Help for poor rests mainly on housing

By SIMON COLLINS

If you can get into a state house, this is the Budget you've been waiting for. But for other low-income people, the gains are slim.

The Budget caps last month's announcement of cheaper state house rents with a modest expansion of new state house building.

Superannuitants are also winners, thanks to last April's 6 per cent increase in pensions. And beneficiaries with the greatest needs are $5 a week better off.

But the Budget has not changed the basic welfare benefits, which have been fixed in inflation-adjusted terms since National cut them in 1991. Social Services Minister Steve Maharey says there are no plans for a real increase in this Government's term.

State house rents are being cut on December 1 from market rates to 25 per cent of tenants' incomes, for the two-thirds of tenants who earn less than the rates of national superannuation.

This means a family with two children, earning $400 gross a week and now paying the average rent for a three-bedroom house in Manukau City of $240 a week, will see their rent drop to just $94 a week.

Although they will lose the accommodation supplement, their net income after paying the rent will jump $45 a week from $297 to $342. However, the same family in a privately owned house will be no better off than before the election.

A spokeswoman for Housing Minister Mark Gosche says this will be fair because the criteria for getting into a state house will give preference to those most in need - people on low incomes and those who are discriminated against because of race, mental disability or other factors.

The Budget provides $411 million in the next three years to buy and build new state houses and to upgrade existing ones.

If all that money were spent on new houses, at a rough $200,000 apiece, that would fund about 2000 new houses, a modest increase on the present 59,000. In 1990, there were 70,000.

But a big chunk of the money is earmarked for bringing existing houses up to scratch. Officials say National planned to sell 10,000 more state houses this year and had allowed those houses to run down.

Some $21.6 million of the money has been allocated to community groups to build new houses in six "housing action zones" in Northland, Auckland and the East Coast.

Welfare groups believe a key change in the Budget is the decision to pay special benefits to beneficiaries whose expenses exceed their incomes, without the need for them to pay the first $5 of the excess.

Wellington People's Centre advocate Stephen Ruth believes that up to a third of all beneficiaries could qualify for special benefits if Work and Income New Zealand officials are told to pay them to all those in need. In contrast, the Budget assumes only a small increase in special benefit numbers, from 11,000 to 12,000.

Mr Ruth has high hopes that the Winz "culture" can be turned around after the Hunn report on the department is made public on Tuesday. There may be no more money, but people may be less scared to claim their entitlements.

Mr Maharey says Tuesday's Government response to the Hunn report will give Winz more flexibility to help people restructure their debts and pay for transport for a period after getting a job.

Budget 2000 feature

Minister's budget statement

Budget speech