1 April 2005

Greens urge Govt not to sacrifice state housing

The Green Party is concerned that the Government may cut back its state housing programme, following Finance Minister Michael Cullen’s admission that he is considering placing some capital works on hold.

The cutback appears to be driven by the Government’s goal to reduce its gross debt to less than 20 per cent of GDP before 2015.

“New Zealand needs more, not less, public sector housing to meet the needs of low-income families,” said Green Co-Leader and Finance Spokesperson Rod Donald.

“While reducing debt is a worthy goal, eliminating the shortage of affordable housing should surely be a higher priority for a Labour Government.

“Dr Cullen’s debt target is an arbitrary number, whereas housing is needed for real people right now.

“In any case, the Government’s focus on reducing gross debt is flawed and can lead to perverse outcomes. A better measure of fiscal health is net debt. Furthermore, Government debt is not necessarily a bad thing, provided it is backed by assets, such as public housing stock.

“While we concede that the shortage of skilled tradespeople is putting excessive pressure on the construction sector and is therefore fuelling inflation, we believe that inflation will be reduced in the long term by increasing New Zealand’s housing stock, because this will bring down rents and reduce property prices.

“I hope Labour Party delegates at this weekend’s Congress, especially those from Northland, South Auckland and the East Coast, where there are housing shortages, make it very clear to Dr Cullen what his priorities should be,” said Mr Donald.

ENDS

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