'THE NATION'
PHIL HEATLEY
Interviewed by DUNCAN GARNER


Duncan There's plenty of support in the Warriors' heartland of South Auckland ahead of this weekend's national Rugby League grand final in Sydney, and as supporters spur on their side to bring back the gold, the government's moving to improve the lives of those living in Auckland's most impoverished region. With the population in South Auckland expected to blow out to half a million in the next 30 years it outlined plans this week for new and better state housing. A third of South Aucklanders live in state houses, a fifth live in overcrowded conditions. Now the state landlord Housing New Zealand hopes to renovate nearly half of its 31,000 state houses in Auckland and build another 1400 over the next five years. Housing Minister Phil Heatley joins me now. Good morning Minister.

Good morning.

Duncan Thanks for coming in 1400 new houses in five years, are they complete newly built houses or you acquire them elsewhere.

Phil Heatley – Housing Minister
No the 1400 houses across Auckland, about half the state housing stock will be upgraded in some way, so what that might mean is insulation, new bedrooms, kitchen, bathrooms, that type of thing. In terms of the number of extra state houses in Auckland about 1400 and brand new state houses something in between that. So what we're going to do is sell a whole bunch of the old stuff, subdivide large quarter acre sections and build new state houses.

Duncan There'll be 1400 new to the housing stock?

Phil Absolutely, but 1400 additional, but a lot more than that will be brand new.

Duncan And how many in South Auckland given those statistics we've talked about, how many per year in South Auckland?

Phil Well I calculated the other day that it's about one a day.

Duncan Well I've calculated it's about 170, because you’ve got 850 new houses in South Auckland so it's one a day, it's 170 a year. Are you comfortable that it's going to meet the demands in South Auckland?

Phil Well what we know at the moment is that the waiting list for the most you know serious in need is around about that sort of mark, about 1600 and were finding that a whole lot of people are moving through state housing a lot more quickly now, so about 10% are turning over each year. So we think that it will contribute dramatically, and of course we're growing the third sector too. So housing providers like Habitat Humanity, New Zealand Housing Foundation, Vision West, others who want to provide social housing, we're giving them a boost.

Duncan Well I looked at the waiting list in Mangere as of about a months ago is 520 and Otara how many in the high needs area is 350. If you're building 170 a year, we've got almost a thousand people on the high needs waiting list there, you're not going to be able to meet that need with your plan.

Phil No because what's happening is only people with the most serious and significant need can come into state housing now.

Duncan I'm talking about A and B, I'm talking about significant need.

Phil Yeah that’s correct, but what happened traditionally with those waiting lists which are coming down quite a lot, is that anyone could apply for a state house, plus they could stay there forever. What we're saying now is if you come into a state house, after three years you'll be reviewed, if your circumstances have improved. So there's two things happening. First we're increasing the number of state houses, but also those people who are currently in state houses or moving in at the moment will be …

Duncan Your A, B, C, and D categories. Now for the public who don’t understand C and D aren’t eligible anymore and will be shelved off.

Phil That is correct.

Duncan A and B, I'm talking A and B in two suburbs alone is almost a thousand people in that high needs category. You're building 170 a year in South Auckland, that’s a bit disconnect isn't it Minister?

Phil But what we're doing is a number of three things. First of all we're increasing the number of state houses in Auckland. Secondly we're boosting the other housing providers in Auckland who will increase their stock as well, and thirdly people no longer move into a state house for life which means they're going to be moving through those state houses quickly, or more quickly, they're not sitting there for 20 years. So the waiting list actually is slowly coming down. For example over the country we had a state house waiting list of about 10,000 two or three years ago, now it's 7,000.

Duncan And that’s because you’ve put people also on to C and D, and I want to get to that in a minute. But this report that you have here the Home and Housed, April 2010, they say that you need two to two and a half thousand houses added to additional stock per year. So over five years you're talking more than 10,000 houses of new additional stock. You are nowhere near it with your numbers.

Phil Yes but what we are doing is we've added about a thousand or just over a thousand in the last two or three years, so we're committed to increasing the state housing stock. We've shown that. In Auckland clearly we're committed to increasing it by 1400 over the next five years.

Duncan Well let me just test that on you please if I can Minister. You’ve just said you’ve built a thousand over the last couple of years, added or built?

Phil No added.

Duncan Okay cos if you look at your number of builds, I'll go back to the Labour government in 2006/7, they built 629 houses, built new houses in that year, you built 166 last year, and these are your Housing New Zealand numbers. It's a lot lower than the previous government.

Phil Look we never promised to build as many state houses as the previous government. What they did was spend all their money on building state houses. What we've done is a combination of the two and the we think the balance is much better. We've increased the state housing stock, but we've upgraded thousands of state houses….

Duncan But you're not adding additional stock with respect, because you're buying a lot of other places too, so you're not adding additional if you look at these numbers.

Phil No, the new builds are significant. All our leased stock, are virtually all of them are new builds, unlike the previous government. We're doing two things here Duncan.

Duncan First you're in denial with the numbers I've put to you. This is you're Housing New Zealand numbers, 166 in the 2010 financial year. You're miles behind the need Minister.

Phil No we're not building as many state houses as the previous government, we're doing two things, we're increasing the state housing stock, but we're upgrading the current state housing. The current state housing is in a serious state of disrepair, it was ignored.

Duncan I accept that, and you're doing a good job in there, I think people appreciate it. But you also have to house people, and you saw that statistic at the start of this programme, 20% living in overcrowded conditions, and that’s come from the Mayor of Auckland with their statistics in their latest report. You need to build more houses than you're building don’t you?

Phil Yeah but it's not the only solution Duncan.

Duncan It's pretty significant.

Phil It is. We're increasing the number of state houses we've got in Auckland. We're also going to be working with the third sector so they can increase the number of state houses we've got. We're upgrading our state houses, that’s plenty as it is, but there's also this other matter, and that’s when people come into a state house, they no long can come in and stay there for life. Those people will move on.

Duncan Let's look at that, let's look at that, because you raise a good point here. So for the public watching this you categorise, you re-categorise. You’ve got A, B, C and D. A and B are high need and are eligible for a state house. C and D are not eligible any more.

Phil That’s correct.

Duncan And you’ve said about four to five thousand roughly people there. How many have you moved out.

Phil So out of state housing at the moment new tenants who come in will be reviewed every three years, and if their circumstances improve they’ll move out of state housing elsewhere and we'll help them with that. Current tenants who have been in state housing when we came into government, we're not moving those on yet in any compulsory way, we may not, we haven’t made a decision.

Duncan Well why are they not eligible, they don’t meet your test?

Phil Well at the moment we're just incentivising them to move and what we've found is that a large number of them, actually when we show them the new house down the road, which is only two bedrooms cos they're just one person, they don’t need five bedrooms – when they see the new house down the road they are moving voluntarily. To bring that in the compulsory way at the moment we just haven’t you know made that decision.

Duncan And his is crucial. Income related rents. If you Mrs Jones as a letter C out to down the road, she – can you confirm this – she's not eligible for income related rents, i.e. 25% of income? Is that correct?

Phil No no, if you remain in state housing, if you move from one state house to another…

Duncan No no, if she moves to a private dwelling.

Phil Oh yeah, well we're talking about moving from one state house to another aren’t we?

Duncan No, you're talking about moving them out of a state house.

Phil No no, to another state house, what we're saying…

Duncan Okay, what happens if they move out of a state house? You move them out and they get a private dwelling or a social housing somewhere else, are they eligible for income related rents.

Phil No, if they move from a state house they get income related rents which is worth about $9000 a year.

Duncan What happens if you kick them out to private dwellings?

Phil If they move to a private rental then they qualify not for income related rents which is about $8000 a year on average, they might get something like the accommodation supplement which is worth about $4000 a year.

Duncan So you're sitting here today telling me that for those people and there will be cases, they're gonna be worse off?

Phil No because if they're in a state house, the amount of rent they pay depends on their income, so if their income doesn’t change when they shift from public to private…

Duncan But you're telling me that they're going to move to – potentially move to a private dwelling, so you can get other high needs people into that state house that they could be worse off. Can you sit here and say no one will be worse off?

Phil No, no I can't. There's a whole bunch of people in state houses at the moment who are being subsidised and have been there for a long time who we're encouraging to move on.

Duncan How are they going to afford to go, because these people are already poor aren’t they?

Phil Well that’s why we haven’t made the decision to move them on in a compulsory manner at this stage.

Duncan No, but you're asking them voluntarily, they are feeling the pressure, and starting to see that they're gonna be worse off. And I've done some calculations potentially by about 80 bucks a week if you're talking four thousand dollars.

Phil That’s correct. Well many of them get a subsidy of eight thousand dollars a year.

Duncan They're going to be worse off. Are you ashamed of yourself as a Minister to be sitting here saying yes there's gonna be some tenants worse off? Are you?

Phil Well no not at all. What we're essentially saying here is that we need the state houses for those most in need. If your circumstances have improved that type of thing, we want to encourage you to move privately.

Duncan What is the average income of those people in the C and D categories that hopefully under your policy would move at some stage? What's their average income?

Phil C and D?

Duncan Yeah, C and D.

Phil Inside state houses?

Duncan Yes.

Phil Well some people earn you know significantly high incomes.

Duncan The average income, the average income.

Phil Oh look, I couldn’t tell you what the average income is, cos I've got the answer back …

Duncan Well I've got the answer because your office sent it. It's $25,800 to $25,900. That’s the minimum wage.

Phil And the highest household income well a year ago was $130,000 a year.

Duncan This is the average income from what your department has told us.

Phil Correct, except that most people in state houses get an income related rent and they should be in state housing and that’s fine, but …

Duncan But you're asking people on 25-26 grand potentially to go to a private dwelling, lose their income related rent, get an accommodation supplement of course which is lower, they're gonna be worse off. Well some people will be worse off.

Phil Yes but we've got people on the waiting list at the moment who are in serious need of state housing, and we want to house them.

Duncan We're right back to the question of why you're not building enough.

Phil We are building plenty.

Duncan Where's the 300 a year based on your plan this week. 1400 over five years.

Phil Duncan we have got – we've got 70,000 state houses, we're upgrading well in Auckland alone 14,500 of them over the next …

Duncan Upgrading – that’s housing stock.

Phil We're adding about 1400 state houses and we're boosting the third sector so that they can build more houses.

Duncan Would you like to do more if the economic conditions were better?

Phil No, I think we've got it about right.

Duncan No?

Phil We have got it about right. The reality is the commitment of the taxpayer and they're happy to provide those in need with state housing is significant, but the housing subsidy for the average person in a state house is $8000 a year. We're happy to provide that but only for those most in need.

Duncan Right, so there will be some people worse off. I think we've confirmed that. Final question. You came to office promising state house tenants, ambitious state house tenants that they could buy their own state house. How many have done that in your time>?

Phil Very flat, it's about, well it reflects housing market, but about 30. Thirty have actually purchased their state home. I think we'll see more as we subdivide sections. You know they can't afford a quarter acre section, but what they might be able to do is…

Duncan But doesn’t it show that the circumstances of these people they don’t have the money. I mean 30 people, I mean the policy's a failure isn't it?

Phil Well it's not many people but then the housing market's been very flat. We never expected a lot of people, but I can tell you this – 30 people buying their state house, freeing up cash for another 30 to come in is good. I mean it's all progress, it's not huge, never promised it to be.

Duncan Right Minister, Phil Heatley, thank you for joining us this morning in the studio.;

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