One Year In: Keeping Our Promises

Published: Wed 6 Dec 2000 11:21 AM
Future Lefts
Tuesday 5th December, 2000.
One Year In: Keeping Our Promises.
CONTENTS: Editorial: One fantastic year - review Income related rents come back National's leadership turmoil continues Accountable government delivers on its promises Website of the Week
Editorial: One fantastic year - review
November 27th was a golden day. A year since the election was marked around the country by quiet celebration. Labour was ending a year in Government after a decade in the opposition wilderness, and boy did it feel good! Tomorrow marks the first anniversary of the coalition, which drew a statement from Helen Clark and Jim Anderton which is reproduced below.
The year started with record poll ratings through a long hot and cheerful summer. The country was very glad to be free of nine years of stultifying National government that achieved little and cost too much. Rapid implementation of the tax increase and the student loans pledges were greeted with equanimity and joy respectively.
Into autumn and over the winter, it's fair to say the Government had a rough ride. The frenzied and hysterical attacks by employers, big businesses, right wing think tanks, National Party jackups and others on the ACC reforms and the Employment Relations Act provoked a sharp crisis of confidence that cost New Zealanders economic growth, jobs and the dignity of a civilized national debate. Combined with the dollar's fall in response to US dollar strength, and the steady increase in oil prices hitting people's pockets, the winter in particular was not a happy one for the Government.
Coming into springtime, the success of the lower dollar in spurring the export sector was becoming evident, even to opposition whingers. A steady campaign by the racist right wing parties to attack and undermine and discredit the Government's Closing the Gaps policy failed to spark the widespread hostility to Labour and the Alliance that the opposition thought it would. Combined with the delivery of the lowest unemployment statistics for over a decade, ACC levies struck at a rate far lower than the private sector could offer (and being cut yet another 15+% next year), a calm and peaceful transition to the ERA environment and a recovery in business confidence, the Government goes into the summer ahead in the polls, roasting the Opposition in the House, and pretty damn happy with itself.
Still to come this year is the end of the health sector restructuring legislation, forthcoming announcements about improvements in working conditions for young New Zealanders, and a renewed focus on prevention and rehab at the ACC.
Overall the Government has performed credibly. There have been no blatant mistakes. The Prime Minister has grown in stature as she has learned her role, and is proving to be immensely popular with the electorate, and the subject of fear and hatred from a demoralised Opposition that simply cannot touch her.
With the continued legacy that the right left behind (the latest debacle being the failure of the electricity reforms), we look forward to 2001 and continuing the charge for social justice in New Zealand again. Perhaps next year the Opposition might actually have some policies to put up against the Government!
Till next time,
Income related rents come back
As of 1 December (and for some people before that), the insidious market rentals policy has been scrapped in the state housing sector. This change means that we will see a massive reduction in poverty and overcrowding over time, and consonant improvements in the health and wellbeing of low-income New Zealand communities. It has been Labour Party policy forever, and it a welcome change of direction in the social policy area.
The Opposition, in a typically dull-witted attack, complained that "it will only benefit 20% of low income earners." This is simply wrong. Ever-rising state house rentals have been a key driver in increases in private rentals over the decade. Anybody who understands how markets work (and I would have thought National would get this, let alone ACT!) would realise that cutting the rentals in the state housing system will force private rentals down too. Thus everyone in low-income housing will benefit from the State leading rents down instead of up.
Over time, this will probably see the values of residential property fall to some extent, or at least rise less slowly than it otherwise would have done. This is a "good thing" (tm) because, with a capital gains tax being political suicide in NZ, it is a relatively painless way of "lowering" the return on residential property investment and making other, productive forms of investment more desirable. Middle class families might put some money into a small business or the stock exchange instead of into a second house, benefiting the whole economy in the long run.
Since some people still have no idea how the new system works, I have put below a govt fact sheet on the system. Enjoy!
This year the Government instructed Housing New Zealand to move from charging market rents to income-related rents.
Why? · The 'market rents' policy saw state house rents rise significantly.
· State house rents rose 106% from 1992-1999. Meanwhile private rents rose 23% and inflation 12% over the same period.
· Housing New Zealand figures show that turnover during this period rose from 12% to 34% as tenants moved more often because of rising rents.
· Market rents and escalating housing costs have been identified by housing and welfare experts as the single largest cause of poverty over the past decade.
· Income-related rents will ease the financial burden faced by thousands of low-income state house tenants
What does this mean? · From now on all state house rents will depend on a tenant's income.
· Low-income tenants will pay no more than 25% of their income on rent.
· All other rents will depend on a tenant's income - but no one's rent will go up as a result of the changeover.
What doesn't this mean? No one's rent will rise as a result of the changeover.
No one will be required to vacate a state house because of their income.
What is a low-income? For single tenants without children: the equivalent to the after tax single-living alone rate of NZ superannuation ($225 a week)
For couples and sold-parents: equivalent to the after tax couple rate of NZ superannuation ($347 a week)
Who is going to benefit? · More than 130,000 people living in state houses nationwide will be better off
· 80% of all 59,000 households renting state houses will be better off.
· 58% of all state tenants will be between $20 and $80 better off each week.
· About 30% of state tenants will receive a partial refund of the bond they paid when they were paying a market rent - on average this will mean a one-off refund of $105 per household
· More than 4800 state house tenants who did not know that they were entitled to an Accommodation Supplement will now beneft as they all qualify for an income-related rent
· No state tenant's rent will rise as a result of this changeover
Has everyone applied? Out of 59,000 households living in state houses nationwide:
· So far, 51,643 have applied
· Those who haven't applied have been contacted by Housing New Zealand tenancy managers several times to encourage them to apply.
· 3698 tenants have advised they won't be applying as there will be no rent change for them
· It is not too late to apply for an income-related rent - all changes will be backdated to 1 December, 2000.
· Tenants were asked to apply because this was the only fair way to ascertain individual household incomes.
Will state house tenant's continue to receive the Accommodation Supplement from the Department of Work and Income New Zealand. No. All Department of Work and Income accommodation assistance for state house tenants will be replaced by income-related rents - that's why state tenants receiving accommodation assistance must apply.
Is there an asset test? There is no cash assets test. Interest from investments or savings above $2,700 per annum for a single person or $5400 for others will be counted.
What counts as income? Broadly, any person's income will include: wages and earnings; income-tested benefits; NZ superannuaion; Veterans pension; student allowances; ACC payments; family support (only counting from second child onwards); interest from savings, rent from property etc.
What about people who do not live in a state house? Government spends around $860 million a year assisting low-income people to pay their rents to private landlords or to pay their mortgage.
Low-income people are also going to benefit from a wide range of new Government initiatives including: reversal of national cuts to superannuation; full entitlement access to benefits; an increase in the special benefit; and the introduction of the Employment Relations Act.
What about building new state houses? So far this year more than 415 new properties have been acquired nationwide - most in the Auckland region.
However by ending state house sales more than 10,000 properties - previously on the 'For Sale' list were secured.
National's leadership turmoil continues
"It won't happen overnight, but it will happen!"
This overused shampoo ad quote is a simply vital tool in any upcoming politician's vocabulary. It can be used to obscure anything, and it provides a particularly good answer to someone's nagging cry of "why haven't you done blah blah yet?"
A particularly good example for using the phrase at the moment is the sad and sorry case of one Hon. Member of the House of Representatives, for the National Party, from the Clutha-Southland electorate.
Yes, it's dear old Bill English. And, you guessed it, the thing that (presumably) won't happen overnight but will happen, is his takeover of the leadership of the National Party.
Consider the situation. An English loyalist launches a scathing attack on the Party bureaucracy and starts a website about how crap the National Party really is. There is endless media speculation on the leadership question which continues despite the Candidate's steadily-more-shrill protestations that he doesn't want the job yet. There's the hysterical attack on the Candidate from a has been Shipley loyalist. There's the leaked memo, from another Shipley loyalist. (Come on, you don't really think that was a mistake, do you??) There's National's dead cat bounce in the polls which despite its ferocious racist attacks on the Government over some months still has left it trailing.
It goes on and on and on.
I actually feel sorry for Bill. No, really, I do. Think about it from his perspective. The economy is going to be good for the Government from now until the election in 2002, so he doesn't have that most potent of National attack lines. He faces the prospect of leading a party that is more divided than it has been for many years between dries and wets, town and country, liberal and conservative. He knows that National will lose the next election, and he has to wonder whether he could turn that around by stepping in now, or whether to let his leader go down in flames after losing in two years.
He's probably also beset, as an ageing former McMinister, with a rowdy bunch of supporters who share the sole underlying tenet of National Party politics - a desperate lust for power, and a terrible self-righteous anger at the country for daring to put them in opposition.
If he moves before the election, he faces a loss and the added opprobrium of having to explain away his pledge of fealty from last weekend. If he moves after, he'll forever be left wondering "could we have won if I tried?"
Poor Bill. Maybe he should just go back to Clutha Southland, and enjoy being a prosperous Catholic farmer once again.
I feel sorry for him.
I do.
Accountable government delivers on its promises
Prime Minister Helen Clark and Deputy Prime Minister Jim Anderton today released a solid list of achievements in a review of the Labour-Alliance government's first 12 months in office.
Prime Minister Helen Clark and Deputy Prime Minister Jim Anderton said the report shows that the government is delivering on its promise to restore a sense of balance by making New Zealand a fairer, more equitable society, while also bringing back accountability to the political process.
"When we came into government 12 months ago, the new government had big challenges ahead of it. But we could not have been clearer about our intentions, and we have kept our word," Helen Clark and Jim Anderton said.
"The government has introduced policies which are beginning to transform the New Zealand economy, reduce inequality and improve opportunity. The building blocks are going in place to fulfil the vision of a more prosperous and decent New Zealand, a country capable of producing the sophisticated goods and services which will guarantee us higher standards of living and a fairer society.
"We are focused on shaping a stronger economic performance and creating the jobs New Zealanders need. We are putting a new emphasis on growth, innovation, business creation and investment. It was important that the country moved on from the hands-off era. The need now is for smart, active and committed government, and we are delivering it.
"The stark difference between this government and its predecessors is a strong and conscious commitment to promoting economic growth and opportunity throughout New Zealand, and reducing inequality, which was growing at a faster rate than almost anywhere else in the western world.
"That is why we have cut the cost to students of tertiary education, raised the minimum wage, poured more money into low-income neighbourhoods' schools, lifted superannuation payments, re-introduced income-related rents for state tenants, and put more money into public health and hospital programmes.
"This government has a vision of where New Zealand should be in 10 years from now. In short it is to speed up our transformation to becoming a knowledge-driven economy, which delivers social and economic benefits to all New Zealanders. We are focused on creating the conditions for our talented people and enterprises to prosper, and to ensure that there is greater equality of opportunity.
"As coalition partners we are proud of the progress we have made. There is much to celebrate one year down the track. That is why the Labour-Alliance coalition is publishing this report. It shows how far we have come - in the interests of all New Zealanders," Helen Clark and Jim Anderton said.
Website of the Week:
Richard Gephardt has been the Democrat's leader in the House of Representatives since before the 1994 trouncing of the Democrats in the Congressional elections that gave the world Newt Gingrich and the Contract with America. He has the ignominy of knowing that his leadership has seen Democrats with a minority of the lower house of the Congress for longer than at any other time for about 80 years.
Looking at this website you can see why. Try the "Leader's Corner" which contains a video that sounds like it's aimed at five-year-olds. All I can say is, thank God I don't live in America!
All submissions should be to the editor, Jordan Carter, at, or the assistant editor, Michael Wood, at
While this newsletter is published in the name of Young Labour, the contents is entirely the responsibility of the editor and the views expressed here don't constitute any official position of Young Labour. All contents copyright (c) 2000. Subscribe at

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