A Government plan to charge people for emergency housing like motels was derailed by Covid-19, but will now come into effect two days after the election
Dileepa Fonseka, Newsroom, 22 September 2020
For most of us the biggest event of the last two years was Covid-19, but for one South Auckland family it was a home renovation.
A family of seven (two adults and five children) have lived beside rodents, been shunted to different corners of Auckland, and had their belongings flooded out in a garage they used for storage – after their landlord of five years decided to renovate the property they lived in.
Mary* spends her days looking for houses, making applications for rentals, getting rejected then taking those seven-eight applications in to Work and Income at the end of the week – where she waits in line for three hours – so she can prove she hasn’t been able to find a house.
“Most of the time I’m stressing out here trying to deal with housing every week. Reporting and following everything they tell me to do to keep us here for my boys to have a roof.
“I don’t know how to do this … I don’t sleep at night. Even if I’m tired. I can sleep for three hours and I wake up and I feel like tired, but I just won’t sleep.”
The Green Party and The Opportunities Party have announced they will both support the introduction of rent caps which would limit the amount a landlord could increase rent.
At the Enough for All: Election Forum 2020 event in Wellington Central on Wednesday evening, a renter called Zoe told politicians about her renting experience in the capital city.
“In 2017, I moved into an eight-bedroom flat in central Wellington – nine of us lived there in order to make it affordable, and we shared a rent of $1600 per week,” she said.
“My rent for a room that could charitably be called a shoebox room was $205 a week which was more than half my income at the time.”
Affording the rent was stressful for Zoe and her flatmates – many had taken on one or more jobs while studying to cover it.
“It wasn’t an uncommon occurrence that me and my flatmates needed to often cover for our other flatmates because of the inability to pay rents on time.”
While they managed to make their payments every week, Zoe said their home was not warm or dry.
“In our first winter in the flat, I began to notice black mould on my ceiling.”
A month later, the roof in her room began to leak and later, pour, she said.
The flat was offered $200 in compensation.
Zoe said their rent was hiked up year after year – in 2018, it was $1700 per week and in 2019, it was put up to $1800.
To make rent affordable, 11 people were living in the property.
In February, the flat was told their rent was going up again by $200 – making it $2000 a week.
“Obviously we moved out because it was unaffordable and over that same period, my income and the same with my flatmates’ [income] had barely gone up.”
Renters needed action now, she told politicians.
“My question to you is: until the rental housing supply kicks up with demand, does your party support introducing rent caps to limit the amount by which landlords can raise rent?”
Ricardo Menéndez-March from the Green Party said it supported “to legislate to ensure secure and affordable long-term rental accommodation”.
“I do think we need to we need to make sure landlords are not ripping us off in the middle of a housing crisis.”
It was “absolutely unfair” for people to be spending most of their income on rent and “people here are going without because of high rents”.
National Party’s Nicola Willis acknowledged that there was a massive housing challenge in Wellington but the party would not support the introduction of rent caps.
“We have to increase the supply of housing that’s why we’re committing to replacing and appealing the Resource Management Act … we believe that kind of systemic reform gets to the nub of our housing issue which comes down to not enough houses to keep up with demand. When we solve that, then rents and house ownership become more affordable.”
Taylor Arneil from New Zealand First said it advocated for the building of more homes instead of introducing rent caps.
Labour Party’s Andrew Little said it did not support introducing rent caps.
“This Government has done a number of things. We have regulated what landlords can and cannot do or need to do in terms of quality of housing and many things are starting to kick in,” he said.
The Labour Party had inherited a housing crisis from the previous Government which had reduced the country’s state housing stock, he said.
The current Government had added to social housing, he said.
“There is more to do and Kiwibuild hasn’t been the success we would have hoped it might be, but we have built houses that are more affordable for more people, and we need to continue through things likes progressive home ownership schemes,” Little said.
The Opportunities Party leader Geoff Simmons said housing was the biggest issue facing New Zealand.
“To solve this problem we need to hold house prices and rents stable for another generation to allow our incomes to catch up,” Simmons said.
“So this is a massive, massive challenge – it is going to take lots of different actions to do that.”
Anna Mooney, spokeswoman for Renters United, a group that advocates for renters and has begun a petition for fair rent, said it was unfortunate “National, Labour and NZ First are offering no solutions to runaway rents other than increasing supply”.
“That will take decades, while renters fall deeper into hardship,” Mooney said.
“Renters United wants to see rent caps in which landlords cannot raise rent by more than inflation. This is the only way to stop rents from becoming more unaffordable.”
Campaign groups are trying to get issues around the welfare system, housing and poverty onto the election agenda. Alex Braae was in Wellington to see a deeply frustrating debate play out.
Many election forums give politicians plenty of room to speak about whatever they want. But at a forum on inequality, the onus was reversed, with candidates asked to account directly and specifically for how their party would help those with the least.
The Enough for All forum was held at Wellington’s St Peter’s Church, hosted by a range of poverty action groups and attended by representatives of five parties. With the nature of the discussion being heavy, the mood of the room was subdued compared to the rowdiness of many events that aim to make the election fun.
People who had lived experiences of coming up against the more difficult and punitive aspects of the welfare system first outlined their stories, before follow up questions were directed at particular politicians. The stories were personal, deeply involved and bleak, illustrating the way many experience government policy as something that’s done to them, rather than for them.
Over the course of the evening, it seemed to become a particularly frustrating room for NZ First’s Rongotai candidate Taylor Arneal and National’s education spokesperson Nicola Willis, who faced more follow-up challenges than other candidates on stage.
The event also illustrated the gap between Labour and the Greens. Labour’s Andrew Little was repeatedly questioned on his statements by the Green Party’s Ricardo Menendez March, particularly on issues of raising core benefit rates, and relationship rules for beneficiaries. His needling was never really responded to by Little, who also took the opportunity to direct some barbs to his right at NZ First’s representative.
The first question came after a demonstration of wealth owned through the slicing of a pavlova. A tiny slice was shaved off to represent the 2.5 million New Zealanders with the least. When a massive slab was given to the top 10%, candidates were asked if they supported the wealthiest paying more, with a wealth tax being an example of how that might happen.
Answers all had to start with a simple yes or no. Willis came out with a no, before speaking about how people had to pay their fair share and that a growing economy would lift all. Taylor was also a no, saying that IRD needed to be properly resourced to make that happen.
Menendez March, joining the meeting through Zoom, was the first yes on that question. He talked about both a wealth tax at the top 6% and how a tax-free threshold of $10,000 was necessary to rebalance the tax system.
Little talked about the party’s policy of a new top tax rate and called that a yes, but didn’t go near a wealth tax in his answer. Opportunities Party leader Geoff Simmons said the devil was in the detail and said rather than a blanket wealth tax, there needed to be a tax on property.
Despite the best efforts of the organisers to pin politicians down with yes or no answers, the slipperiness still showed through. An example of this came in a follow-up question from Stacey Ryan, who has spent years living with chronic pain, making her unable to work. She asked candidates if their party’s policies would force her into work, even if she was too sick to manage.
Each candidate began their answer in much the same way – no, nobody should be forced into work if they have an illness or disability that makes it impossible. However, as Ryan’s question made clear, the hoops that she has to jump through to remain on the sickness benefit (like being required to provide regular medical certificates at her own expense) makes that something of a moot point.
After each question, moderator Susie Ferguson asked the questioner whether they felt they had got an answer. “I got answers, but they weren’t necessarily the ones I was hoping for,” quipped questioner Zoe, who asked about extortionate prices for substandard rental housing.
And that rather summed up the state of the evening. Poverty remains endemic for thousands of New Zealanders, with the downturn from Covid-19 ensuring that many others will soon join them. Progress on alleviating poverty over the last three years has largely been piecemeal, focused on addressing specific facets of the existing welfare system rather any sort of systemic change. With house prices tipped to continue rising amid everything else falling apart, those with wealth will continue to get wealthier.
While the questions that were asked gave Menendez March room to discuss the party’s significantly more ambitious policies, he was hamstrung by the political realities of the Greens having weak polling and having little leverage over Labour. At one point during his pitch, he even noted that Labour had recently ruled out raising core benefit rates. It came in the context of asking for votes, but illustrated just how difficult even a stronger Green Party would find sweeping welfare reform as part of a Labour government.
Picking up on that, Ferguson took a moment to ask Little why so few of the Welfare Expert Advisory Group recommendations had been brought in, particularly on the raising of core benefits by 47%. “We could not do that in one fell swoop because it’s expensive and there are competing priorities,” he said. Nicola Willis agreed, saying “we simply can’t afford that as a country” and argued that incomes from benefits shouldn’t be too close to incomes from jobs in order to incentivise work.
Audience polling conducted over Zoom by Action Station showed that an overwhelming majority of watchers backed what the Greens were saying, with TOP coming in second place, and Labour in third. Not a single person watching online voted for National. Regardless, Willis thanked those who had questioned her for sharing their stories.
“Maybe take some of these stories and kōrero back to your teams,” said Ferguson in closing. But these stories weren’t really new. They were unique examples of what thousands of people have experienced for decades. With candidates sticking closely to their party lines, the biggest frustration of all was clear – that not enough would be done to prevent these same stories needing to be told all over again in three years.
Incomes are scheduled to be cut by up to $63 a week for many of New Zealand’s lowest-income households in less than a month, but Child Poverty Action Group (CPAG) and Auckland Action Against Poverty (AAAP) are both urging the Government to immediately raise family incomes instead, as an ongoing crisis-response measure.
Bryce Edwards, Democracy Project, 27 August 2020 https://democracyproject.nz/
Inequality and poverty look to be the forgotten issues of the election campaign, with not much more than lip-service being paid to them on the campaign trail. Yet decisions are currently being made that appear to be fuelling a greater gap between rich and poor.
Newsroom’s Bernard Hickey has tweeted this week to sum up how the Government has chosen to manage the Covid-19 health and economic crisis: “This Covid-19 response has all been about bailing out property owners, helping banks, propping up zombie small businesses, big grants and loans to well-connected big businesses and middle class welfare via special Covid dole to higher-paid jobless. Not a team of 5 million at all.”
OPINION: Whatever the shape of the next government it will need more revenue to deal with the multiple effects of Covid-19. One proposal has been to sell New Zealand residency to the mega rich. But that seems like selling our soul.
A net wealth tax, as now proposed by the Green Party has much more to commend it – although to be electorally acceptable it needs a higher level of exemption, affecting far fewer people.
White New Zealanders are much more likely to get a new, more generous welfare payment introduced in response to Covid-19.
The Government was warned that it was creating a “two-tier” welfare system which could potentially worsen racial inequality when it introduced the higher, tax-free, more accessible benefit in May.
The Covid Income Relief Payment (CIRP) of $490 a week was worth nearly twice as much as a single person’s unemployment benefit. Unlike most existing benefits, it was also available to people whose partners were earning – as long as that partner was making no more than $2000 a week.
When introduced, the Government said it was to “cushion the blow” for people who had an unexpected, sharp drop in income – but denied it was middle class welfare.
Welfare advocates said the policy gave the impression that long-term beneficiaries were less deserving than middle-class people who had just lost their jobs during the pandemic.
Maori households are over-represented in the long-term beneficiary category, and the National Party said that making the new benefit permanent could worsen racial inequality in the welfare system.
Ministry of Social Development (MSD) data released last week gives a snapshot of who has received the Covid Income Relief Payment so far. European New Zealanders (43 per cent) were claiming it at nearly three times the rate of Maori (16 per cent).
That contrasts with the less generous unemployment benefit. In the period since Covid arrived in New Zealand, Maori and European New Zealanders have received Jobseeker Support at a similar rate (35 per cent).
Auckland Action Against Poverty advocate Kathleen Paraha said beneficiaries she worked with all felt they were being “ripped off” when the Covid relief payment came in.
“It’s just not fair – it’s a two-tier thing,” she said
Paraha, who is herself on the Supported Living Payment, said beneficiaries constantly battled to get grants for food and other costs because core benefits did not pay enough.
Her organisation had applied for food grants for 16 people on Friday alone – all were declined.
Mangere East Family Services CEO Peter Sykes said it was particularly frustrating for long-term beneficiaries who were competing in the same job market as newly jobless.
“The core poor remain poor and remain quite distrustful of the system,” he said. “Now, all of a sudden, people can just send an email and get a payment. Most of our community doesn’t believe it.”
Many of the people in his suburb were casual workers in hospitality and home care and did not qualify for the Covid payment when they lost their jobs. The payment has a minimum hours requirement.
Social Development Minister Carmel Sepuloni stressed that the Covid payment was a short-term measure for an unprecedented crisis. Furthermore, many people found they were better off on a benefit than the temporary payment because of additional support they could be eligible for.
“People take a number of factors into account when applying for support,” Sepuloni said.
“For example their ability to work part time, termination pay, or they may consider the stability of an established payment like a benefit, instead of going on to a temporary payment like CIRP.”
Another rationale for the Covid payment is that those who have lost their jobs because of the pandemic are more likely to be mortgage-holders. If a large number of people defaulted on their mortgages it could significantly increase the economic impact of the pandemic.
Max Rashbrooke, a researcher who specialises in economic inequality, said there could be a potential upside to the new Covid payment. In countries where people were paid more in benefits if they earned more, there tended to be more support for the broader welfare system.
“Increased payments for middle-class households can lead to more political room to increase payments to genuinely poor households,” Rashbrooke said.
“It’s plausible that if they feel like they’re getting more out of the welfare state, they are then more likely to feel some sense of ownership over the system and feel more kinship with other people who are receiving welfare payments. That’s the optimistic take, from an inequality point of view”.
The Government lifted core benefits by $25 a week (13 per cent) in response to Covid, though that was at the bottom end of the 12-47 per cent increase recommended by a Welfare Expert Advisory Group last year.
The expert group found that core benefits were between $100 and $300 a week lower than recipients needed to pay their bills and live with dignity.
The latest Financy Women’s Index shows how COVID-19 has cost Australian women a further delay in achieving economic equality.
By Financy, August 18, 2020
The Coronavirus pandemic has prolonged the timeframe for achieving economic gender equality in Australia to 36 years due to a decline in female workforce participation in the June quarter.
The Financy Women’s Index shows that in just four months of the COVID-19 health crisis, four years had been added to the estimated time it will take to achieve economic equality. During the period, the gap between the number of men and women in full-time employment has widened.
On Tuesday 25 August at 4pm, we have our next webinar ‘Health equity and access to food’ by Dr Geoff Kira. COVID-19 has highlighted the gaps and the gold in the food system and Dr Geoff Kira will be discussing these within the context of sustainability and climate change.
Dr Geoff Kira is a Māori (Ngāpuhi) public health scientist from Massey University and specialises in translating health theory into useful community-based research. His discipline of health equity intervention investigates pragmatic methods of realising equity for disadvantaged communities.