Govt's debt fixation ignores social ills, says church report

Numbers on the unemployment benefit almost quadrupled from 17,710 in June 2008 to 68,369 in January 2010 and were still 68,087 at the end of last month. Photo / NZ Herald

A review of New Zealand social trends says progress has stalled in the past two years - only partly due to the recession.

The Salvation Army's fourth annual "state of the nation" report, published today, says the Government is becoming too "fixated" on reducing debts and is failing to tackle longstanding social problems.

"Our political leaders appear to have no political vision except that of being more like Australia - which if we reflect on a little, we may come to understand is no vision at all," said the director of the church's social policy and parliamentary unit, Major Campbell Roberts.

Unsurprisingly, the report finds that the recession has hit New Zealanders hard since late 2007. Numbers on the unemployment benefit almost quadrupled from 17,710 in June 2008 to 68,369 in January 2010 and were still 68,087 at the end of last month.

The building industry's collapse means that new houses have fallen behind population growth in Auckland by 8500 to 9000 houses over the past five years, including a shortfall of 3500 to 4000 houses in the year to last June.

Ironically, the recession has also made housing more affordable if you can get it. Salvation Army analyst Alan Johnson said it took 7.7 years of the average wage to buy a median-priced house at the end of 2007 and only 6.9 years by the end of last year.

Median rents for a two-bedroom house jumped by $10 a week in the last three months of last year, with much steeper increases in the richer parts of Auckland such as Remuera and the North Shore.

But rents are still more affordable than in December 2007, when it took 18 hours of work in a service sector job to pay the median two-bedroom rent of $271 a week. It took only 16.8 hours to pay the median rent last September and still only 17.3 hours last December.

Mr Johnson said such low rents were unlikely to last and he was not surprised by this week's reports of long queues for Auckland rental properties.

"There is a deficit of about 4000 houses in the last year so what you are seeing now with the squeeze in the rental market is inevitable," he said.

The report says preschool education and childcare enrolments rose from 61.5 per cent of all non-Maori preschoolers in 2005 to 66.9 per cent last year, but fell for Maori from 44.4 per cent of Maori preschoolers to 42.9 per cent.

Early Childhood Council chief executive Peter Reynolds said poorer families generally were less likely than richer families to use the Labour Government's "20 hours free" subsidy for 3- and 4-year-olds because they could not afford to pay even subsidised fees and transport costs.

The report also finds that real wages have stalled.