Labour confirms it would scrap state housing rent hike

Labour has confirmed it would not go ahead with planned changes to increase social housing rents and the Accommodation Supplement, should it enter government.

The Budget contained a major shake-up to social housing, which included increasing the minimum income-related rent contribution for social housing tenants from 25 percent to 30 percent of income from April 2027.

At the same time, the government would increase the support people in private accommodation received through the Accommodation Supplement.

The changes would mean 111,000 families receiving the supplement would get an extra $15 on average per week, but 80,000 families in social housing would be worse off by $30 a week.

At the time, the housing minister Chris Bishop said the current system was "unfair," as similar households could get different support depending on whether they were living in social housing or a private rental.

From the get-go, Labour opposed the changes, but held off on whether it would reverse them until after the Budget.

On Sunday, Labour's housing spokesperson Kieran McAnulty told TVNZ's Q+A that Labour would not go ahead with the changes to social housing rents.

But on Monday, Labour leader Chris Hipkins reiterated his position that Labour was opposed to the changes to the income-related rent subsidy, but it would set out its policy on what it would do differently "in due course."

By Tuesday, he was unequivocal, confirming Labour would not proceed with the increases not only to the income-related rent subsidy, but to the Accommodation Supplement as well.

"Taking money away from our lowest-income renters to give to another group of low-income renters is cruel, and it is wrong, and the Labour Party will not be part of that," he said.

"The Accommodation Supplement, ultimately, is a subsidy for private sector landlords. We want to see additional support to New Zealanders, not to private sector landlords."

Asked how this would fit into Labour's fiscal plan, Hipkins said it would be fiscally neutral.

"The increase in state house rents was going to pay for the increased Accommodation Supplement. We're not going ahead with either of those things."

Housing minister Chris Bishop said it would mean renters were paying more as a result.

"The reality is there are a range of people in the private rental market who pay a significant proportion of their weekly or fortnightly take-home pay in rent, and the Accommodation Supplement helps those people, and we think it's the right thing to do."

Bishop dismissed Labour's criticism that the supplement was a subsidy for landlords.

"It's a common assertion from the Left that it's just a subsidy for landlords. It's a form of income support, and it provides support for people, often paying a significant amount of their weekly take-home pay in rent, and it's an important part of the system."

He admitted in a "perfect world" with a functional housing market, such support would not be needed.

"But that's not the system we have. So the Accommodation Supplement exists to help people."

Labour has also confirmed it would scrap the emergency housing target, and repeal the provisions within the move-on orders legislation that involve children and rough sleepers.