Housing Minister Chris Bishop Photo: RNZ / Angus Dreaver
Housing Minister Chris Bishop has highlighted the Accommodation Supplement as a costly form of housing support, as the government reviews its programmes.
He says it is worth looking at how it interacts with income-related rent subsidies.
Bishop faced a grilling from MPs at the Social Services and Community select committee for 100 minutes as part of the first Scrutiny Week - a new item on the Parliamentary calendar providing for extended questioning of ministers over the government's spending.
Bishop announced the government was reviewing the wide variety of support programmes after Bill English delivered his review of housing agency Kāinga Ora.
Speaking to the committee, he listed housing supports delivered by the Ministry of Social Development, the Accommodation Supplement, income-related rent scheme, the Affordable Housing Fund, the three variants of the Progressive Home Ownership fund, Kiwibuild, and Land For Housing as examples.
"We have had a proliferation of different programmes built up over the last few years - not with ill intent, often programmes and projects started with good intention - but it has made the system extremely complicated to get a line of sight with what we're achieving with govenrment money," he said.
All up, the total support package was costing the government between $4b and $5b a year.
"The best way of thinking about it is we spend the equivalent of four Transmission Gully motorways every year on housing subsidies," he said. "Every dollar we spend on that stuff is a dollar we can't spend on the police and hospitals and education and all the other things that are very important."
Bishop said the government's review was focused on value for money, housing supply, and providing support to those who needed it.
"The housing system provides much needed support to people often in quite vulnerable and tricky circumstances, and it's not clear to me - I suppose from the outside looking in ... that the system always does a very good of doing that.
"So we are taking a good hard look at all those programmes."
He pointed to the discontinuation of the First Home Grant scheme as the first step in that process, and said the government stood by it. Advice suggested the scheme had brought forward people's ability to buy by about six months, he noted.
"Having it not there, does it make a big difference? No it doesn't. And it's an expensive programme for government."
The Accommodation Supplement had one of the biggest price tags of any of them, having doubled to about 380,000 people - about 20,000 of whom had a mortgage - it now cost about $2.3b a year.
"That's two Transmission Gully motorways just on Accommodation Supplement. I'm not saying we're going to cut it, it's a very important means of social support for a huge number of New Zealanders - but is it being used the most effective way, particularly as it relates to the way income related rent happens? I would argue it's worth having a look at that."
People staying in income-related rent subsidised housing pay a quarter of their income towards rent, with the government topping up the rest. However, benefits and allowances like Accommodation Supplement are included as part of someone's income.
"If you get a pay rise, or your circumstances render you ineligible - for a variety of reasons - for public housing, and you move into the private rental market, the cliff face on that ... is vast," Bishop said.
"The incentive is to stay in income-related rent subsidised housing.
"Actually what we should be aiming for - and this previous government identified rightly this problem, and the affordable housing fund I think was partly designed to sort this out or try to help that ... you want people to be able to leave social housing, which frees up a space for someone who might need it more."
He said one option was the government could provide a kind of graduated support, "that's more than the income related rent subsidy but is obviously less than other."
Labour's Kieran McAnulty also questioned about Bishop about his commitment to not carrying out a "mass sell off" of public homes.
"As presented when we came into government, Kāinga Ora was forecasting 10,200 sales over the forecast period. So we're not doing that, that would be a mass selloff of state houses, that would be a seventh of the Kāinga Ora stock. We're not doing that," Bishop said.
"That's nice to hear," McAnulty said, with a hint of sarcasm.
Bishop refused, however, to rule out a lower level of sales or transfer of social housing to community housing providers.
"Kāinga Ora sells houses right now. So, [if] they're in the wrong place, they don't need to own them in a particular locality, their land could be better utilised by someone else.
"I'm not going to rule out transferring state houses owned by Kāinga Ora currently to the Community Housing sector, where one of the recommendations of the Bill English review is that we consider that. We have not made decisions on that."
He said the government would always need to have a role in providing social housing, but it was still working on the right balance between government provision and community housing provision.
Despite repeated questioning from McAnulty, he did not rule out a transfer to providers on the same scale - about 10,000 homes - as the mass sell-off he spoke about earlier.
Watch the full select committee hearing: