Simon Collins is the Herald’s social issues reporter.

House costs raise poverty

Think-tank says today’s Kiwis better off than past generation — until housing factored in.

New Zealand would have less poverty today than a generation ago if it weren't for higher housing costs, a business think-tank says.

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The NZ Initiative, a think-tank supported by 45 corporate chief executives, says in a new report that the number of Kiwis earning below a fixed poverty line of 60 per cent of the 1998 median income fell from 12 per cent in 1982 to 8 per cent in 2014 before allowing for housing costs.

But the numbers falling below that line after housing costs were factored in rose from 8 per cent to 13 per cent.

"In short, housing costs have risen markedly relative to disposable incomes during this period," it says.

Higher housing costs mean that, going by Ministry of Social Development research quoted in the report, the real incomes of low-income households in 2013 were still "around the same as they were in the 1980s".

But those who have avoided higher housing costs are much better off. Auckland Grey Power secretary Jens Meder, 86, who bought his house in Pt Chevalier in 1975 for $30,000, says the five-bedroom house is now worth about $1 million.

"The rating value is $800,000, but a lot of homes in Pt Chevalier at the moment are selling for about $1 million, which I think is a ridiculous thing," he said.

He and his late wife paid off their $19,000 mortgage in 1995 and Mr Meder, a former baker, has some savings. "I could survive without my super, but of course I get it," Mr Meder said.

Report author Jenesa Jeram said the NZ Initiative's corporate members asked for the report on poverty "because they believe it's one of the most important issues in New Zealand".

The report says NZ stands out from European countries because children here are much more likely than households without children to be in material hardship, such as not eating meat at least every second day.

Eight per cent of children live in homes in "severe" material hardship, compared with only 4 per cent of all Kiwis and only 1 per cent of those aged 65-plus.

Ms Jeram said housing costs were too high because local councils were not "incentivised" to facilitate more housing development.

NZ Initiative director Dr Oliver Hartwich and Labour MP Phil Twyford argued jointly last year for policies to replace urban/rural boundaries with powers to protect areas of special value, replace housing density and height controls with urban design standards such as open space requirements, and replace development levies with ratepayer funding of new infrastructure through bonds or targeted rates.

Mr Twyford said yesterday that the first two changes should be made through a national policy statement under the Resource Management Act.

Mum and dad go without

Kihikihi mother Renee Hei Hei says even housing costs a fraction of Auckland's sometimes left no money for mince in her family budget.

Ms Hei Hei, 45, earns $18.09 an hour working 15 hours a week as a teacher aide at Kihikihi School south of Te Awamutu.

Her husband works fulltime as a corrections officer.

Their four-bedroom house cost $225,000 three or four years ago, a fraction of last month's average Auckland house price of $928,921.

But on a promotional video for the KidsCan charity, Ms Hei Hei says that before she went back to work last year, she and her husband often could not afford to eat mince.

"If I cook up a mince, and the kids are still hungry, I'll dish it up," she says. "And [son] Andrew will say, 'What about you and Dad?' And I say, 'Dad and I are fine.'"

Between them, she and her husband now earn $1800-$1900 a fortnight after tax. But the mortgage costs $780 a fortnight and they have high costs for golf, rugby, netball and Brownies for their four children aged 11 to 4.

Ms Hei Hei said half the children at decile 2 Kihikihi School came to class with no breakfast.

- NZ Herald

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