Many state house tenants are on benefits.
In 2007 only 170,000 out of 260,000 working-age beneficiaries were getting an Accommodation Supplement. HNZ tenants do not qualify for this supplement. There are 69,000 state houses so I am picking the percentage of tenants who are beneficiaries would be significant.
Beneficiaries in state houses have their rent paid for by the state, through a Housing NZ rental subsidy and their benefit. Therefore the money stays with or goes back to the state.
However, if those people decide to buy their houses, a possibility if the government raises the mortgage cap, they will instead get their mortgage paid for by the state through the Accommodation Supplement. (In 2007 43,000 people received an Accommodation Supplement to cover or contribute to mortgage repayments.) That money is then lost to the state.
So I am not quite sure how there will be (nett) extra money available for building more state houses.
I suppose it is one way to get people to save. KiwiSaver isn't dissimilar.
But it is a little philosophically mischievous for National to applaud and encourage private ownership yet achieve it by upping the degree of wealth transfer.
DPF thinks it's a great idea - Cactus doesn't.
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