TL;DR: In an effort to save $340 million a year, the new Government plans to slash the number of motel vouchers given out to homeless families, arguing many could and should stay with friends and family instead.
Critics said the moves would just push people out onto the streets and living in cars and sheds unless more social homes are built, which the National-ACT-NZ First coalition is considering in the Budget due on May 30.
Housing Minister Chris Bishop and Social Development Louise Upston announced yesterday they wanted to stop spending $1 million a day housing 3,000 families in motels, starting by giving families living in motels for more than three months first priority on the social housing register.
It would also slash the initial granting of motel vouchers to homeless people from a range of seven to 21 days to a range of between one and four days. Officials would then decide whether these people could stay in the motel or be kicked out to couch-surf with friends and family.
“We're not going to stop handing out motel vouchers. We're just going to get a bit more tough about how we hand them out, and who we give them to because...frankly…three thousand families living in motels at a million bucks a day is unsustainable for those families and is also unsustainable for the taxpayer.” Chris Bishop this morning via RNZ
Critics argued kicking people out of motels without increasing the stock of social housing through Kāinga Ora and community housing providers would increase pressure on people to live rough, sleeping in doorways, cars, sheds and tents.
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Elsewhere in the news in Aotearoa-NZ’s political economy at 11 am:
TVNZ sacked 68 staff in its news and current affairs division this morning, which halves the number of news gatherers and cuts the state-owned broadcaster’s headcount by 10%. Newshub’s 200 news gatherers are being sacked on June 30. 1News
RBNZ Chief Economist Paul Conway told Bloomberg in an interview aired last night that the central bank may be able to start cutting interest rates sooner than it currently expects (next year) if the US Federal Reserve begins easing later this year. Bloomberg-gift
An ASB survey published this morning found a net 51% of respondents thought house prices would rise, which is back to the level last seen at the peak of the post-Covid boom in October 2021, when house prices were rising at an annualised rate of 30%.
‘Go couch-surfing. It’s better than staying in a motel and cheaper for us’
As promised before the election, the National-led Government has announced plans to dramatically reduce the number of people living in motels at the taxpayers’ expense. The plans are focused on getting people to live with friends and families instead, and to prioritise access for Kāinga Ora homes and community housing provider homes for those living in motels with children for more than three months.
Critics argued that adding motel dwellers to the social housing waiting list would just shunt others down the list and lengthen their overall wait times, rather than expand the supply of social houses. Kicking people out of motels to go couch surfing would simply increase the numbers of people living rough, Opposition MPs and social housing activists said.
Bishop told RNZ in an interview this morning that ultimately the solution was more supply and announcements on that were possible in the Budget due on May 30.
“It's a first step. The wider issue, which I think you rightly highlight, is we need more houses and we need to end emergency housing and there's work underway on the wider settings. And we'll make more announcements about that later.” Bishop via RNZ
He said the current system was a mess, indicating many were in the motels unnecessarily. Eligibility would be tightened, he said.
“So at the same time as making it easier for families with kids to get out, we're also going to tighten the eligibility. And MSD staff are going to be asked to do more investigation of people's needs before they get given the grant. So have you unreasonably contributed to your housing situation? Have you paid your bills on time?
“Have you reasonably investigated alternative options? And do you have reason to believe that people are getting emergency accommodation who aren't entitled to it?
“We're not saying that we're not going to stop handing out motel vouchers, we're just going to get a bit more tough about how we hand them out, and who we give them to because...frankly, 3,000 families living in motels at a million bucks a day is unsustainable for those families and is also unsustainable for the taxpayer.” Bishop
The $340 million represents about 10% of the cost of the $3.5 billion worth of tax cuts promised by National in its manifesto for the 2025/26 fiscal year. Detail on the tax cuts is expected in the Budget on May 30.
Bishop was then challenged to provide evidence of people using motels when they weren’t entitled to.
“This is a little bit anecdotal and I don't want to get too into individual circumstances. You do hear stories of families who could go and live with other people for example, live with other families, live with friends, live with other family members, who have instead ended up in emergency housing.” Bishop
He said the last Labour Government had already tightened the rules after people moved to Rotorua because access to motels was easier.
“The evidence was that people were actually moving from outside the Rotorua region in order to go to Rotorua because they could get into a motel. So these are the kind of perverse incentives you set up when you have a kind of free-for-all system. So some of this tightening work started under the last government. We're just accelerating that work.” Bishop.
Borrowing money to pay private landlords not to kick out tenants
Bishop went on to point to social impact bond programmes as one solution to keep people in private rentals and out of motels. The bonds raise money from private investors to pay for social services or new homes where payments are linked to achievements of certain milestones.
“What we're doing with the social bonds is saying: ‘is there a situation where we could go out of the government and actually contract for better results and pay on performance?’ So we might put out a bond, which a group of people might essentially contract into, and it might be a group of landlords, or it might be a group of community housing providers working with private landlords, for example, and say, you know what, we'll aim to get, say, 500 families who are in emergency housing, we'll get them into a new home or into a social house, and we'll aim to keep them in that social house because sustaining people's tenancies is often a challenge.
“And if we do that, then we'll expect some financial reward for doing that. Now, this is about using new approaches such as social investment to try and tackle some of these problems. We're just having a look at that right now, so that the work is underway on that.” Bishop
Quotes of the day
How it began
Cleaning house?
“There needs to be a pogrom. This new government needs to clean house.” The Platform host Sean Plunket in an interview with ACT Leader David Seymour, who subsequently called for the resignation of Victoria University’s Professor Joanna Kidman, a director of the Centre of Research Excellence for Preventing and Countering Violent Extremism, after she wrote on X the Government might be a ‘death cult’ that hates children.
Heads on platters
“Kidman’s salary is paid by taxpayers via the Prime Minister’s Department, which means Christopher Luxon has just been delivered some potential savings on a silver platter. The board of the centre must move immediately to sack the extremist in their midst.” ACT spokesman Todd Stephenson
Critic and conscience
“Under the Education and Training Act 2020 NZ universities should act as 'a critic and conscience of society'. A senior government minister publicly announcing plans for retribution against an academic because they don't like the opinions expressed by them is deeply troubling.” Historian Vincent O’Malley via X
Chart of the day
Where’s the money coming from?
Climate chart of the day
Cartoons of the day
The next election
Actions and consequences
Timeline cleansing nature pic of the day
Splash of colour
Ka kite ano
Bernard
'Couch surf. It's better than motels & cheaper for us'