A Ministry of Social Development report has revealed that the cost of housing in New Zealand remains a significant impediment to lifting people out of poverty.
The Household Income Report (HIR) highlights that, although poverty has declined in the ten years since the Global Financial Crisis, unfortunately not everyone is seeing progress in their own economic situation.
Between the 2011 Housing Economic Survey and 2016, 25 percent of those in the lowest income quintile spent more than half of their total income on housing costs, while 32 percent spent more than 40 percent respectively.
A press release from Social Development Minister Anne Tolley stated that the report shows median household incomes rose three per cent in real terms in the year to June 2016, which she claims “shows the government’s focus on strengthening the economy is delivering for New Zealand families and households … [and] median household incomes have risen by around 11 percent more than inflation [since 2008] – faster than in many other OECD countries. This contrasts with Australia, the UK, the US, France, Italy and Germany, where real household incomes remain at or close to pre-GFC levels.”
While this seems to be correct, one of the report’s main findings is that quality of housing in New Zealand is also affecting a notable amount of children, with 110,000, equivalent to 10 percent of New Zealanders’ under 18, having to live in accommodation that has a “major problem with dampness and mould”; 70 percent of these children live in rental accommodation, 45 percent in private rental, and 25 percent in Housing New Zealand Corporation (HNZC) houses.
"Housing affordability has proven to be the most severe issue affecting our low-income families, as well as the health impacts of low quality and overcrowding for children," said Child Poverty Action Group (CPAG) social security spokesperson Associate Professor Mike O’Brien.
Additionally, the HIR reveals that, although there was a decline in household crowding from 13 percent in 1986 to 10 percent in 2001, the rate has plateaued when looking at census data from 2006 to 2013.
Those of Pacific ethnicity are much more likely to face overcrowding in their homes, with the figure sitting at 39 percent, although this was down from 50 percent in 1986.
The report was released just a few days prior to an announcement from Statistics New Zealand, the results of which may not come as a surprise to New Zealand’s poorest families, but go some way to showing the need for central government to provide them with more assistance.
It mirrored the HIR in saying that higher prices for housing is hitting beneficiaries the hardest, but also added that household utilities and food prices are impacting these struggling families disproportionately.
“Over half their spending was on these essentials, compared with about a quarter for the highest earners,” says Statistics New Zealand Prices, Accommodation, and Construction Senior Manager Jason Attewell.
CPAG will be releasing five documents in the near future on five key election topics that will “analyse how evidence based policy changes can reduce child poverty if implemented after the next election”.