Editorial: As cost of living rises Labour Government's popularity goes down

Prime Minister Jacinda Ardern. Photo / Mark Mitchell

Editorial

EDITORIAL

The long-bubbling plight of renters is one of a number of ongoing political problems for the Government that appears to be taking a toll on its popularity.

There's currently a pincer movement under way on renters' wallets - higher tenancy payments sweeping in from one side as heftier bills caused by rising inflation strike from the other.

If rents rise, there's less of the wage pie for essentials such as power, food, and fuel, which are costing more anyway with inflation at 6.9 per cent in the first quarter to the end of March.

It's indicative of how different stresses on people in different situations are merging into one mass headache, even amid more positive developments such as low unemployment, border reopening steps and the ongoing building programme.

Tuesday's Newshub-Reid Research poll showed a slump in Labour's support by 6.1 to 38.2 per cent.

National appears to be surfing a wave of disgruntlement with the country's direction, gaining 9.5 to 40.5 per cent. Christopher Luxon has been underwhelming while still finding his footing as National leader, but so far he is getting a pass from voters.

Pointing out that inflationary food and fuel price hikes, supply costs and restraints, worker shortages and wage demands, house prices and rental jumps are global problems doesn't appear to be working for the Government.

According to figures in April, the New Zealand median weekly rent was up 7 per cent annually to $575 per week in March. In Auckland, rents increased by 3 per cent annually to $610 per week.

Stats NZ figures in January showed levels for new tenancies nationwide increased by 5.8 per cent to the year ending December, 2021. When the whole market including existing rents was considered, the rise was 3.7 per cent. But there have been major regional variations.

There's a lot of demand for rentals with the general difficulties and costs of buying into housing.

The Government's $3.8 billion housing package announced a year ago has attempted to boost the pace and amount of house-building to target the problem of supply. Other changes included doubling the bright-line test, removing an interest deductibility loophole, and increasing caps for first home loan grants.

Last month, the Green Party argued for a temporary rent freeze until rent controls tied to inflation could be put in place. Co-leader James Shaw cited the six-month freeze two years ago as part of the Covid-19 pandemic response.

Pointing out that Auckland's rents had been relatively stable compared to other cities amid the house-building boom, Shaw said: "We can't let renters bear another six years of increases like we've seen in Wellington, Canterbury or Otago while supply is increased nationwide."

Housing issues are also on the minds of politicians elsewhere.

This week, British Prime Minister Boris Johnson borrowed a Thatcherite idea, ordering officials to develop plans to give people the right to buy homes they rent from housing associations at a discount.

Johnson happens to be facing local elections tomorrow in which the Conservatives are expected to lose hundreds of seats.

Another politician fighting an election, Australian Labor leader Anthony Albanese, included a section on housing at his party's official campaign launch on Sunday. Labor would establish a national housing supply and affordability council and a A$392m ($NZ432m) scheme to help 10,000 people to buy homes.

The Government here isn't facing an election this year, but the pressure is strong for new initiatives.