Legislation extending reviewable tenancies to all Housing New Zealand tenants passed its first reading in Parliament under urgency on Friday morning.
Reviewable tenancies, where tenants are assesssed as to whether they still have high housing needs, will be extended from 10,200 tenants to an estimated 53,000.
The bill, which also extends income-related rents to community housing providers, passed by 63 votes to 56 with the support of National, ACT, United Future and the Maori Party.
The House had resumed at 9am on Friday to debate legislation arising from the Budget delivered by Finance Minister Bill English on Thursday afternoon.
Mr English says that from 2015-16 state-house tenancies will be reviewed by the Housing Corporation and the Ministry of Social Development.
He denies tenants will be pressured to move on, and says state housing is all about ensuring housing is available for those who need it most when tenants move on.
"When people have significant housing need the community through the government is there to meet that need.
"When they no longer need it, we should be transitioning people into ongoing ownership or market rentals so that others who have serious housing need get the support that they need."
Maori Party 'working on the issue'
Maori Party co-leader Pita Sharples concedes Maori will be affected by the extension, because high numbers of Maori live in Housing Corporation homes.
But he says his party is working on the issue.
"It's going to make it a bit difficult but that's the very question we're working on locally in Auckland with the Housing Corporation there and with the tenants, trying to get a culture of understanding amongst the Housing Corporation people on the ground."
Mana Movement leader Hone Harawira says reviewable tenancies are designed to kick even poorer people out of state homes.