There is plenty of reading to be had if you look. Not the TV or newspaper for news though, it is all someones agenda. Until you know the agenda then you will never know the truth. Plenty of links to good info comes via the forums here at interest.co PDK even has his own blog site, get in touch with him if you have questions. He even gives lectures on the topic.

Bingo,,,the message here is that Money (and interest) facilitates the matchup of the time requirements for each widget swap. Well done. Scarfie,,,ad time into your equations
 

You mean time from the future, along with future resources. All things the future has run out of the ability to pay, as per my answer to Money Man. When you go exponential it becomes a mathematical certainty. I haven't done the figures, but my pick is that people are now leaving the workforce faster than they are entering world wide, the labour pool is already in decline.

No thats not what I mean...sigh!

I know it is not what you mean, but you have not understood what I mean. Go and read the link Raf posted on the other thread, or just go to Sustento and look for the articles on interest there. You clowns think that interest is essential, but it isn't it is destructive. 

your offensive comment implies ignorance. I have never insulted you so I politly ask that you get carnal activities  under ceasars kingdom in an opposite direction.

Lol. Fair call.

Scarfie you seem to have been reading too many textbooks. Time to get out into the real world. You will find theory and practice are quite often two different things

Actually the telling is in the practice, and it is all the idiots that don't recognise the signs of destruction of this practice that are going to get a hard lesson. They already have in the US and Europe. I am not quoting graphs, I am quoting hard statistics. The inflection point on the world population graph in 1961, remember that because it is going to bite you one day.

I dont have time to school myself on what happened in 1961 - im far too busy being a self centred, egotistical beneficiary who is a liability to society.
Once ive finished doing that im going to pop round to my tenants and tell them their houses are being bulldozed because they (the houses) dont add any value to society.
That will fix things, right ?
 

Delusion and self certered are a part of egotistical, so you might be on to something there.

Ive figured it out
You're Steven in disguise arent you ?
Come on - fess up.

Scafie if you take your theory to the extreme and everyone was engaged in production who do you suppose will provide the services required to keep the production going? Who would provide the capital to start production without investors willing to risk capital? Whilst you maybe technically correct  it is   irrelevant as an economy needs service providers and investors to function.

Curious - "provide capital". Interesting (sorry)  comment. Was it borrowed? Levered off some hyped valuation? Most money is debt, always has been debt, and - as Scarfie points out - probably wasn't underwritten by anything real.
That a BB couple who had a house forever. They get a 'valuation' well in excess of the last. They ping a mortgage on their 'wealth', and 'invest' it. What, exactly, did they invest? The same house, nothing real was done, yet thew 'capital' mysteriously guarantees someone else can start up producing goods/services?
 
Spare me. What connection to the real planet's ability to support/deliver, does that process have?
 
An Economy, if it needs what you suggest, is a finite thing. It'll run into the physical limits blind.

Please explain exactly how if I own a bar of gold it is "borrowed capital"   In reality wherever  capital comes from it is still required to start production. No capital no business no goods produced.

I have seen some insightful comments on this forum from you, however this time you are way off the mark. 
 

"the wealth, whether in money or property, owned oremployed in business by an individual, firm, corporation, etc.

an accumulated stock of such wealth."

 

Above defintion from Dictionary.com 

 

 

Capital is capital there is no requirement for it to earn a return at any specific point in time. 

 

He didn't say 'earn' a return, you want something in return for parting with it. That something can be time.

 
PDK  If we accept your point that the BB borrows from an existing property to invest in a productive venture just where is the problem with that? My point is that most production requires capital at least initially and in my opinion there is nothing wrong with that scenario.
It could be argued that the BB in question is actually using a non productive asset ie the house to establish a productive asset a business.
Whether or not it helps or detracts from the planets ability to support is not relevant to the point scarfie was trying to make. 

You miss the point, methinks. Or at least, your take on it misses the point.
 
There are squillions of those folk, all expecting to bigger their return. To do so, the hacking into the planet must bigger, exponentially. It can't support that. Period. So someone will be out of pocket.
 
In a fair world, it would be the bank (it didn't supply anything real, nor ahything relative) and the BB's, who didn't have anything to 'loan'. The world isn't fair, and someone else may end up hoding the parcel when the music stops.
 
steadystate.org/wp-content/uploads/Daly_the_crisis.pdf
 
 

The different responses are interesting aren't they? Money Man has asked the right question and is hopefully on the right track to enlightenment, but KH and Curious just can make the mental leap. Tis that favourite of yours, congitive dissonance, at work. I was reading Hypertiger again in the weekend and he lays it on pretty thick :-)

Ain't it a puzzle. Sherwin clearly doesn't get it either, and you wouldn't call him an idiot. David Caygill I had on about it at a lecture, but he couldn't see it either. The regard him as smart.
 
Sigh......

Only one of the three is relevant.

Why does everyone assume that capital must be used to the detriment of the planet?
What about capital invested in new technologies whose aim is to provide more efficient use of resources?

Curious - even linear thinking can see the fault in that one!
 
Efficiencies only slow down the rate of use, but - Jevons Paradox - that just makes the consumption 'cheaper', so more do it. Even if you eliminated that, the slowing of a rate of consumption only extends the time-line.
 
And the capital expects a return on itself - which will be spent on some other goods/services. Thus adding to the growth problem.
 
Can you really not see that?

Actually you don't. The banks do! and then others (normally) your tenants provide yet more funding via your rip off rents so you can go to the bank AGAIN and borrow AGAIN someone elses money to fund your ego trip of a ponzi scheme imaginery wealth. YOU ARE societies 21st century parasite. You probably take the tenants accomodation supplement THUS making YOU the REAL beneficiary    

If I didn't build and renovate buildings then the money wouldn't be spent - I note when people like me slowed down after 2008 and the EQs - so did the economy.

Wow.  So when you, and the other Bob the Buliders, decided not to spend, the whole global economy nosedived.  You are so important.  How have we survived so long,.bereft of your magnificence?

Not the whole global economy, just New Zealand.  New Zealand's economy has revolved around buying and selling property to each other since the early 2000's.
The global economy has other issues that caused it's downfall.

How was the money generated that you borrowed and spent just like all the other PI's?  Your exports? lol
 
I'm pretty sure the 2008 bubble pooped due to no more credit for people like you funding ponzi schemes, atleast, it did in the rest of the world. Here in sleepy NZ we have a RBNZ who   are too gutless to popped the bubble because they are in the big 4 Aussie banks pocket 
Atleast try to feed your ego with facts

No, Chris is quite correct. Unfortunately the NZ economy has been running off interest fueled property 'investment' for a long time. Many sectors will take some time to be weined off this. BTW, this also indicates the the RBNZ can do very little about it, as I have pointed out to you elsewhere.
Exporting is not more noble in any way either. I do wonder if some here think that the greatest human ideal is just to participate in the great race to nowhere which is gradually stripping the planet. Surely the species can think of more enlightened ways to engage in the eventually pointless task of fighting entropy.

Wrong Mist. Without capital, most shelters were developed for most of out species' existence.
 
And wrong too, - the Accom Supp is just a rent-boost. A feed from the poor to the rich, alle same asset-sales.

Another wacky idea from the Greens...more state housing...we need less state housing.
It's good how ACT is arguing for rezoning of land, but they are ignoring (probably intentionally) the affect that high LVR lending has on affordability - it is a huge problem...some bank advertising at the moment is clearly targeting first home buyers to feed to the ponzi scheme....a mixture of rezoning and LVR controls is the right solution - and perhaps tax disincentives for investors.

I was involved in 90% Lending in late 1980's and early 1990's.
Can't recall anyone calling it a ponzi scheme then?

People like me were.
 
:)

Don't know about ponzi being used as a word - but do know any number of individuals who went bankrupt as a result of it.
 

You're right. I was calling it - so help me - unsustainable......

Which party created the Accomodation Supplement and when?

It was brought in by the Bolger Govt in its 1st term, at the same time state house market rents were also implemented.

thankyou. Ask the right question.......

the idea of the accommodation supplement was that if NZ was going to support people with housing there were other ways of doing it than by the single means of having them live in government built and owned houses.  (State Houses)
That particular idea seemed like a good one at the time to me.  But it since has just turned into a can of spagetti.  Awful.  Gone far beyond what anybody intended.

And the government then turned around and started its big sell off of state houses - which were promptly bought up by the private sector and then rented back to ex-government tenants at "market" rents supported by the taxpayer subsidy.  I recall the yuppies of the era buying up large in Porirua for example ... average family types who would never before have considered becoming landlords.  The beginning of leveraging the family home.  All the talk around the tea room was about slapping a bit of paint around, hanging new curtains and being in business :-). 
 
What the government accomplished was twofold:  it successfully transferred the aging assets (and debt) from public to private but more importantly they avoided the need to maintain/upgrade the 1940s/50s built accommodation to 1980/90s standards.   
 
No one writes front page of the Herald articles about private sector slum landlords, you see!
 
 
 
 
 
  

lol- the silence is deafening

the idea of the accommodation supplement was that if NZ was going to support people with housing there were other ways of doing it than by the single means of having them live in government built and owned houses.  (State Houses)
That particular idea seemed like a good one at the time to me.  But it since has just turned into a can of spagetti.  Awful.  Gone far beyond what anybody intended.

We have had the awful situation of earnings in real terms especially for middle and low, effectively decreasing over the last decade or two and housing prices going through the roof. Yup, accommodation supplement has added fuel to that, propping up rentals and purchase prices and masking to some degree the lack of income for people needing it.
It will still be needed for single parents as you now have to be a couple both earning a reasonable income to purchase anywhere but the boondocks, workwise.
There are a few other factors though, compliance costs, the whole leaky homes fiasco, immigrants with the ability to pay over the market prices for property, foreign landlords (a group we could get rid of in one fell swoop), neo-liberalist policies where jobs have been exported, public housing stock has been reduced, the "free market", supposed to be our saviour, yeah right". It's time once again for a social conscience and social action to right the whole situation again.

How bizarre! A situation where both the left and the right are both correct and suggesting useful measures to solve a real problem? 

Actually, the whole left/right thing is not as simple as it seems. There's also up and down. Go to www.politicalcompass.org and do the test. It is quite interesting

What the hell are you on about?

We all need to take a deep breath and stop beneficiary bashing. The banks are having a hard enough time without us constantly bashing them. It's not their fault they can't earn an honest living without subsidy.

The whole thing also goes to show the extent to which the property bubble has become NZ's version of the Common Agricultural Policy - both desperately need reform, but no one's got the cojones to challenge the vested interests in favour of retaining the status quo.

My understanding is the accom supplement is the trade off for not having billions of capital tied up in state housing stock.
Does anybody out there know the value of state housing stock sold off by successive govts since the program began ? 

Should ACT be arguing with anybody about anything at all, aside from being National's Ace in the hole also known as the B team, their only claim to fame to this point in time has been proving while you may not need to be stupid to vote in Epsom  it certainly helps.
Historical highlights so far for the ACT Party
Made the quarter finals of Dancing with the Stars 
Completed the harbour swim and lost a small man in the process.
Succeeded in having a Former Reserve Bank Govenor shoot himself in the foot, shortly followed by shooting himself in the head......( see dictionary for Gullibility and Naivety)
Enlisted the services of  a former and present National Party member to pose as the New Leader while still being on the run from Simon Weisenthal.
Had a cup of tea in public with the Boss  while stirring more than his drink  and sneering at the peasants.
Denied an underwriter his allegiance as the cock crowed thrice, without admitting dementia.
Forgets passages of time due to helicopter propeller noise emissions.
 
And they are arguing with someone you say...?
 

Basically you get what you pay for.  Without the accommodation supplement, many poorer people would be forced to go into more substandard housing, which would become the new 'growth industry' in some cities, as they wouldn't have State housing as an option. Populism by the Greens and now possibly Labour to scrap the accommodation supplement sounds ok but there would be unintended consequences for those tenants affected.
I only have 1 rental (of a $300,000 property) which accommodates a solo-mum, who I might add is personally an excellent person to deal with, as basically it is easier to rent out the $400,000- $500,000 properties to people who are better off and have more desire for living in/looking after nice properties- as a valid generalisation they are a better class of tenant for a landlord ( although I realise it is not very PC to say that).
That's the reality.

Yet thats what builders and developers want to build as it gives them a better profit margin.
regards

I dont think that adds up,  for instanace you accept,
a) the argument that landlords charge the absolute maximum they can.... and it would be reasonable to assume this....every other business does, by and large.
b) from this the argument that a landlord will look at what they can charge for a house and as long as the margin left after the mortgage etc is reasonable wont care too much what the purchase price is as that rises / inflates "anyway" every other business does this as long as there is a profit, by and large.
c) The standard of housing whether sub-standard or not bears no relation in this argument as its all relative.  As an example you could have a $500,000 sub-standard house in say Auckland but a very good house in say Dunedin costing the same amount.
So removing the suppliment forces the tenants into cheaper accomodation in the short term, yes. Landlords with more expensive rentals then find that they have to drop their charges or sell the empty property...or drop prices to keep the tenant from moving out.
regards
 
 

Steven is 100% right here. Feeding money into the system by way of accommodation supplements only creates a temporary improvement for renters. Much like the first-home allowance in Oz. After a year or so a new equilibrium is found with landlords and you're back to suqare one with landlords getting more cash. On the flipside, removing all forms of housing assistance would mean some short term pain for renters, but landlords would either have to lower rents to keep occupied or sell up.
 
It's the same on the housing market front. Say tomorrow that maximum LVRs of 50% were mandated and borrowing for one property against another was disallowed. Interest rates could stay low. Initially, that would mean buyers find it tougher as few, if any would have the required deposit, but over time as necessity forced people to move out of their existing homes (due to circumstances changing, moving jobs etc) then the price for homes on the market would need to fall drastically.
 
At the moment with 95% LVRs and historic low interest rates, it's free money for all. the 95%LVR + Kiwisaver + Welcome home loans + Kiwisaver grants means effective "no money down" for a great deal of first home buyers. Your housing budget is now dictated by your ability to service a mortgage on a house.... which is easy at 5% for most people. Hence dollars being pumped in at millions-per-minute, and home-owners riding the wave that creates. One shudders to think what happens when the merry-go-round stops!

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