Housing Minister Phil Heatley has confirmed the Government is considering changes to the accommodation supplement and has slammed the cost of new subdivisions.
He told TV3’s The Nation yesterday that the Government was concerned about the $1.2 billion annual cost of the supplement, and the $600 million that went on state house rental subsidies.
It plans to review the situation in relation to state rentals to stop people being able to live in subsidised accommodation rent-free.
"We are reviewing it because we think it probably can be targeted better.
The concern was first flagged in this year’s Budget and Labour Minister Annette King has been lobbying for the supplement to be scrapped, saying it simply lines private landlords’ pockets.
But Heatley said that, for now at least, the focus is on state housing.
"For example you know when you've got someone in a state house getting a really cheap rent, you know 80 bucks a week, and then they have boarders who get the accommodation supplement, you know that household could be getting that state house almost for free.
"We're looking at this at the moment.
"I'd say by the back-end of the year Ministers will get a good feel of where we're going to head with this."
But he said the Government had no intention of returning to the market rents introduced by the previous National Government in 1991.
And he indicated the Government wanted to see changes in planning regulations covering housing in cities like Auckland to provide more sections and improve the affordability of new housing.
"Essentially we need more supplies so we need more houses and we need more sections," he said.
He said the Government would be eyeing greenfield developments. "Most cities have you know some low unproductive land that they could release for housing.
"Extending city limits to provide for more sections should be done in combination with subdividing large properties within existing city limits.”
He said consent costs for subdivision of existing sections were too high "and that's crazy".