Shameful poverty – why we must elect a Labour led government

Written By: - Date published: 7:04 am, August 31st, 2017 - 48 comments
Categories: class war, health, housing, labour, national - Tags: , , , ,

Two excellent but very disturbing pieces in The Herald yesterday. Kirsty Johnston:

Damp, overcrowded homes bigger threat to kids than car crashes

Diseases linked to cold, damp, overcrowded homes are killing more New Zealand children than car crashes or drownings.

An average 20 children die and 30,000 are hospitalised every year from preventable, housing-related diseases like asthma, pneumonia and bronchiolitis, health statistics show.

Poor areas that have high deprivation and low incomes, lots of rental housing and fewer Europeans suffer the most – suburbs like Auckland’s Pt England and parts of Glen Eden.

Health data shows the hospitalisation numbers are climbing. Respiratory conditions in particular – like bronchiolitis and asthma – are causing more hospitalisations each year, with the most severe, such as a “third world” disease named bronchiectasis, irreparably damaging babies’ lungs.


Kirsty Johnston and Chris Knox:

Childhood diseases in the land of milk and poverty

More New Zealand children are killed by diseases linked to cold, damp, and overcrowded housing than in car crashes or drownings.

Disease casts a shadow over Parrs Park in West Auckland. It’s there in the data: the children are getting sick. And when the women open their doors, they’ll tell you.

Hospitalisations caused by poverty-related conditions have increased since 2000 – up to 43,000 last year. Respiratory diseases, in particular, are growing at much more severe rates.

Doctors argue the hospitalisations are a result of embedded child poverty levels combined with a relentless housing crisis.

“In New Zealand we have created a triple jeopardy for poor health,” says expert paediatrician Professor Innes Asher. “Poverty, unhealthy housing and inadequate basic health care puts health at risk, but when the three are combined…poor physical health is almost inevitable, as in Dickens’ times.”

“It’s deeply disappointing,” says Philippa Howden-Chapman, a professor of public health at the University of Otago. “There’s a real reluctance of landlords, who are providing a service, to maintain that service. It’s a reluctance I can only put down to the fact that most landlords aren’t concerned about depreciation but only capital gains.”

Howden-Chapman says with up to 800,000 uninsulated homes in New Zealand, she was staggered the government reduced such an important programme.

“It’s both a social and a moral argument – children end up with compromised health for their whole lives, and they die.” …

Plenty more data, personal anecdotes, and analysis in both of these pieces, everyone should read them in full.

This crisis in poverty, housing and health is a national disgrace. It is why we desperately need to elect a Labour led government in September.

48 comments on “Shameful poverty – why we must elect a Labour led government”

  1. UncookedSelachimorpha 1

    Excellent Post.

    The graph just needs “Delivering for New Zealand” splashed across the front.

  2. Dot 2

    and splashed on the website

  3. jcuknz 3

    Yes it is a national disgrace … that so many adults in NZ do not understand that having kids is expensive and don’t get pregnant when they are on low wages.
    It is not just a Pacifcia/Maori problem either.

    • Muttonbird 3.1

      Could your parents afford you? Not sure they did a good job, regardless.

    • Stuart Munro 3.2

      Part of the brighter future was supposed to be increased opportunity – but instead wages have been static and are not expected to rise for three years. Cost of living meanwhile is going through the roof, as privatized former public services gouge their customers instead of delivering the savings on which their sales were predicated.

    • It’s not the individuals but the system that we have that creates poverty. The system that you support.

      So, this is the inevitable result of your actions and beliefs. Time for you to start taking personal responsibility.

    • Lara 3.4

      Such a predictable response. And so sadly common in middle NZ today.

      Your statement has at least these three unacknowledged assumptions. I would like to think you’ll consider this, but I fear you will not.

      1. At the time of conception all prospective parents can see the future and know that their financial circumstances will not deteriorate.

      2. Every conception is the result of consensual intercourse.

      3. Contraception works 100% all of the time.

      Clearly, none of these assumptions are true.

      I don’t think you’ve thought your knee jerk attitude through very well.

      Do you think there should be a means test / income test before people are allowed to have children? What annual income do you think would be okay? The poor aren’t allowed to have kids?

  4. The Chairman 4

    “If elected the party would address unhealthy homes in its first 100 days, she said”
    http://www.nzherald.co.nz/health/news/article.cfm?c_id=204&objectid=11913852

    That doesn’t allow them (Labour) the necessary time to build more homes, thus take the heat out of an overheated rental market. Allowing landlords more scope to pass related WoF costs on.

    Couple that with the warning from insurance brokers of an expected massive 50% plus increase in the cost of insurance cover, rents are going to soar. Resulting in more dropping below the poverty line.

    Adding to that inflationary pressure will be a reduction in rental supply due to the work required not being feasible for some – or landlords inability to afford to stump up the initial outlay required. Removing a number of cheaper, lower end rentals from the market.

    Therefore, what is to become of those that are struggling to cover their rent now, let alone having to cope with new WoF related rent increases? More poverty? More overcrowding?

    The main barrier to warm, dry and safe homes is lack of funding. A $2000 grant is vastly insufficient in protecting against rent increases as the outlay to meet the criteria of a comprehensive Warrant of Fitness will be considerably more. But seeing as the health savings are substantial and the need is dire, Labour should be offering more.

    So while the intention is good, the wider ramifications hasn’t been well thought through.

    As for the Greens.

    “Davidson said the Green Party would bring in a comprehensive Warrant of Fitness for houses to make sure every property – not just rentals – were warm, dry and safe.”
    http://www.nzherald.co.nz/health/news/article.cfm?c_id=204&objectid=11913852

    Genuine question. What happens to a household who own their own home but cant afford to meet the criteria a comprehensive Warrant of Fitness requires? Will they be forced out of their home? Fined?

    • tracey 4.1

      Their policy of Warrant of Fitness applies to Rental properties. The Press release quoted from states this, earlier than the statement you quoted;

      ““National’s repeated refusal to put in a mandatory rental warrant of fitness is putting further lives at risk.”

      And more in an earlier statement;

      https://www.greens.org.nz/news/press-release/greens-will-fix-slum-rentals-exposed-renting-review

      • The Chairman 4.1.1

        Are you implying Davidson is incorrect? Or the policy has only now been extended to all homes?

        • tracey 4.1.1.1

          Neither, as I stated int he post you replied to, her quote was taken out of context. In full context she is clearly referring to rental homes.

          • The Chairman 4.1.1.1.1

            I don’t see how. It was a rather straight forward quote. Stating “not just rentals” was blatantly clear.

            Moreover, as you are referring to an older press release to substantiate your claim, how can you be sure it hasn’t been extended?

    • tracey 4.2

      And the cost of not addressing it, in terms of health implications and associated costs?

      • The Chairman 4.2.1

        The cost (thus taxpayer savings) is said to be substantial. Hence they should be offering more to offset costs being passed onto tenants.

    • Siobhan 4.3

      ” Removing a number of cheaper, lower end rentals from the market.”…actually I’m all for that.
      Landlords who buy cheap run down houses, (all of which probably have their rents/income artificially subsidised/propped by the taxpayer through Accommodation Allowance etc), are competing with first home buyers (ie renters).

      The less landlord owned houses, the more actual home owners.

      • The Chairman 4.3.1

        I can’t see too many of the people utilizing those homes due to their lower rent sharing your sentiment when they are forced out.

      • The Chairman 4.3.2

        As for your sentiment, Siobhan, sorry, I was in a rush before. Hence, didn’t have time to give it the attention it requires.

        So lets delve a little deeper into it now.

        Landlords who own and can’t afford to repair cheaper, lower end rentals are less likely to be well off. Therefore, reducing the value of their home (by requiring WoFs they’ll find difficult to attain) could result in tipping a number of them over and into financial hardship.

        Meanwhile, well off landlords, sensing blood in the water, will be looking to cash in on their downfall. Therefore, it would be safe to say landlords will still be competing with first home buyers.

        So we can expect to see the less well off landlords being squeezed out of the market, leaving the market to be dominated by the larger players. Who will then (with the cheaper competition largely removed) cash in on the higher rents.

        • Ad 4.3.2.1

          I agree with much of that.

          There will be some landlords who are well cashed up and will be able to buy.
          But there are some market factors mitigating against that.

          The market is already shifting. Those landlords who have strong equity ie over 75% in their properties will be able to survive most downturns. Those who have low equity – around 50% or less – will be the most vulnerable.

          Those landlords with low equity will likely sell as the market continues to decline.

          Those who have ready cash will be able to buy, but then, as the market comes down, so will owner-occupiers be able to consider buying.

          Banks and the Reserve Bank now require much higher deposits for investor buyers. So the pool of speculator-owners is going to dry up very fast.

          Under Labour, the biggest landlords are going to be social housing providers, either HNZ or community trusts. Their rents are able to be controlled.

          Also under Labour, the marketplace is going to be flooded with new houses. This will stabilise the market.

          Also under Labour, they will institute a 5-year Bright Line test, which means that the market for speculation will die.

          And under both Aussie and NZ Reserve Banks, our retail banks are being required to hold much higher deposits, and far lower percentages of risky loans. Again, investment properties will be far harder to fund.

          All you are describing is that small scale renters will quickly decrease, and that market change will be filled by the state and its proxy providers.

          If you think that’s a big task to take on, what is being described is weaning New Zealand off the idea of property investment as a whole. And onto assets and investments that will increase our productivity.

          • The Chairman 4.3.2.1.1

            “The market is already shifting. Those landlords who have strong equity ie over 75% in their properties will be able to survive most downturns. Those who have low equity – around 50% or less – will be the most vulnerable.”

            This will accelerate the shift, leading to a more consolidated market.

            “Banks and the Reserve Bank now require much higher deposits for investor buyers.”

            Yes, but that’s not a problem for those well cashed up or those utilizing equity accrued in other property.

            “Under Labour, the biggest landlords are going to be social housing providers, either HNZ or community trusts. Their rents are able to be controlled”.

            Through Income Related Rent (where the Government pays the difference between the rent tenants are able to pay and normal market rates). Meaning, housing providers will receive full market rents, albeit partly subsidised.

            And considering Labour’s connection to the Wellington model (http://www.stuff.co.nz/business/80673715/Wellington-City-looks-to-private-sector-to-head-off-its-own-affordability-crisis) it’s logical to assume this model may be adopted.

            “Also under Labour, the marketplace is going to be flooded with new houses.”

            It will take years to meet and exceed current housing demand, yet housing WoFs will be put in place within the first 100 days, according to Jacinda.

            A 5-year Bright Line test merely means investors would have to wait a little longer if they wanted to avoid the tax. Alternatively, investors would increase their turnover, flipping over more homes to offset the tax burden.

            Making investment properties far harder to fund merely locks out the smaller players .

            And constraining their ability to borrow isn’t going to lead to those smaller players investing in the far riskier productive sector.

        • Therefore, reducing the value of their home (by requiring WoFs they’ll find difficult to attain) could result in tipping a number of them over and into financial hardship.

          And we’re supposed to be concerned about this because?

          They’re the ones who decided to take the risk fully understanding that the government was going to have to step in and fix the housing.

          I suspect that they did that hoping that the government would give them a free upgrade.

          • The Chairman 4.3.2.2.1

            “And we’re supposed to be concerned about this because? “

            Poverty is a problem we are trying to reduce. Therefore, putting more into financial hardship is counterproductive when it comes to meeting that objective.

            • Draco T Bastard 4.3.2.2.1.1

              Poverty is a problem we are trying to reduce.

              True, we are. Propping up a housing bubble won’t do that. In fact, it does the opposite as we’ve already seen.

              Therefore, putting more into financial hardship is counterproductive when it comes to meeting that objective.

              We could offer to buy the place off of them and turn it into a state house that they can then live in. Removes their financial hardship, increases state housing and doesn’t reward immoral behaviour.

    • McFlock 4.4

      Are you suggesting that landlords aren’t already extracting the maximum possible amount from their tenants?

      • The Chairman 4.4.1

        A rather general question, which no doubt will have a mixed response.

        Here’s one for you.

        Are you suggesting that in an overheated market (where there is clearly scope) landlords won’t pass these new costs on?

        • tracey 4.4.1.1

          Isn’t the big problem that because landlords do not get good yields in places like Auckland, they have to be in it for the capital gain? And to recover the capital gain they have to sell and this is condemning people to short term rentals?

          Having just done the renting thing for the first time in 26 years I am astounded at the size of the bond, the advance rent, having to do the gardens/lawns and the extent of cleaning (including commercial carpet cleaning) I have to do when I leave. I am lucky, having sold in Auckland and moved South I have some spare. But holy crap for the poor bastards not in my position (and that is most of them).

        • McFlock 4.4.1.2

          If they want to rent out the place, and it’s already the lowest end of the market, any raised priced will lower their occupancy rate. Because capitalists ream as much money as they can before people walk away.

          • The Chairman 4.4.1.2.1

            “Any raised priced will lower their occupancy rate.”

            Being at the lower end of a overheated market, there will be plenty looking for the opportunity to secure a place with lower than market average rent.

            In general, if landlords weren’t passing costs on and extracting the maximum possible amount from their tenants, rent’s would be largely stagnant. Which, of course, they’re not.

            • McFlock 4.4.1.2.1.1

              “Passing costs” means increasing rents. If landlords are already “extracting the maximum”, they can’t raise the rents any higher – they’re already maximising their profits.

              Their profits are slightly less, is all.

              • The Chairman

                “Passing costs means increasing rents. If landlords are already “extracting the maximum”, they can’t raise the rents any higher”

                Yet, generally, rents are increasing. Which was my point. If landlords were absorbing costs, rents would be largely stagnant. Which, of course, they’re not.

                • McFlock

                  If landlords were “extracting the maximum”, rents would also be stagnant – unless tenants’ incomes were increasing.

                  • The Chairman

                    What’s increasing is the proportion of incomes going towards rents.

                    • McFlock

                      Fair call.

                      But price (as opposed to value) is a function of supply and demand, not production costs. Capitalists (successful ones) ask “what is the current going rate for properties like the one I’m considering?”, not “I’ll charge cost plus 5%”.

    • The Chairman 5.1

      Clearly Labour’s current stance on this matter has the potential to put more into financial hardship and lead to more overcrowding. Possibly driving more rentals underground, further robbing tenants of protection.

      So why are you so supportive?

      • tracey 5.1.1

        He is in pom-pom mode.

      • Ad 5.1.2

        I am supportive because the housing market is in catastrophic failure.

        Labour’s policy is that that they will subsidise every home owner with a grant
        of $2,000 to insulate their home:

        http://www.labour.org.nz/investing_in_warm_dry_homes

        If landlords can’t afford to bring their home sup to scratch, it will generally be because their yield on that property cannot be touched because they are mortgaged up to the top of their banking limit.

        For those, I would encourage them to sell that property to someone with the money to bring it up to a reasonable standard. That will be good for their risk, and good for others seeking to own a home.

        • The Chairman 5.1.2.1

          See my comments above. You’ll find all your points have been covered.

          To summarise, it will basically result in a transfer of wealth, putting a number of landlords into financial hardship and leaving tenants struggling to cover higher rents. Tipping more below the poverty line while forcing more to resort to overcrowding.

          • McFlock 5.1.2.1.1

            I think plantation owners had similar concern arguments when it was suggested that they might pay a fair wage rather than keeping their employees as slaves: people turfed out of their homes, the ruling elite driven to poverty, and other apocalyptic terrors.

            • The Chairman 5.1.2.1.1.1

              You clearly have the wrong end of the stick.

              I wasn’t suggesting the ruling elite will be driven to poverty. This will largely benefit the larger, more well off players. At the expense of struggling renters.

  5. Peter Bradley 6

    I don’t think NZ voters really care about poverty. Sure, there are lots of articles and media stories about people living in cars but there is little political will to really address the issues. Labour and Greens talk a good game about reducing poverty but in reality they will have little room to move should they become the next government because NZ has reduced its’ tax take significantly over the past 9 years.
    NZ’s treatment of the poor – in particular beneficiaries – was defined in the 1990’s with ruthless changes to the welfare system.
    Subsequently – Helen Clarks government introduced Working For Families tax credits but only for those deemed worthy and working enough hours to qualify. This deliberate omission by the last Labour government was presumably based on research into voter attitudes about who should receive help and who shouldn’t.
    Overall, I believe most NZ voters vehemently despise the poor and this was no better highlighted by the treatment of Metiria Turei – a brown, female from the wrong side of the tracks could not be forgiven her youthful transgressions under any circumstances. The reaction from white middle aged, middle class, male and female pundits was a unanimous foaming at the mouth rage that I have not seen expressed against anyone in politics ever – even Rachel Stewart got in on the act. It was disturbing but also revealing as it peeled back the thin veneer of egalitarianism we like to think is part of our culture. It clearly isn’t and never has been.
    It reminded me of 18th century Britain where the poor where deported to Australian prison colonies or hung for minor crimes. We have not changed as much as we’d like to think since then.

    • tracey 6.1

      Some interesting observations Peter, thanks for sharing. Your last sentence puts me in mind of this

      “… the sufferings of the poor are indeed less observed than their misdeeds; not indeed from any want of compassion, but because they are less known; and this is the reason why they are so often mentioned with abhorrence and so seldom with pity… They starve and freeze and rot among themselves, but they beg, steal and rob among their betters.” Hanoverian London, George

      • Michael 6.1.1

        Agree with you and Peter Bradley. Voters are mostly middle class these days and do not care about other people living in poverty. Neither does the Labour hierarchy, which is why “business as usual” will remain the order of the day on 24 September, regardless of which bunch of political actors score acccess to the taxpayer-funded troughs in the Beehive.
        The best outcome I can see for the poor is a strong Labour/Greens opposition in the next Parliament, holding NACT/Winston to account and, finally, developing progressive policies, such as Universal Basic Income and taxes on rents of various sorts, that actually address our country’s social and economic problems (in that order, too). Had Labour actually done any of this during the last nine years, it might be fit for government now. But it hasn’t, so it isn’t.

  6. This crisis in poverty, housing and health is a national disgrace. It is why we desperately need to elect a Labour led government in September.

    It is a disgrace but are Labour promising to go round and fix all those homes that are, essentially, worthless? If they fix them are they also going to nationalise them?

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