25 Jul 2017

Housing costs claim half of poorest NZers' pay

5:18 pm on 25 July 2017

People on the lowest incomes are spending more than half their pay on housing costs, government figures show.

No caption

Photo: RNZ / Alexander Robertson

The Ministry of Social Development's Household Incomes Report 2017 showed the poorest were spending 51 percent of their incomes on housing, up from 29 percent in 1990.

It found child poverty rates were either flat or falling, depending on how it is measured.

About 155,000 children, or 14 percent, were living in poverty in 2015 and 2016, down from a peak of 200,000 hit during the Global Financial Crisis.

It also found the number of children living in severe material hardship has dropped from 100,000 in 2011 to 70,000.

However, the report found the "working poor" remained an issue in New Zealand, with an estimated one third to one half of children in hardship coming from working families.

Overall, median household incomes have risen 3 percent, inflation adjusted in the 12 months to June.

"This increase shows the government's focus on strengthening the economy is delivering for New Zealand families and households," said Social Development Minister Anne Tolley.

"Despite the effects of the Global Financial Crisis, most Kiwi households are much better off today than they were back in 2008.

"Since 2008 median household incomes have risen by around 11 percent more than inflation - faster than in many other OECD countries. This contrasts with Australia, the UK, the US, France, Italy and Germany where real household incomes remain at or close to pre-GFC levels."

The report shows household income inequality has remained static over the last two decades, but housing affordability and quality were an issue.

Ten percent of children lived in a house with damp or mould problems, 13 percent of children lived in a home that had a problem with heating or keeping it warm, and 70 percent of those reporting both these issues lived in rental accommodation.

Green Party co-leader Metiria Turei said the figures showed the housing crisis was hurting the poorest the most.

"That, combined with low incomes, is a recipe for growing poverty.

"It's clear that to solve the housing crisis we need a new government that will build thousands of affordable homes, crack down on speculators, and tax property fairly," she said.

"The report also notes that 'the 2016 sample is 'light' on sole-parent households and on beneficiary households with children (both around 20 to 25 percent lower than expected).

"This is the government's main report into household incomes. We would expect a thorough and complete picture. For the government to not include a proportionate number of sole-parent and beneficiary households is simply not good enough."

"Despite the omission, these results are damning," Mrs Turei said.

The Ministry said variations in sample sizes were common, but the report used a standard process to adjust the numbers to meet external benchmarks for all groups in the survey.

Get the new RNZ app

for ad-free news and current affairs