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Not a bad view from a state houseGareth Morgan

State Housing a Joke

Not a bad view from a state house

Not a bad view from a state house

Here is a classic illustration of how stuffed the welfare system is.

Housing New Zealand (HNZ) allocates it’s low-rent properties to people based on their income and savings.

Ms Bella Bowden easily qualified on all their criteria – a working person on very low pay – and has been a tenant at one property for over 11 years.

HNZ want to sell the house and offered her the chance to buy it – for $1 million give or take a few thousand.

Ms Bowden apparently has a good relationship with her extended family who decided to chip in and get the money together for her.

Her offer to buy the house set NZ staff reeling (which, as an aside, raises a huge question mark over the sincerity of their sale offer to tenants).

HNZ had no idea their tenant had access to such wealth and, after investigating further, are now threatening to throw her off their books as a tenant.

This situation is ridiculous on so many levels.

Government agencies like HNZ try to target help to people.

But in order to target assistance they have to have some view of what is ‘normal’.

In their eyes, it is ‘normal’ to assume people only have their own income or savings to rely on, and so they only look at that when deciding eligibility. But these rigid rules don’t work.

They don’t get support to where it is needed. This is because family life is so enormously varied.

The reported relationship between Ms Bowden and her wider family will resonate with many. Research shows that many people provide and receive financial support from family members who don’t live with them, and this is particularly true of Maori and Pasifika.

How is a welfare system supposed to accommodate the great variety in support that people have access to from their wider network of friends and family?

Do we want HNZ staff to get affidavits from every cousin and Aunty to say they won’t provide financial help?

Does HNZ interview every friend?

Do we want to foot the bill for this work?

Or do we just turn a blind eye to the support people have access to from friends and family, or the support they provide, in effect saying it counts for nought.

In other words, we are indifferent as to the circumstances of someone who has no meaningful support from family and friends and someone who has heaps. Surely not.

The current system of targeting support also provides incentives for people to pull back from being self-reliant.

In this case, the extended family evidently care about Ms Bowden but had no incentive to pool together to help her buy a house earlier, even though it looks like they probably could have.

Why would they, when she was happily housed by HNZ?

The lesson we can learn from this is that the sooner we give up trying to target welfare support the better.

Far better to use the welfare system to provide a basic floor of income to everyone (an ‘unconditional basic income’ or ‘UBI’) which they can then supplement with paid work and any financial or other support offered by friends and family.

Such a system wouldn’t eliminate inequality because we all differ in terms of what we can earn and the nature of our relationships with family and friends.

But it would mean that people have every incentive to be self-reliant and if the UBI was set at an adequate level even those without paid work or a strong network of friends and family would nevertheless have a socially acceptable standard of living.

We would have achieved this outcome without spending the vast sums that are currently absorbed interviewing and assessing applicants.

For more about the UBI see the book The Big Kahuna.

  • Bev

    A very different viewpoint. I find I agree with it except for :

    Far better to use the welfare system to provide a basic floor of income
    to everyone (an ‘unconditional basic income’ or ‘UBI’) which they can
    then supplement with paid work and any financial or other support
    offered by friends and family.

    Does the above mean that EVERY PERSON in NZ would then be on a ‘benefit / welfare’? Do not like that at all.


    • Gareth Morgan

      This piece explains the idea of a UBI further –

      • kim

        I agree with the UBI as would it not mean we could do away with all the administration dept needed now and investigative teams, etc etc etc the buildings they rent and just have a simplified system with everyone getting say $200 per week? Would the savings outweight the costs do you think?

        • cosmopolite

          A UBI would not eliminate the need for the Accommodations Supplement. $200/week is unaffordable. I propose $100/week for every adult and child, and is very fair to families. It would essentially amount to the full WFF and IWTC for everyone, regardless of income, plus another $140/week for couples.
          Overall a comprehensive UBI would enable a significant cut in the cost of administering all benefits.

      • cosmopolite

        I like the idea of a UBI, but prefer it take the form of $100/week, untaxed, paid to every legal resident of New Zealand. Reduce all cash benefits to take this UBI into account. This UBI would replace WFF and IWTC, and most of the dole for families with children. it would not replace the Accommodation Supplement.

    • rcarterbrown

      Hi Bev/Frances,

      Yes it does. Everyone would receive the exact same amount regardless of individual circumstances (including millionaires and the homeless). This would largely be funded by a CCT (comprehensive capital tax). It’s a bit hard to explain in a paragraph but you can find more information here: New Zealands tax and transfers (welfare) system hasn’t been significantly changed since the end of WWII, is piece meal, and basically doesn’t achieve what it was intended for (a hand-up, as opposed to the current poverty trap).

      I’m happy to discuss it further with you if you like.


  • B Bisset

    oh, yes, welfare bashing. last resort of the morally bereft. this doesn’t illustrate how “stuffed the welfare system is”… it illustrates how stuffed the MANAGEMENT of the welfare system is – a point you make in a very roundabout way that nevertheless suggests it is the fault of the beneficiary, not management, to be in this situation. given you supposedly have expertise in management, it would have been nice to see you apply yourself to that part of the equation, instead of flipping it round to make it appear beneficiaries are both the problem and solution.

    • Gareth Morgan

      We are not criticising Mrs Bowden. We are criticising the welfare system which is completely flawed. Peoples lives are far too complex to allow targeted welfare. Who manages the system is irrelevant. The system is broken. Take a breath and read again.

      • Dave

        Completely agree with you Gareth. I recently had the misfortune of falling temporarily on the scrap heap – I simply ran out of money and had ran out of food. My issues were partly illness related and partly my own bad business management. I did not qualify for assistance because I could not prove my income – as a small business owner I was caught in a bind. I managed to get a $100 emergency food assistance (to be repaid), which I managed to stretch out three weeks. This year I will be a low income earner (less than $10,000) though if eligible for assistance, I don’t know how to go about it. In the mean-time, I am still liable to pay child support, while my ex-wife pays off a mortgage while on the DPB, (her multi-millionaire father fronted with the deposit), she gets a helping hand to pay her mortgage – this year while on the DPB she will earn more than me. I last saw my children in March – having become an economic refugee I have moved to a cheaper region in order to make ends meet. Simply can’t afford to see them. Those looking for a great example of welfare not working need not look further than DPB / Child Support.

      • kim

        I do think the example would be a rare rather than common occurence however that said I agree with UBI – just find the example less persuasive an argument having worked in the community around many who are economically challenged typically within a web of hardship or other challenges whereas it seems that the example of this particular beneficiary is not one of hardship at all. Something in my nearly twenty years of community work I have not witnessed often.

      • B Bisset

        i’m well aware of how flawed the system is; i have plenty of personal experience of it (which i doubt you do). that does not mean you throw it out irregardless and introduce some sort of universal support payment and expect that to fix the ills … because it wouldn’t come close. there is, actually, plenty of capacity to deliver appropriate targeted welfare within the current system; indeed, that is, in essence, what it does – in far more detail than you appear to acknowledge. the problem is that the provision of that welfare is on a denied-until-you-prove-differently basis instead of any genuine caring attempt to provide viable support. whether you call this a “management” or a “political” problem, it is NOT the problem of the beneficiary – but becomes one ever after.
        your suggestion, though at first glance appearing socialist in origin, more correctly smacks of libertarianism – treat everyone identically and expect them to cope and prosper; end of story. but it isn’t; at one end you have people who have no need of any state funding to survive; giving them such help merely lowers the median available for the rest to below “coping point” (without breaking the economy). at the other end, there are folk who CANNOT (for a whole range of reasons) manage their own lives well enough to survive let alone do better; they would quickly either become forced exceptions (back to square one) or die.
        bottom line is, welfare is a support network for those who need it. reform it as much as necessary, but never lose sight of that base.

  • Margaret Mcarthur

    WINZ staff do enquire about family at times – 12 years ago I remember talking with a friend who had gone to ask about unemployment benefit when he could not find work during polytech holidays. He’d been told he should rely on his family. He had come to NZ as a (mandated) refugee from Ethopia after 5 years in a ghastly camp in Kenya and had no family in NZ. He was one of the most positive and hardest working people I’ve ever met – eventually completed car mechanics training, and reluctantly moved to Australia because he could not get work here. He hadn’t argued with the staff member (English was his fourth language and he wasn’t very proficient at that time) but she/he played their own part in meaning that NZ missed out on keeping a wonderful person who still needed help to rebuild his life. And NZ also missed out on what would have been a long term economic return to the cost of our laudable humanitarian commitment to bringing him to NZ in the first place.

  • Rosinah

    Ka pai Gareth, HNZ allows its Investigation team which is made up of ex Police Officers extraordinary leeway to snoop. If you delve a bit deeper you will see that the decision to investigate was made on assumptions, the main being that Bella Bowden must have been ripping them off somewhere along the line.From there HNZ gained access to her bank statements, credit records,chatted to neighbours and followed her around in order to gain information with which to discredit her. The finger needs to be pointed at whomever is empowering the Investigations team.Right now that would be Glen Sowry.

  • Bevan King

    Yes, I hate people who use their family to make financial gain…

  • John Morrison

    Nothing wrong with this if we were living in a benign dictatorship. Unfortunately we are living in a democracy and have prob’ly 600 people wanting to be elected next election and about 2000 wannabe councillors. That means free lunches are always going to win over political ethics and individual responsibility.
    Your move:)

    • Curtis Antony Nixon


      • John Morrison

        Forget it! You don’t want to understand.

        • Curtis Antony Nixon

          In an article and comments stream about Housing NZ, you throw up councillors, elections and free lunches – all off topic. I asked for clarification SO I could understand. You said ‘forget it’ = you don’t want to BE understood.

          • John Morrison

            Nothing there “off topic”. Just pointing out the reasons I believe Gareth’s philosophy will not be considered by wannabe poli’s. I apologise if you were genuinely confused. Please; next time your comment should be “Pardon, please elucidate”.

  • Curtis Antony Nixon

    The recovery model used to help people with difficult life circumstances like having a mental illness, being addicted to drugs and alcohol, being recently released from prison, relies on a hierarchy of needs with stable housing being at the base with food, water etc. The provision of needs must be constant, predictable and not subject to arbitrary removal. HNZ has recently initiated tenancy reviews for all clients. As a HNZ tenant I know the sort of people these reviews will weed out. Hard working, probably women in their 50s or early 60s, some who are my neighbours, who work at local rest homes. Like Ms Bella Bowden. The other requirement for recovery is a way out, a light at the end of the tunnel. People like Ms Bowden lead by example. I want to have neighbours like her to inspire me to do better in my life.

    When a government provides systems like Housing NZ and WINZ that nominally meet peoples needs, there is an unfortunate tendency for the methods used to become bureaucratised, punitive, arbitrary and perverse. A self-perpetuating vicious circle operates, budget capture and maximization starts,with the staff being the focus not the clients, leading to a toxic system that has become predatory on the underclass in our society. The story of Ms Bella Bowden is one of many. Your analysis is spot on. UBI is the answer. How would your UBI system deal with Housing NZ and other social housing, and the Accommodation Benefit?

  • Curtis Antony Nixon

    Govt urged to stop pension anomalies
    Susan St John, of Auckland University’s retirement policy and research centre, says the system creates many unfair anomalies.
    She says fitting different pensions from different countries into some bureaucratic rule, then deducting dollar for dollar is a very draconian way of saving a few million dollars.
    -sounds like the same punitive and nasty system at work again.
    Oh, and with recent law changes, beneficiaries can only travel overseas if they have a reason now. Big Brother.

    • John Morrison

      If you insist on having “big brother” feeding and housing you, should you not also allow him a say regarding your conduct?

      • Curtis Antony Nixon


    • cosmopolite

      I agree.
      A recent press release from the government suggests that these sorts of problems are set to become even worse.

  • cosmopolite

    If my middle aged siblings asked me for $2000/month, I would ask “why aren’t you on the dole?” If they told me “that’s none of your business”, I would reply “end of story”. If they said “I am”, I would offer them $1000/month for 3-6 months, and ask them to discuss their job search activities once a fortnight.

    I think I am more generous than most. What many people are willing to do for a sibling in financial difficulty is to offer them a residence. Because for the recipient to sell the house and spend the proceeds at the pub or TAB parlour, is not easy to do. To enable someone without a job to live somewhere decent for free (except for power and rates), is a major favour. The dole and WFF are viable, when one pays neither rent not mortgage.

  • margaret

    State Housing should be a temporary arrangement only, not a long term plan where they live in a State house all their lives.

    • cosmopolite

      Some poverty stems from a spell of unemployment or sickness. But there is also a lot of poverty of indefinite duration, due to a lack of skills and work habits. Access to State Houses is an important part of the coping package for the latter. There is a long tradition of Kiwi families making a career of living in state houses. Better than than jacking up the benefits by another $1000/month.

    • Curtis Antony Nixon

      Margaret, you lost me at “should”.
      Everyone needs housing all their lives. If the continuity of a state house permanently helps stabilise a person’s life, and maybe their family’s life, that’s for the best

  • cosmopolite

    If my middle aged siblings asked me for $2000/month, I would ask “why aren’t you on the dole?” If they replied “that’s none of your business”, I would reply “end of story”. If they said “I am on the dole”, I would offer them $1000/month for 3-6 months, and ask them to discuss their job search activities with me once a fortnight.

    What many people are willing to do for a sibling in financial difficulty is to offer them a free residence. To enable someone without a job to live somewhere decent for free (except for power and rates), is a major favour. Because for the recipient to sell the donated house and spend the proceeds at the pub or TAB parlour, is not easy to do. The dole and WFF are viable, when one pays neither rent not mortgage.

    • Ian Boag

      I guess if you feel inclined to give your brother $1000/month as personally funded dole you can’t complain if the WINZ input is cut by $1000/month. It’s really good of you to save the taxpayer some money and cool that you are willing to help with his case management.

      The $1000 dole cut is what would happen if he was working for the money rather than getting it as a brotherly gift.

      And if my daughter is on the DPB and I give her free/cheap accommodation at home, that might perhaps be valued and taken out of her benefit. If I preferred I might just rent a flat for her and bubs, but that would involve money ….

      Welcome to the world of the poverty trap. I’m quite open to ideas as to how we deal with this sort of anomaly. Closer targetting does seem to throw up its own set of problems ….

      • cosmopolite

        If my giving a sibling $1000/month would result in WINZ cutting my brother’s dole by the same amount, than rest assured that I would never make the offer, and were I to make an offer, he would decline it!

        Welcome to a world in which all sorts of payments and exchanges take place, but are carefully hidden from all agencies of the Crown…

        • Ian Boag

          Yes I know about that world. Cashies and the like.

          However when you are on a benefit, getting other money from anywhere without telling WINZ could well be classed as benefit fraud? Which we all frown on …. don’t we?

          • cosmopolite

            There is no doubt that beneficiaries have to disclose all income and all pensions sourced from anywhere in the world. But it is not at all clear if this includes gratuitous transfers within extended families, which do not give rise to taxable income.

          • Ian Boag

            And this is fair?

            Kind of brings us back to where Gareth started …

          • cosmopolite

            In the world of Dickens and Walter Scott, it was not unusual for the well off in extended families to offer some financial assistance to the ne’er do wells. There was a legal reason for this: primogeniture. The eldest son got most or all of the inheritance. In exchange, there was an unspoken moral duty to look after his siblings if they came on hard times.
            Primogeniture is completely gone. Super means that we do not have to pay money to our elderly parents. Paying $3K/month to a relative who can’t get his act together is quite rare. And so the benefit system doesn’t address this. I spent time in WINZ’s web site yesterday, to see if they had rules about resources that were not also taxable income. I could not find any.

  • Curtis Antony Nixon

    The Romans had a social programme of ‘bread and circuses’ – it started out as grain but as that became unaffordable for the state a bread dole was instituted. For ever after since then the problem of social support, targeting, abuse of the system by those that don’t need it, including the concept of the ‘worthy poor’ have dogged charity/ state support. Gareth’s UBI is the natural and sensible mature development of social provision. I think a lot of people commenting on here haven’t read the whole description of your Big Kahuna idea so don’t understand it properly.

  • Melinda

    Having been a beneficiary in a HNZ property in the past I saw my neighbours proactively ensure they did not better their circumstances to guarantee their lifestyle.
    Over the 3 years I was housed by HNZ I worked part time and studied at Open Polytechnic part time.
    Gradually I started to work in a full time paraprofessional role, then had to
    make the decision to still pay under market rent for my place or move on to
    another home. My HNZ place was newly decorated, very flash in inner city
    Auckland – it was hard to leave – but I feel HNZ should be available to help
    those that help themselves, they then can move on. Tenancies need to be fixed term and tenants should be encouraged to upskill and be independent. I strongly support the UBI as there is incentive for unemployed or low income to move on and up – our current welfare system and HNZ rewards the unnecessarily helpless and those that willingly leaning on the system.

  • Barry Tretheway

    I do not agree with UBI. Having worked for a short time with HNZC properties I feel that they should only be a short term lease arrangement. HNZC have about 70,000 properties throughout New Zealand; 10% to 15% of these have problem tenants. 7,000 to 10,500 properties will need up to $40,000 spent on them each year to repair the damage caused. This could be more than 100 million a year. My limited experience has shown me that the tenants have a very large sense of entitlement with almost no sense of responsibility. Limiting the time any tenant can be in a property will free up properties for those that really need them and stop the dependency we currently have.

  • FuriousG

    I have worked as a teacher, property manager and landlord, I have had to deal with a number of people who would be classed as lower socio economic as well as those from more affluent backgrounds. I believe that I have an ideal background from which to comment.
    Just so that people are aware, those living in HNZ properties do not qualify for an accommodation supplement. This is because their rent is already subsidised by the Government, this is fair enough.
    Those that live in a private rental and are Winz beneficiaries qualify for accommodation allowances. It may vary depending on their circumstances, i.e. the rent they pay and the number of dependants etc…
    Having said that; many of those who are renting in the private sector still pay a high proportion of their income to cover rent. In many cases 50- 75% of their income on rent alone, even with the assistance of the accommodation supplement.
    It is no wonder that there is resistance from state tenants to vacate and rent in the private sector. If you work and are on wages you may not even qualify for assistance from the Government to help with rent.
    The issue may really be that, private rents are too high. As a property manager, I cringe at times when I see the rents that landlords charge. How can a family on an income of say, $650.00 pay $500 plus on rent for a 3 bdrm house in a solid but not flashy suburb, yet still pay their utilities, feed their children etc.. and be expected to get ahead, and one day be able to own their own house.
    I also know that landlords’ have expenses, and depending where a property is situated, it is not always a good investment. I understand that.
    I would welcome feedback on this

  • Simon M

    I like the idea of an “unconditional” basic income. I suspect this would save a small fortune on bureaucratic spending (ie: the wasted man-hours spent trying to figure out who was elligible in the first place, and then chasing down people who might have crossed some arbitrary boundary while trying to dig themselves out of a hole).

    But the thing I like most about this is that it makes a simple but powerful statement that the people who live here are human beings and we care about them. Furthermore it says that we won’t accept poverty in this country.

    I think the suggestion in the comments below that this UBI be restricted to about $100 a week and be paid to everyone regardless of means is hard to endorse. $100 a week isn’t going to go anywhere for someone who really needs it. You can’t pay rent with that. You might be able to eat for a week on that – I don’t know. I doubt that it would feed a family for a week. And most of us don’t need it. You can bet that some politician would suggest we scrap the scheme and go for a straight $100 tax cut across the board instead and those who really need the money would lose the benefit entirely.

    I see the UBI as something that would be available to anyone who applies for it. Sure some people will abuse it. They always do. And the cost of tracking them down and punishing them is regularly higher than the cost of just turning a blind eye and investing in further education so that those who want to get off the benefit can do so.

    I think this is a great idea that would start us back on the road to being a country who’s people are proud to fend for themselves.