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Housing policy and affordability both impact on the welfare system and are critical to it. If people do not have secure homes, they cannot be realistically expected to move off benefits, engage with the labour market and enjoy good health. Likewise, if the cost of renting takes half a beneficiary’s or a low-paid worker’s income, then families are left in poverty and insecurity and/or may crowd into homes, resulting in stress and ill health. Growing up in such an environment is particularly detrimental to children.

Unfortunately, housing in New Zealand has become unaffordable for many people, and there are not enough houses. The Government has recognised there is a systemic housing crisis and has begun to address it. House price inflation in the past 5 years was double that of incomes.

The current welfare system is inadequate to meet households' reasonable financial needs, hence our recommendations to raise benefit rates to a more adequate level. However, there is a danger this solution could increase housing inflation and substantially reduce the effectiveness of the benefit increases in improving wellbeing, if the systemic housing problems are not addressed. The housing crisis is also contributing to the growth in inequality in New Zealand by denying low-income families the only chance most have of acquiring an asset base. This has many implications, not the least of which is the danger of future widespread poverty for older citizens as younger cohorts age with low levels of home ownership and a long-term dependency on the rental market for housing. Vulnerable people need secure, affordable, tenure options including renting, owning and shared equity across the life cycle (WEAG, 2019d; 2019i).

"At present New Zealand housing costs are a huge burden on household budgets that is eroding the health, security and welfare of beneficiaries and many other households."

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